chapter 1: Business activity

Question 1

Business

Answer 1

organization that produces goods and services

Question 2

consumer goods

Answer 2

goods and services to customers

Question 3

producer goods

Answer 3

goods and services produced by one business for another

Question 4

private sector

Answer 4

business organizations owned by individuals or groups of individuals

Question 5

public sector

Answer 5

business organisations owned by central or local governments

Question 6

private enterprise

Answer 6

business ownership by ordinary people, in the private sector

Question 7

public enterprise

Answer 7

a business that is owned by the government in the public sector

Question 8

social enterprise

Answer 8

a business that is set up to help society rather than to make a profit

Question 9

objectives

Answer 9

goals or targets set by a business

Question 10

economies of scale

Answer 10

financial advantages of producing something in very large quantities

Question 11

profit satisfying

Answer 11

making enough profit to satisfy the needs of the business owners

Question 12

profit maximizing

Answer 12

making as much profit as possible in a given time period

Question 13

unincorporated business

Answer 13

no legal distinction between owner and the business

Question 14

corporated business

Answer 14

a business that has a separate legal identity from that of its owners

Question 15

sole trader

Answer 15

business owned and operated by one person

Question 16

partnership

Answer 16

a business owned by two or more people

Question 17

deed of partnership

Answer 17

a binding legal document which states the formal rights of partners

Question 18

franchise

Answer 18

structure in which a business [the franchisor] allows another operator [the franchisee] to trade under their name

Question 19

costumer cooperative

Answer 19

owned and controlled by members

Question 20

worker cooperatives

Answer 20

businesses in which its employees share ownership

Question 21

limited liability

Answer 21

shareholders are legally responsible for the debts of a company according to how many shares they own

Question 22

unlimited liability

Answer 22

owner of a business is personally liable for all business debts

Question 23

prospectus

Answer 23

document produced by a company that wants the public to buy shares.

Question 24

regulatory control

Answer 24

official power to control business activity

Question 25

flotation

Answer 25

the process of a company 'going public'

Question 26

limited company

Answer 26

business organisations that have a separate legal identity from that of their owners [incorporated business]

Question 27

memorandum of association

Answer 27

A document that sets out the constitution and states key details [e.g. name, address] about a limited company

Question 28

articles of association

Answer 28

a document that contains details of how a company is organized [e.g. rights of shareholders]

Question 29

certificate of association

Answer 29

document needed before a new company can start doing business.

Question 30

private limited company

Answer 30

a private company which can only transfer shares privately

Question 31

public limited company

Answer 31

a limited company whose shares are freely sold and traded, with a minimum share capital

Question 32

multi nationals

Answer 32

large business with significant production or service operations in at least two different countries

Question 33

natural monopolies

Answer 33

market where it is more efficient to have just one organisation meeting total market demand

Question 34

public corporations

Answer 34

business organizations owned and controlled by the state/ government

Question 35

privatization

Answer 35

transfer of public sector resources to the private sector [business]

Question 36

primary sector

Answer 36

production involving the extraction of raw materials from the Earth

Question 37

secondary sector

Answer 37

production involving the conversion of raw materials into finished and semi-finished goods

Question 38

tertiary sector

Answer 38

production of services in the economy

Question 39

de- industrilisation

Answer 39

the decline in manufacturing

Question 40

trade bloc

Answer 40

group of countries situated in the same region that join together and enjoy trade free of barriers

Question 41

brownfield sites

Answer 41

areas of land which were once used for urban development

Question 42

greenfield sites

Answer 42

undeveloped land

Question 43

globalization

Answer 43

the growing integration of the world's economies

Question 44

exports

Answer 44

goods and services sold overseas

Question 45

imports

Answer 45

goods and services bought from overseas

Question 46

visible trade

Answer 46

trade in physical goods

Question 47

invisible trade

Answer 47

trade in services

Question 48

balance of trade

Answer 48

difference between visible exports and visible imports

Question 49

exchange rate

Answer 49

value of one currency in terms of another

Question 50

transactions

Answer 50

business deals or actions

Question 51

dumping

Answer 51

where a business sells goods in another country often below cost

Question 52

fiscal policy

Answer 52

using changes in taxation and government expenditure to manage the economy

Question 53

direct tax

Answer 53

charge on income

Question 54

indirect tax

Answer 54

levied on spending

Question 55

multiplier effect

Answer 55

the employees will spend some of the money received by these businesses from the government. boosts demand for all types of businesses.

Question 56

protectionism

Answer 56

use of trade barriers to protect domestic producers

Question 57

trade barriers

Answer 57

measures designed to restrict trade

Question 58

tariffs

Answer 58

taxes on imported goods

Question 59

quota

Answer 59

physical limit on the amount allowed into the country

Question 60

subsidy

Answer 60

financial support given to a domestic producer to help compete with overseas firms

Question 61

administrative barriers

Answer 61

the use of strict health and safety or more environmental regulations and specifications to make importing more awkward

Question 62

interest

Answer 62

the price paid for the use of borrowed money

Question 63

monetary policy

Answer 63

using changes in interest rates and the money supply to manage the economy