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MGTA01H3- Midterm Exam Guide - Comprehensive Notes for the exam ( 12 pages long!)


Department
Management
Course Code
MGTA01H3
Professor
Bill Mc Conkey
Study Guide
Midterm

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UTSC
MGTA01H3
MIDTERM EXAM
STUDY GUIDE

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MGTA01 Chapter 5: Understanding the Business Environment: Measuring Performance
Measuring Economic Performance: Introduction
Judging the effectiveness of an economic system by observing:
o Ho uh goods ad seies it’s poduig
o Increasing or decreasing availability of goods and services provided to the population
o Quantity of goods and services available per person
o If people are stably employed
o If the goods and services are distributed equally among the population
Measuring Total ProductionGross Domestic Product
Gross Domestic Product (GDP): The total value of all of the goods and services that are produced within a
country, during any given period
The US has the largest GDP, followed by China
In terms of Canada, we have a medium sized population but a large economy
Limitations of GDPWhat It Does Not Tell Us
GDP ol tells us aout the size of a atio’s eoo
o It does’t tell us aout a out’s output goth or decline, aout its itize’s ealth, nor whether all
of the out’s esoues ae eig euall us ad podutie
GDP Growth
GDP growth: The percentage change, from one period to the next, in the total value of all the goods and
services produced within a country
o Can GDP keep up with a growing population?
o A growing GDP means businesses are hiring more people to produce the growing number of goods and
services that people need and want
In Canada, the annual GDP growth averaged 2.0% (a steady growth rate)
RecessionWhen the GDP Does Not Grow
Consequences of falling GDP
o Fewer workers employed
o Work shorter hours and shorter shifts
o Offices may close earlier
o Not producing enough goods and services
Recession: Two consecutive quarters (two periods of three months each) when GDP shrinks
Possible cause of recessionsbusiness is a human activity
o Losig ofidee i oe’s eooi ell-being can make them stop buying goods and services, which in
turn
o Banks end up collapsing due to the overwhelming amount of money people borrowed and whom could
not pay back their loans
This caused other banks to stop lending people money
o Companies collapsed as well, leading to unemployment
Business cycle: The epasio ad otatio of a atio’s eooi atiit that happe oe a peiod of
years, periodically and with great regularity
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MGTA01 Chapter 5: Understanding the Business Environment: Measuring Performance
o No confirmed cause of the business cycle
o Peaks oos—Periods of economic growth
o Tough usts—Periods of economic contraction (decline)
Peaks are followed by busts
Depression: An unusually long or deep recession
High Growth Countries
The poorer the country, the larger the increase in GDP
Countries with the Largest Increase in GDP 2012-2013: South Sudan, Sierra Leone, Paraguay
Bazil, Russia, Idia, ad Chia the BRICs epeset the gloe’s geatest futue soue of eooi goth
and increased prosperity
o These are large but relatively poorer countries compared to wealthier and already fully-developed
countries like the USA or Japan
GDP Per Capita
GDP per Capita: A easue of a out’s elatie ealth, alulated  diidig a out’s GDP  its
population
o This gies a easue of ho uh the aeage peso i a out podues
As compared to GDP (by itself), GDP per Capita is not concerned about the size of a country
o Small countries with small populations can still produce high GDP per Capita
People ho ok i suh outies do’t eessaily live there
Tourism and gambling also create GDP without adding to the population
Canada ranks 11th of countries with a per capita GDP of under $52k
Poorest countries are mainly in Africa
Participating in the Labour Force
Occupation is not necessarily a paid jo, ut athe haig soethig useful ad eaigful to do ith oe’s
time and energy
Employment: Having paid work
Labour force: People aged 15 and over, who have a job or a business, and those who are without work, but
actively seeking work
o Excludes full time home-makers, full-time students, retirees, and those unable or unwilling to work at a
paid job
Participation Rate: The percentage of the population aged 15 and over who are in the labour force
o Rates vary across countries for different reasons
In some countries women rarely participate in the labour force
I poo outies, people ust fid soe ok
o Thee is o ideal o oet patiipatio ate
Each country adopts an economic system that best suits the needs of its people
o In Canada, there is many opportunities for women to participate in the labour force
Employment and Unemployment
Unemployment: Actively seeking work, but unable to find work
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