Workbook 2

Question 1

Mission statement

Answer 1

A formal summary of the businesses aims and values

Question 2

Stakeholder

Answer 2

Anyone inside or outside the company interested in the businesses activities

Question 3

Shareholder

Answer 3

invests in a company in shares –> owns part of the business

Question 4

What is an businesses objective?

Answer 4

The aim that a business works towards

Question 5

Why does a business need to change its objectives over time?

Answer 5

1 - Owner wants to work towards a higher profit
2 - There is a larger market share
3 - They are facing a serious economic problem

Question 6

Common objectives for a business

Answer 6

• Profit
• Survival
• Growth
• Increase market share
• Quality Goods/Services
• Service to community

Question 7

Most important objective of a small business

Answer 7

Survival

Question 8

Social enterprise company’s objectives

Answer 8

1 - Provide jobs and support
2 -To protect the environment
3 - To make profit to invest back into the enterprise

Question 9

Social enterprise sector

Answer 9

They operate in the private sector

Question 10

Stakeholders

The objectives of each one is just common sense!

Answer 10

• Owners
• Workers
• Managers
• Customers
• Government
• Community
• Bank

Question 11

Key objectives of a public sector

Answer 11

Financial - Meet profit targets for the government
Service - Quality goods/Services
Social - Create employment

Question 12

Why is the public sector not expected to be profitable?

Answer 12

The government fund the businesses using taxes and they want the prices to be low

Question 13

Multinational company

Answer 13

A company that manufactures goods in 2 or more countries

Question 14

Host country

Answer 14

The country that a business manufactures in but head quarters isn’t based there

Question 15

Home country

Answer 15

Head Quarters

Question 16

Globilisation

Answer 16

Selling or producing products around the world

Question 17

Fair Trade Agreement

Answer 17

When the primary sector workers get a fair price for their materials that they farmed

Question 18

Protectionism

Answer 18

Protecting a country by not allowing imports in or taxing imports

Question 19

Quota

Answer 19

A limit on the number of goods that are imported

Question 20

Tariff barrier

Answer 20

Taxing imports

Question 21

Non-Tariff barrier

Answer 21

Putting a physical limit on imports

Question 22

Exchange rates

Answer 22

The value of one currency in relation to another currency

Question 23

Currency APPRECIATION

Answer 23

Value of a currency goes up ^

Question 24

Currency DEPRECIATION

Answer 24

Value of currency goes down v

Question 25

Going multinational Advantages

Answer 25

- Cheaper labour - Cheaper resources ( coke in India) - Avoid tariffs - Cheaper for customers - Expanding profit and production - Expand brand name - Better customer service - Spreading the risk

Question 26

Going multinational Disadvantages

Answer 26

- Economic failure risk - Affects local competition - Unskilled employees (training cost) - Could be more powerful than the government - Often uses up all the resources in the area

Question 27

Open Questions

Answer 27

Do a good and bad argument | :) :(

Question 28

Inflation

Answer 28

The increase in the price of goods and services over time

Question 29

Unemployment

Answer 29

When people don't have jobs

Question 30

Imports

Answer 30

To bring goods into the country

Question 31

Exports

Answer 31

To send products out of the country

Question 32

Interest rates

Answer 32

The percentage of money you get paid/charged over a year of saving/borrowing

Question 33

Disposable income

Answer 33

Money that you can use to buy little things | E.g Wine, shoes, take-away's, personal items

Question 34

Direct tax

Answer 34

Tax that comes directly off your pay check to the government

Question 35

Indirect tax

Answer 35

The price added to goods and services GST that is paid to the government

Question 36

Trade barrier arguments For

Answer 36

- Helps protect small businesses - They prevent 'dumping' (offloading goods to a country at a lower price) - Prevents overspecializing so certain skills are still used to make products/services (Plumbers, Welders, Cabinet makers)

Question 37

Trade barrier arguments Against

Answer 37

- Restricts customer choice - Prevents business growth - Protects companies that have no competition and offer poor quality goods - Other countries will do the same so you can't export

Question 38

Business cycle (graph)

Answer 38

USE COMMON SENSE!

Question 39

How are exchange rates determined?

Answer 39

Most currencies are allowed to float or vary on the foreign market according to the demand and supply of each currency

Question 40

Working out currencies

Answer 40

Use COMMON SENSE!