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Business Dynamics midterm Questions and CORRECT Answers 2024/2025Business Dynamics midterm Questions and CORRECT Answers 2024/2025
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Business Dynamics midterm Questions and CORRECT Answers 2024/2025
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Business Dynamics midtermBusiness - ANSAny activity that seeks to provide goods and services to others while operating
at a profit.
Goods - ANSTangible products such as computers, food, clothing, cars, and appliances.
Services - ANSIntangible products (that can't be held in your hand) such as education, health
care, insurance, recreation, and travel.
Entrepreneur - ANSA person who risks time and money to start and manage a business.
Revenue - ANSThe total amount of money a business takes in during a given period by selling
goods and services.
Profit - ANSThe amount of money a business earns above and beyond what it spends for
salaries and other expenses.
Loss - ANSWhen a business's expenses are more than its revenues.
Risk - ANSThe chance an entrepreneur takes of losing time and money on a business that may
not prove profitable.
Standard of living - ANSThe amount of goods and services people can buy with the money they
have.
Quality of life - ANSThe general well-being of a society in terms of its political freedom, natural
environment, education, health care, safety, amount of leisure, and rewards that add to the
satisfaction and joy that other goods and services provide.
Stakeholders - ANSAll the people who stand to gain or lose by the policies and activities of a
business and whose concerns the business needs to address.
Nonprofit organization - ANSAn organization whose goals do not include making a personal
profit for its owners or organizers
5 Factors of Production - ANSLabor
Land
Capital
Entrepreneurship
,Knowledge
Importing - ANSBuying products from another country.
Exporting - ANS•Selling products to another country.
Comparative advantage - ANSA country should sell to other countries those products that it
produces most efficiently, and buy from other countries those products that it cannot produce as
effectively or efficiently.
Absolute advantage - ANSA country has a monopoly on producing a specific product or is able
to produce it more efficiently than all other countries.
Balance of trade - ANSThe total value of a nation's exports compared to its imports over a
particular period.
Trade surplus (favorable) - ANSOccurs when the value of a country's exports exceeds that of its
imports.
Trade deficit (unfavorable) - ANSOccurs when the value of a country's imports exceeds that of
its exports.
Balance of payments - ANSThe difference between money coming into a country (from exports)
and money leaving the country (from imports) plus money flows from other factors such as
tourism, foreign aid, military expenditures, and foreign investment.
Dumping - ANSSelling products in a foreign country at lower prices than those charged in the
producing country.
Multinational corporation - ANSAn organization that manufactures and markets products in
many different countries and has multinational stock ownership and multinational management.
Sovereign wealth funds (SWFs) - ANSInvestment funds controlled by governments holding
large stakes in foreign companies.
Forces Affecting Trading in Global Markets - ANSSociocultural
Economic and Financial
Legal and Regulatory
Physical and Environmental
Exchange rate - ANSThe value of one nation's currency relative to the currencies of other
countries.
, High value of the dollar - ANSDollar is trading for more foreign currency; foreign products
become cheaper.
Low value of the dollar - ANSDollar is trading for less foreign currency; foreign goods become
more expensive.
Floating exchange rates - ANSCurrencies float in value depending on the supply and demand
for them in the global market.
Devaluation - ANSLowering the value of a nation's currency relative to others currencies.
Countertrading - ANSA complex form of bartering in which several countries may be involved,
each trading goods for goods or services for services.
Trade protectionism - ANSThe use of government regulations to limit the import of goods and
services
Tariffs - ANSA tax imposed on imports.
Import quota - ANSA limit on the number of products in certain categories that a nation can
import.
Embargo - ANSA complete ban on the import or export of a certain product, or the stopping of
all trade with a particular country.
General Agreement on Tariffs and Trade (GATT) - ANSA 1948 agreement that established an
international forum for negotiating mutual reductions in trade restrictions.
World Trade Organization (WTO) - ANSAn independent entity of 164 member nations whose
purpose is to oversee cross-border trade issues and global business practices; headquartered
in Geneva.
Common market - ANSA regional group of countries that have a common external tariff, no
internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc.
North American Free Trade Agreement (NAFTA) - ANSAgreement that created a free-trade area
among the United States, Canada, and Mexico; ratified in 1994.
Central American Free Trade Agreement (CAFTA) - ANSAgreement that created a free-trade
zone with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and
Nicaragua; signed into law in 2005.
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