1.03 & 2.01 Vocabulary

74 terms by mroettgen 

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Proprietorship

A business owned and run by just one person. Easiest form of business to start.

Partnership

A business owned and controlled by two or more people who have entered into a written agreement.

Corporation

A separate legal entity formed by documents filed with your state. It is owned by one or more shareholders and managed by a board of directors.

Partnership Agreement

A written agreement among all owners. It details the rules and procedures that guide ownership and operations.

Articles of Incorporation

A written legal document that defines ownership and operating procedures and conditions for the business.

Limited Liability Partnership

Identifies some investors who coannot lose more than the amount of their investment, but they are not allowed to participate in the day-to-day management of the business.

Joint Venture

A unique business organized by two or more other businesses to operate for a limited time and for a specific project. It is a type of partnership.

S-Corporation

Offers the limited liability of a corporation.

Limited Liability Company

Provides liability protection for owners.

Nonprofit Corporation

A group of people who join to do some activity that benefits the public..

Franchise

A written contract granting permission to operate a business to sell products and services in a set way.

Franchiser

Business that is granted the rights to operate a business to sell products and services in a set way.

Absolute Advantage

Exists when a country can produce a good or service at a lower cost than other countries.

Comparative Advantage

Is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient.

Absolute Advantage

Exists when a country can produce a good or service at a lower cost than other countries.

Comparative Advantage

Is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient.

Imports

Are items bought from other countries.

Exporting

Goods and services sold to other countries

Balance of Trade

The difference between a country's total exports and total imports.

Balance of Payments

Is the difference between the amount of money that comes into a country and the amount that goes out of it. An increase demand for both the nation's products and it currency causes this situation.

Positive or favorable balance

Occurs when a nation receives more money in a year than it pays out.

Negative or unfavorable balance

Is the result of a country sending more money out than it brings in.

Exchange Rate

Is the value of a currency in one country compared with the value in another.

Absolute Advantage

Exists when a country can produce a good or service at a lower cost than other countries.

Comparative Advantage

Is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient.

Imports

Are items bought from other countries.

Exporting

Goods and services sold to other countries

Balance of Trade

The difference between a country's total exports and total imports.

Balance of Payments

Is the difference between the amount of money that comes into a country and the amount that goes out of it. An increase demand for both the nation's products and it currency causes this situation.

Positive or favorable balance

Occurs when a nation receives more money in a year than it pays out.

Negative or unfavorable balance

Is the result of a country sending more money out than it brings in.

Exchange Rate

Is the value of a currency in one country compared with the value in another.

Interest Rates

The cost of using someone else's money.

Culture

The accepted behaviors, customs, and values of a society. A society's culture has a strong influence on business activities.

Infrastructure

Refers to a nation's transportation, communication, and utility systems.

Trade Barriers

Are restrictions to free trade.

Formal trade barriers

Are quotas, tariffs, and embargoes.

Informal Trade Barriers

Can be created by culture, traditions, and religion.

Quotas

Governments set a limit on the quantity of a product that may be imported or exported within a given period.

Tariffs

Is a tax that a government places on certain imported products.

Embargoes

Governments can stop the export or import of a product completely.

Free Trade Zone

Selected area where products can be imported duty=free and then stored, assembled, and/or used in manufacturing. Importer pays duty only when the product leaves the zone.

Free-Trade Agreements

Member countries agree to remove duties and trade barriers on products traded among them. Examples North American Free Trade Agreement (NAFT).

Common Markets

Members do away with duties and other trade barriers. They allow companies to invest freely in each member's country. Also called an economic community.

Absolute Advantage

Exists when a country can produce a good or service at a lower cost than other countries.

Comparative Advantage

Is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient.

Imports

Are items bought from other countries.

Exporting

Goods and services sold to other countries

Balance of Trade

The difference between a country's total exports and total imports.

Balance of Payments

Is the difference between the amount of money that comes into a country and the amount that goes out of it. An increase demand for both the nation's products and it currency causes this situation.

Positive or favorable balance

Occurs when a nation receives more money in a year than it pays out.

Negative or unfavorable balance

Is the result of a country sending more money out than it brings in.

Exchange Rate

Is the value of a currency in one country compared with the value in another.

Interest Rates

The cost of using someone else's money.

Culture

The accepted behaviors, customs, and values of a society. A society's culture has a strong influence on business activities.

Infrastructure

Refers to a nation's transportation, communication, and utility systems.

Trade Barriers

Are restrictions to free trade.

Formal trade barriers

Are quotas, tariffs, and embargoes.

Informal Trade Barriers

Can be created by culture, traditions, and religion.

Quotas

Governments set a limit on the quantity of a product that may be imported or exported within a given period.

Tariffs

Is a tax that a government places on certain imported products.

Embargoes

Governments can stop the export or import of a product completely.

Free Trade Zone

Selected area where products can be imported duty=free and then stored, assembled, and/or used in manufacturing. Importer pays duty only when the product leaves the zone.

Free-Trade Agreements

Member countries agree to remove duties and trade barriers on products traded among them. Examples North American Free Trade Agreement (NAFT).

Common Markets

Members do away with duties and other trade barriers. They allow companies to invest freely in each member's country. Also called an economic community.

Multinational Companies (MNC)

Is an organization that does business in several countries.

Global Strategy

Uses the same product and marketing strategy worldwide. Coca-Cola is an example.

Multinational strategy

Treats each country market differently. McDonald's in the US vs. China.

Licensing

Is selling the right to use some intangible property (production process, trademark, or brand name) for a fee or royalty.

Franchising

Is the right to use a company name or business process in a specific way.

Joint Venture

Is an agreement between two or more companies to share a business project.

World Trade Organization (WTO)

Was created in 1995 to promote trade around the world. Over 150 member countries. WTO settles trade disputes and enforces free-trade agreement between its members.

International Monetary Fund (IMF)

Has over 150 member nations. Helps to promote economic cooperation. It maintains an orderly system of world trade and exchange rates.

World Bank

Also known as the International Bank for Reconstruction and Development. Provides loans for rebuilding after World War II. Today, key function is to give economic aid to less developed countries.

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