How can we help?

You can also find more resources in our Help Center.

74 terms

1.03 & 2.01 Vocabulary

STUDY
PLAY
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.