Business 110 Exam 1
Code of ethics
A formal, written document that defines the ethical standard of an organization and gives employees the information they need to make ethical decisions across a range of situations
Monopoly
A market structure with one producer completely dominating the industry, leaving no room for any significant competitors; barriers to entry tend to be virtually insurmountable
Oligopoly
A market structure with only a handful of competitors selling products the can be similar or different; barriers to entry are typically high
Deflation
A period of falling average prices across the economy
Recovery
A period of rising economic growth and employment
Disinflation
A period of slowing average price increases across the economy
Consumerism
A social movement that focuses on four key consumer rights; the right to be safe, to be informed, to choose, and to be heard
Economic System
A structure for allocating limited resources
Social audit
A systematic evaluation of how well a firm is meeting its ethics and social responsibility goals
Corporate philanthropy
All business donations to nonprofit groups, including money, products, and employee time
Communism
An economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government
Recession
An economic downturn marked by a decrease in the GDP for two consecutive quarters
Socialism
An economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare
Capitalism
An economic system--also known as the private enterprise or free market system--based on private ownership, economic freedom, and fair competition
World Bank
An international cooperative of 188 member countries, working together to reduce poverty in the developing world
Stakeholders
Any groups that have a stake--or personal interest--in the performance and actions of an organization
Foreign franchising
Authority granted by a domestic firm to a foreign firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area
Corporate responsibility
Business contributions to the community through the actions of the business itself rather than donations of money and time
Sustainable development
Doing business to meet the needs of the current generation, without harming the vanity of future generations to meet their needs
Whistle-blower
Employees who report their employer's illegal or unethical behavior to either the authorities or the media
Universal ethical standards
Ethical norms that apply to all people across a broad spectrum of situations
Sarbanes-Oxley Act
Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms; key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements
Countertrade
International trade that involves the barter of products for products rather than for currency
Quotas
Limitations on the amount of specific products that may be imported from certain countries during a given time period
Structural unemployment
Longer term unemployment; encompasses people who don't have jobs because the economy no longer needs their skills
Exchange rate
Measure the value of one nation's currency relative to the currency of other nations
Tariffs
Taxes levied against imports
Federal reserve
The central bank of the United States
Social responsibility
The obligation of a business to contribute to society
Unemployment rate
The percentage of people in the labor force over age 16 who do not have jobs and are actively seeking employment
Equilibrium price
The price associated with the point at which the quantity demanded of a product equals the quantity supplied
Macroeconomics
The study of a country's overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies
Microeconomics
The study of smaller economic units such as individual consumers, families, and individual businesses
Gross Domestic Product (GDP)
The total value of all final goods and services produced within a nation's physical boundaries over a given period of time
Quality control; Social responsibility; policing factories
Three disadvantages to foreign outsourcing
Family; social group; culture
Three factors that influence an individual's ethical choices
Manages US monetary policy Oversees the operation of the 12 federal reserve banks
Two purposes of the Federal Reserve
Frictional unemployment
Unemployment that arrises when you quit your job in order to find a better position that suites you better
Seasonal unemployment
Unemployment that involves job loss related to the time of year
Cyclical unemployment
Unemployment that involves layoffs during recessions
Direct investment
When firms either acquire foreign firms or develop new facilities from the ground up in foreign countries