Download glossary - Cengage

GLOSSARY
A
Annual percentage rate (APR) the percentage cost of
credit stated on a yearly basis (p. 166)
B
Balance of trade the difference between a country’s
exports and imports (p. 93)
Balance sheet a financial statement that lists a
business’s assets (what a company owns) and liabilities
(what a company owes) (p. 83)
Benefits compensation in forms other than a direct
payment to the employee (p. 76)
Board of directors officers of a corporation, elected by
shareholders, who have the responsibility for directing
the business of the corporation (p. 42)
Brand name name given to a product or service to
distinguish it from other similar products or services
(p. 127)
Bribe a forced payment of money or a favor required
before an official or decision maker will make a
favorable decision (p. 107)
Business budget a detailed plan for meeting the
financial needs of the business (p. 80)
Business cycle movement of the economy from one
condition to another and back again, including the four
phases of prosperity, recession, depression, and recovery
(p. 20)
Business ethics rules about how businesses and their
employees are expected to behave (pp. 105–106)
Business plan a written description of the business
idea and how it will be carried out including all major
activities (p. 64)
C
Capitalism economic system in which economic resources
are privately owned by individuals rather than by the
government (p. 6)
Channel of distribution the path that a product travels
as it goes from producer to consumer (p. 49)
Code of ethics a set of rules for guiding the actions of
employees or members of an organization (p. 106)
Commercial bank deposit-type financial institution that
offers a wide range of financial services (p. 145)
Comparison shopping comparing unit prices, quality,
and services associated with one product with those of
another (p. 124)
176
Compensation the amount of money paid to an
employee for work performed (p. 75)
Competition rivalry among businesses to sell their
products and services to consumers (p. 8)
Consumer a person or business that buys or uses goods
and services (p. 118)
Consumer movement the uniting of consumers to get
fair treatment from businesses (p. 132)
Contract an agreement to exchange goods and services
for something of value, usually money (p. 99)
Corporation business owned by a number of people and
operated under written permission from the state that
charters it (p. 42)
Credit the privilege of using someone else’s money for a
period of time (p. 158)
Creditor the one who sells on credit or who grants a
loan (p. 158)
D
Debtor anyone who buys on credit or receives a loan
(p. 158)
Demand the relationship between the amount of a good
or service that consumers are willing and able to buy
and the price of the good or service (p. 24)
E
Economic resources the means through which goods
and services are produced (p. 11)
Electronic funds transfer (EFT) a system through which
funds are moved electronically from one account to
another (p. 154)
Embargo a device governments use to regulate international trade that completely stops the export or import
of a product or service (p. 96)
Exports goods and services that U.S. companies sell to
other countries (p. 93)
Extractor business that takes resources from nature to
make its products or for direct consumption (p. 35)
F
Federal Deposit Insurance Corporation (FDIC) federal
agency that regulates banks and other financial institutions (pp. 144–145)
Federal Reserve System government agency that supervises and regulates member banks and helps them serve
the public efficiently (p. 148)
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Finance charge the total dollar cost of credit (p. 166)
Financial record a record of the financial performance
of a business (p. 82)
Franchise a written contract granting permission to a businessperson to sell someone else’s product or service (p. 42)
Fraud occurs when consumers are given false information deliberately in an effort to make a sale (p. 132)
G
Goods things you can see and touch that satisfy needs
and wants (p. 11)
Grade a rating given to food that indicates the quality or
size of the product (p. 120)
Gross domestic product (GDP) the total dollar value of
all goods and services produced in an economy in one
year (p. 18)
H
Human relations activities that involve interacting with
people (p. 69)
Human resources management business function
that involves all aspects of recruiting, hiring, training,
compensating, and evaluating employees (p. 72)
M
Manufacturer business that gets supplies from other
producers and converts them into its own products
(p. 35)
Market economy economic system in which businesses
and individuals are free to make their own decisions as
they buy and sell in the marketplace (p. 5)
Marketing orientation the concept that businesses consider the needs of customers when developing products
and services (p. 48)
Marketing strategy the plan that a company develops to
show how it will use marketing to achieve its goals (p. 48)
Markup the amount that is added to the cost of producing a product or service (p. 52)
Money order a form of payment that orders the issuing
agency to pay the amount printed on the form to a specified payee (p. 153)
Monopoly environment in which a business has no competition and controls the market for a good or service
(p. 133)
N
Needs things required in order to live (p. 10)
I
P
Imports goods and services that U.S. companies buy
from other countries (p. 93)
Impulse buying buying without giving much thought to
the purchase (p. 129)
Income statement a financial statement that shows
revenues, expenses, and net income (profit) or loss for a
certain period of time (p. 82)
Intellectual property property that is purely intangible,
with no physical characteristics (p. 100)
Interest the amount charged for borrowing money or
the amount the bank pays for use of a depositor’s money
(p. 155)
Intermediary business involved in selling the goods and services of producers to consumers and other businesses (p. 35)
International business all of the business activities
necessary for creating, shipping, and selling goods and
services across national borders (p. 92)
Partnership business owned and managed by a small
group—often not more than two or three people—who
have entered into an agreement (p. 41)
Profit the amount of money left over when subtracting the
expenses of operating a business from its income (pp. 7–8)
L
Label a tag attached to or printed on a product that
contains useful information about it (p. 122)
Leadership the ability to influence individuals, groups,
or teams to accomplish important goals (p. 67)
Q
Quota a device governments use to regulate international
trade that sets a limit on the quantity of a product that
can be imported or exported (p. 95)
S
Scarcity the conflict between unlimited wants and
limited resources (p. 4)
Service business business that performs activities that
are consumed by customers (p. 35)
Services activities that are consumed at the same time
they are produced (p. 11)
Small business an independent business with fewer than
500 employees (p. 60)
Small Business Administration (SBA) government agency
that provides services and helpful publications to small
businesses (p. 62)
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Social responsibility the duty of a business to contribute to
the well-being of a community and society at large (p. 108)
Sole proprietorship business owned and operated by one
person (p. 40)
Supply the amount of a good or service that businesses
are willing and able to provide based on the price of the
good or service (p. 24)
Tariff a device governments use to regulate international
trade that taxes certain imported products to cause their
prices to increase in the country’s markets (p. 95)
T
W
Target market a group of individuals or businesses that
has similar product needs (p. 48)
Wants things that are not necessary for survival, but add
comfort and pleasure to our lives (pp. 10–11)
178
U
Unit price a price per unit of measure, such as price per
ounce, pound, quart, or other unit of measure (p. 125)
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