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Economics & Business (Key Terms (Interest Rates (The amount a borrower…
Economics & Business
6 Key Concepts
Specialisation & Trade
Many countries are unable to produce a variety of goods and services and rely in trade or the ability to import and or export to other countries. Specialisation, focuses on the production of a particular good or service to develop a more efficient and competitive production process.
Interdependence
Interdependence is the way we rely on others to satisfy our need and wants., as they rely on us to create a coherent relationship of imports and exports. The participants in any economic system must belong to a trading network to obtain the products they cannot produce efficiently for themselves.
Making Choices
Making choices is an important part of economics.We made choices to buy, to satisfy our needs and wants. In order to make good choices we have to evaluate and consider our options; weighing up the costs and benefits.
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Allocation & Markets
Allocation and Markets is the way we distribute scarce resources among producers. Also, it refers to the way we then distribute scarce goods or services among consumers. The market is referred to as the exchange of goods and services among buyers and sellers; often rely on price to determine how much is produced and consumed.
Scarcity
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Economic problem of having unlimited needs and wants, but limited resources; natural or man-made. In economics and business resources can be divided into four categories (Factor of Production); Capital, Enterprise, Land and Labour.
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Key Terms
Interest Rates
The amount a borrower must pay to a lender for the use of assets such as money; usually expressed as a percentage of the total amount borrowed,
Investing
Putting money into shares, property or other finances schemes in the hope of making a profit.
Gross Domestic Product
The total market value of all goods and services produced in a country, within a given time frame.
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Economics
The study of how people produce, consume and share wealth.
Unemployment Rates
The percentage of people who are in the labour force who are unemployed; the labour force includes those who are employed and unemployed.
Cost Benefit Analysis
Estimating what will need to be paid (costs) and possible profits (benefits) derived from a business proposal.
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Global Financial Crisis
The global financial crisis (GFC) or global economic crisis is commonly believed to have begun sometime in early to mid-2007 with a credit crunch when a loss of confidence by US investors in the value of sub-prime mortgages caused a liquidity crisis.
Major investment bank Lehman Brothers, which had subprime mortgage-backed securities, filed for bankruptcy on September 15, 2008. It was the fourth largest bank in the US at the time of its collapse which sparked a banking crisis in the US, Europe and across parts of Asia.
Types of Economy Systems
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Market Socialist Economy
In an Market Socialist Economy productive materials are mostly owned by the state. However, the producer decides what and how much of that product to produce.
This type of economic system has been adopted by the former Socialist Federal Republic of Yugoslavia.
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Business
Corporations
Corporations are businesses that are considered seperate legal entities to their owners. Limited liability, this means if the company fails, the owner will not be forced to sell their personal assets.
Cooperatives
A cooperative is a business made up of at least 5 members who contribute to the running of the business.
Partnerships
Partnerships are formed when two or more people agree to run a business together. Specified in a partnership agreement. Partnerships help the owner share the responsibilities of running a business. Partnerships are cheaper to set up and run than corporations.
Franchises
A franchise agreement allows a producer to use their name, product and services of an existing business (Franchiser), in return franchise fees must be paid of the portion of profits made. The franchise must follow the guidelines set by the franchiser.
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Scams
Scams are traps to dishonestly manipulate a victim into making them hand over their finances to a scammer.
Types of these scams set out to personally target you with the undeniable aim of inexplicably stealing your finances has become extremely recent over the years.
Charity Scams- the scammer poses as a genuine charity and takes advantage of the individual's generosity.
Physic and Clairvoyant Scams- the victim may be told that they will be in some sort of trouble in the future. To avoid this, they have to pay money as a "lucky charm"
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Types of scams set out that offers the investor a 'rare' opportunity to make money very quickly. These operators may make an unsolicited phone call, or send an email.
Sport Investment Scams- a scammer will give an victim an inexplicit amount of interest if the fund into a certain sports betting website which is rigged, so as soon as a victim makes an investment the website will go down and the scammer would have stolen your finances.
Phishing Scams- pretend yo be sent on the behalf of a victim's financial institution asking for account details.