Business And Its Environment

Question 1

Privatisation

Answer 1

Is the process of transferring organisations from state ownership to being owned and controlled by individuals and other businesses in the private sector

Question 2

Nationalisation

Answer 2

Is the transfer of a privately owned organisation to the control of the state

Question 3

Innovation

Answer 3

The development of new ideas into new products or new methods of producing products

Question 4

Regulation

Answer 4

Is the enforcement of principles or rules that result from the passing of a law or series of laws

Question 5

Gig economy

Answer 5

Is a labour market in which short term contracts or freelance work are common as opposed to permanent jobs

Question 6

Cartel

Answer 6

Exists when two or more businesses collide to control prices or output thereby limiting competition and increasing profits

Question 7

Merger

Answer 7

Is the combining of two or more firms into a single business, following an agreement by the firms management teams and shareholders

Question 8

Takeover

Answer 8

When a company acquired complete control over another by purchasing more than 50 % of share capital

Question 9

Enterprise

Answer 9

All the skills needed to make new ideas work

Question 10

Infrastructure

Answer 10

Refers to the physical and organisational factors necessary to allow both society and an economy to operate effectively

Question 11

Joint venture

Answer 11

Occurs when businesses collaborate on a project but do not formally join together all of their activities

Question 12

Market failure

Answer 12

Occurs when a market does not work properly and resources are not allocated correctly

Question 13

Macroeconomics

Answer 13

Is the study of the behaviour of a whole economy and the factors that can influence it

Question 14

Microeconomics

Answer 14

Is the study of smaller parts of an economy such as the behaviour and decision making of businesses

Question 15

Economic growth

Answer 15

Is an increase in the value of goods and services produced by a nation’s economy over a period of time

Question 16

Inflation

Answer 16

Is a sustained rise in the general price level and corresponding fall in the value of money

Question 17

Unemployment

Answer 17

Is the number of people who are seeking a job but are unable to resource one

Question 18

Recession

Answer 18

Is characterised by falling levels of demand and declining levels of output and employment over at least six months

Question 19

Slump

Answer 19

Takes place when production is at its lowest, unemployment is high and there are many business failures

Question 20

Supply side policies

Answer 20

Are a range of measures designed to improve the free operation of markets and therefore the total amount that is produced by an economy

Question 21

Level of economic activity

Answer 21

Refers to the amount of spending and production in an economy, governments generally aim to have smooth increases in level of economy over time

Question 22

Consumer price index

Answer 22

Measures the rate of inflation based on the changes in prices of a basket of goods and services

Question 23

Cost push inflation

Answer 23

Happens when firms face increasing costs due to rising wages or increasing costs of raw material

Question 24

Demand pull inflation

Answer 24

Occurs when the demand for country’s goods and services exceeds its ability to supply these products

Question 25

Structural unemployment

Answer 25

Occurs due to fundamental changes in the economy whereby some industries reach the end of their lives