Untitled Deck Flashcards
(72 cards)
What is momentary policy?
Where the Australian government uses the reserve bank to influence the level of interest rates to help manage and control the economic cycle.
Example: During the COVID-19 pandemic, interest rates in Australia dropped as a way to boost spending.
What is fiscal policy?
The government’s use of spending and taxation to influence the economy, aiming to achieve objectives like controlling inflation, reducing unemployment, and promoting economic growth.
Example: The JobKeeper payment scheme provided wage subsidies during the COVID-19 pandemic.
What are the two main sources of finance for business?
- Debt finance: Funds borrowed from a financial institution that must be repaid with interest.
- Equity finance: Finance provided by the owner or reinvested net profit.
Example: An Acai shop purchasing more machines to create different flavors.
How does the level of interest rates affect debt finance?
As interest rates increase, businesses become more cautious about taking on extra debt. Conversely, as interest rates drop, businesses are more likely to take on more debt.
What is the significance of Australia’s geographic location?
Australia’s location within the Asia-Pacific region significantly impacts business activity, with China being its biggest trading partner.
Over 70% of Australian exports are to this region.
Define globalization.
The process that sees people, goods, money, and ideas moving around the world faster and more cheaply than before.
What does demography study?
Particular features of the population, including size, age, sex, income, cultural background, and family size.
How has Australia’s aging population affected business?
It has led to a greater need for aged care and health facilities.
What strategies are businesses implementing for social responsibility?
- Reducing waste
- Recycling
- Reducing carbon footprint
Example: Woolworths and Coles cancelling plastic bags in favor of paper and reusable options.
True or False: Major political changes can lead to business uncertainty.
True
What is the role of the Australian Taxation Office (ATO)?
It collects revenue for the Australian government and enforces taxation law.
What does the Australian Securities and Investments Commission (ASIC) do?
It enforces and regulates company and financial services laws to protect Australian consumers, investors, and creditors.
What is the impact of technology on business competition?
Businesses must adopt appropriate technology to remain competitive; failure to do so can lead to business failure.
What does ‘ease of entry’ refer to in a market?
The ability of a person to establish a business within a particular industry, determined by market concentration.
What are the four main resources available to businesses?
- Human Resources
- Information Resources
- Physical Resources
- Financial Resources
What is one challenge in the establishment stage of a business?
Getting enough sales to create a positive cash flow.
List factors that can contribute to business decline.
- Failure to meet customer needs
- Lack of demand
- Increased competition
- Poor location
- Lack of management skills
What is undercapitalization?
A lack of sufficient funds to operate a business normally.
What is voluntary cessation in business?
When a business owner chooses to stop operating for reasons like retirement or lifestyle change.
What is liquidation?
The process of winding up a business, often due to financial difficulties.
Define stakeholders in a business context.
Any group or individual who has an interest in or is affected by the activities of a business.
What are internal stakeholders?
Employees and others who work in a business.
What role do shareholders play in a company?
They are part owners of a company and have voting rights on major business decisions.
How can managers influence employee morale?
Through their leadership style and approach to employee interactions.
