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WGU C201 Business Acumen (Western Governors University MSML Class Vocab & Complete Study Guide Latest Update 100% Complete Solution
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C201 – Business Acumen Course Notes
Part 1, Chapter 3: Economics
LEARNING OBJECTIVE 1
Discuss microeconomics and explain the forces of demand and supply:
Microeconomics is the study of economic behavior among individual consumers, families, and businesses whose collective behavior in the marketplace determines the quantity of goods and services demanded and supplied at different prices. Macroeconomics is the study of the broader economic picture and how an economic system maintains and allocates its resources; it focuses on how a government's monetary and fiscal policies affect the overall operation of an economic system.Demand is the willingness and ability of buyers to purchase goods and services at different prices. Factors that drive demand for a good or service include customer preferences, the number of buyers and their incomes, the prices of substitute goods, the prices of complementary goods, and consumer expectations about the future. Supply is the willingness and ability of businesses to offer products for sale at different prices. Supply is determined by the cost of inputs and technology resources, taxes, and the number of suppliers operating in the market.Assessment Check Answers • 1.1 Define microeconomics and macroeconomics. Microeconomics is the study of economic behavior among individual consumers, families, and businesses. Macroeconomics is the study of a nation's overall economic issues and how an economic system maintains and allocates its resources.• 1.2 Explain demand and supply curves. A demand curve is a graph of the amount of a product that buyers will purchase at different prices. A supply curve shows the relationship between different prices and the quantities that sellers will offer for sale, regardless of demand.• 1.3 How do factors of production influence the overall supply of goods and services? A change in the cost or availability of any of the inputs considered to be factors of production can shift the entire supply curve, either increasing or decreasing the amount available at every price.
LEARNING OBJECTIVE 2
Describe macroeconomics and the issues for the entire economy Four basic models characterize competition in a private enterprise system: pure competition, monopolistic competition, oligopoly, and monopoly. Pure competition is a market structure, like that in small-scale agriculture, in which large numbers of buyers and sellers exchange homogeneous products and no single participant has a significant influence on price. Monopolistic competition is a market structure, like that of retailing, in which large numbers of buyers and sellers exchange differentiated products, so each participant has some control over price. Oligopolies are market situations, like those in the steel and airline industries, in which relatively few sellers compete and high start-up costs form barriers to keep out new competitors. In a monopoly, one seller dominates trade in a good or service, for which buyers can find no close substitutes.The major economic systems are private enterprise economy, planned economy (such as communism or socialism), and mixed market economy. In a private enterprise system, individuals and private businesses pursue their own interests—including investment decisions and profits—without undue governmental restriction. In a planned economy, 2 / 4
the government exerts stronger control over business ownership, profits, and resources to accomplish governmental and societal—rather than individual—goals. Socialism, one type of planned economic system, is characterized by government ownership and operation of all major industries. Communism is an economic system with limited private property; goods are owned in common, and factors of production and production decisions are controlled by the state. A mixed market economy blends government ownership and private enterprise, combining characteristics of both planned and private enterprise economies.Assessment Check Answers • 2.1 What is the difference between pure competition and monopolistic competition? Pure competition is a market structure in which large numbers of buyers and sellers exchange homogeneous products, and no single participant has a significant impact on price. Monopolistic competition is a market structure in which large numbers of buyers and sellers exchange differentiated (heterogenous) products, so each participant has some control over price.• 2.2 On which economic system is the U.S. economy based? The U.S. economy is based on the private enterprise system.• 2.3 What is privatization? Privatization is the conversion of government-owned and operated companies into privately held businesses.
LEARNING OBJECTIVE 3
Identify how to evaluate economic performance The four stages of the business cycle are prosperity, recession, depression, and recovery. Prosperity is characterized by low unemployment and strong consumer confidence. In a recession, consumers often postpone major purchases, layoffs occur, and household savings may be depleted. A depression occurs when an economic slowdown continues in a downward spiral over a long period of time. During recovery, consumer spending begins to increase and business activity accelerates, leading to an increased number of jobs.As productivity rises, so do an economy's growth and the wealth of its citizens. In a recession, productivity stalls or possibly declines. Changes in general price levels—inflation or deflation—are important indicators of an economy's general stability. The U.S. government measures price-level changes by the Consumer Price Index. A nation's unemployment rate is an indicator of both overall stability and growth. The unemployment rate shows, as a percentage of the total labor force, the number of people actively seeking employment who are unable to find jobs.Assessment Check Answers • 3.1 Describe the four stages of the business cycle. The four stages are prosperity, recession, depression, and recovery. Prosperity is characterized by low unemployment and strong consumer confidence. Recession may include consumers postponing major purchases, layoffs, and decreased household savings. A depression occurs when an economic slowdown continues in a downward spiral over a long period of time. In recovery, consumer spending increases and business activity accelerates.• 3.2 What are some measures that economists use to determine the health of an economy? Gross domestic product (GDP), general level of prices, core inflation rate, the Consumer Price Index, and the unemployment rate are all measures used to determine the health of an economy.
LEARNING OBJECTIVE 4
Discuss managing the economy's performance 3 / 4
Monetary policy encompasses a government's efforts to control the size of the nation's money supply. Various methods of increasing or decreasing the overall money supply affect interest rates and therefore affect borrowing and investment decisions. By changing the size of the money supply, government can encourage growth or control inflation. Fiscal policy involves decisions regarding government revenues and expenditures. Changes in government spending affect economic growth and employment levels in the private sector. However, a government must also raise money, through taxes or borrowing, to finance its expenditures. Because tax payments are funds that might otherwise have been spent by individuals and businesses, any taxation changes also affect the overall economy.Assessment Check Answers • 4.1 What is the difference between an expansionary monetary policy and a restrictive monetary policy? An expansionary monetary policy increases the money supply in an effort to cut the cost of borrowing. A restrictive monetary policy reduces the money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth by increasing the cost of borrowing.• 4.2 What are the three primary sources of government funds? The U.S. government acquires funds through taxes, fees, and borrowing.• 4.3 Does a balanced budget erase the national debt? No, a balanced budget does not erase the national debt; it just doesn't increase it.
LEARNING OBJECTIVE 5
Describe the global economic challenges encountered by businesses today Businesses face ten key global risks in today's economy: (1) asset bubble in a major economy, (2) deflation in a major economy, (3) failure of a major financial mechanism or institution, (4) failure/shortfall of critical infrastructure, (5) fiscal crises in key economies, (6) high structural unemployment or underemployment, (7) illicit trade, (8) trade tensions, (9) energy price shock , and (10) unmanageable Inflation.Assessment Check Answers • 5.1 Why is virtually no country an economic island these days? No business or country is an economic island because many goods and services travel across national borders. Companies now are becoming multinational firms.• 5.2 Describe two ways in which global expansion can benefit a U.S. firm. A firm can benefit from global expansion by attracting more customers and using less expensive labor and production in other parts of the world to produce goods and services.
Part 1, Chapter 7: Management, Leadership, and Internal Organization
LEARNING OBJECTIVE 1
Define management Management is the process of achieving organizational objectives through people and other resources. The management hierarchy is generally as follows: top managers provide overall direction for company activities, middle managers implement the strategies of top managers and direct the activities of supervisors, and supervisors interact directly with workers. The three basic managerial skills are technical, human or interpersonal, and conceptual.Assessment Check Answers • 1.1 What is management? Management is the process of achieving organizational objectives through people and other resources. The manager's job is to combine human and technical resources in the best way possible to achieve the company's goals.
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