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.