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29 Cards in this Set

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Question 1. Define Traditional economic systems

The traditional economic system existed in early societies where people formed communities and produced food and basic goods for a simple life style. Enough was produced to satisfy the needs of all persons. Barter was used to obtain goods and services the community did not produce itself.

Define Planned Economic System.

A planned economy is one in which the government assumes responsibility for economic planning in order to achieve best possible use and distribution of a country's scarce resources. Government therefore influences and control key economic variables such as, savings, investment, imports and exports.

State two advantages of a mixed economy?

1. Government of free to make laws to protect natural resources and its people.


2. There is a more efficient use of resources, therefore a wide variety of goods are available.

State two disadvantages of a mixed economy

1. There is always a need to keep a balance between government and private sector involvement.



2. Conflict may arise between government and private investments and thus result in long delays in the production of goods and services.

Outline three ways in which business can fulfill its role the government

1. A business can contribute to the growth of an economy by providing jobs, increasing trade and providing community needs.



2. A business can contribute to the finances of a government by paying taxes and providing exports



3. A business can contribute to the social services of a country by sponsoring and donating to health, sports, education, infrastructure of communities

Explain one way in which each of the following stakeholders contribute to the success of a business.

1. Business owners


Business owners manage or hire managers to manage their businesses. They are the strategic minds with the vision for the business.


They provide the resources needed for the managers to plan, organize, lead, control and make decisions in the best interest of the business, themselves and other stakeholders of the business. Business owners are responsible for equipping employees with the resources needed to achieve organizational goals.


.They must plan and strategize taking their investment and business environment into consideration when making decisions and setting goals.


Business owners have a responsibility to treat employees fairly.


They must be aware of all laws and regulations that affect the business they are operating and must ensure that they operate within the boundaries created by these laws and regulations.Business owners should provide goods and services of high quality and provide a proper environment for conducting the business.Business owners should provide investors with correct records and financial statements regarding the business.



2. Employees


employees carry out the activities assigned to them by their employers. They are responsible for operating with the best interest of their employers in mind and for doing the duties laid out in their job descriptions so as to contribute to the success of the business.Employees should be loyal to the organization.


Their priority should be to ensure the growth and survival of the business and not the intentional under-mining or sabotaging of the business.Employees are responsible for safe-guarding the assets and reputation of the organization.They are responsible for keeping employers aware of all developments related to the business and for communicating their needs. They often are directly involved with the customers and are expected to treat them properly and fairly. This will motivate customers to return to do further business.

Question 2. Define teamwork

Teamwork is when a group of two or more people Interact regularly and coordinate their work to accomplish a common objective

State two advantages of teamwork.

1. Quantity and quality of work will improve as a result of many employees working together effectively.



2. Group interaction and participation will motivate each member.

State two disadvantages of teamwork.

1. More time is needed to make decisions and solve problems because more persons are participating in the process.



2. The cost of training the team members to work as a team might be high.

Outline two examples that show how teamwork is used at the school or in a workplace

1. Teamwork can be shown in a school among students by assigning students in a project/ class assignment to work together or participate in a sport or game such as football, chest or dance where members of the group has to work together to get a task done or achieve a goal.



2. Teamwork can be shown in the workplace amongst staff by holding staff meetings where persons of staff can give their input in meetings and discuss problems related to business or business goals

List four important elements in the communication process

1. Sender.


2. Receiver.


3.ideas.


4. Communication channel.

Using an example of state one strategy for effective communication between each of the following groups (3 marks each)

1. Teachers and students



Classroom meetings with students to discuss upcoming events allowing students to ask questions and make suggestions. Example, meeting to plan booth for school annual fundraiser.




2. Teachers and parents



Parent-teacher meetings to inform of school rules and schedules. Example, yearly parent meetings at start of school year

Question 3. Define an Entrepreneur.

An Entrepreneur is a person who identifies successful business opportunities, risks time and money to start and operate a business and brings together resources with intention of generating wealth.

State 2 advantages of being an entrepreneur

1. flexibility. entrepreneurs can schedule their work around other commitments, including spending quality time with family.



2. Rational salary


As an entrepreneur your income is directly related to the efforts and success of your business.

State two disadvantages of being an entrepreneur

1 competition . staying competitive is critical as a small business owner.



2. Administration . while making all the decisions can be a benefit, it can sometimes be a burden.

Identify four characteristics of an entrepreneur

1. Goal oriented


2. Creative


3. Risk taker


4. Flexible

Identify two problems faced by entrepreneurs

1. Failed product line


2. Financing

Identify one way in which one problem identified previously may be resolved

Problem: failed product line.



Solution: an entrepreneur can avoid failed product lines by trying to adopt new product lines gradually rather than all at once

Explain two ways in which entrepreneurship benefits one economy

1. employment - an entrepreneur by setting up various businesses and establishment generates


employment in the economy. People need jobs to sustain human life and to provide for themselves and some for their family.



2. Diversity in products and services . an interpreter can provide various types of goods and services to the consumer. The latter has much to choose from. Also personal desires are met if there are products and services to choose from.

Question 5. List three services offered by commercial banks

.Offers varied Deposit options.



. Offers advisory services.



. Offers bank overdraft.


List three services offered by central banks

. Banker to the government.



. Banker to commercial banks.



. Issues notes and coins to commercial banks.

Differentiate between a current account and an ordinary savings account

A savings account is a interest-bearing account with certain limitations, whereas a current account is a "general use" account in which you can write checks use atms, debit cards and have unlimited transactions.

Outline two ways in which technology has influenced banking and commerce

1. The location of ATM machines in malls and supermarkets adds to the convenience of customers who can transact business without having to wait in line at a bank



2. another influence of technology is the practice of on-line banking which enables customers to access their accounts from home using personal computers. This facility enables customers to check their balances from the comfort of their homes and permits easy and convenient payment of bills.

Explain two ways in which central banks regulates the activities of commercial bank.

1. The central bank demands special deposit from the commercial banks. These are for fixed time periods.



2. Sets the cash reserve ratio. The central bank determines how much money does commercial banks will have to lend.

Question 6.. State 2 differences between direct taxes and indirect taxes

1. Direct taxes are based upon a person's income and wealth whereas indirect taxes are based upon a person's consumption of goods and services



2. Direct tax is progressive in nature but indirect taxes is regressive in nature

This one example of direct taxes on indirect taxes

Direct Taxes - land tax, income tax.


Indirect tax - VAT

Outline three reasons why government charge taxes.

1. To generate government revenue to fund government services or goods.


2. To control money spending


3. To reduce the occurrence of alcohol impaired driving by taxing alcohol, drugs and tobacco


4 To curb inflation by reducing the supply of money in the economy .

Identify two sources of government revenue other than Taxes

Fines, penalties and fees


Investments


Royalties

Explain why the high income earners paid more than the lower income earners under each of the following forms of taxation : proportional and progressive.

Proportional. Income earners of a higher income brackets are required to pay a higher rate of tax because the tax rate stays constant under proportional taxation terms, despite the the level of income.



Progressive. Income earners of a higher bracket are required to pay a higher level of tax as the tax rate of one's income increases, as the income increases of that individual.