Textbook Notes (290,000)
CA (170,000)
UTSC (20,000)
MGT (800)
MGTA01H3 (600)
Chapter 2

Chapter 2 Study Notes


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird
Chapter
2

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MGTA03Chapter2
StudyNotes
Definitions
ExternalEnvironmenteverythingoutsideanorganization’sboundariesthat
stillcanaffecttheorganizationitself
EconomicEnvironmentconditionsofeconomicsysteminwhichthe
organizationoperates
BusinessCyclepatternofshortrtermupsanddownsinaneconomy
(4phases;peak,recession,trough,&recovery)
Recessionperiodwhenaggregateoutputdeclines,measuredby
realGDP
Depressionlongrlasting,andsevererecession
AggregateOutputtotalgoodsandservicesproducedbyeconomical
systeminagivenperiod
StandardofLivingtotalquantity&qualityofgoodsandservicesthatcan
bepurchasedwiththecurrencyusedineconomic
system
GrossDomesticProduct(GDP)totalvalueofgoods&servicesproducedinagiven
periodthroughfactorsofproductioninanational
economy
PurchasingPowerParityprinciplethatdetermineshowexchangeratesareset,
sodifferentproductsindifferentcountriesareapprox.
same
Productivitymeasureofeconomicgrowth,comparingproduction
withresourcesusedtoproduce
BalanceofTrade[TotalCountryExports(Sales)]rrMINUSrr[TotalCountry
Imports(Purchases)]
Unemploymentlevelofjoblessnessamongpeoplelookingactivelyinan
economicsystem
Notes
r PurposeofEconomicSystemisto;i)assemble/organizefactors,ii)feeddemandof
good/service,iii)createprofitforbusiness
r WhenMeasuringEconomicPerformance,determineiftheeconomicsystemproducing;
i)lotsofthingspeoplewant
ii)morethingseveryyear
iii)fast&efficientproduction
iv)usingallavailableresources
v)reasonableprice
r GDP=GrossDomesticProduct=TotalSizeofEconomy=valueofallgoods&service
producedinacountryin1year(largerGDPindicatesthatmoreworkers,areusingmore
resourcestoproducemorethingsofvalue)
r GrowingGDP=morepeoplemakingmorestuff
r FallingGDP=lesspeoplemakinglessstuff=Recession
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