Business100

True or False: Transportation costs have relatively little impact on a domestic firms decision to go international

False

Federal Reserve System

the central bank of the United States, which acts as the government's bank, serves member commercial banks, and controls the nation's money supply

What are products that are created domestically and transported for sale abroad?

Exports

True or False: A subsidy is a tax designed to help companies who import products

False

True or False: IF the US exports more to the Netherlands than it imports from the Netherlands, the US has a trade deficit with the country.

False

True or False: NAFTA regulates trade between the US, Europe, and Japan

False

Current ratio

A financial ratio for measuring a company's ability to pay current debts out of current assets

Pension Fund

A non deposit pool of funds managed to provide retirement income for its members

Describe the effects of subsidies

A subsidy essentially lowers the prices of domestic goods rather than raising the prices of foreign goods

True or False: The primary purpose of the WTO is to to impose tariffs on imported products

False

What organization was founded in Pacific Asia in 1967 for economic, political, social, and cultural cooperation?

ASEAN

GAAP

Accounting guidelines that govern the content and form of financial reports

Depreciation

An accounting method used to spread the cost of an asset over the years of its useful life

Current Asset

An asset that can or will be converted into cash within a year

Asset

Any economic resources expected to benefit a firm or an individual who owns it

Economic value of all of the products that a country exports minus the economic value of its imports

Balance of trade

Checking Account

Bank account funds owned by the depositor that may be withdrawn at any time by check or cash

Time deposit

Bank funds that have a fixed term of time to maturity and cannot be withdrawn earlier or transferred by check

In some South American countries, it is sometimes legal to bribe other businesses and government officials. While this practice is illegal in the US, what is it called?

Business practice laws

What refers to the associations of producers that control supply and prices?

Cartels

What country has the world's third largest economy?

China

Commercial Bank

Company that accepts deposits that it uses to make loans, earn profits, pay interest to depositors, and pay dividends to owners

Debt

Company's total liabilities

Liability

Debt owed by a firm to an outside organization

Current Liability

Debt that must be paid within one year

What refers to the practice of selling a product abroad for less than the cost of production?

Dumping

Retained Earnings

Earnings kept by a firm for its use rather than paid out as dividends

Positive trade balance

Economic condition in which a country's exports exceed its imports

Trade deficit

Economic condition in which a country's imports exceed its exports

What denotes a government order forbidding exportation or importation of a particular products from a particular country?

Embargo

Which organization is a firm that makes products in one country and then distributes and sells them in others?

Exporter

Money Market Mutual Fund

Fund of short term, low risk financial securities purchased wit the pooled assets of investor-owners

Revenues

Funds that flow into a business from the sales of goods or services

Which treaty sought to eliminate trade barriers such as tariffs and quotas?

General Agreement on Tariffs and Trade

Net income

Gross profit minus operating expenses and income taxes

Which type of organization buys products in foreign markets and then sells them for resale in its home country?

Importer

What are products created abroad and sold domestically?

Imports

Controller

Person who manages all of a firm's accounting activities (head accountant)

Primary purpose of tariffs on imports

Maintain domestic competition

Monetary Policy

Management of the nation's economic growth by managing the money supply and interest rates

M-1

Measure of the money supply that includes only the most liquid forms of money

Under which of the following treaties are Canada, US, and Mexico gradually eliminating tariffs and all other trade barriers?

NAFTA

Finance Company

Nondeposit institution that specializes in making loans to businesses and consumers

Intangible Asset

Nonphysical asset (patent or trademark) that has economic value in the form of expected benefits

Credit Union

Nonprofit, cooperative financial institution owned and run by its members, usually employees of a particular organization

Earnings per Share

Profitiability ratio measuring the net profit that the company earns for each share of outstanding stock

What denotes the practice of protecting domestic business at the expense of free market competition?

Protectionism

What is the practice of limiting the amount of certain items that can be imported from a country?

Quota

Government payment to help a domestic business compete with foreign firms

Subsidy

Individual Retirement Account

Tax-deferred pension fund that wage earners set up to supplement retirement funds

International Monetary Fund

The UN agency consisting of about 150 nations that have combines resources to promote stable exchange rates, provide temporary short-term loans, and serve other purposes

Goodwill

The amount paid for an existing business above the value of its other assets

Electronic Funds Transfer

The communication of fund-transfer information over wire, cable, or microwave

Cost Of Goods Sold

The costs of obtaining materials to make products sold by a firm during the course of a year

Liquididty

The ease with which an asset can be converted into cash

FDIC

The federal agency that ensures the safety of deposits up to $250,000 in the financial institutions that it insures

Balance Sheet

The financial statement that supplies detailed information about a firms assets, liabilities, and owners equity

Discount Rate

The interest rate at which member banks can borrow money from the Federal Reserve Bank

Prime Rate

The interest rate available to a bank's more creditworthy customers

Gross Profit

Total revenue- the cost to make the product

True or False: An import is a product made or grown abroad but sold domestically

True

True or False: Critics of protectionism charge that it drives up prices by reducing competition

True

True or False: Even free market economies often establish some system of quotas or tariffs

True

True or False: Globalization refers to the process by which countries around the world are becoming more dependent on one another

True

True or False: International firms conduct a good deal of business abroad and may even maintain overseas manufacturing facilities

True

True or False: The World Trade Organization was created to encourage international trade

True

True or false: The US has a large trade deficit with Japan, China, and Mexico: this means the US has imported more from them than we have purchased from them.

True

Fixed Asset

an asset with long-term use or value (land, buildings, etc)

Trust Services

management by a bank of an estate, investments, or other assets on behalf of an individual

M-2

measure of the money supply that includes all the components of M-1 plus the forms of money that can be easily converted into spendable forms

Which organization created the classification of countries based on per capita income?

the World Bank