MGTA01H3 Chapter 2: Chapter 2 notes

• School: UTSC
• Department: Management (MGT)
• Course: MGTA01H3
• Professor: Chris Bovaird

Document Summary

2: understanding the environment of business: external environment everything outside an organizations boundaries. Managers must understand this environment if the business is to compete wi thin it. Economic environment conditions of economic system the organization op erates within: eg: low inflation, moderate growth, moderate unemployment. Low inflation: cost of supplies is constant but organization can"t increase prices: business cycle: patter of short term up/downs in an economy (expansions and contractions) recession. Recession: aggregate (grossed, combined) output, measured by real gdp, de clines. Aggregate output: total quantity of goods/services produced by economic sy stem in a given period: increase in aggregate output signifies an economic expansion. A higher standard of living results when aggregate output grows faster th an population (increased output per capita and more services people want). Standard of living: total quantity/quality of the goods and services that ca n be purchased by a country"s citizen with the currency used in their economic system.