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Ch 6: Business and the Economy

About This Chapter

Use our online video lessons and quizzes to help you understand the relationship between national and international economies and business organizations. Learn about capitalism, the global business environment, economic cycles and more.

Business and the Economy - Chapter Summary

In this chapter, our video instructors explain the circular flow of economic activity. You'll be introduced to the concept of gross domestic product (GDP) and the components associated with the GDP. This chapter will also discuss how the unemployment rate is measured.

You'll learn about the difference between an economic recession and a depression. As you progress through this chapter, you'll study the ways fiscal and monetary policy affect the economy. After you complete this chapter, you should be able to:

  • Describe the business cycle
  • Understand the consumer price index
  • Define gross domestic product and name its components
  • Differentiate between depression and recession
  • Explain how the unemployment rate is measured
  • Understand how the competitive, economical, global, legal, social, and technological environments affect business
  • Demonstrate understanding of past, present, and future business trends

Our online lessons on business and the economy each include a brief, engaging video presentation. They also come with a self-assessment quiz, so you can track how well you've learned the lesson, and a written transcript - in case you'd rather read the lesson than listen to it. User-friendly video tools include tags that allow you to toggle back and forth between the important points in this lesson and links embedded in key vocabulary words that take you to text lessons for even more in-depth information.

16 Lessons in Chapter 6: Business and the Economy
Test your knowledge with a 30-question chapter practice test
Circular Flow of Economic Activity: The Flow of Goods, Services & Resources

1. Circular Flow of Economic Activity: The Flow of Goods, Services & Resources

Learn about the simple model used to describe where money goes and what it is exchanged for in a market economy. The circular flow model of economic activity shows you the basic relationships between households, firms and the government.

Capitalism and the Free Market: Definition & Limitations

2. Capitalism and the Free Market: Definition & Limitations

Capitalism is an economic system that has played a dominant part in building the world in which we currently live. In this lesson, you'll learn about some key concepts of capitalism, as well as its limitations.

Gross Domestic Product: Definition and Components

3. Gross Domestic Product: Definition and Components

Learn how economists measure the total production of an economy using gross domestic product (GDP). This lesson also outlines the components that make up a GDP. How do we calculate the economic value of a nation?

Defining and Measuring the Unemployment Rate

4. Defining and Measuring the Unemployment Rate

You've probably heard about the unemployment rate, especially given how high it was in the 2008 recession. Find out how economists define unemployment, what the unemployment rate is, and how to calculate it in this lesson.

The Business Cycle: Economic Performance Over Time

5. The Business Cycle: Economic Performance Over Time

Learn the economic terms that describe economic performance over time and how indicators such as unemployment and inflation behave throughout these economic fluctuations.

Productivity: The Economy's Long-Run Growth Engine

6. Productivity: The Economy's Long-Run Growth Engine

Using real-world examples, you'll learn more about what productivity is and four things that determine it within a nation - physical capital, technology, human capital, and natural resources.

Consumer Price Index: Measuring the Cost of Living and Inflation

7. Consumer Price Index: Measuring the Cost of Living and Inflation

In this lesson, you'll learn what the Consumer Price Index is and how it measures changes in the level of prices in an economy. You'll also learn about the important economic concepts of inflation and deflation. Why do prices always seem to be going up?

Recession vs. Depression: Definitions and Differentiation

8. Recession vs. Depression: Definitions and Differentiation

Discover the real differences between recession and depression, including how economists actually define the two terms and when they have happened in the past.

How Fiscal Policy and Monetary Policy Affect the Economy

9. How Fiscal Policy and Monetary Policy Affect the Economy

Governments often intervene in their economies in an attempt to maintain economic stability. In this lesson, you'll learn about fiscal and monetary policies, including what effect they can have on a national economy. A short quiz follows.

How the Economic and Legal Environment Affects Business

10. How the Economic and Legal Environment Affects Business

Businesses do not operate in a vacuum. They are subject to their external environments. In this lesson, you'll learn about the legal and economic environments of business and how businesses are affected by them.

How The Technological Environment Affects Business: Examples & Effects

11. How The Technological Environment Affects Business: Examples & Effects

Technology affects all of us. Technology can catapult a business to success or destroy it. In this lesson, you'll learn about technology, technological change, and creative destruction. A short quiz follows.

How The Competitive Environment Affects Business: Examples & Importance

12. How The Competitive Environment Affects Business: Examples & Importance

Competition is essential for the successful operation of a market economy. Competition helps provide the best products and services at the best price. In this lesson, you'll learn about competition and some strategies employed by competitors.

How The Social Environment Affects Business: Examples & Impact

13. How The Social Environment Affects Business: Examples & Impact

Businesses operate in a society. In fact, large organizations are mini-societies unto themselves. In this lesson, you'll learn some of the factors that make up the external and internal social environment of a business.

How The Global Business Environment Affects Business: Explanation & Examples

14. How The Global Business Environment Affects Business: Explanation & Examples

The world is becoming smaller. As globalization continues, businesses will be presented with opportunities and face challenges. In this lesson, you'll learn about some of these challenges and see how businesses can meet them.

Understanding Business Trends: Past, Present & Future

15. Understanding Business Trends: Past, Present & Future

We can often use past and current trends to predict where we will be in the future. In this lesson, you'll learn about some important business trends occurring right now that may have important consequences to new students and graduates.

How Economic Conditions Influence the Modern Business Market

16. How Economic Conditions Influence the Modern Business Market

The modern business market is regularly affected, defined, and shaped by economic conditions. In this lesson we will examine government influence, international transactions, expectation and speculation, and supply and demand.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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