Business

oligopoly vs monopoly

-Oligopoly: a state of limited competition, in which a market is shared by a small number of producers or sellers. -Monopoly: the exclusive possession or control of the supply of or trade in a commodity or service

Two main tasks of monetary policies

1. Maximum employment 2. Stable prices (low, stable inflation)

Oligopoly

A market structure in which a few large firms dominate a market

What is an example of a demographic factor?

A person's age

A preferential tariff:

A tariff that is lower for some nations than for others.

What are the benefits associated with free trade and globalization?

An Open Economy that Spurs Innovation

Borderless Corporations

An organization that operates without looking at borders

The _____ is the total amount of money that flows in and out of a country.

Balance of Payments

The _____ is defined as the difference in value of a country's exports and imports over a period of time.

Balance of Trade

_____ is the practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteers' efforts of company employees.

Corporate Philanthropy

Pierre Cardin gives technical advice on textile manufacturing to China and in exchange receives silk and cashmere. This is an example of a(n):

Countertrade

The base of the corporate social responsibility pyramid is:

Economic Responsibilities

Formal training to develop awareness of inappropriate behavior and to practice appropriate responses.

Ethics Training

________ is the practice of tying philanthropy closely to the corporate mission or goals targeting donations to regions where a company operates.

Strategic Giving

What is a demand curve?

The quantity of a good or service that people are willing to buy at various prices.

(T/F) the opposite of free trade is protectionism

True

A country that imports more goods than it exports is said to have a(n):

Unfavorable Balance of Trade

_____ is a philosophy that focuses on the consequences of an action to determine whether it is right or wrong. This philosophy holds that an action that affects the majority adversely is morally wrong.

Utilitarianism

cost-push inflation

When prices rise due to an increase in the cost of production.

market equilibrium

a situation in which quantity demanded equals quantity supplied

Social investing

is the practice of limiting investments to companies that have ethical policies that match those of the investor

World Trade Organization (WTO)

has emerged as the world's most powerful institution for reducing trade barriers and opening markets

Fiscal policy is concerned with

taxation and spending

standard of living

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

Balance of trade

the difference between a country's total exports and total imports

Corporate Philanthropy

the dimension of social responsibility that includes charitable donations

horizontal merger

the joining of two firms in the same industry

market structure

the number and relative size of firms in an industry

Role of the Federal Reserve System (U.S. Central Bank)

1. Maintaining an effective, reliable payment system 2. Supervising and Regulating Bank Operations 3. Establishing monetary policies

What 7 external environmental factors affect business?

1. Technological 2. Political/Legal 3. Economic 4. Demographic 5. Social 6. Competitive 7. Global

multinational corporation (MNC)

A large business organization operating in a number of different national economies; the term implies a more extensive form of transnational corporation.

horizontal merger example

cell phone companies, banks

Bribery translates to kuroi kiri (black mist) in Japan, schmiergeld (grease money), and baksheesh (tip or gratuity) in the Middle East. This differing way of looking at bribes is descriptive of differences in:

Culture

_____ is the reduction of a currency's value relative to another currency.

Devaluation

All of the following are terms associated with international market EXCEPT: A. Balance of Trade B. Discount Rate C. Absolute Advantage D. Comparative Advantage E. Balance of Payments

Discount Rate

An enterprise in which two or more firms or investors (including governments) share ownership of a business and its property rights is called a(n):

Joint Venture

Laws have curtailed smoking, and as a result, the sale of cigarettes is down. Rather than fighting the law, the cigarette industry is looking for ways to take their business beyond cigarettes. Many experts believe that the cigarette producers have found a way around the law with the promotion and distribution of smokeless tobacco, which has shown consistent sales gains over the last decade. In terms of the social responsibility pyramid, at which level is the cigarette industry operating?

Legal

Peter Drucker, a well-known management scholar, has said that companies should be evaluated on two basic dimensions:

Legality and Responsibility

T/F: A strategic alliance is a cooperative agreement between business firms

True

T/F: An organizations first responsibility is to provide a job to employees.

True

T/F: International Trade-dependent jobs have grown at a rate three times the growth of U.S.-dependent jobs.

True

T/F: One of the advantages multinational corporations have over other companies is their ability to sidestep regulatory difficulties.

True

T/F: The international Monetary Fund (IMF) was created to promote trade through financial cooperation by working to eliminate trade barriers.

True

T/F: The tax that the United States imposes on imported carbon steel products is called a tariff.

True

T/F: When congress passes a law to raise individual tax rates, it is creating a fiscal policy

True

Economics is the study of

how society manages its scarce resources

One of the keys to ethical business behavior is:

how the company's top management conducts themselves

contractionary monetary policy

the Federal Reserve's policy of increasing interest rates to reduce inflation

What is the difference between macroeconomics and microeconomics?

Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach. Macroeconomics takes a top-down approach and looks at the economy as a whole, trying to determine its course and nature.

_____ refers to a government's programs for controlling the amount of money in circulation

Monetary Policy

_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.

Multinational Corporation

demand-pull inflation

Occurs when the demand for goods and services is greater than the supply

A strategic alliance is sometimes called a(n)

Strategic partnership

Social Responsibility should extend beyond the shareholders to include:

Suppliers, Employees, Consumers, and Community

The quantity of a product or service that businesses will make available at various prices is called

Supply

The most fundamental reason for the growth in world trade is probably due to:

The need for businesses to expand their markets

Amgen, the largest biotechnology company in the world, donates millions of dollars annually to raise the value of science literacy in the community and attract bright young minds into the field of science. Since Amgen, as an employer would benefit from this philanthropy, it would be characterized as strategic giving. T/F

True

T/F: People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs

True

T/F: When Coca-Cola sends cases of Coke to France and receives sparkling water as payment, a countertrade has taken place.

True

T/F: When a country sells its products in a foreign country at a cheaper price than usual, and sometimes even at a loss, it is dumping products.

True

A company that has a global vision:

recognizes and reacts to international business opportunities

The least costly and least risky method for selling a product on the global market is:

Exporting

_____ are goods and services that are made in one country and sold to other countries.

Exports

A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:

Free Trade

The most basic measure of economic growth is the:

Gross Domestic Product (GDP)

______ are products that are brought from one country for use in another just as the U.S. buys wood pulp and timber from Canada

Import

External Business Environment

Includes all those things over which the organisation has little control.

Which of the following is NOT part of a nation's infrastructure?

It's mountain ranges

A mixed economy is

an economic system combining private and public enterprises

What is a business cycle?

a cycle or series of cycles of economic expansion and contraction.

Capitalism

An economic system based on private ownership of capital

How do businesses adapt to periods of contraction and expansion?

An increase in business activity results in rising output, income, employment, and prices. A decline is called a recession and is followed by recovery period when economic activities increase

A _____ regulation in the United States bans the use of foreign steel in constructing U.S. highways.

Buy-national Regulation

Protectionism

Prohibits tariffs, embargoes, and import quotas

U.S. Steel has established an alcoholic rehabilitation program for the city of Pittsburgh. The company provides the facilities and the personnel to operate the program. U.S. Steel is practicing:

Social Responsibility (doing what's right for the environment around them)

perfect competition

a market structure in which a large number of firms all produce the same product

Monopolistic competition

a market structure in which many companies sell products that are similar but not identical (ie, restaurants)

________ is the quantity of a good or service that people are willing to buy at various prices

Demand curve/Demand

A total prohibition against importing certain products is called a(n):

Embargo