ICS 200 Quiz 1 Study Guide
ICS 200 Quiz 1 Study Guide ICS 200
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This 10 page Study Guide was uploaded by Tatum Notetaker on Thursday September 15, 2016. The Study Guide belongs to ICS 200 at DePaul University taught by Paul Kessenich in Summer 2016. Since its upload, it has received 54 views. For similar materials see Introduction to Business in Business at DePaul University.
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Date Created: 09/15/16
ICS 200 Quiz 1 Study Guide CHAPTER 1 What is the difference Revenue is the total amount of between revenue and money a business takes in, profit? including money given back to the business for different expenses. Profit is the money above and beyond business expenses. What is the difference Standard of living refers to the between standard of living amount of money people have and quality of life? to buy the things they want. Quality of life refers to the general well-being of citizens. What is risk, and how is it Risk refers to taking a chance related to profit? of losing time and money when creating a business. Typically, the higher risk you take, the higher the profit could be for your business. What do the terms Stakeholders are the people stakeholders, outsourcing, who stand to gain or lose by and insourcing mean? the activities of a business. Outsourcing refers to company’s hiring people outside of the home country, and Insourcing is the opposite (where foreign companies hire people within the US) What are some of the Someone else assumes the advantages of working for risk, you are provided with others? healthcare, paid vacation time, and pay What benefits do you lose See above for what you lose. by being an entrepreneur, You gain freedom to hire who and what do you gain? you want/make your own choices, and freedom to make your own success What are the five factors of Land, labor, capital, production? Which ones entrepreneurship, and seem to be the most knowledge. Entrepreneurship important for creating and knowledge seem to be the wealth? most important. What are the four ways the Minimize gov’t spending, keep gov’t can foster taxes and regulations to a entrepreneurship? minimum, allow private ownership of businesses, and minimize corruption in businesses What’s the difference Effectiveness is being able to between effectiveness, produce the desired results. efficiency, and productivity? Efficiency is when you produce those results using the least amount of resources possible. Productivity is how much of the desired results you are able to obtain in an efficient way. What is empowerment? Giving lower-level employees the training to make their own decisions in order to help customers quickly. What are some of the major Diversity, the increase in the issues affecting the number of older citizens, the economy today? increase in single-parent homes, how business has changed towards a global economy, and war and terrorism What major factor caused Increase in technology that people to move from made jobs more efficient farming to manufacturing (therefore we needed less and from manufacturing to workers to do a job) the service sector? What does the future look Businesses need the like for tomorrow’s college cooperation of gov’t and social 2 graduates? leaders in order to be successful in a more info-based world CHAPTER 2 What is the difference Macroeconomics looks at between macroeconomics economic trends nationally, and microeconomics? while microeconomics looks at trends in smaller communities or particular markets What is better for an Teaching a man to run a fish economy than teaching a farm, which could feed a whole man to fish? village for a lifetime What does Adam Smith’s Invisible hand refers to turning term invisible hand mean? self-directed gain into social How does the invisible and economic benefits for all. hand create wealth for a When an entrepreneur starts a country? business in order to become wealthy her/himself, that person would automatically hire others and provide goods/services to an entire community, therefore creating a mutually beneficial relationship. What are the four basic The right to own private rights that people have property, the right to own a under free-market business and keep all that capitalism? business’s profits, the right to freedom of competition, and the right to freedom of choice How do business people The price know what to produce and in what quantity? How are prices determined? Through a give and take between supply and demand of a product. Wherever the supply 3 curve and the demand curve meets is what the price is set to. What are the four degrees Perfect competition – a of competition, and what previous example was farming are some examples of but even now that is obsolete each? Monopolistic competition – cell phone companies Oligopoly – fast food industry Monopoly – utility companies What led to the emergence Socialists believed that of socialism? capitalism did not distribute wealth evenly enough What are the benefits and Benefits: social equality drawbacks of socialism? Drawbacks: takes away incentive for business people What countries still North Korea, Cuba, some parts practice communism? of the Soviet Union What are the Some allocation of money is characteristics of a mixed made by the market and some economy? by the gov’t Name the three economic GDP, unemployment rate, and indicators and describe price indexes how well the US is doing based on each indicator. What’s the difference Recession is just two or more between a recession and a consecutive quarters of decline depression? in the GDP, whereas a depression is a more severe and longer lasting version How does the gov’t manage The gov’t increase or the economy using fiscal decreases taxes and gov’t policy? spending in order to draw money out or put money into the private sector What does the term Monetary policy refers to the monetary policy mean? Federal Reserve Bank’s What organization is management of the supply of 4 responsible for monetary money and interest rates policy? CHAPTER 3 What are two of the main No country is self-sufficient, arguments favoring the and natural resources and expansion of US businesses technological skills are not into global markets? evenly distributed among the world What is comparative Comparative Advantage is the advantage, and what are theory that a country should some examples of this sell products that it produces concept at work in the US? effectively and buy from other countries the products that we don’t have the ability to produce. The US sells software and engineering. How are a nation’s balance Balance of trade is determined of trade and balance of by how much a country trades payments determined? with another country, hopefully having had a higher value of trade exports. Balance of payments is determined by the amount of money a country has taken in compared to the amount of money given + other expenditures What is meant by the term Dumping refers to selling dumping in global trade? products to foreign countries at lower prices than those charged in the country where the product was produced What are the advantages to Advantages: can gain revenues a firm of using licensing as it would not have otherwise a method of entry in global generated, licensors hardly markets? What are the spend any money to produce disadvantages? and market their products 5 Disadvantages: if it is very successful, the bulk of the revenue could belong to the licensee, the licensing firm may lose trade secrets and royalties What services are usually Matches buyers and sellers provided by an export- from different countries, deals trading company? with foreign customs offices, documentation, and weights/measures conversions, and can assist with warehousing, billing, and insuring What is the key difference A joint venture is a partnership between a joint venture between two or more and a strategic alliance? companies on a major project, whereas a strategic alliance is more long-term and help each company build competitive market advantages What makes a company a If it manufactures and markets multinational corporation? products in different countries, if it has stock ownership from different countries, and if they have multinational management What are four major Dealing with differences in hurdles to successful global sociocultural forces, economic trade? and financial forces, legal and regulatory forced, and physical and environmental forces What does ethnocentricity Ethnocentricity is the attitude mean, and how can it affect of belief that your own culture global success? is better than other cultures. It can affect global success by causing other countries to be less likely to work with you. 6 the dollar affect US that foreign goods become exports? more expensive for the US (it takes more US money to purchase foreign goods), but US goods become cheaper for foreign buyers What does the Foreign It prohibits “questionable” Corrupt Practices Act payments to foreign officials to prohibit? secure business contracts (prohibits bribery) What are the advantages Advantages: allows domestic and disadvantages of trade producers to grow, creates protectionism and/or more jobs, can create a tariffs? favorable balance of trade Disadvantages: can be detrimental to free trade because it makes it more difficult What is the primary To mediate trade disputes purpose of the WTO? among nations What is the key objective of To negotiate mutual reductions a common market like the in trade restrictions among EU? nations What three nations The US, Canada, and Mexico comprise NAFTA? What are the major threats Terrorism, nuclear proliferation, to doing business in global rogue states, income markets? inequality, and other issues What key challenges must India: has difficult trade laws India and Russia face and an inflexible bureaucracy before becoming global Russia: has many political, economic leaders? currency, social problems, and is considered to have the most corrupt major economy What does the acronym Acronym for the rising BRIC stand for? economies of Brazil, Russia, India, and China What are the two primary It negatively affects US 7 concerns associated with economy by taking away jobs, offshore outsourcing? and there are worries that some of the manufacturing in outside countries may be unsafe CHAPTER 20 What is money? Anything that people generally accept in return for goods and services What are the five Portability, Divisibility, Stability, characteristics of useful Durability, and Uniqueness money? What are “Bitcoins”? A digital version of money What is the money supply, The money supply is the and why is it important? amount of money the Federal Reserve Bank makes available to people How does the Federal They determine how much Reserve control the money money they need to make supply? What are the major Major functions: putting money functions of the Federal into the market or taking it out, Reserve? What other increasing or decreasing functions does it perform? interest rates It also buys and sells foreign currency, regulates various types of credit, supervises banks, and collects data on the money supply and other economic activity Why did the US need a Cash shortage in 1907 led Federal Reserve Bank? finally to the final version of the Federal Reserve System, because it was able to lend money to other banks 8 What are the differences Banks are for-profit among banks, savings and organizations that receives loan associations, and deposits from customers and credit unions? then uses those funds to make loans Savings & Loan Associations accepts checking and savings deposits and provides home mortgage loans (they were created to promote land ownership) Credit Unions are nonprofit organizations that offers many different financial services beyond storing money What is a consumer finance A company that offers short- company? term loans at high interest rates to those who can’t meet the credit requirements of other institutions What are some of the Some blame the Fed because it causes for the banking kept the cost of loans low, crisis that began in 2008? Congress for promoting questionable loans, and some blame the banks because they made the loans What is the role of the To make sure that should a FDIC? bank fail, each account would be able to be transferred or reimbursed up to $250,000 How does a debit card Debit cards: more like paying differ from a credit card? with a check, automatically takes money out of your account and transfers it Credit cards: costs more money to transfer because there’s paperwork to process, more like promising to pay 9 money at a later time and collects interest What is the World Bank and The bank responsible for what does it do? financing economic development; lends money to developing nations to improve their quality of life and standard of living What is the IMF and what International Monetary Fund; does it do? fosters cooperative money policies among nations and promotes exchange of currencies 10
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