BSAD 101 Test 1

Partnership

A business in which two or more persons combine their assets and skills

Sole Proprietorship

A business owned by one person

Corporation

A business owned by stockholders who share in its profits but are not personally responsible for its debts

Inflation

A general and progressive increase in prices

trading bloc

A group of neighboring countries that promote trade with each other and erect barriers to limit trade with other blocs

strategic alliance

A long-term partnership between two or more companies established to help each company build competitive market advantages. less formal than partnership.

Monopoly

A market in which there are many buyers but only one seller.

Consumerism

A social movement that focuses on four key consumer rights: (1) the right to be safe, (2) the right to be informed, (3) the right to choose, and (4) the right to be heard.

Hyperinflation

A very rapid rise in the price level; an extremely high rate of inflation.

NAFTA (North American Free Trade Agreement)

Allows open trade between the US, Mexico, and Canada.

foreign outsourcing

Contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production.

sustainable development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

6 dimensions of business environment

Economic, competitive, workforce, technological, social, global.

PPI (Producer Price Index)

Evaluates the change over time in the weighted-average wholesale prices

disadvantages of C Corporations

Expense and complexity of formation and operation Complications when operating in more than one state Double taxation of earnings and additional taxes More paperwork, more regulation, and less secrecy Possible conflicts of interest

direct investment

Firms acquire foreign firms or develop new facilities from ground up in foreign countries

Oligopoly Competition

Handful of competitors selling products that can be similar or different

M2 money supply

Includes all of M1 money supply plus most savings accounts, money market accounts, and certificates of deposit.

4 factors of production

Natural resources, capital, human resources, entrepreneurship

limited liability

Owners are not personally liable for claims against their firm and their personal assets are protected.

Relationship era

TODAY, long-term relationship with customers

discount rate

The interest rate on the loans that the Fed makes to banks

C Corporation

The most common type of corporation, which is a legal business entity that offers limited liability to all of its owners, who are called stockholders

active voice

The subject of the sentence performs the action

passive voice

The subject of the sentence receives the action. taxes were done by jim.

Business Ethics

The use of ethics in making business decisions

Career choices are affected by broader economy and business skills.

True

General Agreement on Tariffs and Trade (GATT)

a 1948 agreement that established an international forum for negotiating lower tariffs and promote free trade

balance of trade

a basic measure of the difference in value between a nation's exports and imports, including both goods and services

nonprofit corporation

a corporation that does not seek to earn a profit and differs in several fundamental respects from C corporations

statutory close corporation

a corporation with a limited number of owners that operates under simpler, less formal rules than a C corporation

ethical dilemma

a decision that involves a conflict of values; every potential course of action has some significant negative consequences

Limited Liability Company (LLC)

a form of business ownership that offers both limited liability to its owners and flexible tax treatment

S corporation

a form of corporation that avoids double taxation by having its income taxed as if it were a partnership

limited liability partnership

a form of partnership in which all partners have the right to participate in management and have limited liability for company debts

code of ethics

a formal statement of ethical principles and rules of conduct

Common Market

a group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations

monopolistic competition

a market structure in which many companies sell different products.

WTO (World Trade Organization)

a permanent global institution to promote international trade and to settle international trade disputes

Disinflation

a reduction in the rate of inflation

social audit

a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs

corporate philanthropy

all business donations to nonprofit groups, including money, products, and employee time

whisteblower

an employee who exposes unethical or illegal conduct to federal government

International Monetary Fund (IMF)

an international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation

GATT (General Agreement on Tariffs and Trade)

an international trade treaty designed to encourage worldwide trade among its members

Embargo

an official ban on trade or other commercial activity with a particular country.

institutional investor

an organization that pools contributions from investors, clients, or depositors and uses these funds to buy stocks and other securities

Stakeholders

any groups that have a stake - or a personal interest - in the performance and actions of an organization

natural monopoly

arises when a single supplier is more efficient than multiple

corporate responsibility

business contributions to the community through the actions of the business itself rather than donations of money and time

CPI (Consumer Price Index)

change in weighted-average price of goods that an average consumer buys per month

American Recovery and Reinvestment Act

cut taxes, build infrastructure, invest in green energy

Economy

financial and social system of how resources flow

limited partnership

form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business

2008

high risk subprime mortgage loans granted to borrowers with low credit scores. first sign of slowing economic growth, manufacturing get large orders ahead of time, fall in consumer demand.

trade surplus

imports is higher than exports

Business

improves standard of living of people, contributes to higher quality of life, contributes to society via innovation

M1 money supply

includes all currency plus checking accounts and traveler's checks

Fiscal Policy

influence economy through taxation and spending...1) encourage growth, boost employment, curb inflation, debt ceiling, seeks to decrease budget deficit

monetary policy

influence interest rates and supply of money, bailing out shaky firms during crisis,

Federal Reserve

influence size of money supply

Free trade

international trade free of government interference

Countertrade

international trade that involves the barter of products for products rather than for currency

Marketing era

late 1940s, bus. began to develop brands to help consumers understand diff. products, cornflakes, toaster, frozen food

cyclical unemployment

layoffs during recessions

voluntary export restraint

limitations on the amount of specific products that one nation will export to another nation

Advantages of C Corporations

limited liability, permanence, ease of transfer of ownership, ability to raise large amounts of financial capital, ability to make use of specialized management

Sarbanes-Oxley Act of 2002

mandates financial disclosure to prevent accounting fraud, example enron

green marketing

marketing efforts to produce, promote, and reclaim environmentally sensitive products

cause-related marketing

marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit

Protectionism

national policies designed to restrict international trade, usually with the goal of protecting domestic businesses

deflation

people dont have money to spend, demand followed by prices

Recession

period of economic decline identified by a fall in GDP in two successive quarters

Bias

preconception about members of particular group.

Speed-to-market

rate at which new product moves from conception to commericialization

carbon footprint

refers to the amount of harmful greenhouse gases that a firm emits throughout its operations, both directly and indirectly

Fundamental rights of capitalism

right to own business and keep after-tax profits, private property, free choice, fair competition

reserve requirement

rules set by fed. reserve, specifies amount of cash reserves a bank is required, 10%

trade deficit

shortfall that occurs when the total value of a nation's imports is higher than the total value of its exports

structural unemployment

skills are no longer relevant

foreign franchising

specialized type of foreign licensing where firm expands by offering businesses in other countries the right to produce and market its products according the specific operating requirements

2000 economic crisis

stock market dropped, unempl. inc, 1995-2000, investors pumped money into internet start-ups,

Economics

study of choices made by people, companies, to allocate resources

Depression

sustained long term economic decline, large increases in unemployment, fall in credit availability, shrinking buyer, bankrupticies

corporate bylaws

the basic rules governing how a corporation is organized and how it conducts its business

comparative advantage

the benefit a country has in a given industry if it can make products at a lower opportunity cost than other countries

absolute advantage

the benefit a country has in a given industry when it can produce more of a product than other nations using the same amount of resources

pure competition

the market structure that exists when there are many small businesses selling one standardized product. sole producer cannot control market price

unemployment rate

the percentage of the labor force that over 16, seeking jobs.

open market operations

the purchase and sale of U.S. government bonds by the Fed

planned obsolescence

the strategy of deliberately designing products to fail in order to shorten the time between purchases

GDP

total value of goods produced provided in a country in one year

universal ethical standards

trustworthiness, respect, responsibility, fairness, caring, citizenship

frictional unemployment

unemployment that occurs when people take time to find a job

dynamic delivery

vibrant, compelling presentation delivery style that grabs and holds the attention of the audience

joint venture

when two or more companies join forces, share resources, risks, and profits

Industrial Revolution

1700s-1800s, technological advances fueled rapid industrialization- gas light, bike

Entrepreneurship Era

1800s, large scale entrepreneurs emerged, building business, steel, railorad, light bulb, soda

Production Era

1900s, businesses refined production process and created efficiency, car, antibiotics

Troubled Asset Relief Program (TARP)

A 2008 Federal government program that authorized the U.S. Treasury to loan up to $700 billion to banks and auto industry.