Glossary

A country has an absolute advantage in producing a good over another country if it uses fewer resources to produce that good. Absolute advantage can be the result of a country’s natural endowment.

Acquisition is a term used when one company purchases another company.

The balance of payments (BOP) is the difference, over a period of time, between the total flow of money coming into a country and the total flow of money going out.

Balance of trade (BOT) is the difference between the value of a country's exports and the value of a country's imports for a given period.

The business cycle is the regular economic pattern of upturns and downturns in demand and output within the economy that tend to repeat themselves every three to five years or may last much longer.

Business ethics is the study of how a business should act when faced with ethical dilemmas and controversial situations in a business context.
Business ethics is important because it enables a business to work within the boundaries of the law, and ensures that the the business is not committing crimes against its employees, customers, consumers and other stakeholders and interested parties.

Coincident indicators show the state of the economy today.

A country has a comparative advantage when a good can be produced at a lower cost in terms of other goods. The idea is that countries can benefit from specializing in the production of goods at which they are relatively more efficient. This implies that consumers in each country gain the maximum benefit from international trade.

The Consumer Price Index (CPI) represents changes in prices as experienced by Canadian consumers. It measures price change by comparing, through time, the cost of a fixed basket of goods and services.

A cooperative is a business owned and controlled by those who use its services - producers, customers or consumers..

A corporation is a legal entity that is entirely separate from the parties who own it. Once businesses reach a substantial size, it is advantageous to organize as a corporation so that its owners can limit their liability.

Cross-functional teams are teams where team members come from different organizational functional areas.

Current assets, include cash and any other assets (accounts receivable and inventory) that can be converted to cash within a year.

Deflation is downward pressure upon the level of economic activity. It is a period of falling demand and prices. It is usually accompanied by reduce output and rising unemployment.

Demand is the quantity of a product that buyers are willing to purchase at various prices.

Dumping describes the selling of a good in another country at less than its cost price.

An economic indicators are the monthly statistics that provide information on the country's economic performance. There are different types of indicators which are all subject to considerable error, so it is unwise to draw any conclusions from just one month's data.

Economics is concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources.

Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, telephones without the direct intervention of bank staff.

The term ethics is used to describe moral principles that governs a person's behavior or conduct during an activity.

Exporting refers to the sales of products and services in foreign countries that are sourced or made in the home country.

Extended reality (XR) is an umbrella term referring to all real-and-virtual combined environments and interactions generated by computer technology. It includes augmented reality (AR) and virtual reality (VR).

External environmental factors are the factors outside the organization that influence the business. These often include the social and cultural, natural environment, political, legal, technological, and economic factors.

Fiscal policy is a government towards its raising of revenue and its level of public spending.

Foreign direct investment refers to the buying or establishing tangible assets in another country.

Franchise is a business based upon the name, logo and trading method of an existing successful business (franchisor). To obtain a franchise requires the payment of an initial fee and the signing of a contract that imposes constraints and restrictions on the franchisee.

Free market system is defined as an economy operating by free competition.

The term full employment describes the level of employment which provides jobs for all those who wish to work.

Gross domestic product (GDP) is defined as the market value of all goods and services produced by the economy in a given year.

Gross national product is the value of all products and services produced by citizens of a country both domestically and internationally minus income earned by foreign residents.

A group is a collection of individuals who coordinate their individual efforts.

Group cohesiveness is the tendency for a group to be in unity while working towards a goal.

Groupthink is the tendency to conform to group pressure in making decisions, while failing to think critically or to consider outside influences.

Horizontal merger is when companies in the same industry merge.

Hostile takeover is an act of assuming control that is resisted by the targeted company’s management and its board of directors.

The human resources is an organizational function that is about searching for, selecting, training, and maintaining workers.

Importing refers to buying goods and services from foreign sources and bringing them back into the home country. Importing is also known as global sourcing.

Inflation is a sustained rise in the average prices of goods within an economy. It can also be explained as the fall in the purchasing power of money, since it is usual for wages to move ahead at least as fast as the price level.

Inputs are the elements which goes into producing a good or service such as labor, raw materials, capital, land, entrepreneurship etc.

International Monetary Fund (IMF) is the banker to the world's central banks. If a country requires to borrow money it can apply for a loan from the IMF. There will be conditions tied to the loan.

Joint ventures is where one or two companies set up a business division that will be operated jointly.

Lagging indicators show the health of the economy in the recent past.

Leading indicators give a prediction of future events.

Licensing agreements allows firms to choose foreign individuals or organizations to manufacture or market their products in another country.

Limited liability company is where the owners or shareholders are financially only responsible for the amount they have invested in the company rather than their personal wealth. The importance of limiting the amount of a shareholder's liability is that it encourages people to invest with relatively little risk.

A limited partnership (LP) exists when two or more partners go into business together, but the limited partners are only liable up to the amount of their investment. A limited partnership have limited partners and a general partner with unlimited liability.

Management accounting is the production and use of accounting information for internal managerial purposes of analysis, planning, review and control rather than for historical financial records.

Manager-led team is where the manager is the team leader and is in charge of setting team goals, assigning tasks, and monitoring the team’s performance.

The marketing concept involves identifying consumer needs and wants and then producing products (which can be goods, services, or ideas) that will satisfy them while making a profit.

A merger is a term used to describe an agreement between the management and shareholders of two companies of approximately equal size to bring both companies together under a common board of directors.

A mixed market economy is defined as an economic system blending elements of a market economy with elements of a planned economy, markets with state interventionism, or private enterprise with public enterprise.

Monetary policy is concerned with the money supply, rates of interest, exchange rates and the amount of credit available in order to control the level of spending within the economy.

Monopolistic competition occurs when an industry has many firms offering products that are similar but not identical. Unlike a monopoly, these firms have little power to curtail supply or raise prices to increase profits.

A monopoly is a market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.

Multinational corporation is a company that operates - design, produces and market products in many countries.

A financial-service company that pools investors’ funds to buy a selection of securities that meet its stated investment goals.

National debt is the liabilities of the government sector. Historically, government deficits have occurred much more often than surpluses since government typically spends more than it takes in.

Oligopoly means few sellers. In such an oligopolistic market, each seller supplies a large portion of all the products sold in the marketplace.

Opportunity cost measures cost in terms of the next best or highest-valued alternative foregone. Opportunity cost may be measured in money terms or not.

Output is the finished product coming from a production process.

Outsourcing is a business practice in which a company hires a third-party in a foreign country to perform tasks, handle operations or provide services for the company.

A partnership is a business owned jointly by two or more people. Partnership have unlimited liability where each partner is liable for the debts of the other partners, including their tax liability.

Perfect competition exists when there are many consumers buying a standardized product from numerous small businesses. Because no seller is big enough or influential enough to affect price, sellers and buyers accept the going price.

Planned system is an economic system in which the elements of an economy (such as labor, capital, and natural resources) are subject to government control and regulation designed to achieve the objectives of a comprehensive plan of economic development.

Price stability is the stable level of prices in the economy, which avoids long periods of inflation or deflation and sustains the value of money over time.

Quota is a form of import protection that limits the sales of foreign goods to a specified quantity or market share.

A self-managed team is a small group of employees who take full responsibility for delivering a service or product through peer collaboration without a manager's guidance. This team often works together long-term to make decisions about a particular process.

A social audit is an official evaluation of an organization's involvement in social responsibility projects or endeavors.

Sole proprietorship is an individual who may or may not employ other people but owns and operates the business.

A strategic alliance is an agreement between two companies (or a company and a nation) to pool resources in order to achieve business goals that benefit both partners.

Supply is the quantity of a product that sellers are willing to sell at various prices.

Tariff is a tax imposed on an imported good. This is likely to reduce the demand and make any domestic competitor more attractive to consumers.

Team (or a work team) is a group of people with complementary skills who work together to achieve a specific goal

A team contract is an agreement between you and your teammates about how your team will operate. The team focusses on issues that the team considers most important. All team members must sign the contract indicating their agreement.

The Equilibrium Price is the price point at which the demand and supply curves intersect.

Trade Controls are restrictions imposed on the transfer of items from one country to another by any individual, company, government or public body.

The unemployment rate is the percentage of the labour force that is unemployed and actively seeking work.

Vertical merger is when one of the companies in the merger is a supplier or customer to the other.

Virtual team is where geographically dispersed members interact electronically in the process of pursuing a common goal.

A virtual team usually refers to a group of individuals who work together from different geographic locations and rely on communication technology such as email, instant messaging, and video or voice conferencing services in order to collaborate to achieve a common goal.

World Bank provide aid to developing countries in the form of loans and technical assistance.

The World Trade Organization is an international free trade club, where member countries commit themselves to work towards the elimination of barriers to imports and thereby encourage free and fair trade.