AQA A-level Business Key Terms

  • Created by: Gaynor
  • Created on: 20-01-20 17:33
Ansoff's matrix
Shows the strategies that a firm can use to expand, according to how risky they are
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Anthing that a business owns
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Balance sheet
A snapshot of a firm's finances at a particular time
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Barrier to entry
An obstacle that makes it harder for a business to enter a market
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Identifying how to improve your business by comparing its performance, products and processes against those of another firm
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Big data
A term used to describe the vast quantities of data that can be collected from various sources
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Blake Mouton grid
A grid used to define managers according to how much they care about employees and production
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Boston Matrix
A matrix that compares a firm's products based on their market growth and market share
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Bowman's strategic clock
Shows positioning strategies based on different combinations of price and perceived added value/benefits
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Break-even analysis
Identifies the point where a company's total revenues equal its total costs
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Forecasts future earnings and spending
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Capacity utilisation
How much of its maximum capacity a business is using
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A company's wealth in the form of money or other assets
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Capital expenditure
Money used to buy fixed assets
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Carroll's Pyramid of CSR
A diagram showing four elements of CSR as layers in a pyramid
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Cash flow
Money that moves in and out of the business over a set period of time
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A way to structure a business where all decisions come from a few key people
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Channel of distribution
The route a product takes from the producer to consumer
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Competitive advantage
The way that a company offers customers better value than competitors do
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Confidence interval
A range in which you can say, with a certain level of confidence, that a value lies
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Confidence level
A percentage showing how confident you are that a value falls within confidence interval
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Consumer Price Index
Measures changes in prices of a sample of consumer goods and services, it measures inflation
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Contingency plan
A plan preparing for an event that is unlikely to happen, just in case it does
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The difference between the selling price and the variable costs of a product
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Core competence
A unique feature of a business that gives it a competitive advantage
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Corporate objective
A goal of the business as a whole
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Corporate social responsibility (CSR)
A company's contribution to society
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Cost-push inflation
When rising costs push up prices
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Someone who a business owes money to
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Critical path
In network analysis, the series of activities that is critical in the timing of the overall project
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Current ratio
A liquidity ratio that compares current assets to current liabilities
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Debt capital
The capital raised by borrowing
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Someone who owes money to a business
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A way to structure a business where decisions are shared across the company
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Decision tree
A method of analysing the expected pay-offs of different business decisions
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Reducing the number of levels in the hierarchy of an organisation
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Demand-pull inflation
When a rise in disposable income means there's too much demand for too few goods, leading to businesses increasing prices
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Demographic change
A change in the structure of a population
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Loss of value over time
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Developed country
A relatively rich country with a high GDP
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Developing country
A relatively poor country with a low GDP
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Dimensions of a national culture
A model used to compare the differences in cultural values between different countries
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A person responsible for running a company
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When one group of people is treated unfairly to others
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Selling new products to new markets
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Divorce between ownership and control
When the owners of a company no longer total control
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Earliest start time (EST)
In network analysis, the earliest time that an activity can possibly start
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Economic growth
The rate of increase in GDP
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Economies of scale
When the cost of producing each item decreases as the scale of production increases
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Economies of scope
When a single company can make two or more products more cheaply than they can be made by seperate companies
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Elasticity of demand
Shows the relationship between changes in demand for a product and the change in another variable
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Elkington's Triple Bottom Line model
A model that assesses performance considering three overlapping areas: profit, people and planet
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A ban on trade with particular countries
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Emergent strategy
A form of strategy that develops over time, based on experience and changes in the environment
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Emerging economy
A developing country with a fast growing, but not yet fully developed, economy
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Employment tribunal
A type of court which hears disputes between employers and employees
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Equity capital
The capital raised by selling shares
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Morally and professionally acceptable
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Exchange rate
The value of one currency in the terms of another
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Fiscal policy
The government's method of adjusting tax rates and its spending to control the economy
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Fixed assets
An asset that a business keeps long-term or uses repeatedly
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Fixed cost
A cost that stays the same despite output
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Flat structure
An organisational structure that has few layers of management
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Float time
The amount of time non-critical activity can be delayed without delaying the completion of the entire project
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Force field analysis
A technique used to analyse forces for and against change
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Trying to predict what will happen in the furture
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An agreement which allows one business to use the name, knowledge and processes of an established business
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Functional objective
An objective of an individual department or business function
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The proportion of a business financed through debt rather than equity or reserves
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The increase in how interconnected the world is
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Gross domestic product (GDP)
The total market value of goods and services produced within a nation over a period of time, usually a year
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Historical budget
A budget based on previous budgets
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Human Resource Mangement (HRM)
Looks after all the people related aspects of a business
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Income statement
Statement showing how much money's gone into and out of a company over period of time
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An increase in the price of goods and services
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The basic facilities such as roads, railways, power lines, water pipes and communication networks that allow society to function
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Coming up with new ideas, products and processes
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Unable to pay debts
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Interest rates
The fee paid for borrowing
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A business' entire stock
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Inventory turnover ratio
How many times a business sells and replaces all its stock
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Just-in-time (JIT) production
Manfacturing process that operates with very small amounts of stock
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A lean production method that involves encouraging everyone to constantly improve quality
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The system used JIT production that triggers repeat orders
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Kaplan and Norton's Balanced Scorecard model
A model that assesses performance using four different perspectives: financial, internal business process, learning and growth, and customers
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Labour retention
The proportion of staff that stay at a company for a given period
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Labour turnover
The proportion of staff that leave a company during a given period
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Latest finishing time (LFT)
In network analysis, the latest time that an activity can finish without delaying the completion of the entire project
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Lean production
Techniques that aim to reduce waste to an absolute minimum
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A debt a business owes
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Liquidity ratio
A ratio that shows whether a business has enough liquid assets to pay its short-term liabilities
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Living wage
The amount of money thought to be enough to allow an acceptable standard of living
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Margin of safety
The difference between break-even output and actual output
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Market development
Selling existing products to new markets
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Marketing mix
The seven ps firms use to market their products: price, product, promotion, place, people, physical environment and process
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Market mapping
A graph that compares two aspects of different or brands in a market
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Market penetration
Trying to increase market share in your existing market
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Market share
The percentage of sales in a market made by one firm or brand
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Maslow's Hierarchy of Needs
A way of considering employee's needs in a job
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Mass customisation
This combines aspects of bespoke production with the low costs of mass production
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Matrix structure
A way of organising staff by two different criteria
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Where two companies agree to join together into one business
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The movement of people from one place to another
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Minimum wage
The lowest amount that someone can legally be paid
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Mission statement
A written description of a company's corporate aims
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Monetary policy
The government's method of controlling inflation, exchange rates and the economy by adjusting interest rates
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When one business has complete control over the market
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A business with its headquarters in one country and bases in other countries
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Net realisable value
The amount a company could get by selling its stock in its current state
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Network analysis
A method of calculating the most efficient order in which to carry out a series of activities
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New product development
Selling new products to existing markets
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A medium to long term target
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When a firm has one or several of its activities carried out abroad
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Opportunity cost
The idea that money or time spent doing one things means missing out on doing something else
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Organic growth
When a business grows from within
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Organisational culture
The way things are done within a business, in relation to attitudes, expectations and how staff make decisions
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Organisational design
The structure or hierarchy of a company
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When a firm has one or more of its activities carried out by another specialist company
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Money that a business owes
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Payable days ratio
The number of days it takes a firm to pay for goods bought on credit
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Planned strategy
A form of strategy that involves all strategic planning being done before it's implemented
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Porter's Five Forces Model
A framework for analysing competition within an industry and judging how attractive the market is
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Porter's Strategic Matrix
Identifies a competitive strategy, based on competitive advantage and market scope
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Porter's three generic strategies
Three different strategies that can be used to gain a competitive advantage: cost leadership, differentitation and focus
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When state-owned firms are sold to private companies
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A good or service
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The output per worker in a given time period
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The difference between total revenue and total costs
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Protected characteristic
The Equality Act 2010 makes it illegal to discriminate against people based on a protected characteristic such as age, disability, pregnancy or religion
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Protectionist policy
a policy designed to protect domestic businesses from foreign competition
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Quality assurance
Measures that are introduced to the production process to ensure quality products
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Quality circle
A meeting of a group of employees to discuss quality
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Quality control
Checking goods as they are made to see if anything is wrong with them
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A limit on the quantity of a product that can be imported or produced
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When a firm brings activities back to the country its based in
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Money owed to a business
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Receivables days ratio
The number of days a business has to wait to be paid for goods it supplies on credit
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A temporary decline in a country's economic activity
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Regional structure
A way of organising a business based on geographical location
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Government rules that apply to all firms in a particular industry
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When a business decreases in size
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Return on capital employed (ROCE)
Shows you how much money is made by the business compared to how much money's been put into the business
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Return on investment (ROI)
A calculation of how efficient an investment
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The value of sales
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A restriction on trade with a particular country
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Scientific management
A method pf mangement that makes sure every worker is doing the right job for them and in the right way to improve efficiency
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A person owns a share of a company
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Single market
The countries in a single market have few trade barriers between them. This means goods and labour can move freely with the single market
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Sole trader
A self-employed individual
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Anyone with an interest in a business
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Strategic drift
When a business' strategy doesn't adapt to changes in the environment
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A medium to long term plan for achieving a business' objectives
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SWOT analysis
A method of assessing a business' current situation: strngths, weaknesses, opportunities and threats
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Where one firm buys over 50% of the shares of another firm, giving them a controlling interest
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Tall structure
An organisational structure that has many layers management
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Tannenbaum Schmidt Continuum
A scale used to define managers based on the style of their decision-making
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A tax on imports or exports that is put in place to restrict trade
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Time series analysis (TSA)
Recording data over time to help identify trends
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Total equity
The total money that's been put into a business by shareholders
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Total quality management
A system that involves the whole workforce having input into quality improvements
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Trade bloc
A group of countries with few trade barriers between them
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Trade union
A group that acts on behalf of employees in negotiations with employers
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An increase in the proportion of a population that lives in towns or cities
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Variable cost
A cost that varies depending on how much business a firm does
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The difference between a budgeted figure and an actual figure
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Venture capital
High-risk investment in a business, in the form of share or loan capital
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Wage-price spiral
A cycle in which wage increases cause price increases, which causes further wage incrases and so on
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Working capital
Money available for day-to-day spending
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World Trade Organisation (WTO)
An international organisation which encourages trade between member countries. It deals with trade rules and negotiations
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Zero-based budget
A budget that is based on specific spending plans for the year ahead
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Other cards in this set

Card 2


Anthing that a business owns



Card 3


A snapshot of a firm's finances at a particular time


Preview of the back of card 3

Card 4


An obstacle that makes it harder for a business to enter a market


Preview of the back of card 4

Card 5


Identifying how to improve your business by comparing its performance, products and processes against those of another firm


Preview of the back of card 5
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