Chapter 2 Flashcards
(35 cards)
Productivity
Measure of economic growth that compares how much a system produces with the resources need to produce it.
Research and development (R&D)
Those activities that are necessary to provide new products, services, and processes.
Merger
The union of two companies to form a single new business.
Gross national product (GDP)
Total value of goods and services produced by a national economy within a given period regardless of where the factors of production are located.
Inflation
Occurrence of widespread price increase throughout an economic system
Political – legal environment
Conditions reflecting the relationship between business and government, usually in the form of government regulation.
Balance of trade
The total of a country’s exports (sales to other countries) minus its imports (purchases from other countries).
Deflation
A period of generally falling prices
National debt
The total amount of money that a country owes its creditors
Purchasing power parity
Principle that exchange rates are set so that the price of similar products in different countries are about the same
Real GDP
GDP calculated to account for changes in currency values and price changes
Gross domestic product (GDP)
Total value of all goods and services produced within a given period by a national economy through domestic factors of production.
Budget deficits
The result of the government spending more in one year than it takes in during that year
Outsourcing
Strategy of paying suppliers and distributers to perform certain business processes or to provide needed materials or services
External environment
Everything outside an organizations boundaries that might affect it.
Fiscal policies
Policies whereby governments collect and spend revenues
Consumer price index (CPI)
Measure of the prices of typical products purchased by consumers living in urban areas
Divestiture
Occurs when a company sells parts of its existing business operations to another company
GDP per capita
Gross domestic production per person
Business process management
Approach by which firms move away from department – oriented organization and towards process – oriented team structures that cut across old departmental boundaries
Poison pill
A defence management adopts to make a firm less attractive to an actual or potential hostile suitor in a takeover attempt
Spinoff
Strategy of setting up one or more corporate units as new, independent corporations.
Business cycle
Pattern of short-term ups and downs (expansions and contractions) in an economy
Aggregate output
Total quantity of goods and services produced by an economic system during a given period
