Business 101-Introduction to Business
Exam 1 Essay Questions
Leslie Dubin, Instrutor
1. What is demography? Name several demographic trends in the U.S. and discuss how they will impact U.S. businesses. In your opinion, why is it important to understand demographic trends?
Demography is the statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.
1) Diversity: includes seniors, people with disabilities, homosexuals, atheists, extroverts, introverts, married people, singles, and the devout. It means dealing sensitively with workers and cultures around the world. Legal and illegal immigrants have had a dramatic effect on many cities. Schools and hospitals have had been especially affected. Some local governments are making every effort to adapt, including changing signs, brochures, websites, and forms to include other languages.
2) The increase in the number of older citizens: People ages 64 to 74 are currently the richest demographic group in the U.S. They thus represent a lucrative market for companies involved with food service, transportation, entertainment, education, lodging, and so on. The percent of population over 60 will be 22.8 percent by 2020. Also, retired people will be draining the economy of wealth. Social security has become a major issue. Today, as the baby boom generation begins to retire, that number is under 3 and dropping. In addition, the government has been spending the accumulated Social Security money instead of leaving it in a Social Security account. Soon, less money will be coming into Social Security than will be going out. The government will have to do something to make up for the short fall.
3) The rapid growth of single-parent households has also had a major effect on business. Single parents, including those forced by welfare rules to return to work after a certain benefit period, have encouraged businesses to implement programs such as family leave and flextime.
In my opinion, understanding demographic trends is important because demography presents not only population growth; it also shows life expectancy and infant mortality and more. I believe that demographic changes will affect human’s culture, economic and social life as well. And as we study demographic trends, we also can comprehend the past trends and in preparing for future developments!
2. When describing the state of the U.S economy, reporters and commentators often refer to figures for the nations’ GDP, its unemployment rate, and the CPI. Explain what each of these terms means and why each measure is significant.
Gross domestic product (GDP) is the total value of final goods and services produced in a country in a given year. Both domestic and foreign-owned companies can produce the goods and services included in GDP, as long as the companies are located within the country’s boundaries.
A major influence on the growth of GDP is the productivity of the workforce-that is, how much output workers create with a given amount of input. The high GDP in the United States is what enables its citizens to enjoy a high standard of living.
Consumer price index (CPI) is the monthly statistics that measure the pace of inflation or deflation. The CPI is an important term because some wages and salaries, rents and leases, tax brackets, government benefits, and interest rates are based on it.
3. Describe four different strategies for reaching global market.
1) Licensing: the right to manufacture its product or use its trademark to a foreign company (the licensee) for a fee (a royalty). A company with an interest in licensing generally sends company representatives to the foreign company to help set up operations.
2) Exporting: the U.S Department of Commerce of created Export Assistance Center (EACs). EACs provide hands-on exporting assistance and trade-finance support for small and medium-sized business that wish