Finance

Chapter 3

Economic Challenges Facing Global and

Domestic Business

5 Identify and describe the four

stages of the business cycle.

1

Distinguish between microeconomics and macroeconomics.

6 Explain the factors that affect the

2

Explain the factors that drive

supply and demand.

7 Discuss how monetary and fiscal

3 Describe the four types of market

structures in a private enterprise

system.

4 Compare the three major types of

economic systems.

stability of a nation’s economy.

policy are used to manage an

economy’s performance.

8 Describe the major global

economic challenges of

the 21st century.

• What is economics?

•

Economics is the social science that analyzes the choices made by

people and governments in allocating scarce resources, and related

factors in producing, distributing, and consuming.

•

Economic systems refer to exchanges that companies and societies

make as a whole, reflecting the combination of choices a nation makes

to allocate resources.

•

What is economics?

•

Everyone’s life is affected by economic choices when you decide

what products to buy, what services to use, or what activities fit into

your schedule, you are making economic choices.

1.

People make choices that are often global in scope; firms may

emphasize American made products but often their components

come from foreign countries.

2.

Not-for-profits and businesses make economic choices about use

of human and natural resources, equipment or buildings, and

partnership formation.

•

Define microeconomics?

•

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.

•

The more individualized microeconomic areas are affected, however,

by broad government decisions about a country’s economy.

•

Define...