Business Terms and Definitions: A Comprehensive List
Business Terms and Definitions
Financial Terms
Income Budget
The budget which sets out estimates of the likely demand for and value of the firm’s sales.
Interest Rates
The additional cost for borrowing money.
Liquidity
The measure of how close an asset is to cash.
Loans
Borrowing money from the bank.
Long-Term Liabilities
Debts that have longer than a year to be paid back.
Loss Leaders
A low price on a product to attract customers.
Margin of Safety
The difference between the actual level of output and the break-
Read MoreEconomic Activity: Sectors, Agents, and Impact
What is Economic Activity?
People have many needs: food, clothing, housing, medical care, etc. We call economic activity any process by which we obtain the products and services that meet those needs. Economic activities cover three stages: the production of what we need, distribution, and consumption.
The needs and desires of people are infinite, but the means we employ to meet them (raw materials, labor, money, etc.) are limited. So we have to choose what goods and services are produced, in what
Read MoreUnderstanding the Tertiary Sector: Services, Trade, and Tourism
The Tertiary Sector: A Comprehensive Analysis
The tertiary sector, also known as the service sector, is a non-productive economic sector that provides services to all citizens. It is the predominant sector in developed countries. It encompasses a wide range of activities, including health, construction, tourism, trade, and education.
Tertiary Sector Subcategories
The tertiary sector can be broadly divided into two subcategories:
- Superior Tertiary Sector: This segment includes individuals with a good
Business Objectives and Stakeholder Roles in a Company
Setting SMART Business Objectives
Objectives should be SMART: Specific, Measurable, Achievable, Realistic, and Time-Specific.
Understanding Corporate Aims
Corporate aims are very long-term goals, the core of business activity is expressed here. Benefits include:
- Serving as a starting point for the entire set of objectives
- Developing a sense of purpose and direction
- Allowing an assessment to be made
Mission Statements
A mission statement is an attempt to condense the central purpose of a business’s existence
Read MoreKey Concepts in Money, Banking, and Financial Systems
Money
Money is a generally accepted medium of exchange that serves as the unit of account and a store of value.
Money Supply
The money supply is the amount of money circulating in an economy and is defined as the sum of currency held by the public and bank deposits.
Demand for Money
Demand for money refers to the amount of notes and coins (legal tender money) that economic agents wish to hold.
Legal Cash Ratio
The legal cash ratio is the percentage of lawful money, imposed by the central bank, kept inactive
Read MoreKey Principles of Economics: Understanding Decision-Making, Trade, and Market Dynamics
CHAPTER 1: Ten Principles of Economics
Ninth Edition
In this Chapter
- What kinds of questions does economics address?
- What are the principles of how people make decisions?
- What are the principles of how people interact?
- What are the principles of how the economy as a whole works?
Ten Principles of Economics
Resources are scarce
- Scarcity: The limited nature of society’s resources
- Society has limited resources and cannot produce all the goods and services people wish to have.
- Economics
- The study of how society