Gov & Econ Unit 2 Test Review

sole proprietorship

a business owned and managed by a single individual

advantages of sole proprietorship

easy start-up, you make decisions, owner enjoys the profits of successful management, profits taxed once, few government regulations, psychological satisfaction, easy of getting out of business

disadvantages of sole proprietorship

unlimited liability, difficult to raise capital, difficulty to find qualifies employees, size and efficiency, limited skills

partnership

a business owned by two or more people

general partnership

all partners are responsible for the management and financial obligations of the business

limited partnership

at least one partner is not active in the daily running of the business, although he or she may have contributed funds to finance the operation

advantages of partnership

easy to start, ease of management (each partner usually brings different areas of expertise to the business), profits taxed once, usually attracts top talent, lawyers + doctors + accountants

disadvantages of partnership

unlimited liability, shared profits, limited partnership, limited life, potential conflict

corporation

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual

advantages of corporations

ease of finding professional managers, limited liability for its owners, corporation is fully responsible for its debts and obligations, unlimited life, ease of raising financial capital, ease of transferring ownership

disadvantages of corporations

difficult to get a charter, owners/shareholders have little say in business affairs, double taxation, lots of government regulation

unlimited liability

the owner is personally and fully responsible for all losses and debts of the business

limited life

the corporation legally ceases to exist when the ownership changes

stocks

shares of ownership in a company, ownership certificates

new york stock exchange

handles stock and bond transactions for the largest and most established companies in the U.S., must have a "seat" on the exchange

NASDAQ

National Association of Securities Dealers Automated Quotations, created in 1971, no trading floor, send out information automatically through computer terminals worldwide

stock index

a statistic that tracks how the prices of a specific set of stocks have changed

bull market

steady rise in the stock market over a period of time

bear market

steady drop in the stock market over a period of time

bonds

paper notes promising to repay money after a certain length of time with interest

dividend

a check paid to shareholders if the corporation is profitable

common stock

basic ownership of corporation, usually receiving 1 vote for each share of stock

preferred stock

nonvoting ownership shares of the corporation

merger

a combination of two or more businesses to form a single firm

horizontal merger

a type of merger which takes place when firms that produce the same kind of product join forces

vertical merger

a type of merger which involves companies in different stages of manufacturing or marketing joining together

reasons for merging

grow faster, efficiency, better product, eliminate rival, change image

conglomerate

a firm that has at least four businesses each making unrelated products and none responsible for its sales

multinational

large corporations that become international in scope

nonprofit organization

economic organization that operates like a business but does not seek financial gain

cooperative

nonprofit associations performing some kind of economic activity for the benefit of its members

perfect competition

a market structure characterized by a large number of well-informed independent buyers and sellers who exchange identical products

monopolistic competition

market structure that has all the conditions of perfect competition except for identical products

product differentiation

real or perceived differences between competing products in the same industry

non-price competition

use of advertising or other promotions designed to convince buyers that product is better

oligopoly

market structure in which a few very large sellers dominate the industry

collusion

a formal agreement to set prices or behave in a cooperative manner

natural monopoly

market situation where costs are minimized by having a single firm produce a product

geographic monopoly

a monopoly simply because of its location

technological monopoly

an individual has discovered a new manufacturing technique

government monopoly

a monopoly owned and operated by the government

# of house of representatives members

435

house of representatives term limit

2 years

# of senate members

100 (2 per state)

senate term limit

6 years

delegates

agents of the people who elected them

trustees

believe each question they face must be decided on its merits

partisans

allegiance to political party

politicos

combines delegate, trustee, and partisan roles

bills

proposed laws, are referred to various committees

oversight function

the process by which Congress checks to see that the executive branch agencies are carrying out the policies Congress set by law

delegated powers

Congress only has powers granted to it by the constitution

expressed powers

powers directly stated in the constitution

implied powers

powers that congress has that are not stated explicitly in the constitution but reasonably deducted

inherent powers

powers that congress has because it is a part of the national government

necessary and proper clause

power to make all laws needed to support the Constitution

commerce power

power to regulate interstate and foreign trade

currency power

power to coin money and regulate the value thereof

tax

charge levied by govt to raise money to meet public needs

public debt

all of the money borrowed by the fed govt not yet repaid

deficit financing

spends more than it takes in

speaker of the house

the leader of the majority party who serves as the presiding officer of the House of Representatives

president of the senate

vice president

majority leader

floor leader of the party that holds more seats

minority leader

floor leader of the party that holds less seats

whips

assistant floor leaders, chosen at party caucus

standing committees

permanently established legislative committees that consider and are responsible for legislation within a certain subject area (permanent panels)

subcommittees

divisions of committees that do most of the committees' work

select committees

special committees for a specific purpose

joint committee

mostly permanent committee composed of House and Senate members

conference committee

temporary committee with members of House and Senate

joint resolutions

deal with unusual/temporary matters

concurrent resolutions

deal with matters in which the House and Senate act jointly

resolutions

deal with either House or Senate alone

omnibus measures

one bill that contains numerous issues and topics, mega-bill

pigeonhole

to set a congressional bill aside in committee without considering it (bury a bill, it dies in committee)

quorum

the minimum number of members who must be present for business to be conducted in Congress (majority of the full membership of House/Senate present)

filibuster

an attempt to "talk a bill to death"

cloture

limits debate over a bill, combats the filibuster

steps in which a bill becomes a law

bill introduced in House/Senate, bill referred to committee, committee approves bill, one house approves bill, other house approves bill, president signs bill