Key Business & Economic Terms: Absolute to Economy
Key Business and Economic Terms
A
Absolute Advantage: Ability to produce a specific product more efficiently than any other nation.
Affirmative Action Program: Plan designed to increase the number of minority employees at all levels within an organization.
B
Balance of Payments: Total flow of $ into a country – total flow of $ out of that country over some period of time.
Balance of Trade: Total value of a nation’s exports – total value of its imports over some period of time.
Barter: System of exchange in which goods or services are traded directly for other goods and services without using $.
Bill of Lading: Document issued by a transport carrier to an exporter to prove that merchandise has been shipped.
Business: The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs.
Business Cycle: Recurrence of periods of growth & recession in a nation’s economic activity.
Business Ethics: Application of moral standards to business situations.
C
Capitalism: Economic system in which individuals own and operate the majority of businesses that provides goods and services.
Caveat Emptor: Latin phrase “let the buyer beware.”
Code of Ethics: Guide to acceptable and ethical behavior as defined by the organization.
Command Economy: Economic system in which the government decides what goods & services will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production.
Comparative Advantage: Ability to produce a specific product more efficiently than any other product.
Competition: Rivalry among businesses for sales to potential consumers.
Consumerism: All activities undertaken to protect the rights of consumers.
Consumer Price Index: Monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area.
Consumer Products: Relatively inexpensive, frequently purchased items for which buyers want to exert only minimal effort.
Countertrade: An international barter transaction.
Cultural Diversity: Differences among people in the workforce owing to race, ethnicity, and gender.
Currency Devaluation: The reduction of the value of a nation’s currency relative to the currencies of other countries.
D
Deflation: General decrease in level of prices.
Demand: The quantity of a product that buyers are willing to purchase at each of various prices.
Depression: A severe recession that lasts longer than a typical recession and has a larger decline in business activity when compared to a recession.
Domestic System: Method of manufacturing in which an entrepreneur distributes raw materials to various homes, where families process them into finished goods to be offered for sale by the merchant entrepreneur.
Draft: Issued by the exporter’s bank, ordering the importer’s bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer’s bank.
Dumping: Exportation of large quantities of a product at a price lower than that of the same product in the home market.
E
Economics: The study of how wealth is created and distributed.
Economy: The way in which people deal with the creation and distribution of wealth.