Unit 2 Flashcards
(132 cards)
1
Q
Describe a mixed economy.
A
A mixed economy, also known as a modified free enterprise system, falls between a market economy and a centrally planned economy, combining government intervention and private enterprise.
2
Q
Define a centrally planned economy.
A
A centrally planned economy, also known as communism or a command economy, is one where the government controls all elements of the economy, including prices, wages, and production, and provides education, health care, employment, and housing to all members of society.
3
Q
How does a market economy function?
A
In a market economy, also known as capitalism or private enterprise, economic decisions are determined by free competition, where businesses, consumers, and government act independently, and market forces and self-interest dictate what goods are created and sold.
4
Q
Identify a key characteristic of a market economy.
A
A key characteristic of a market economy is that corporations and individuals are encouraged to own private property and profit belongs to business owners.
4
Q
Describe the competition in a market economy.
A
In a market economy, companies compete in terms of quality, services, price, reputation, and warranties, which drives innovation and consumer choice.
5
Q
How do autocratic systems differ from democratic systems?
A
Autocratic systems are governed by a single individual or a small group with unlimited power, while democratic systems involve governance by all eligible members of the population through elected representatives.
6
Q
How does a mixed economy function regarding property ownership?
A
In a mixed economy, property is owned by individuals, corporations, or the government.
6
Q
Describe the three fundamental questions that economics considers.
A
Economics considers how goods are produced, what is produced, and for whom goods are produced.
7
Q
Define economics in the context of decision-making.
A
Economics is the study of how people make decisions in a world where wants are unlimited but resources are limited.
8
Q
What characterizes a democracy in terms of governance?
A
A democracy is characterized by governance through elected representatives, free and fair elections, the rule of law, free speech and press, the right to assembly, and freedom of religion.
9
Q
Explain the role of competition in a mixed economy.
A
In a mixed economy, strong competition among corporations is encouraged, while profits are taxed to support government projects and programs.
10
Q
What are some examples of countries with autocratic political systems?
A
Examples of autocratic political systems include China, Cuba, and North Korea.
11
Q
How should resources be allocated when they are limited, according to economic principles?
A
When resources are limited, decisions must be made about whether to build schools, repair highways, or construct recreational centers, among other priorities.
12
Q
Describe the implications of pollution in production processes.
A
Economics considers how much pollution should be allowed when firms produce goods, balancing production needs with environmental concerns.
13
Q
What is a key concern for politicians in a democratic system?
A
In a democratic system, politicians may be more concerned with re-election than with the overall good of the country.
14
Q
Describe a mixed economy and provide an example.
A
A mixed economy is an economic system that combines elements of both capitalism and socialism. An example of a mixed economy is Canada, where both private enterprise and government involvement coexist.
15
Q
Define a traditional economy.
A
A traditional economy is an economic system where traditions and customs govern economic decisions, and activities are often centered around family, tribe, or ethnic groups, with resources allocated based on inheritance.
16
Q
How do resources get allocated in a traditional economy?
A
In a traditional economy, resources are allocated based on inheritance and the customs of previous generations, often through farming, hunting, and gathering.
17
Q
How does demand influence production decisions in a market economy?
A
In a market economy, demand influences production decisions as businesses respond to consumer preferences, adjusting their output to maximize profits based on what is currently in demand.
18
Q
What role does government play in a mixed economy?
A
In a mixed economy, the government may act as a competitor, regulator, or provider of services, balancing the interests of private enterprise with public welfare.
19
Q
How does a centrally planned economy operate?
A
In a centrally planned economy, property ownership is restricted, all profits belong to the government, all workers are employed by the government, and the government determines price, quality, style, and amount of goods and services.
20
Q
Define a market economy.
A
A market economy is an economic system where business owners make most economic decisions based on market conditions, without government intervention, as long as they follow fair trade policies.
21
Q
What are some characteristics of a mixed economy?
A
A mixed economy combines elements of both market and centrally planned economies, allowing for some government intervention while also enabling private ownership and market-driven decisions.
21
Q
Explain the relationship between economic systems and political systems.
A
The economic system of a country is closely linked with its political system, which can be based on various forms such as religion, monarchy, aristocracy, democracy, or autocracy.
22
What happens to profits in a centrally planned economy?
In a centrally planned economy, all profits belong to the government.
22
Describe the term 'economics'.
Economics is the study of how individuals and societies allocate scarce resources to satisfy their needs and wants.
22
Identify the role of competition in a centrally planned economy.
In a centrally planned economy, competition is limited as the government controls the production and distribution of goods and services.
22
List some types of political systems.
Types of political systems include Theocracy, Monarchy, Aristocracy, Democracy, and Autocracy.
23
How do business owners in a market economy make production decisions?
Business owners in a market economy make production decisions based on market demand and conditions, often timing their releases to maximize profit.
24
Define 'market economy'.
A market economy is an economic system where decisions regarding investment, production, and distribution are based on supply and demand, and prices are determined in a free price system.
25
Explain the concept of 'opportunity cost'.
Opportunity cost refers to the value of the next best alternative that is forgone when making a decision.
26
Assess the impact of economic systems on daily life.
Economic systems affect daily life by influencing job availability, income levels, and the prices of goods and services.
27
Analyze the differences between developed and developing countries.
Developed countries typically have advanced economies, high GDP per capita, and better living standards, while developing countries often face economic challenges and lower living standards.
28
Describe the role of corporations in international policy.
Corporations can influence international and domestic policy through lobbying, advocacy, and by shaping public opinion on economic issues.
29
What is a mixed economy?
A mixed economy is an economic system that incorporates elements of both market and centrally planned economies.
30
Explain the term 'gross domestic product (GDP)'.
Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a country's borders in a specific time period.
31
Define 'absolute advantage'.
Absolute advantage is the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group.
32
Describe the concept of 'lobbying'.
Lobbying is the act of attempting to influence the decisions of government officials, often by special interest groups or corporations.
33
Analyze the business cycle.
The business cycle refers to the fluctuations in economic activity that an economy experiences over time, typically characterized by periods of expansion and contraction.
33
How do political systems influence economic systems?
Political systems influence economic systems by determining the rules and regulations that govern economic activity, including property rights, taxation, and trade policies.
34
Evaluate the advantages of a centrally planned economy.
Advantages of a centrally planned economy include the ability to quickly mobilize resources for large projects and the potential for equitable distribution of wealth.
35
What is the significance of comparative advantage?
Comparative advantage is significant because it explains how countries can benefit from trade by specializing in the production of goods where they have a lower opportunity cost.
36
Describe the characteristics of underdeveloped countries.
Underdeveloped countries often have low GDP per capita, high poverty rates, limited access to education and healthcare, and reliance on agriculture.
37
How do geographic factors influence international business?
Geographic factors influence international business by affecting transportation costs, access to resources, and market accessibility.
38
Assess the impact of Canadian government initiatives on international trade.
Canadian government initiatives can impact international trade by promoting exports, negotiating trade agreements, and implementing tariffs or trade barriers.
39
Describe the business cycle.
The business cycle refers to recurring periods of increased and decreased economic activity, characterized by four stages: recession, trough, expansion, and peak.
40
Define the recession stage of the business cycle.
Recession is defined as two consecutive quarters of GDP decline, during which the economy slows down, consumer purchasing declines, unemployment increases, and businesses may contract or close.
41
What occurs during the trough stage of the business cycle?
During the trough stage, production and unemployment reach their lowest levels, marking the end of the recession and the beginning of a turn towards prosperity.
41
Describe the peak stage of the business cycle.
The peak stage represents the top of the business cycle, where the economy stops expanding and begins to contract.
41
What are the three types of economic indicators related to the business cycle?
The three types of economic indicators are leading, coincident, and lagging indicators.
41
How does the expansion stage affect the economy?
In the expansion stage, the economy begins to grow again, leading to increases in employment, wages, production, and profits.
41
Describe the concept of housing starts in relation to the business cycle.
Housing starts are an example of a lagging indicator, reflecting the number of new residential construction projects that have begun during a specific period.
42
Define leading economic indicators.
Leading economic indicators are metrics that adjust before the economy experiences a change and are used to predict future economic activity.
43
Define lagging indicators in economics.
Lagging indicators are metrics that do not change until after the economy has experienced a change, such as the unemployment rate.
44
Explain the term 'coincident indicators' in the context of the business cycle.
Coincident indicators are economic metrics that move in conjunction with the business cycle, such as international trade.
45
Describe the characteristics of the expansion stage of the business cycle.
During the expansion stage, also known as prosperity, employment, wages, production, and profit expand, with strong investments and the creation of new businesses.
45
What is the significance of the expansion stage in the business cycle?
The expansion stage signifies a period of economic growth where the economic climate is favorable and growth is expected to continue.
46
How is Gross Domestic Product (GDP) defined?
Gross Domestic Product (GDP) is the total value of goods produced and services provided in a country one year.
47
How did the Liberal party's election win relate to the expansion stage of the business cycle?
The Liberal party's unprecedented win on election night can be seen as a reflection of the positive economic conditions associated with the expansion stage.
48
Define the role of a politician during the expansion stage of the business cycle.
A politician during the expansion stage may focus on policies that promote continued economic growth, job creation, and investment.
49
Explain the importance of presenting the business cycle in a group task.
Presenting the business cycle in a group task helps to organize and communicate the various stages effectively, enhancing understanding among peers.
50
How can visual representation enhance the understanding of the business cycle stages?
Visual representation, such as pictures of relevant people or businesses, can help illustrate and contextualize each stage of the business cycle, making it more relatable.
51
Define the Business Cycle.
The Business Cycle refers to the fluctuations in economic activity that an economy experiences over a period of time, typically consisting of expansion, peak, contraction, and trough.
52
What is the Global Business Cycle Map?
The Global Business Cycle Map is a resource that provides insights into the economic cycles of different countries, useful for understanding global economic trends.
53
How does NAFTA protect intellectual property?
NAFTA provides protection for intellectual property through patents, trademarks, and other legal mechanisms to ensure that creators and inventors are safeguarded.
54
How does NAFTA facilitate easier travel for business?
NAFTA allows for easier travel across the continent for business travelers, streamlining the process and reducing barriers.
54
Describe the role of tax treaties in international business.
Tax treaties prevent double taxation and tax evasion, determining how much tax each country can collect, thus making international business more predictable.
54
What are the advantages of NAFTA for job creation in Canada?
NAFTA has contributed to the creation of higher paying jobs in sectors such as education, engineering, and banking in Canada.
55
What is the significance of market access for goods under NAFTA?
Market access under NAFTA includes the elimination of duties on thousands of goods and special rules for agricultural, automotive, and textile products, enhancing trade opportunities.
56
How does NAFTA address the rights of service providers?
NAFTA includes provisions that protect the rights of service providers, particularly in telecommunications and financial services, ensuring fair access to markets.
57
What is the impact of NAFTA on foreign investment?
NAFTA ensures that all investors, whether domestic or international, are treated equally, giving preference to NAFTA countries over others.
58
How did the European Union (EU) facilitate trade among its member countries?
The EU removed obstacles associated with trade between many countries close together.
59
Define the disadvantages of NAFTA.
Manufacturing jobs have been lost to Mexico, many Mexican farmers lost their livelihoods due to inability to compete without tariffs, and Canadian companies were sold to foreign investors.
60
Explain the '4 freedoms' expressed in the 1993 EU agreement.
The '4 freedoms' include the movement of goods, services, people, and money.
61
What are the Copenhagen criteria for EU membership?
The Copenhagen criteria include a free-market economy, a stable democracy and the rule of law, and acceptance of all EU legislation, including the euro.
62
What is the Comprehensive Economic and Trade Agreement (CETA)?
CETA is a trade agreement aimed at reducing trade barriers between Canada and the EU.
62
`Describe the challenges faced by the EU in increasing trade among its members.
The EU is challenged by a wide gap in GDPs, technological advancement, and economic development.
63
List the advantages of a common currency.
Advantages include decreased risk of exchange-rate fluctuations, price transparency, elimination of transaction costs, easy billing, increased markets, economic stability, and enhanced labor movement.
64
What are some disadvantages of adopting a common currency?
Disadvantages include initial costs of implementation, lack of national control, and loss of tradition.
65
Define a trade agreement.
A trade agreement is an enforceable treaty between two or more countries that involves the movement of goods and services, elimination of trade barriers, and establishment of terms of trade.
66
What is the difference between FTAs and FIPAs?
FTAs (Free Trade Agreements) eliminate barriers to trade, while FIPAs (Foreign Investment Promotion and Protection Agreements) promote investment by assigning legal rights.
67
Describe the significance of trade organizations in international business.
Trade organizations facilitate cooperation among businesses across countries, promote trade policies, and help businesses navigate international markets.
68
Define Corporate Social Responsibility (CSR).
Corporate Social Responsibility (CSR) refers to the practice of businesses taking responsibility for their impact on society, including social, environmental, and economic factors.
69
How do multinational corporations (MNCs) affect local cultures?
MNCs can have both positive and negative effects on local cultures, influencing norms and practices through their operations and business practices.
70
Explain the role of non-governmental organizations (NGOs) in economic development.
NGOs promote economic progress in developing countries by providing resources, support, and advocacy for sustainable practices.
71
Describe the concept of ethical imperialism.
Ethical imperialism is the belief that a company's home country’s ethical standards should be applied universally, regardless of local customs.
72
What are sweatshops and their implications in international business?
Sweatshops are workplaces with poor conditions and low wages, raising ethical concerns for companies sourcing products from such environments.
73
Define cultural relativism in the context of business ethics.
Cultural relativism is the idea that a person's beliefs and activities should be understood based on that person's own culture, impacting ethical decision-making in international business.
74
What is predatory dumping and its effects on international trade?
Predatory dumping involves selling products at an unfairly low price to eliminate competition, which can disrupt local markets and economies.
74
How does pollution relate to corporate social responsibility?
Pollution is a significant concern for CSR, as companies are expected to minimize their environmental impact and promote sustainable practices.
75
Explain the concept of microcredit and its importance.
Microcredit refers to small loans provided to individuals in developing countries to promote entrepreneurship and economic development.
76
Assess the role of corporate corruption in international business.
Corporate corruption undermines ethical practices and can lead to significant legal and reputational risks for businesses operating globally.
77
How do working conditions vary in international markets?
Working conditions can differ significantly across international markets, influenced by local laws, cultural norms, and economic conditions.
78
Compare Canada with other countries regarding cultural theories in business ethics.
Canada's approach to cultural theories in business ethics may differ from other countries, reflecting unique values and practices in international business.
79
How can companies demonstrate socially responsible practices?
Companies can demonstrate socially responsible practices by providing a safe work environment, adopting fair labor policies, donating to charity, protecting the environment, avoiding price discrimination, and being truthful in advertising.
80
What are primary stakeholders in the context of Corporate Social Responsibility?
Primary stakeholders are those who directly affect the company and its profitability.
81
What role do secondary stakeholders play in Corporate Social Responsibility?
Secondary stakeholders have an impact on the company but do not directly influence its success or contribute to profitability.
82
List some examples of socially responsible practices companies can adopt.
Examples include providing fitness facilities, adopting fair labor policies, donating to charity, funding environmental programs, avoiding price discrimination, and ensuring truthful advertising.
83
How can CSR be used as a marketing tool?
CSR can enhance a company's brand image and attract customers who value ethical practices, thereby differentiating the company in a competitive market.
83
Describe the importance of consistent CSR strategies in international businesses.
Consistent CSR strategies across countries help avoid perceptions of hypocrisy and ensure that companies are seen as genuinely committed to social responsibility.
84
What are some benefits of implementing CSR in a company?
Benefits of CSR include attracting and retaining excellent employees, enhancing brand reputation, and potentially dissuading governments from imposing regulations.
85
How can CSR distract customers from a company's problems?
CSR initiatives may lead customers to focus on a company's positive contributions rather than its negative impacts or ethical issues.
86
Describe the criticisms associated with CSR.
Criticisms of CSR include the perception that it costs money and detracts from profits, consumes employees' time and energy, and may lead to inconsistent ethical behavior across different countries.
87
Examples of socially responsible companies include The Body Shop, Best Buy, Ben & Jerry’s, and Bombardier.
Canada's CSR priorities in the extractive sector focus on transparency, anti-corruption, anti-bribery, conflict minerals, and due diligence in the retail garment industry.
87
List examples of socially responsible companies.
Examples of socially responsible companies include The Body Shop, Best Buy, Ben & Jerry’s, and Bombardier.
88
What role do employees play in understanding CSR policies?
Employees need to be informed about CSR policies to ensure alignment with the company's values and practices, fostering a culture of social responsibility.
89
Describe the impact of technology on consumer awareness of CSR.
Today's consumers are educated and can quickly access information about a company's CSR practices, making transparency and accountability crucial for businesses.
90
Describe the concept of sustainable development in the context of international business.
Sustainable development refers to the ability to meet human consumption needs while maintaining the environment, which is a critical issue for businesses.
91
How do companies often respond to environmental plans that may hinder economic growth?
Companies and governments often resist environmental plans that could impede economic growth.
92
How do environmental issues impact business practices globally?
Environmental issues lead to challenges such as pollution and resource depletion, prompting businesses to navigate the balance between economic growth and sustainability.
93
What is a common practice among officials at checkpoints in developing countries?
Officials at checkpoints often accept cash payments from drivers, which can lead to corruption and ethical concerns regarding legality.
94
Identify a consequence of companies prioritizing economic growth over environmental sustainability.
Companies may contribute to pollution and resource depletion, negatively impacting the environment.
95
How does the practice of collusion among contractors affect competition in public works?
Collusion among contractors undermines fair competition by allowing them to take turns winning contracts rather than competing fairly.
96
How does Stakeholder Analysis help in ethical dilemmas?
Stakeholder Analysis is used to determine which group’s interests are most important when a company is faced with an ethical dilemma, distinguishing between primary and secondary stakeholders.
96
Do ethical standards vary across cultures?
Yes, ethical standards can vary across cultures, as some believe in universal truths (Ethical Imperialism) while others advocate for respecting different cultural values (Cultural Relativism).
97
Explain the ethical issues associated with sweatshops.
Sweatshops are factories in underdeveloped and developing countries where employees work in unsafe environments, are treated unfairly, and have no chance to address those conditions, often due to global competitiveness and corporate greed.
98
What is the significance of gifts and consultancy fees in the ethical situation described?
In the ethical situation, gifts to local politicians and consultancy fees are seen as part of a civilized system that ensures all parties, including opposition parties, benefit, raising questions about the morality of such practices.
99
How do primary and secondary stakeholders differ?
Primary stakeholders directly affect the company and its profitability, while secondary stakeholders have an impact on the company but do not directly influence its success or contribute to profitability.
100
What are the implications of ethical imperialism in international business?
The implications of ethical imperialism in international business include the potential for conflict when imposing one culture's values on another, leading to ethical dilemmas and resistance.
101
How can cultural relativism impact business practices?
Cultural relativism can impact business practices by encouraging companies to adapt their operations and ethical standards to align with local customs and values, promoting respect for diversity.
102
Describe the responsibilities of companies that own factories in developing nations.
Companies must ensure that workers are paid a living wage and are able to speak up against abuses.
103
Define corporate corruption in the context of international business.
Corporate corruption involves illegal activities, such as bribery and fraud, to further one’s business interests.
104
How does predatory dumping affect domestic competition?
Predatory dumping is an anti-competitive practice where foreign companies price their products below market value to increase sales and force domestic competition out of business, after which they raise their prices.
104
Explain the concept of microcredit and its role in addressing poverty.
Microcredit involves granting very small loans to spur entrepreneurship, primarily aimed at women, who use the loans to start small businesses and support their families.
105
Define business ethics.
A set of rules or guidelines that management or individuals follow when making decisions facing their company.
105
How does dumping impact international trade?
Dumping involves selling products in a foreign country below the cost of production or below the price in the home country, which can disrupt local markets.
106
Describe the factors that influence business ethics.
Factors include domestic and international laws, the company’s code of ethics and corporate governance, and the personal values of the individual making the decision.
107
What is the Bribe Payers Index?
The Bribe Payers Index is a measure that assesses the likelihood of companies from different countries to engage in bribery when doing business abroad.
108
Examples Primary Industry
Customers
Competitors
management
suppliers
Shareholders
Distributors
Employees
109
Examples Secondary Industry
Community
Political Parties
NGOs
Courts
Media
110
What are the 6 areas of CSR
Providing a safe and healthy work environment
Donating to charity
Avoiding price discrimination
Being truthful
Protecting the environment
Adopting fair labor policies
111
What are business ethics, and what guidelines can be used?
• A set of rules or guidelines that management or individuals follow when making decisions facing their company
• The guidelines used include:
Domestic and international laws
• The company's code of ethics and corporate governance
• The personal values of the individual making the decision
