05 economics&ethics

Principles of Business, Marketing, and Principles of Business, Marketing, and FinanceFinance

Lesson FiveLesson Five

Economic and Ethical Activity in a Changing World

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Economic MeasurementsEconomic Measurementsfor a Changing Worldfor 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

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Economic MeasurementsEconomic Measurementsfor a Changing Worldfor 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

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Economic MeasurementsEconomic Measurementsfor a Changing Worldfor 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

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Four Phases of the BusinessFour Phases of the Business CycleCycle

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EthicsEthics

• 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

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Unethical Business PracticesUnethical 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

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Important Ethical QuestionsImportant Ethical Questions

• Is it against the law?• What if everyone did this?• Am I sacrificing long-term benefits for short term

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Making Decisions on Ethical Making Decisions on Ethical IssuesIssues

• 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 ResponsibilitySocial 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 Government’s Responsibility to CustomersCustomers

• FDA (Food and Drug Administration)• FTC (Federal Trade Commission• CPSC (Consumer Product Safety

Commission)• USDA (United States Department of

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Business’ Responsibility to Business’ Responsibility to EmployeesEmployees

• Equal Pay Act

• OSHA-division of the Department of Labor (sets and enforces work-related health and safety rules))

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Business’ Responsibility to Business’ Responsibility to SocietySociety

• 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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Adapting to Current MarketsAdapting to Current Markets

• Meeting the challenges of international competition

• Overcoming economic conditions

• Adjusting to changing government demands

• Adjusting the workforce to different economic conditions

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