chapter 1 Flashcards
goods VS services
Goods = tangible products such as computers, food, clothing, cars, and appliances
Services = tangible products such as computers, food, clothing, cars, and appliances
whats An entrepreneur
A person who risks time and money to start and manage a business.
what is Revenue? period.
the total amount of money received during a given period for goods sold and services rendered and from other financial sources.
what is Profit
the amount of money a business earns above and beyond what it spends on salaries and other expenses.
loss
occurs when a business’s expenses are more than its revenues
*Most business failures are due to poor management or problems associated with cash flow.
what is Risk (COL)
refers to the chance of loss, the degree of probability of loss, and the amount of possible loss.
what is The standard of living
refers to the amount of goods and services people can buy with the money they have.
what is Quality Of Life (PF,NE,E,H,C,S)
General well-being of a society based on political freedom, natural environment, education, health care, and safety.
who is Onex
The largest private employer in Canada is Onex, an investment manager with its headquarters in Toronto. In 2019, they were listed in the Fortune Global 500 as having employed at least 217,000 people.
- A country’s businesses are part of an economic system that contributes to the standard of living and quality of life for everyone in the country.
Stakeholders
are all of the people who stand to gain or lose from the policies and activities of a business
A stakeholder is a person, group or organization with a vested interest, or stake, in the decision-making and activities of a business, organization or project.
Stakeholders can be members of the organization they have a stake in, or they can have no official affiliation.
Primary stakeholders
those who without their participation the business would not exist. E.x rogers to maple leaves.
Media stakeholders: Two telecommunications conglomerates, Bell and Rogers, paid CAD$1.32 billion to acquire a 75 percent share of Maple Leaf Sports & Entertainment.
Secondary stakeholders:
Those whose influence is not essential to the survival of a business. E.x stockholders.
Offshoring
sourcing part of the purchased inputs outside of the country
Ex.car parts are being made in other countries.
- Interest in offshoring arises because it may signify changes in international trading
Outsourcing
means contracting with other companies to do some or all of the functions of a firm, such as production or accounting
E.x child labor.
- Interest in outsourcing arises because it may foretell changes in industrial structure.
Insourcing
the initiative to return jobs to companies exist in various industries, such as the automotive sector, where Ford Motor Company advanced workers to higher pay scales and as a result, hired more entry-level employees.
Business Principals in Non-Profit Organizations:
Seek economic gains because revenue is needed to operate, but such gains are used to meet their social or educational goals rather than for personal or shareholder profit.
Social entrepreneurs:
people who use business principles to start and manage non-profit organizations and help address social issues.
who is Muhammad Yunus
won the Nobel Prize for starting the Grameen Bank, a microlending organization that provides small loans to entrepreneurs too poor to qualify for traditional loans.
Social Enterprises:
Ventures established by social entrepreneurs and which act as vehicles for addressing social and/or environmental needs
*Non-profit organizations in Canada contribute to 189 billion in GDP (gross domestic product.
Entrepreneurship Vs Working For Someone Else.
Entrepreneurs: assume entrepreneurial risk, do not receive benefits such as vacation pay and time off.
Working for someone: else means you avoid facing the entrepreneurial risk and you can get benefits.
E.x Ron Joyce, an investor in Time Hortons, Wendys, and Burger King, he franchised Time Hortons.
Creation Of wealth - Factors of production
(LL-CEK)
Land (or natural resources):
Land and other natural resources are used to make homes, cars, and other products.
Labour (workers):
People have always been an important resource in producing goods and services, but many people are now being replaced by technology.
Capital:
This includes machines, tools, buildings, or whatever else is used in the production of goods. It does not include money. Money is used to buy factors of production but is not always considered to be a factor by itself.
Entrepreneurship.
All the resources in the world have little value unless entrepreneurs are willing to take the risk of starting businesses to use those resources.
Knowledge:
Of what needs to be produced and responding to desired goods. This is the most important factor despite being dismayed in the conversation for many years.
Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
The goal of government law and regulation of business is to maintain the integrity and stability of business, thereby protecting the employees’s rights, environment and hold corporations accountable for the amount of power they have excercised in a business-driven society.
In reality, Businesses due to their profit making attitude do need some amount of control otherwise tend to get out of hand because of their new found freedom and their future actions affect the industry as a whole. Their attitude towards customer changes specially the ones who cannot pay more to purchase their products. Their arrogancy towards the less priviledged is a cause of concern because these businesses in absence of any control from state put their profit motives first before any social and environmental concerns. This attitude largely affects quality of the products too as the government is only supposed to act when a specific complain is received. Taking advantage of such situations, a low quality product may be passed off to customers at a low price, specially the under priviledged ones who are forced to buy because of their inability to pay a higher price.
Describe how the Bank of Canada influences monetary policy.
During the outbreak of Covid-19 pandemic, Canadian central government adopt many monetary policy instruments to stimulate liquidity in the economy. * Change overnight interest rate. One day changes in bank’ s interest rate does not have affect on borrowing cost of consumers and businesses. But a sudden change in overnight interest rate can affect the borrowing cost of consumers a d businesses. In order to curb the crisis, on March 2020, bank lowered interest rate to 0.25%. but it has no much impact in spending in the economy. Nowadays, many countries followed a zero level of interest rate but it creates distortion among financial institutions. Open market operations. Another important monetary policy instruments used by the Canadian govt is the open market operations. Canadian govt buy different types securities like corporate bonds, banker’s acceptance, Canada mortgage bonds etc in order to inject liquidity into the economy. When govt buying security in exchange for money, then, money supply will increase. Fall in reserve requirements is the another instrument used by the Canadian govt. They adopt quantitative easing method. It necessitate the banks to buy at least $5 billion of Canadian bond. Buying of govt bonds helps in lowering borrowing cost for a long period. This will turn investment to increase. Hence, in aggregate demand and income in the economy.
6 elements of the business environment (LETCGS)
It comprises of forces that provide opportunities, but at the same time also pose threats to company. Six components of macro environment are
Legal Environment
Economic environment
Technological environment:
Competitive environment
Social environment
Global environment:
