Chapter 3 and 4 Business test

Four major economic shifts

Four major economic shifts

Service Based Agriculture Industry Based Information

Service Based

work is done for others as an occupation or business. Bartered or traded (1600s)

agricultural based

farming was a way of life and a huge occupation

Industry Based

manufacturing, big machines and producing goods.

informational based

computers are now used to do work

Business Cycle

1. Prosperity

2. Recession

3. Depression

4. Recovery

What is a business cycle

Measuring the rise and fall of economic activity

Gross Domestic Product

The sum total of the value of all the goods and services produced in a nation.

Standard of Living

the degree of wealth and material comfort available to a person or community.

how do you measure economic activity

Gross Domestic Product (GDP) is the most commonly used measure of a country's economic activity. most important indicators of the status of an economy.

Unemployment Rate

the percentage of the labor force that is unemployed

Inflation

a general increase in prices and fall in the purchasing value of money.

Deflation

a decrease in the general level of prices

What happens when GPD goes above 5% each year

inflation rises

What happens when GPD is below 2% per year

unemployment rate increases due to less jobs

Two different ways to measure economic activity

Consumer Price Index: measures pricing power and inflation.

Gross National Product (GNP) measures the value of goods and services produced by a nation and income from foreign investments.

Producer Price Index (PPI)

an average of the prices received by producers of goods and services at all stages of the production process.

Consumer Price Index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer

Employment Statistics

a measure of the extent of available labor resources (people available to work) are being used.

Consumer Confidence Survey

The degree of optimism that consumers have regarding the overall state of a country's economy and their own financial situations.

S&P 500

index that shows the price changes of 500 different stocks

Housing Starts

the number of new homes being built

Money Supply (M2)

the sum of currency in circulation, checking accounts, savings accounts, and most other types of bank accounts

Food Services

business responsible for preparing, delivering and serving of foods

Manufacturing & Trade

Producing products or providing services in large quantities. Factories, Office buildings.

Budget deficit versus Budget surplus

Deficits arise when gov't spending exceed revenues. A surplus arises when revenue exceed spending

National Debt

The amount of money a national government owes to other governments or its people

the difference between ethics and business ethics

The difference between ethics and business ethics is that ethics is moral values, while business ethics are morals for a business

Code of Conduct/Ethics

a formal statement of an organization's values on certain ethical and social issues

Triangle Shirtwaist Factory

March 1911 fire in New York factory that trapped young women workers inside locked exit doors. 146 Women died. led to the establishment of many factory reforms, including increasing safety precautions for workers

Sweatshop

small factory where employees have to work long hours under poor conditions for little pay

OSHA

Occupational Safety and Health Administration, a government agency in the Department of Labor to maintain a safe and healthy work environment

Conflict of interest

A conflict between self-interest and professional obligation.

The Ethical Decision Making Process

1. Identify the ethical dilemma

2. Discover alternative actions

3. Decide who might be affected

4. List the probable effects of the alternatives

5. Select the best alternative

Social Responsibility

the obligation of a business to contribute to society

4 social responsibilities

Customers Employees Society Creditors & Owners

FDA

Food and Drug Administration. The agency that is responsible for determining if a food or drug is safe and effective enough to be sold to the public.

Equal Pay Act

1963 law that required both men and women to receive equal pay for equal work

ADA

Americans with Disabilities Act—forbids discrimination on the basis of a physical or mental disability if the individual can perform "essential function" of the job.

EPA

Environmental Protection Agency An independent federal agency established to coordinate programs aimed at reducing pollution and protecting the environment

Whistle Blowing

informing the press or government officials about unethical practices within one's organization

Internal whistle blowing

occurs within an organization, reporting up the chain of command

External whistle blowing

involves reporting outside the organization, such as to the media or an elected official

risks of whistleblowing

loosing your job, bad reputation.

Rewards of whistle-blowing

whistle blower may receive money