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Principles of Business, Marketing, and Finance
Economic and Ethical Activity in a Changing World
Copyright © Texas Education Agency, 2011. All rights reserved
Economic Measurementsfor a Changing World
• Gross Domestic Product-total value of goods and service produced in a country in a given year• Consumer goods and services• Business goods and services• Government goods and services• Goods and services sold to other
countries
Copyright © Texas Education Agency, 2011. All rights reserved2
Economic Measurementsfor a Changing World
• Unemployment Rate• Rate of Inflation
-rate at which the cost of goods and services rise
• Standard of Living
-amount of goods and services the average citizen can buy
• Deflation
-when the supply of good is greater than the demand
Copyright © Texas Education Agency, 2011. All rights reserved3
Economic Measurementsfor a Changing World
• National Debt
-total amount of money a government owes
• Budget Surplus
-when a government’s revenue exceeds its expenditures during a one-year period
Copyright © Texas Education Agency, 2011. All rights reserved4
Basic Business Cycle
Prosperity
Recession
Depression
Recovery
Four Phases of the Business Cycle
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Ethics
• A set of moral principles by which people conduct themselves personally, socially, or professionally• Businesses have a legal
responsibility to do what is right for society’s welfare
• Business Ethics-a set of laws about how a business should conduct itself
Copyright © Texas Education Agency, 2011. All rights reserved6
Unethical Business Practices
• Bad for business• Affects a business’s profits,
customer base, and employee loyalty
• Sweatshops
-factories that have unsafe working conditions, treat workers badly, and pay poorly
Copyright © Texas Education Agency, 2011. All rights reserved7
Important Ethical Questions
• Is it against the law?• What if everyone did this?• Am I sacrificing long-term benefits for short term
gains?Copyright © Texas Education Agency, 2011. All rights reserved
8
Making Decisions on Ethical Issues
• Identify the ethical dilemma.• Discover alternative actions.• Decide who might be affected.• List the probable effects of the alternatives.• Select the best alternative.
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Social Responsibility
• Duty to do what is best for the good of society
• Businesses have a responsibility to consumers, workers, and society
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Government’s Responsibility to Customers
• FDA (Food and Drug Administration)• FTC (Federal Trade Commission• CPSC (Consumer Product Safety
Commission)• USDA (United States Department of
Agriculture)Copyright © Texas Education Agency, 2011. All rights reserved
11
Business’ Responsibility to Employees
• Equal Pay Act
• OSHA-division of the Department of Labor (sets and enforces work-related health and safety rules)
Copyright © Texas Education Agency, 2011. All rights reserved12
Business’ Responsibility to Society
• EPA (Environmental Protection Agency)• Saving energy• Recycling
• Conflict of Interest-when a business is tempted to put profits before social welfare
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