Economics ch. 8

Conglomerate

Composed of four or more businesses that make unrelated products.

Multinational

Corporation with manufacturing and service operations in several countries.

Bottom line

Real measure of business profit.

cooperative

voluntary association of people who carry on economic activity for the benefit of its members.

charter

permission from the government to create a corporation.

horizontal merger

union created among firms that make the same product.

unlimited liability

big disadvantage of a sole proprietorship.

sole proprietorship

most numerable of organizations in U.S. Economy.

partnerships

least numerous of organizations in U.S. economy

general partner

Partner involved in management and finances.

producer cooperative

association set up for the benefits of the farming industry.

attraction of skilled employees

task that is much harder for sole proprietorship and partnerships due to lack of revenue.

court granted bankruptcy

allows people or businesses to cease or delay payments to their creditors.

Principal

the actual amount of money borrowed in a loan by a business or individual.

bond

a written promise to repay a written amount on a later date.

interest

percentage of money to be paid back along with the original amount of the loan.

cash flow

Represents the real measure of business profit.

vertical merger

Union of firms that are involved in different stages of production of the final product.

limited partner

at least one partner only involved in only the finances of an operation or business.

conglomerate diversification

allows operation even if one product lines fail