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43 Cards in this Set
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What are the four basic rights that people have under free market capitalism? |
The right to own private property, the right to own a business and keep that business profits, the right to freedom of competition, the right to freedom of choice. |
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How do business people know what to produce and in what quantities? |
Based on the demand |
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What are the four different degrees of competition |
Monopolistic monopolies oligopoly and perfect competition |
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What is economics |
Economics is the study of how society choose to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals. |
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What are the two branches of economics? |
There are two major branches of economics macroeconomics that is the study of operating a nation's economy as a whole and microeconomics studies the behavior of people and organizations in particular markets like why would a person buy a smaller car when gas prices go up. |
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How can we be assured of having enough resources? |
Resource development is the study of how to increase resources and create the conditions that will make better use of them. |
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How does capitalism create a climate for economic growth? |
Under capitalism, business people don't often deliberately set out to help others, they were mostly for their own prosperity and growth. Yet people's effort to improve their own situations in life at like an invisible hand to help the economy grow and prosper through the production of needed goods, services, and ideas. |
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What is capitalism |
Capitalism is an economic system in which all or most of the means of production and distribution are privately owned and operated for profit. |
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Who decides what to produce under capitalism? |
In capitalist countries business people decide what to produce, how much to pay workers, and how much to charge for goods and services. They also decide whether to produce certain goods in their own country, import those goods, or have them made in other countries |
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What is state capitalism |
State capitalism is a combination of freer market and some government control |
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What are the four basic rights people have under capitalism |
Won the right to own private property, to the right to own a business and to keep all of the businesses profit after taxes, 3 the right to freedom of competition, + 4 the right to freedom of choice. President Franklin D Roosevelt felt like there were other important freedoms like the right to freedom of speech and expression and the right to worship in your own way and freedom from want and fear |
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How does the free market work? |
The free market is one in which buyers and sellers negotiating prices for goods and services influence that decisions about what get produced and in what quantities. Buyers decisions in the marketplace tell sellers what to produce and in what quantity. When buyers demand more goods, the price goes up, signaling suppliers to produce more. The higher the price, the more goods and services suppliers are willing to produce. Price is the mechanism that allows free markets to work. |
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What is socialism |
Socialism is an economic system based on the premise that some businesses should be owned by the government. |
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What are the advantages and disadvantages of socialism? |
Socialism intends to create more social equity. Workers in a socialist country or countries usually receive more education, health care, and other benefits and also work fewer hours, with longer vacations. The major disadvantage of socialism is that it lowers the incentive to start a business or to work hard. Socialist economies tend to have a higher unemployment rate and a slower growth rate than capitalist economies. |
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How does socialism different from communism? |
Under communism, the government owns almost all major production facilities and dictates what get produced and by whom. Communism is also more restrictive when it comes to personal freedoms, such as religious freedom. |
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What are the key economic indicators in the United States? |
GDP gross domestic product which is the total value of final goods and services produced in a country in a given year. The unemployment rate which is the percentage of civilians at least 16 years of age who are unemployed and try to find a job within the recent 4 weeks and the CPI which is Consumer Price Index measures changes in the prices of about 400 goods and services that consumers buy. |
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What is Geo gross output? |
Gross output is a measure of total sales volume at all stages of production. |
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What are the four phases of business cycles? |
In an economic boom, business is doing well. Recessions occurs when two or more quarters show declines in the GDP, prices fall people purchase fewer products, and businesses fail. A depression is a severe recession. Recovery occurs when the economy stabilized and starts to grow. |
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What is a fiscal policy? |
Fiscal policy consists of government efforts to keep the economy stable by increasing or decreasing taxes or government spending. |
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What is the importance of monetary policy to the economy? |
Monetary policy is the management of the money supply and interest rates. When unemployment gets too high, the Federal Reserve Bank the Fed may put more money into the economy and lower interest rates. That is supposed to provide a boost to the economy as businesses borrow and spend more money and hire more people. |
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Dumping |
Selling products in a foreign country at lower prices than those charged in the producing country. |
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Why should nations trade with other nations? |
1 no country is self sufficient, to other countries need products that prosperous countries produce, + 3 natural resources and technological skills are not distributed evenly around the world |
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What is the theory of comparative advantage? |
Comparative advantage contends that a country shouldn't make and sell those products it produces most effectively, but buy those it cannot produce as effectively. |
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What is absolute advantage? |
When a country produce a specific product more efficiently or better than any other countries. |
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What kind of products can be imported and exported? |
Though it is not necessarily easy, just about any product can be imported or exported. |
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What terms are important in understanding world trade? |
Exporting is selling products to other countries importing is buying products from other countries. The balance of trade is the relationship of imports to exports. The balance of payments is the balance of trade plus any other money flows such as tourism and foreign aid. Dumping is selling products for less in a foreign country in your own country. |
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What are some ways in which a company can engage in global business? |
Ways of entering World Trade includes licensing, exporting, franchising, contract manufacturing, joint ventures, strategic alliances, and direct foreign investments. |
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How do multinational corporations differ from other companies that participate in global business? |
Unlike companies that only export or import, multi-national corporations have also manufacturing facilities or other physical presence abroad. |
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What are some of the forces that can discourage participation in global business? |
Potential stumbling blocks to global trade includes social cultural forces, economic and financial forces, legal and regulatory forces, and physical and environmental forces. |
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What is trade protectionism? |
Trade protectionism is the use of government regulations to limit the import of goods and services. Advocates believe it allows domestic producers to grow, producing more jobs. The key tools of protectionism are tariffs, import quotas, and embargoes. |
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What are tariffs? |
Tariffs are taxes on foreign products. Protective tariffs raise the price of foreign products and protect domestic industries, revenue tariffs raises money for the government. |
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What is an embargo? |
An embargo prohibits the importing or exporting of certain products. |
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Is trade protectionism good for domestic producers? |
That is debatable. Trade protectionism offers pluses and minuses |
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Why do governments continue such practices? |
The theory of mercantilism started the practice of trade protectionism and it has persisted, though in a weaker form, ever since. |
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What is offshore outsourcing? Why is it a major concern for the future? |
Outsourcing is the purchase of goods and services from outside a firm rather than providing them inside the company. Today, more businesses are outsourcing manufacturing and services offshore. Many fear that growing number of jobs in the United States will be lost due to offshore outsourcing and that the quality of products produced could be inferior. |
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How is legality different from ethics? |
Ethics goes beyond obeying laws to including abiding by moral standards accepted by society. Ethics reflects people's proper relationships with one another. Legality is more limiting semicolon it refers only to laws written to protect people from fraud, theft, and violence. |
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How can we tell if our business decisions are ethical? |
We can put our business decisions through an ethics check by asking 3 questions: 1 is it legal? 2 is it balanced? 3 how will it make me feel |
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What is management role in setting ethical standards |
Managers often set formal ethics standards, but more important are the message they send through their actions. Management's tolerance or intolerance of ethical misconduct influences employees more than any written ethics codes. |
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What's the difference between compliance based and integrity based ethics codes? |
Whereas compliance base ethics codes are concerned with avoiding legal punishment, integrity base ethics codes defines the organization's guiding values, create an environment that supports ethically sound behavior, and stress a sheared accountability among employees. |
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What is CSR corporate social responsibility |
corporate social responsibility is a concern businesses have for society. |
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How do businesses demonstrate corporate responsibility toward stakeholders |
Businesses demonstrate responsibilities to stakeholders by satisfying consumers with goods and services of real value, 2 making money for investors. 3 creating jobs for employees, maintaining job security, and seeing that hard work and talent are fairly rewarded. Number 4 creating new wealth for society, promoting social justice, and contributing to making the businesses own environment a better place. |
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How are a company social responsibility efforts measured? |
a corporate social audit measures and organizations progress toward social responsibility. Some people believe the audit should add together the organization's positive actions and then subtract the negative effects to get a net social benefit. |
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How can US companies influence ethical behaviors and social responsibility in global markets? |
Many u.s. businesses are demanding socially responsible behavior from their international suppliers by making sure there suppliers do not violate us human rights and environmental standards. Companies such as Sears, PBH, and dow chemicals will not import products from companies that do not meet their ethical and social responsibility standards. |
