ABUS001-3-1-BEN

Word Definitions

An Entrepreneur recognizes opportunities to introduce new products, new processes or an improved

organization while raising the necessary money, assembling the factors for production and organizing an
operation to exploit the opportunity.

An organization is said to be Profitable when its income exceeds its expenditure

Asset: a probable future benefit that would be obtained or controlled by a particular entity as a result of
a past transaction or event.

Backward Integration: a form of vertical integration that involves the purchase of suppliers in
order to reduce dependency.

Capital: investment made to start a business

Centralization: administration from a single centre

Commercial: activities done to make profit.

Decentralize: central administration transferred to distributed local authority.

Democratic: characterized by the principle of political or social equality for all.

Economy: a system for producing goods and services and distributing them throughout the
community.

Employer: using the service of a person (hire people) for a salary in return.

Employee: a person employed for wages / salary especially at non-executive level.

Enterprising: Showing initiative and willingness to undertake new projects.

Entity: something that has a different, separate existence, though it need not be a material existence.

Entrepreneur: an individual who organizes, manages, and assumes the risks of a business or
enterprise.

Floating Exchange Rate: a country’s exchange rate regime where its currency is set by the foreign
exchange market through supply and demand for that particular currency
relative to other currencies. Thus, floating exchange rates change freely
and are determined by trading in the foreign-exchange market.

Fixed Exchange Rate [Also known as pegged exchange rate]:

A country’s exchange rate regime under which the government or central bank ties the official
exchange rate to another country’s currency (or the price of gold). The purpose of a fixed
exchange rate system is to maintain a country’s currency value within a very narrow band.

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Financial Markets: a mechanism that allows people to easily buy and sell (trade) financial
securities (such as stocks and bonds), commodities (such as precious
metals or agricultural goods), and other fungible items of value at low
transaction costs and at prices that reflect the efficient market hypothesis.

Forward Integration: a form of vertical integration with expansion of a business' products and/or
services to related areas in order to more directly fulfill customer needs.

Global: operating worldwide.

Government: the organization of people that rules a country, city or area. A government is a body that
has the authority to make and the power to enforce laws within a civil, corporate,
religious, academic, or other organization or group.

Industry: industry is the segment of economy (synom: market) concerned with production of goods.

Inflation: an increase in price levels within an economy which is sustained over a period of time.

Intellectual Property Law: Genuine, primary work of an individual(s) that can be protected under
federal law, including copyrightable works, ideas, discoveries, and
inventions.

Investment: an asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of

getting a future return or interest from it.))

Investor: any party that makes an investment

Legislation: collection of laws.

Macro Environment: macro environment is the societal environment comprising of

uncontrollable factors that constitute the external environment - including
demographic, economic, technological, natural, socio-cultural, and
political forces.

Macro Economy: studies the behavior of the economy as a whole. Macroeconomics examines
economy-wide phenomena such as changes in unemployment, national income,
rate of growth, gross domestic product, inflation and price levels.

Micro Economy: focus is placed on factors that affect the decisions made by firms and individuals.

Multinational: an organization operating in several countries including several nationalities or

ethnic groups.

Non-Profit: an organization that has committed legally not to distribute any earnings to individuals
with control over it such as members, officers, directors. It may pay them for services
rendered and goods provided.

Opportunity cost: The cost of pursuing one choice instead of another.

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Patent: A patent is a set of exclusive rights granted by a state to an inventor or his assignee for a
fixed period of time in exchange for a disclosure of an invention.

Private Sector: that portion of the economy composed of businesses and households, and
excluding government.

Professional: experienced, specialized, skilled entities working

Profit: making an increase in business activity for the benefit of its owners. Profit is defined as the
increase in wealth (earnings) that an investor has from making an investment, taking into
consideration all costs associated with that investment including the opportunity cost of capital.

Public Sector: the part of the economy concerned with providing basic government services. The
composition of the public sector varies by country, but in most countries the public
sector includes such services as the police, military, public roads, public transit,
primary education and healthcare for the poor. Public sector provides services which
benefit all of society rather than just the individual who uses the service (such as public
education), and services that encourage equal opportunity.

Return: payments awarded to wave the various investors’ investments.

Regulation: the act or an instance of regulating.

Sales Tax: A tax charged on the selling price of goods and collected by the seller.

Sales: Transaction that involves the transfer of services/products for money.

Share Market: Institutions which facilitate the regulated sale and purchase of shares; includes the
primary and secondary markets.

Share: A share of stock represents a unit of ownership in a corporation.

Tariff: a value percentage (duty) imposed by the government of a country upon the declared value of
goods imported or exported. Tariffs unlike sales tax will differ from one good to another
and will not apply to domestically produced goods.

Trading: To exchange, or to buy and sell; to be engaged in the exchange, purchase, or sale of
goods, wares, merchandise, or anything else; to traffic; to bargain; to carry on commerce
as a business.

Totalitarian Government: a centralized government with dictatorial (has supreme authority)

imposed, where a single part or indeed individual attempt to control their
society with no opposition allowed.

Wage: Fixed regular payment made by an employer to an employee.

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