Business exam

Economy

The system a country uses to produce and exchange goods and services.

Economic Indicators

Statistics used to measure how the economy is doing.

Leading Indicators

Predict future economic changes.

Coincident Indicators

Show what is happening right now.

Lagging Indicators

Confirm trends after they happen.

Production (Output)

The amount of goods and services produced.

Producers

People or businesses that make goods or services.

Consumers

People who buy and use goods or services.

Distributors

Businesses that move products from producers to customers.

Standard of Living

The level of wealth, comfort, and necessities available to people.

Unemployment Rate

The percentage of people looking for work who cannot find jobs.

GDP (Gross Domestic Product)

The total value of goods and services produced in a country.

Real GDP

GDP adjusted for inflation.

Nominal GDP

GDP measured using current prices.

GDP Per Capita

GDP divided by population.

GDP Growth Rate

The percentage increase or decrease in GDP over time.

Foreign Investment

Money invested by people or companies from another country.

Inflation

Rising prices over time.

Deflation

Falling prices over time.

Hyperinflation

Extremely rapid inflation.

Stagflation

High inflation and high unemployment at the same time.

Interest Rate

The cost of borrowing money.

Consumer Spending

Money spent by households on goods and services.

Business Cycle

The pattern of economic growth and decline.

Peak

The highest point of economic growth.

Expansion

A period of economic growth.

Contraction

A period when the economy shrinks.

Recession

A significant decline in economic activity.

Depression

A severe and long-lasting recession.

Trough

The lowest point of a business cycle.

Soft Landing

Slowing inflation without causing a recession.

Stock Market

A place where shares of companies are bought and sold.

Goods

Physical products people buy.

Services

Activities performed for customers.

Factors of Production

Resources used to make goods and services.

Natural Resources

Materials from nature used in production.

Human Resources

Workers and their skills.

Capital Resources

Tools, machinery, and equipment used to produce goods.

Scarce Resources

Resources that are limited in supply.

Intermediate Good

A product used to make another product.

Final Good

A finished product sold to consumers.

Monetary Policy

Actions by a central bank to control money and interest rates.

Fiscal Policy

Government decisions about spending and taxes.

Expansionary Policy

Policies that stimulate economic growth.

Contractionary Policy

Policies that slow economic growth.

Central Bank

The institution that manages a country's money supply.

Bank of Canada

Canada's central bank.

Federal Reserve

The central bank of the United States.

International Trade

Buying and selling goods between countries.

Exports

Goods sold to other countries.

Imports

Goods bought from other countries.

Balance of Trade

Exports minus imports.

Trade Surplus

Exports are greater than imports.

Trade Deficit

Imports are greater than exports.

Trading Partner

A country that trades with another country.

Comparative Advantage

Producing something at a lower opportunity cost.

Absolute Advantage

Producing something more efficiently than others.

Opportunity Cost

What you give up when making a choice.

Protectionism

Government policies that protect domestic industries.

Trade Barrier

Anything that limits trade.

Tariff

A tax on imports.

Trade Quota

A limit on the amount of imports.

Trade Embargo

A ban on trade with a country.

Sanctions

Economic penalties placed on a country.

Subsidies

Government payments to support businesses.

Free Trade

Trade with few or no restrictions.

Fairtrade

Trade that ensures fair wages and conditions for producers.

Exchange Rate

The value of one currency compared to another.

Floating Rate

A currency value determined by the market.

Fixed Rate

A currency value set by a government.

Reserve Currency

A currency widely used in global trade.

Currency Speculation

Buying and selling currencies to make a profit.

Forex (FX) Market

The global currency trading market.

Purchasing Power Parity (PPP)

Comparing currencies based on what they can buy.

Globalization

Increasing connections between countries.

Global Interdependence

Countries relying on each other.

Global Sourcing

Getting products or materials from around the world.

Specialization

Focusing on producing a specific product or service.

Supply Chain

The network involved in making and delivering products.

Offshoring

Moving work to another country.

Onshoring

Bringing work back to the home country.

Nearshoring

Moving work to a nearby country.

Reshoring

Returning production from overseas.

Outsourcing

Hiring another company to perform work.

Multinational Corporation

A company operating in multiple countries.

Tax Haven

A place with very low taxes.

Shell Corporation

A company that exists mainly on paper.

Foreign Direct Investment (FDI)

Buying or building businesses in another country.

Foreign Portfolio Investment

Investing in foreign stocks or bonds.

Horizontal FDI

Opening the same business operation in another country.

Vertical FDI

Investing in different stages of production abroad.

Brownfield Investment

Buying an existing facility.

Greenfield Investment

Building a new facility from scratch.

Developed Country

A country with a high standard of living and strong economy.

Developing Country

A country still improving economically.

Emerging Market

A developing country with rapid growth.

Underdeveloped Country

A country with very low economic development.

Human Development Index (HDI)

A measure of health, education, and income.

Primary Industry

Uses natural resources.

Secondary Industry

Manufactures products.