Key Economic & Business Terms: Definitions & Concepts
Economic & Business Terms: Definitions
Economic Community
An economic community is an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies.
Economic Model of Social Responsibility
The economic model of social responsibility is the view that society will benefit most when business is left alone to produce and market profitable products that society needs.
Embargo
An embargo is a complete halt to trading with a particular nation or in a particular product.
Entrepreneur
An entrepreneur is a person who risks time, effort, and money to start and operate a business.
Equal Employment Opportunity Commission (EEOC)
The Equal Employment Opportunity Commission (EEOC) is a government agency with the power to investigate complaints of employment discrimination and the power to sue firms that practice it.
Ethics
Ethics is the study of right and wrong and of the morality of the choices individuals make.
Exporting
Exporting involves selling and shipping raw materials or products to other nations.
Export-Import Bank of the United States
The Export-Import Bank of the United States is an independent agency of the US government whose function is to assist in financing the exports of American firms.
Factors of Production
Factors of production are resources used to produce goods and services.
Factory System
The factory system is a system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place.
Federal Deficit
A federal deficit is a shortfall created when the federal government spends more in a fiscal year than it receives.
Foreign-Exchange Control
Foreign-exchange control is a restriction of the amount of a particular foreign currency that can be purchased or sold.
Free Enterprise
Free Enterprise is a system of business in which individuals are free to decide what to produce, how to produce, and at what price to sell it.
General Agreement on Tariffs and Trade (GATT)
The General Agreement on Tariffs and Trade (GATT) was an international organization of 158 nations dedicated to reducing or eliminating tariffs and other barriers to world trade.
Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is the total dollar value of all goods and services produced by all people within the boundaries of a country during a one-year period.
Hard-Core Unemployed
The hard-core unemployed are workers with little education or vocational training and a long history of unemployment.
Import Duty (Tariff)
An import duty (tariff) is a tax levied on a particular foreign product entering a country.
Importing
Importing involves purchasing raw materials or products in other nations and bringing them into one’s own country.
Import Quota
An import quota is a limit on the amount of a particular good that may be imported into a country during a given period of time.
Inflation
Inflation is a general rise in the level of prices.
International Business
International business encompasses all business activities that involve exchanges across national boundaries.
International Monetary Fund (IMF)
The International Monetary Fund (IMF) is an international bank with 188 member nations that makes short-term loans to developing countries experiencing balance-of-payment deficits.
Invisible Hand
The invisible hand is a term created by Adam Smith to describe how an individual’s personal gain benefits others and a nation’s economy.
Letter of Credit
A letter of credit is issued by a bank on request of an importer stating that the bank will pay an amount of $ to a stated beneficiary.
Licensing
Licensing is a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation.