KEY TERMS TEST 1

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jillmwashington
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259748
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KEY TERMS TEST 1
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2014-02-02 21:38:19
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KEY TERMS TEST BUS101 JOURNAL
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KEY TERMS FOR BUS 101 TEST 1 CHAPTERS 1-4
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  1. Businesses
    organizations that provide goods or services that are then sold to earn profits.
  2. Profits
    the difference between a business’s revenues and its expenses. Rewards owners get for risking their money and time.
  3. External environment
    everything outside an organization’s boundaries that may affect it.
  4. Political-Legal Environment
    reflects the relationship between business and government, usually in the form of government regulation of business. It is important for several reasons.
  5. Economic System
    a nation’s system for allocating its resources among its citizens, both individuals and organizations.
  6. Capital (obtaining and using labor and other
    resources requires capital)
    the financial resources/funds needed to operate a business enterprise.
  7. Planned Economy
    economy that relies on a centralized government to control all or most factors of production and allocation decisions.
  8. Market Economy
    rely on capitalism and free enterprise to create an environment in which producers and consumers are free to sell and buy what they choose within certain limits. As a result, items produced and prices paid are largely determined by supply and demand. The underlying premise of a market economy is to create shared value - in theory, at least, effective businesses benefit because they earn profits on what they sell while customers also benefit by getting what they want for the best price available.
  9. Demand
    is the willingness and ability of buyers to purchase a product (a good or a service).
  10. Supply
    the willingness and ability of producers to offer a good or service for sale.
  11. Equilibrium Price
    profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.
  12. Oligopoly
    market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products.
  13. Gross Domestic Product (GDP)
    total value of all goods and services produced within a given period by a national economy through domestic factors of production.
  14. Productivity
    a measure of economic growth that compares how much a system produces with the resources needed to produce it.
  15. Balance of Trade
    is the economic value of all the products that it exports minus the economic value of its imported products.
  16. Stability
    condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate.
  17. Inflation
    occurs when an economic system experiences widespread price increases.
  18. Recession
    A period, during which aggregate output, as measured by GDP, declines.
  19. Depression
    a prolonged and deep recession.
  20. Fiscal policy
    policy used by a government regarding how it collects and spends revenue.
  21. Monetary policy
    policy used by a government to control the size of its money supply.
  22. Ethics
    beliefs about what is right and wrong or good and bad in actions that affect others.
  23. Utility
    ability of a product to satisfy a human want or need.
  24. Social Responsibility
    the attempt of a business to balance its commitments to groups and individuals in it environment, including customers, other businesses, employees, investors, and local communities.
  25. Organizational Stakeholders
    those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance.
  26. Suppliers
    they are producers who offers a good or service for sale.
  27. Consumerism
    form of social activism dedicated to protecting the rights of consumers in their dealings with businesses.
  28. Collusion
    illegal agreement between two or more companies to commit a wrongful act.
  29. Whistle-blower
    employee who detects and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them.
  30. Obstructionist Stance
    approach to social responsibility that involves doing as little as possible and may involve attempts to deny or cover up violations.
  31. Defensive Stance
    approach to social responsibility by which a company meets only minimum legal requirements in the commitments to groups and individuals in its social environment.
  32. Accommodative Stance
    approach to social responsibility by which a company,  if specifically asked to do so, exceeds legal minimums in its commitments to groups and individuals in its social environment.
  33. Proactive Stance
    approach to social responsibility by which a company actively seeks opportunities to contribute to the well-being of groups and individuals in its social environment.
  34. Small business
    independently owned business that has relatively little influence in its market.
  35. Services
    products having nonphysical features, such as information, expertise, or an activity that can be purchased.
  36. Business plan
    document in which the entrepreneur summarizes her or his business strategy for the proposed new venture and how that strategy will be implemented.
  37. Franchising
    an arrangement in which a buyer purchases the right to sell the good or service of the seller.
  38. Venture capital
    private funds from wealthy individuals seeking investment opportunities in new growth companies.
  39. Sole Proprietorship
    business owned and usually operated by one person who is responsible for all of its debts.
  40. Partnership
    owned by more than one person.
  41. Cooperatives
    form of ownership in which a group of sole proprietorships and/or partnerships agree to work together for common benefits.
  42. Corporation
    business that is legally considered an entity separate from its owners and is liable for its own debts; owner’s liability extends to the limits of their investments.
  43. Limited Liability Corporation (LLC)
    hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability.
  44. Strategic Alliance
    strategy in which two or more organizations collaborate on a project for mutual gain.
  45. Joint Venture
    strategic alliance in which the collaboration involves joint ownership of the new venture.
  46. Divestiture
    strategy whereby a firm sells one or more of its business units.
  47. Imports
    products made or grown abroad but sold domestically.
  48. Exports
    products made or grown domestically but shipped and sold abroad.
  49. North American Free Trade Agreement (NAFTA)
    agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada, and Mexico.
  50. European Union (EU)
    agreement among major European nations to eliminate or make uniform most trade barriers affecting group members.
  51. Association of Southeast Asian Nations (ASEAN)
    organization for economic, political, social, and cultural cooperation among Southeast Asian nations.
  52. World Trade Organization (WTO)
    organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices.
  53. Balance of trade
    economic value of all products a country exports minus the economic value of all products it imports.
  54. Trade deficit
    situation in which a country’s imports exceed its exports, creating a negative balance of trade.
  55. Trade surplus
    situation in which a country’s exports exceed its imports, creating a positive balance of trade.
  56. Balance of payments
    flow of all money into or out of a country.
  57. Exchange rate
    rate at which the currency of one nation can be exchanged for the currency of another nation.
  58. Absolute Advantage
    the ability to produce something more efficiently than any other country can.
  59. Comparative Advantage
    the ability to produce some products more efficiently than others.
  60. National Competitive Advantage
    international competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries.
  61. Outsourcing
    the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services.
  62. Royalties
    ongoing payments that the exporter receives that are calculated as a percentage of the license holder’s sales.
  63. Quota
    restriction on the number of products of a certain type that can be imported into a country.
  64. Embargo
    government order banning exportation and/or importation of a particular product or all products from a particular country.
  65. Tariff
    tax levied on imported products.

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