6570900
Description
Flashcards by Kyle Olson, updated more than 1 year ago
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Created by Kyle Olson
about 8 years ago
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| Question | Answer |
| Macroeconomic environment | Aggregate economic activity including GDP, interest rates, consumer spending and income and unemployment |
| Microeconomic environment | Industry/firm level including industry specific regulation and material prices |
| Forces driving the economy | Demographics Productivity International Trade |
| Productivity | The ability to produce more with the same number of people. When productivity goes up so does standard of living |
| Business cycles | Pattern of economic recession and expansion. |
| Economic indicators | Data series that successfully describe the pattern of projected, current or past economic activity |
| Leading indicators | Money supply, building permits, claims for unemployment |
| Lagging indicators | Consumer price index, inventories, labor cost |
| Coincident indicators | Industrial production, personal income, payrolls |
| Industry's market structure | Number and size of competitors, conditions of entry and exit, monopoly, oligopoly |
| Competitive advantage | Better, cheaper, faster |
| Porter's Five Forces | Rivalry among existing competitors Threat of new entrants Pressure from substitutes Bargaining power of customers Bargaining power of suppliers |
| Concentration Ratio | CRn = [(Sum of n number of firms sales) / Industry Sales] x 100 (measures percentage of market share controlled by top n number of firms) |
| CR ratio meaning | Low numbers mean vigorous competition, greater than 80% means highly concentrated |
| Herfindahl Hirschmann Index (HHI) | Sum of market share per company squared Ranges from 0 to 10,000 |
| HHI rules | HHI over 1800 represents a concentrated industry, low competition means high HHI. DOJ investigates mergers that increase the HHI by more than 100 points |
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