Ch.3,8+12 review

Public goods

Shared good or service for which it would be inefficient or impractical (1) to make consumers pay individually and (2) to exclude those who did not pay

Investors take more risks even possibly losing money in hopes of getting a higher return on their money.

What is the difference in savings and investing money?

Interest group

a private organization that tries to persuade public officials to act in ways that benefit its members

Business franchise

a semi-independent business that pays fees to a parent company

Economic growth

a steady, long-term increase in real GDP

Stagflation

A decline in real GDP combined with a rise in the price level

Inflation

A general increase in prices across an economy

Corporation

A legal entity, or being owned by an individual stockholders, each of whom faces Limited liability for the firm debts

Expansion

A period of economic growth as measured by a rise in real GDP

Recession

A prolonged economic contraction

Depression

A recession that is especially long and severe

Phishing

A scam in which a fraudulent website is used to gain personal or financial data to commit fraud.

Voluntary exchange

Allows people to decide what, when, and how they want to buy and sell

Externality

An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume

Free enterprise

An economic system in which decisions are made in a free market by private individuals and firms

A corporation is a legal entity, or being, owned by individual stockholders, each of whom has limited liability for the firms debts. Corporations grow by merging with another corporation. Multinational corporation's are a large corporation that produces and sells its goods and services in more than one country. They are all corporations.

Compare and contrast corporations, mergers, and multinationals.

High prices hurt consumers (especially the poor), low prices hurt businesses

Describe how consumers and businesses can get hurt by fluctuations in price levels.

Bond is a IOU issued by a corporation or by some level of government. Stocks represent ownership in a public company. A mutual fund is an investment in a company that buys and sells stocks and bonds in other companies.

Describe how the following investments work: Bond, stocks, mutual funds.

Stock is a certificate of ownership in a corporation. Stockholders own stock and are part-owner of the corporation issuing it. A bond is a formal contract issued by a corporation or other entity that includes the promise to repay borrowed money with interest at fixed intervals. Stockholders elect The board of directors. The board of directors

Describe stock, stockholders, and bonds... Include their roles in a corporation.

Macro is the study of nations whole economy and micro is the study of households and firms in a nation

Describe the difference between macro and microeconomics.

A horizontal merger joins two or more firms competing in the same market with the same good or service. Horizontal is you buying out your company. Vertical merger join two or more firms involved in different stages of producing the same good or service. The government might block a horizontal merger if the resulting single firm might gain monopoly power in its market and they will stop competition.

Describe the differences between a horizontal merger and a vertical merger. Why might the government block a horizontal merger?

Certificate of deposit (CDs) is a certificate issued by a bank to a person depositing money for you specified length of time. Money market accounts are a type of saving account with a high yield that allows you to write checks as long as you maintain a high balance in the account. And saving accounts.

Describe the following ways to save money: saving account, CDs, money market.

1. Make a list of your earnings per month from all sources. Add up and calculate expected monthly income. 2. Keep a record of everything you spend. collect receipts or write everything in a notebook. 3. After, organize your spending into categories and total the amount in each category. 4. List income and expenses.

Describe the steps involved in creating a budget.

It's easy to create them but the large capital is hard to have a large profit and produce products

Evaluate their effectiveness of sole proprietorship and partnerships.

Welfare

Government aid to the poor

Contraction

a period of economic decline marked by falling real GDP

Update the latest versions of antivirus and anti-spyware software. Double check the website. Avoid obvious passwords. Change passwords regularly. Close other browser windows during a transaction. Go through bank website.

How can one protect themselves when banking online?

Keep prices steady, protect our banking system and our deposits, regulator our banks and the stock market, support employment, provide research and investments in technology

How do governments attempt to promote economic strength?

By providing jobs and products around the world. Bring the money in and help have a better way of living.

How does a multinational benefit consumers, workers, and the corporation involved?

Business cycle shows how GDP has gone up and down during a period of months or years.

How is gross domestic product directly related to a business cycle?

To have money put aside for emergencies.

How is the idea of "paying yourself first" and the idea of an emergency fund related?

Federal agencies fund research projects at universities and have their own government organizations whose sole purpose is to develop new technologies (NASA); Grant patents and copyrights to investors

In what ways does our government encourage innovation in order to boost our economy?

Compound interest

Interest you earn, not only on The money you put into an account, but also on all of the interest you have previously built up.

Business cycle

Period of microeconomic expansion, or growth, followed by one of the contraction, or decline

Free-rider

Someone who would not be willing to pay for a certain good or service but who gets the benefits of it anyway if it were provided as a public good

Liability

The legal obligation to pay d The legal obligation to pay debts

Trough

The lowest point of an economic contraction, when real GDP stops falling

Individual retirement account (IRA)

The money may escape taxation until you retire or at least until you reach age 59 1/2.

Dollar cost averaging

The strategy of investing on a regular schedule over a period of time.

Diversification

The strategy of spreading out investments to reduce risk

Gross domestic product

The total value of all final goods and services produced in a country in a given year

Franchisers are the parent company that you would pay money to and franchise is each individual store.

What is the difference between the role of a franchiser and the role of a franchise?

It helps make predictions; helps both make decisions. Example: if it looks like a contraction is going to happen a business wouldn't hire more workers

Why do businesses and governments keep track of current business cycles?

Conglomerates does not tend to decrease competition because the companies produce totally unrelated goods and services.

Why is it that Conglomerates do not tend to decrease competition?

Partnership

a business organization owned by two or more persons who agree on a specific division of responsibilities and profits

Sole proprietorship

a business owned and managed by a single individual

Multinational corporation

a large corporation that produces and sells its goods and services in more than one country

Public disclosure laws

laws requiring companies to provide information about their products or services

Peak

the height of an economic expansion, when real GDP stops rising

Profit motive

the incentive that drives individuals and business owners to improve their material well-being

Private sector

the part of the economy that involves the transactions of individuals and businesses

Eminent domain

the right of government to take private property for public use

Macroeconomics

the study of economic behavior and decision-making in a nation's whole economy

Microeconomics

the study of the economic behavior and decision making of small units, such as individuals, families, and businesses