BE Terms and Definitions by keralaguest


									                                                                             Business Economics
                                                                 Vocabulary Terms and Definitions


Economics – is the social science that studies the production, distribution, and consumption of goods
and services.

Scarcity – Ever-present situation in all markets whereby either fewer goods are available than the
demand for them, or only too little money is available to their potential buyers for making the purchase.
This universal phenomenon leads to the definition of economics as the "science of allocation of scarce
resources.‖ Individuals, families, businesses, and government all face this basic economic problem.

Economizing – practicing economics; that is, avoiding waste or reducing expenditures. For example,
your mother buys the larger, more concentrated laundry detergent in order to economize.

Opportunity cost – the best alternative that is forgone because a particular course of action is
pursued. For example, buying an expensive iPod Nano means you'll have less money to spend on fun
weekend activities.

Trade-off – an exchange of one thing in return for another, especially relinquishment of one benefit or
advantage for another regarded as more desirable. For example, you want both a new outfit and a new
and a class ring. You forgo the outfit for something that will last longer.

Consumption – Expenditure during particular period on goods and services used in satisfaction of
needs and wants.

Production – Processes and methods employed in transformation of tangible inputs (raw materials,
semi-finished goods, or subassemblies) and intangible inputs (ideas, information, know how) into goods
or services.

Producer – someone who produces or manufactures something.

Exchange – reciprocal transfer of goods or services from one entity to another.

Distribution – in economics, the movement of goods from manufacturer, or a way in which wealth is
shared in any particular economic system.

Culture – a particular society at a particular time and place; the knowledge and values shared by a

Subculture – A social group within a national culture that has distinctive patterns of behavior and

Ethnocentric – centered on a specific ethnic group, usually one's own.

Social class – people having the same social, economic, or educational status.

Nuclear family – a family consisting of parents and their children and grandparents of a marital partner.

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Extended family – a family consisting of the nuclear family and their blood relatives.
Custom – practice or rule of conduct established in a particular community, locality, or trade, by long
usage and obligatory on those within its scope.

Self-interest – personal advantage or interest.

Financial incentives – a monetary reward for a specific behavior, designed to encourage that

Non-financial incentives – a reward that does not include money.

Perverse incentives – an incentive that has an unintended and undesirable effect, that is against
the interest of the incentive makers. For example, 19th century palaeontologists traveling to China used
to pay peasants for each fragment of dinosaur bone (dinosaur fossils) that they produced. They later
discovered that peasants dug up the bones and then smashed them into multiple pieces to maximise their

Demand – desire for certain good or service supported by the capacity to purchase it.

Law of demand – observation that, as a general rule, the demand for a product varies inversely with
its price—lower prices stimulate demand and higher prices dampen it.

Supply – total amount of a product (good or service) available for purchase at any specified price. It is
determined by: (1) Price: producers will try to obtain the highest possible price whereas the buyers will try
to pay the lowest possible price—both settling at the equilibrium price where supply equals demand. (2)
Cost of inputs: lower the input price the higher the profit at a price level and more product will be offered
at that price. (3) Price of other goods: lower prices of competing goods will reduce the price and the
supplier may switch to switch to more profitable products thus reducing the supply.

Law of supply – if demand is held constant, an increase in supply leads to a decreased price, while a
decrease in supply leads to an increased price.

Law of supply and demand – economic proposition that, in any free market, the relationship
between supply and demand determines price and the quantity produced. A change in either will lead to
changes in price and/or amount produced in order to achieve equilibrium in the market.

Buyer's market – a market that has more sellers than buyers; low prices result from this excess of
supply over demand; also called soft market; opposite of seller's market.

Seller's market – a market that has more buyers than sellers; high prices result from this excess of
demand over supply.

Elasticity – degree to which supply or demand for a product or service will change as a result of a
change in price.

Elastic demand – responsiveness of buyers to changes in price, defined as the percentage change
in the quantity demanded divided by the percentage change in price.

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Inelastic demand – desire for a product or service that does not vary with increases or decreases in
price. Products that are daily necessities, and for which there are few alternatives, tend to exhibit inelastic

Price – Cost, usually expressed in monetary terms.

Relative prices –

Substitution effect – in economics, the effect of a change in the price of a commodity, which
encourages consumers to substitute one good for another. If a good's price falls, consumers will tend to
buy it in preference to other goods; if its price rises, consumers will buy other goods instead.

Rationing – method for limiting the purchase or usage of an item when the quantity demanded of the
item exceeds the quantity available at a specific price. For example, during World War II many domestic
items in the United States, including gasoline and other commodities, were rationed.

Equilibrium price – price when the supply of goods in a particular market matches demand.

Excess supply – disequilibrium condition in a competitive market in which the quantity supplied is
greater than the quantity demanded, hence there's "extra" supply. Also called a surplus.

Excess demand – disequilibrium condition in a competitive market in which the quantity demanded is
greater than the quantity supplied, hence there's "extra" demand. Also called a shortage.

Market price – A security's last reported sale price (if on an exchange) or its current bid and ask
prices (if Over-the-Counter); i.e. the price as determined dynamically by buyers and sellers in an open
market; also called market value.

Innovation – the creation of new products and/or services.

Decision matrix – systematic approach to making decisions especially under uncertainty.

Evaluation criteria – Benchmark, standard, or yardstick against which accomplishment,
conformance, performance, and suitability of an individual, alternative, activity, product, or plan, as well as
of risk-reward ratio is measured.

Relative weight – used in decision matrices to determine how important criteria are rated. The
weight is then multiplied by the rate and then totaled for the score.

Multi-voting – a structured series of voting used to reduce a large list to a significant few items.

Productivity – in labor and other areas of economics, the amount of output per unit of input, for
example, the quantity of a product produced per hour of labor.

Output – the amount produced.

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Standard of living – degree of prosperity in a nation, as measured by income levels, quality of
housing and food, medical care, educational opportunities, transportation, communications, and other
measures. The standard of living in different countries is frequently compared based on annual per capita
income. On an individual level, the standard of living is a measure of the quality of life in such areas as
housing, food, education, clothing, transportation, and employment opportunities.

Total production – processes and methods employed in transformation of tangible inputs (raw
materials, semi-finished goods, or subassemblies) and intangible inputs (ideas, information, know how)
into goods or services.

Income per capita – Income per person in a population. Per capita income is often used to measure
a country's standard of living.

Consumption per capita – consumption per person in a population who uses a product or service
until it has no remaining value.

Input – item external to a system (such as a process) that is transformed by the system (usually
together with one or more other items) to become an output.

Output – amount of energy, work, goods or services, etc. produced by a machine, factory, firm, or an
individual in a period.

Total product – the total quantity of output produced by a firm for a given quantity of inputs.

Productive resources – resources used in the production of goods and services.

Fixed inputs – an input whose quantity cannot be changed in the time period under consideration.

Variable inputs – an input whose quantity can be changed in the time period under consideration.

Fixed costs – a cost that does not vary depending on production or sales levels, such as rent,
property tax, insurance, or interest expense.

Variable costs – a cost of labor, material or overhead that changes according to the change in the
volume of production units. Combined with fixed costs, variable costs make up the total cost of
production. While the total variable cost changes with increased production, the total fixed costs stays the

Total costs – variable costs plus fixed costs.

Average total cost – total cost per unit of output, found by dividing total cost by the quantity of

Labor union – an organization of workers or employees who act jointly to negotiate with their
employers over wages, fringe benefits, working conditions, and other facets of employment. The main
function of unions is to provide a balance for the market control exerted over labor by big business.

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Local – labor union acting locally for employees of an industry. For example, the local union of the

National – labor union acting nationally for employees of an industry.

Federation – overall umbrella labor organization having many affiliated local labor unions and
providing extensive support services. The national AFL-CIO is a central trade union federation in the
United States having numerous affiliates.

Collective bargaining –negotiation process between a union and the company that employs the
union's members; The purpose of collective bargaining is to find mutual agreement on wages, fringe
benefits, work hours, promotion criteria, grievance procedures, and everything else that has to do with
employment. The end result of this process is a collective bargaining agreement, which is a formal
contract between management and the union. A negotiation process that breaks down without reaching
an agreement might lead to a strike, lockout, or mediation.

Strike – agreement of workers, usually the members of a union, to stop working. The objective of a
strike is to encourage an employer to raise workers' wages or to improve working conditions.

Picketing – the traditional method of demonstrating that a labor union is on strike against an employer,
whereby union members carry picket signs and walk in a line in front of the employers plant, factory, or
place of business.

Boycotts – organized effort to reduce the sales of a particular good that's intended to punish the
producer or seller. Boycotts are promoted by labor unions to inflict harm on their companies and
(hopefully) encourage their employers to settle labor distributes.

Featherbedding – a labor union practice of artificially increasing the number of workers employed
even though the specific job or task can be completed with fewer workers. This can be done mandating
that specific jobs be performed only by workers with specific skill levels or be mandating that a certain
number of workers are needed to perform a job or task. By increasing the demand for workers,
featherbedding also keeps wages higher.

Lockouts – a plant or factory that is closed temporarily, because it's owners are trying to gain a
negotiating advantage over the employees' union. A company’s management commonly uses a lockout if
they suspect the union is planning to strike. A lockout by management before the union strikes is much
like a pre-emptive military attaché that tries to hit the enemy hard, fast, and first.

Injunctions – court order requiring a person, union, or firm to refrain from a particular activity. The
general intent of an injunction is to prevent the action of one person that is very likely to harm another.
Injunctions were commonly used during the more turbulent periods of the labor union movement,
primarily by firms to prevent unions from striking.

Strikebreakers – someone who starts working or continues to work for a firm while a labor union is
engaged in a strike of the firm. Strikebreaker is the polite name for such a person. Striking union
members are more inclined to use the term scab (or something even more derogatory).

Importing/exporting – goods purchased from other countries/sale of goods to a foreign country.

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Licensing – the granting of permission to use intellectual property rights, such as trademarks, patents,
or technology, under defined conditions.

Franchising – arrangement where one party (the franchiser) grants another party (the franchisee) the
right to use its trademark or trade-name as well as certain business systems and processes, to produce
and market a good or service according to certain specifications.

Foreign direct investment – the acquisition of controlling interest in foreign firms and businesses
from one country in another country. Abbreviated FDI, foreign direct investment can also take the form of
constructing factories, structures and equipment (or any form of physical capital) in foreign soil.

Joint ventures – activity undertaken by two or more entities in which each entity has some degree of
control. Joint ventures are commonly undertaken by two or more business firms, allowing each firm to
participate in the benefits of the venture without the loss of control that would come from a formal merger
of the firms. For example, a bank and a computer company might undertake a joint venture to develop a
computerized, online payment system. Joint ventures are usually risky activities and often related to the
development of new technology.

Wholly owned ventures –

Quality – an inherent or distinguishing characteristic.

no project here

Specialization of labor – the condition in which resources are primarily devoted to specific
production tasks. This is one of THE most important and most fundamental notions in the study of
economics. Specialization is closely related to the concept of division of labor. To the extent that specific
production tasks are divided among different workers, each worker is able to specialize. If every worker
performs every task, then specialization is not possible.

Division of labor – basic economic notion that labor resources are used more efficiently if work tasks
are divided among different workers. This allows workers to specialize in production as each becomes
highly skilled at specific tasks.

Depth of jobs – ability and power an employee has to influence his or her work environment. It refers
to the amount of discretion an employee has in a job. A highly specialized position, such as a high-level
manager, provides many decision opportunities characteristic of a job with great depth.

Scope of jobs – number of different tasks that constitute a job, and the number of job cycles in a
given period.

Business processes – series of logically related activities or tasks (such as planning, production,
sales) performed together to produce a defined set of results. Also called business function.

Value chain –

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Management processes – a process of planning and controlling the performance or execution of
any type of activity.

Support processes – activity or function that supports the day-to-day operations of an organization,
such as accounting, communications, maintenance, sales.

Tax – any sort of forced or coerced payment to government. The primary reason government collects
taxes is to get the revenue needed to finance public goods and pay administrative expenses.

Revenue – amount generated from sale of goods or services, or any other use of capital or assets,
associated with the main operations of firm—before any costs or expenses are deducted.

Expenditure – actual payment of cash or cash-equivalent for goods or services, or a charge against
available funds in settlement of an obligation—as evidenced by an invoice, receipt, voucher, or other such

Excise tax – alternative term for excise duty; tax levied on the manufacture, sale, or use of locally
produced goods.

Income tax – annual charge levied on both earned income (wages, salaries, commission) and
unearned income (dividends, interest, rents). In addition to financing a government's operations,
progressive income taxation is designed to distribute wealth more evenly in a population, and to serve as
automatic fiscal stabilizer to cushion the effects of economic cycles. Its two basic types are (1) Personal
income tax, levied on incomes of individuals, households, partnerships, and sole-proprietorships; and (2)
Corporation income tax, levied on profits (net earnings) of incorporated firms.

Property tax – tax imposed on the market value of real and personal property such as boats, cars,
buildings, land, etc.

Sales tax – tax levied on sale of goods or services.

Exchange rate – price for which the currency of a country can be exchanged for another country's

Exchange rate quotation – an exchange rate quotation is given by stating the number of units of
"term currency" (or "price currency" or "quote currency") that can be bought in terms of 1 unit currency
(also called base currency).

Free-floating currency –

Pegged currency – one currency is said to be pegged to another when the exchange rate between
the two is fixed and the market forces do not influence the exchange rate. For instance the Chinese yuan
is pegged at 8 yuan to a dollar, which means that one dollar will buy 8 yuans no matter what the market
conditions are.

Foreign-exchange market – a market that trades the currencies of different countries.

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Strong/weak dollar – dollar that can be exchanged for a large or increasing amount of foreign
currency. For example, if the dollar were strong, one would expect imports to be high and exports to be
low because the dollar will buy a lot in a different country while it is expensive to purchase dollars with
outside currencies. / dollar that can be exchanged for only a small or decreasing amount of foreign
currency. A weak dollar means that the U.S. dollar cannot buy very much of another currency.

Arbitrage – attempting to profit by exploiting price differences of identical or similar financial
instruments, on different markets or in different forms.

Stages of production – the three stages of production are characterized by the slope and shape of
the total product curve. The first stage is characterized by an increasingly positive slope, the second
stage by a decreasingly positive slope, and the third stage by a negative slope. Because the slope of the
total product curve IS marginal product, these three stages are also seen with marginal product. In Stage
I, marginal product is positive and increasing. In Stage II, marginal product is positive, but decreasing.
And in Stage III, marginal product is negative.

Theory of production – an effort to explain the principles by which a business firm decides how
much of each commodity that it sells (its ―outputs‖ or ―products‖) it will produce, and how much of each
kind of labor, raw material, fixed capital good, etc., that it employs (its ―inputs‖ or ―factors of production‖) it
will use.

Production function –describes a mapping from quantities of inputs to quantities of an output as
generated by a production process.

Increasing returns – Stage I in the short-run production process. Output increases even though
one input varies.

Diminishing returns – Stage II in the short-run production process. Output begins to decline.

Law of diminishing returns – principle stating that as more and more of a variable input is
combined with a fixed input in short-run production, the marginal product of the variable input eventually

Law of variable proportions – by varying one input (like labor) and other inputs remain constant,
output will eventually decline. Output will go through 3 stages: I – increasing returns; II – diminishing
returns; and III – negative returns. Stage II is ideal because there is a balance between production and
total output.

Marginal product negative returns –

Marginal cost – increase or decrease in the total cost of a production-run, from making one additional
unit of an item.

Total revenue – total sales revenue and other revenue for a particular period.

Marginal revenue – increase in the gross revenue of a firm produced by selling one additional unit of

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Monetary policy – economic strategy chosen by a government in deciding expansion or contraction
in the country's money supply. Applied usually through the central bank, a monetary policy employs three
major tools: (1) buying or selling national debt, (2) changing credit restrictions, and (3) changing the
interest rates by changing reserve requirements.

Maximum sustainable output and employment –

Stable prices –

Reserves – funds or materials set aside or saved for future use.

Loose monetary policy – increasing of money supply in an economy by the central bank through
(1) relaxing of credit qualifications, (2) injecting cash by buying government bonds, and/or (3) lowering the
banks' reserve requirements.

Tight monetary policy – restriction of money supply in an economy by the central bank through (1)
tightening of credit qualifications, (2) soaking up cash by selling government bonds, and/or (3) raising the
banks' reserve requirements.

Fiscal policy – government's revenue (taxation) and spending policy designed to (1) counter
economic cycles in order to achieve lower unemployment, (2) achieve low or no inflation, and (3) achieve
sustained but controllable economic growth. In a recession, governments stimulate the economy with
deficit spending (expenditure exceeds revenue). During period of expansion, they restrain a fast growing
economy with higher taxes and aim for a surplus (revenue exceeds expenditure).

Aggregate demand – total level of demand for desired goods and services (at any time by all groups
within a national economy) that makes up the gross domestic product (GDP). Aggregate demand is the
sum of consumption expenditure, investment expenditure, government expenditure, and net exports.

Neutral fiscal policies –

Expansionary fiscal policies –

Restrictive fiscal policies –

Public capital –

Infrastructure – relatively permanent and foundational capital investment of a country, firm, or project
that underlies and makes possible all its economic activity. It includes administrative, telecommunications,
transportation, utilities, and waste removal and processing facilities. Some definitions also include
education, health care, research and development, and training facilities.

Capital spending – alternative term for capital expenditure. Money spent to acquire or upgrade
physical assets such as buildings and machinery.

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Tax abatements – reduction of or exemption from taxes granted by a government for a specified
period, usually to encourage certain activities such as investment in capital equipment.

Inflation – a persistent increase in the average price level in the economy. Inflation occurs when the
AVERAGE price level (that is, prices IN GENERAL) increases over time. This does NOT mean that ALL
prices increase the same, nor that ALL prices necessarily increase. Some prices might increase a lot,
others a little, and still other prices decrease or remain unchanged. Inflation results when the AVERAGE
of these assorted prices follows an upward trend. Inflation is the most common phenomenon associated
with the price level.

Inflation rate – the percentage change in the price level from one period to the next.

Deflation – an extended decline in the average level of prices. This is the exact opposite of inflation--in
which prices are rising over an extended period, and it should be contrasted with disinflation--which is a
decline in the inflation rate. Like inflation, deflation occurs when the AVERAGE price level decreases over

Consumer Price Index – an index of prices of goods and services typically purchased by urban
consumers. The Consumer Price Index, commonly known by its abbreviation, CPI, is compiled and
published monthly by the Bureau of Labor Statistics (BLS), using price data obtained from an elaborate
survey of 25,000 retail outlets and quantity data generated by the Consumer Expenditures Survey.

Standard of living – an economy's ability to produce the goods and services that consumers use to
satisfy their wants and needs. In practice, it is the average real gross domestic product per person--
usually given the name per capita real GDP.

Targeted inflation rate –

Price stability –

Consumer Confidence Survey – reflects prevailing business conditions and likely developments
for the months ahead. This monthly report details consumer attitudes and buying intentions, with data
available by age, income, and region.

GDP – Gross Domestic Product. The total market value of all final goods and services produced in a
country in a given year, equal to total consumer, investment and government spending, plus the value of
exports, minus the value of imports.

Personal consumption expenditures – common term for expenditures by the household sector
on gross domestic product. In general consumption expenditures include the wide assortment of goods
and services purchased by the household sector that provide satisfaction of wants and needs.
Consumption expenditures are divided into three categories -- durable, nondurable, and services.

Gross private domestic investment – expenditures on capital goods to be used for productive
activities in the domestic economy that are undertaken by the business sector during a given time period.

Government purchases of goods and services – expenditures made by the government
sector on final goods and services, or gross domestic product. Government purchases are used to buy

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the goods and services needed to operate the government (such as administrative salaries) and to
provide public goods (including national defense, highway construction).

Net exports of goods and services – the official government measure of net exports with the
foreign sector, the difference between exports and imports. It seeks to quantify that portion of gross
domestic product that is purchased by the foreign sector.

Trade deficit – a condition in which a nation's imports are greater than exports. In other words, a
country is buying more stuff for foreigners than foreigners are buying from domestic producers. A trade
deficit is usually thought to be bad for a country.

Trade surplus – a condition in which a nation's exports are greater than imports. In other words, a
country is buying less stuff from foreigners than foreigners are buying from domestic producers. A trade
surplus is usually thought to be a good thing for a country.

Uncounted production –

Underground economy – illegal and unreported market transactions and productive activity that
escape the watchful eyes of official record keepers.

Double counting – act of including the value of intermediate goods more than once in the value of
gross domestic product. Because the value, or price, of final goods includes the cost, or value, of all
intermediate goods used, including market transactions for intermediate separately in the measurement
of gross domestic product would lead to double counting.

Unemployment rate – proportion of the civilian labor force 16 years or older that is actively seeking
employment, but is unemployed and not engaged in the production of goods and services.

Frictional unemployment – unemployment attributable to the time required to match production
activities with qualified resources. Frictional unemployment essentially occurs because resources,
especially labor, are in the process of moving from one production activity to another. Employers are
seeking workers and workers are seeking employment, the two sides just haven't matched up. Hence
unemployment of the frictional variety increases. This mismatch is largely the result of limited information,
which is often compounded by geographic separation between producer and resource. Frictional
unemployment is one of four unemployment sources. The other three are cyclical unemployment,
seasonal unemployment, and structural unemployment.

Structural unemployment – unemployment caused by a mismatch between workers' skills and
skills needed for available jobs. Structural unemployment essentially occurs because resources,
especially labor, are configured (trained) for a given technology but the economy demands goods and
services using another technology.

Cyclical unemployment – unemployment attributable to a general decline in macroeconomic
activity, especially expenditures on gross domestic product, that occurs during a business-cycle
contraction. When the economy dips into a contraction, or recession, aggregate demand declines, so less
output is produced and fewer workers and other resources are employed. Hence unemployment of the
cyclical variety increases. Cyclical unemployment is one of four unemployment sources. The other three
are seasonal unemployment, frictional unemployment, and structural unemployment.

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Seasonal unemployment – caused by relatively regular and predictable declines in particular
industries or occupations over the course of a year, often corresponding with the seasons. Unlike cyclical
unemployment, that could occur at any time, seasonal unemployment is an essential part of many jobs.
For example, your regular, run-of-the-mill, department store Santa Clause can count on 11 months of
unemployment each year. Seasonal unemployment is one of four unemployment sources. The other
three are cyclical unemployment, frictional unemployment, and structural unemployment.

Technological unemployment – unemployment resulting from the application of new technology,
either by eliminating jobs or by changing the nature of work so that those who had performed the work no
longer have applicable skills to do so.

Full employment – a rate of employment defined by government economists to take into account the
percentage of unemployed who would not be employed regardless of the nation's economy.

Interest rate – this is the cost of borrowing funds and the payment received for lending.

Nominal interest rate – market interest rate unadjusted to reflect the erosion of the purchasing
power due to inflation. See real interest rate.

Real interest rate – the market, or nominal interest rate, after adjusting for inflation. This is the
interest rate lenders receive and borrowers pay expressed in real dollars. See nominal interest rate.

Interest rate fluctuation – rate that fluctuates over the term of a loan on the basis of changes in an
index that reflects changes in the market rates of interest.

Default risk – probability that a borrowing agent will not pay in full the agreed interest and/or principal.

Liquidity risk – probability of loss arising from a situation where (1) there will not be enough cash
and/or cash equivalents to meet the needs of depositors and borrowers, (2) sale of illiquid assets will yield
less than their fair value, or (3) illiquid assets will not be sold at the desired time due to lack of buyers.

Maturity risk –

Business cycles – recurring expansions and contractions of the national economy (usually
measured by real gross domestic product). A complete cycle typically lasts from three to five years, but
could last ten years or more. It is divided into four phases -- expansion, peak, contraction, and trough.
Unemployment inevitably rises during contractions and inflation tends to worsen during expansions. To
avoid the inflation and unemployment problems of business cycles, the federal government frequently
undertakes various fiscal and monetary policies.

Expansion – a phase of the business cycle characterized by a general period of rising economic
activity. An expansion is one of two basic business cycle phases. The other is contraction. The transition
from expansion to contraction is termed a peak and the transition from contraction to expansion is termed
a trough. Expansions last an average of about 3-4 years, but this by no means not guaranteed.

Peak – the transition of a business cycle from an expansion and a contraction. The end of an
expansions carries the descriptive term peak. At the peak, the economy has reached the highest level of

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production in recent times. The bad thing about a peak, however, is that it is a turning point, a turning
point to a contraction. So even though a peak is the "highest" is not necessarily something we want. We
would prefer never to reach the peak.
Contraction – a phase of the business cycle characterized by a general period of declining economic
activity. A contraction is one of two basic business cycle phases. The other is expansion. The transition
from contraction to expansion is termed a trough and the transition from expansion to contraction is
termed a peak. The popular term for contraction, one that frequent shows up in the media, is recession.

Trough – the transition of a business cycle from a contraction and an expansion. The end of a
contraction carries the descriptive term trough. At the trough, the economy has reached the lowest level
of production in recent times. The good thing about a trough, however, is that it is a turning point, a
turning point to an expansion. So even though a peak is the "lowest" is not necessarily something that's

Entrepreneurial discovery –

Feasibility study – evaluation of a contemplated project or course of action, according to pre-
established criteria to determine if the proposal meets management requirements. An analysis is also
made of alternative means of accomplishing the task.

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