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Management tools and principles > Chapter 2 > Flashcards

Chapter 2 Flashcards

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1
Q

Economy

A

Total of all economic activity in a given region

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2
Q

Economics

A

Study of how a society uses its scarce resources to produce and distribute goods and services

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3
Q

Microeconomics

A

Study of how individual actors make choices in response to changes in incentives, prices resources or methods of production

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4
Q

Macroeconomics

A

Branch of economics that studies how overall economy behaves

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5
Q

Factors of production

A

Economic resources, including natural resources, HR, capital, entrepreneurship and knowledge

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6
Q

Scarcity

A

Productive resource that has a limited supply

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7
Q

Trade-off

A

The more time you spend on an activity means less time for any other

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8
Q

Opportunity cost

A

Value of the most appealing alternative

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9
Q

Economic indicators

A

Statistics that measure the performance of the economy (GDP, Unemployment rate)

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10
Q

Durable-goods

A

Goods that typically last more than 3 years

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11
Q

Price indexes

A

A way to monitor the inflation or deflation

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12
Q

CPI

A

Statistic that measures changes in prices in goods and services people typically buy overtime

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13
Q

PPI

A

Statistical measure of price trends at the producer levels

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14
Q

GDP

A

The value of all goods and services produced by businesses located within the nation’s boarders, usually in a year

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15
Q

GNP

A

The value of all goods and services produced by country’s residents no matter where they live, usually in a year

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16
Q

Economic system

A

Policies that define a society’s particular economic structure

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17
Q

Planned system

A

Economic system in which the government controls most of the factors of production

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18
Q

Free-market system

A

Economic system in which decisions about factors of production are decided by the market’s buyers and sellers

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19
Q

Capitalism

A

Economic system based of economic freedom and competition

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20
Q

Regulation

A

Relying more on laws and policies than on market forces to govern economic activity

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21
Q

Deregulation

A

Removing regulations to allow the market to prevent excesses and correct itself overtime

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22
Q

4 major areas in which the government plays a role

A

Protecting stakeholders, Fostering competition, Encouraging innovation and economic development, Stabilizing and stimulating the economy

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23
Q

Monetary policy

A

Applied by the Fed, involves the control of money supply and interest rates to influence the economy

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24
Q

Fiscal policy

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A

Use of government revenue and spending to influence the business cycle

25
Antitrust legislation
Limit what businesses can and cannot do, to ensure that competitors have an equal chance
26
Divesting
Selling some parts of the company or making other concessions
27
Demand
Quantity that consumers are willing and able to buy at a given time for various prices
28
Supply
Quantity that producers are willing and able to provide at a given time at various prices
29
Demand curve
Graph that shows the quantity of a product that buyers will purchase at a given time at various prices
30
Supply curve
Graph that shows the quantity of a product that producers are willing to provide at a given time at various prices
31
Equilibrium price
The point at which quantity demanded equals quantity supplied
32
Competition
Rivalry among businesses for the same customers
33
Monopoly
A dominant company in a market to the degree it can control prices and shut out other competitors
33
Pure competition
Multiple suppliers of whom none is dominant enough to control prices
33
Oligopoly
A market situation in which a small number of suppliers provide particular goods and services and cn influence each other though production and pricing
34
Monopolistic competition
Situation in which many sellers offer differentiated products and new suppliers can enter the market
35
Recession
Period during which national income, employment and production all fall, often defined at least two quarters of decline in the GDP
36
Business cycle
Fluctuations in the rate of growth that an economy experiences over a period of several years
37
Unemployment rate
Percentage of the labor force currently without a job
38
The 4 types of unemployment
Frictional, Seasonal, Structural, Cyclical
39
Inflation
Steady rise in the average prices of g/s
40
Deflation
Steady fall in the average prices of g/s
41
Money
Anything generally accepted as a means of paying for g/s, serves as a medium of exchange, unit of accounting, store of value and standard of deferred payment
42
Fiat money
Official currencies issued through the government fiat (U.S. dollar, Euro)
43
Cryptocurrency
Currency represented by digital tokens
44
Non-fungible tokens (NFTs)
Digital certificates that convey sole ownership of a digital asset, cannot be replaced by something else unlike crypto
45
Money supply
The amount of money in circulation at any given time
46
M1
Cash held by the public and money deposited in a variety of checking accounts
47
M2
M1+ saving accounts
48
Federal Reserve system
Central banking system in the U.S. responsible for banks and implementing monetary policy, maximizing employment, keeping prices stable and keeping inflation under control
49
Fed funds rate
Interest rate that member banks charge each other to borrow money overnight from the funds they keep in the Fed accounts
50
Discount rate
Interest rate that member banks pay when they borrow funds from the Fed
51
Prime rate
Interest rate a bank charges its best loan customers
52
Investment banks
Firms that offer a variety of services related to initial public stock offerings, mergers and acquisitions etc..
53
Commercial banks
Banks that accept deposits, offer various checking and saving accounts and provide loads. Rather applied to serve businesses only, not customers
54
Retal bank
Banks that serve customers with checking and saving accounts, debit and credit cards and loans for home, cars etc...
55
Fintech
Technologies with potential to improve of disrupt the financial services
56
What 5 major fields does fintech explore?
Making financial services more inclusive Improving the efficiency of financial activities Strengthening the security of financial systems Improving the customer experience in financial services Enhancing financial decision-making
57
Neobanks
Banks that provide services entirely through mobile and digital channels

Management tools and principles (16 decks)

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