Flashcards: Fundamentals of Business and Economic Environments — 22 cards

Revenue — definition?

Money earned from sales of goods/services.

Costs — definition?

Expenses incurred in running a business.

Profit — definition?

Revenue minus costs; financial gain.

Factors of Production — five?

Natural resources, labor, capital, entrepreneurship, knowledge.

Standard of Living — measure?

Overall well-being based on goods/services output.

Entrepreneurs — role?

Drive innovation and economic growth.

Business vs Not-for-profit — difference?

Profits for businesses; societal benefit for not-for-profits.

External Environment — sectors?

Economic, political & legal, demographic, social, competitive, global, technological.

Internal Environment — control?

Management, employees, culture, resources.

Economic System — types?

Capitalism, socialism, communism, mixed economy.

Macroeconomics — focus?

Overall economy, GDP, inflation, unemployment.

Microeconomics — focus?

Individual agents, markets, supply/demand.

GDP — indicator of?

Economic growth and activity.

Unemployment Types — four?

Frictional, structural, cyclical, seasonal.

Inflation — effect?

Reduces money's purchasing power.

Balance of Payments — records?

All international transactions of a country.

Current Account — includes?

Goods, services, income, unilateral transfers.

Capital Account — tracks?

Financial and real asset flows.

Hedging — purpose?

Reduce investment risk via derivatives.

Forward Contract — characteristic?

Customized, future price agreement OTC.

Futures Contract — characteristic?

Standardized, exchange-traded, daily settlement.

Business Mergers — goal?

Combine companies to increase competitiveness.