economics vocab

supply

The quantity of something that producers have available for sale

demand

the quantity of a good or service that consumers are willing and able to buy

multinational

A corporation that engages in business worldwide

conglomerate

a group of diverse companies under common ownership and run as a single organization

elastic

describes demand that is very sensitive to a change in price

inelastic

describes demand that is not very sensitive to price changes

Shorting/Short Selling

an investment or trading strategy that bets on a decline in a security's price. An investor or trader expects the shares to drop and to be able to purchase them at a lower cost, thus keeping the difference as a profit.

bond

a formal contract to repay borrowed money with interest at fixed intervals

stock

A share of ownership in a corporation.

shareholder

A person who invests in a corporation by buying stock and is a partial owner

non

profit

double taxation

a corporation pays income taxes on its earnings, and when dividends are distributed to stockholders, the stockholders pay taxes a second time on the corporate dividends they receive

horizontal merger

the combination of two or more firms competing in the same market with the same good or service

vertical merger

the combination of two or more firms involved in different stages of producing the same good or service

sole proprietor

A business owned by one person

dividend

The portion of corporate profits paid out to stockholders

unlimited liability

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

limited liability

A form of business ownership in which the owners are liable only up to the amount of their individual investments.

Estate Tax (Death Tax)

a tax levied on the net value of the estate of a deceased person before distribution to the heirs.

Microeconomics

the study of how households and firms make decisions and how they interact in markets

Macroeconomics

the study of economy

TINSTAAFL

acronym for THERE IS NO SUCH THING AS A FREE LUNCH; means that there is always a cost for a product, even if it is not evident.

Corporation

A business owned by stockholders who share in its profits but are not personally responsible for its debts

union

A worker association that bargains with employers over wages, benefits, and working conditions

equilibriam

A state of balance

royalty fee

weekly or monthly payments made by the owner of the franchise to the seller of the franchise

Franchise

A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area

command economy

An economic system in which the government controls a country's economy.

Traditional Economy

An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.

market economy

Economic decisions are made by individuals or the open market.

Janet Yellen

Secretary of Treasury

Jerome Powell

Chairman of the Federal Reserve

FOMC (Federal Open Market Committee)

the branch of the Federal Reserve Board that determines the direction of monetary policy

Herschel

Discovered Uranus and made a forty

Rule of 70

Doubling time (in years) = 70/(percentage growth rate).

CPI (Consumer Price Index)

an index of the cost of all goods and services to a typical consumer

gdp

Gross Domestic Product

Recession

A slowdown in a nation's economy