BUS 226 FINAL EXAM

The Fair Labor Standards Act

1938 act which provided for a minimum wage and restricted shipments of goods produced with child labor

Banks and Banking

A bank is a financial institution that holds and lends money, and offers a variety of services to customers.

A bank run

A bank run happens when a large number of customers withdraw their money from a bank at the same time because they think the bank might fail

Corporate Organizational Chart

A business organizational chart (or org chart) is a visual representation of the structure of a company. It shows the hierarchy, roles, and relationships between different positions within the organization.

Corporate Form

A corporate form refers to the legal structure of a business that is recognized as a separate entity from its owners. It is a common way for businesses to organize themselves and is often chosen for the benefits it provides, such as limited liability, easier access to capital, and continuity of existence.

The Sherman Anti-Trust Act (1890)

A federal law that aimed to prevent monopolies and encourage competition.

The Interstate Commerce Act/The Interstate Commerce commission

A law passed in 1887 that regulated the railroad industry and established the Interstate Commerce Commission to ensure fair rates and practices.

Unions

An association of workers, formed to bargain for better working conditions and higher wages.

Laissez-faire

An economic policy of minimal government interference in the business and economic affairs of individuals and corporations.

Capitalism

An economic system based on the private ownership of the means of production and their operation for profit

Regional Republicanism

Business moderate sized Regionally based Flatter hierarchies Shared authorities between owners / managers Economies of scope

Capital

Capital is the money or resources used to build, run, or grow a business. Real capital is the assets used to produce some goods.

The Chicago Board of Trade

Chicago Board of Trade was a key marketplace for commodity trading

Collateral or collateralization

Collateral refers to an asset or property that a borrower offers to a lender as security for a loan or credit.

Equity

Equity generally refers to ownership in a company. When you own an equity, you're essentially a shareholder or part-owner of that company.

Federal Trade Commission (FTC)

FTC was set up to oversee business action and to protect consumers, investors, and to protect consumers, investors, and businesses from anti-competitive practices. These practices include monopolies, monopolistic mergers, price-fixing, and fraudulent and or deceptive advertising

Consumer Capitalism

Focuses on consumer goods and services, driven by consumer demand.

Coperate Liberalism

Huge National firms Hierarchically organized Separation of property for management Economies of scale High volume, long haul freight National markets

Inventories (and why these are important to busimess)

Inventories refer to the goods and materials a business holds for the purpose of resale, production, or maintenance They ensure that products are available to meet customer demand without delays They help maintain smooth production processes by ensuring necessary materials and components are readily available

Investment banking

Investment banking is a part of banking that helps businesses and governments raise money by selling stocks and bonds, and gives advice on big deals like mergers and acquisitions.

Capital-goods driven capitalism

Involves investment in machinery, buildings, and equipment that are used to produce goods.

Trusts

Large corporations that monopolized industries to limit competition

The Three Branches of the Federal Government

Legislative, Executive, Judicial

Macroprudential Monetary Policy

Macroprudential policy is a set of regulatory and policy tools used to ensure the stability of the financial system as a whole, rather than just the stability of individual financial institutions or markets.

Fordism

Promotes mass production and consumption

Retail banking

Retail banking refers to the services provided by banks to individual consumers, rather than businesses or large institutions.

The New Deal

Roosevelt's reform program during great depression Its main goals were relief for the unemployed, recovery of the economy, and reform of the financial system to prevent future crises Created jobs for unemployed

Securities

Securities is a broad term that refers to financial instruments or investment products that can be traded in financial markets. They represent a financial asset or a claim on the assets of the issuing entity.

Federal Reserve Act

The Federal Reserve Act is a key piece of U.S. legislation that created the Federal Reserve System

The Gold Standard and "Hard Money"

The Gold Standard is a system where a country's currency is directly tied to a certain amount of gold. "Hard money" refers to currency backed by gold, often seen as more stable and less prone to inflation.

The Great Merger Movement

The Great Merger Movement refers to a period in the late 19th and early 20th centuries when there was a wave of mergers and acquisitions among U.S. companies, particularly in industries such as railroads, steel, oil, banking, and manufacturing.

Panic of 1907

The Panic of 1907 was a severe financial crisis in the United States that was triggered by a series of bank failures, stock market crashes, and a general loss of confidence in the banking system. Key events: Bank runs Stock Market Crash Business Failures Intervention by JP Morgan

Commodity trading

The buying and selling of raw materials (commodities) like grains or metals.

Commerce Clause of the US Constitution and its importance

The clause in the Constitution (Article I, Section 8, Clause 1) that gives Congress the power to regulate all business activities that cross state lines or affect more than one state or other nations. It allows Congress to control and regulate the economy

The surge in union memberships

The economic hardship and labor unrest during the Depression created an environment where workers increasingly turned to labor unions for protection, support, and improved working conditions.

Industrial capitalism

The economic system that emerged during the industrial revolution, focuses on manufacturing and industrial production.

Survival of the fittest:

The idea that only the strongest or most adaptable survive and succeed, often applied to business competition.

Supply Chain

The lines of distribution for the organization's goods or services.

The Federal Reserve (FED)/ Federal Reserve System

The national banking system that conducts monetary policy including setting interest rates, managing money supply, and regulating financial markets The FED uses "Macroprudential Monetary Policy"

The Securities and Exchange Commission (SEC)

a U.S. government agency responsible for regulating the securities industry, enforcing federal securities laws, and overseeing the stock markets

Commodities

a basic, raw material primary agricultural product but also energy resources, livestock, or metals that can be bought and sold, typically in bulk

Bond

a debt investment in which an investor loans money to an entity, which borrows the funds for a defined period of time at a variable or fixed interest rate

New York Clearinghouse Association

a private financial institution that served as a clearinghouse for banks in New York City. It played a key role in the development of the U.S. banking system, especially in facilitating the settlement of interbank transactions.

Tariffs

a tax or duty imposed by a government on imported or exported goods Effects: On consumers: Higher prices for imported goods, leading to potential higher overall costs for consumers. On domestic producers: Domestic businesses may benefit from reduced competition from foreign imports. On international trade: Tariffs can lead to trade wars, where countries retaliate with their own tariffs, potentially reducing overall global trade.

Buying on Margin

borrowing money from a broker to purchase stock

Holding Companies

company that owns and controls other companies or businesses A holding company is a company that doesn't produce goods or services itself. Instead, its primary purpose is to own shares or assets of other companies

Monopoly

exclusive possession or control of the supply or trade in a commodity or service

Rise of Mass Production Practices

he rise of mass production practices during the late 19th and early 20th centuries revolutionized manufacturing and led to increased productivity, lower costs, and the widespread availability of goods. This shift was driven by key innovations such as the moving assembly line, the use of factories and interchangeable parts, and new managerial techniques focused on efficiency. Here's a breakdown of how these elements contributed to mass production

Short sale/selling short

is a trading strategy where an investor borrows shares of a stock or other security that they do not own and sells them in the open market, with the intention of buying them back later at a lower price. The goal is to profit from a decline in the price of the stock or security. (essentially betting on the decline in a stock)

"Corner" in a market

obtaining control of a particular asset so to manipulate its price. The goal is to gain enough control of the supply to set the price

New York Stock Exchange

played a crucial role in shaping the economic landscape of the United States during the Roaring Twenties, a decade of rapid economic growth, technological innovation, and cultural change. The NYSE, located on Wall Street in New York City, was at the heart of the American financial system and witnessed unprecedented growth during this period. However, the decade also culminated in the stock market crash of 1929, which marked the beginning of the Great Depression.

Merger - Horizontal vs Vertical

refers to the combination of two or more companies into a single, unified entity. Horizontal - two companies operating in the same industry and at the same stage of the supply chain combine Vertical - Involves companies at different stages of production in the same industry merging

Capitalization

the accounting practice of recording a cost as a fixed asset on the balance sheet/the amount of outstanding stock, debt, and retained earnings ??

The Power Revolution

the electrical power revolution entering a new world of electrical products -Shift from Human and Animal Power to Machines -Introduction of Steam Power -Electrification

"Morganization"

the monopolization techniques used my JP Morgan -Aim was eliminating "wasteful" competition to limit financial instability Morganization - massive reorganization, often through mergers, to improve profitability

Liquidation/liquidity

the process of converting assets into cash or cash equivalents by selling them on the market/how easily something can be exchanged for cash (ex: stocks, bonds, bank accounts, cash etc) the process of bringing a business to an end and distributing its assets to claimants

acquisition

the purchase of one business enterprise by another

Bankruptcy

when a company is unable to repay outstanding debts

"Squeeze" in a market

when a stock price rapidly increases due to a large number of short sellers being forced to buy back the stock to cover their positions, causing a surge in demand and further pushing the price higher