Key Economic Concepts and Terms

This set of flashcards covers important vocabulary and concepts related to economic systems, business practices, financial regulations, and labor laws.

Horizontally integrated corporation

A company that has expanded its business by merging or acquiring other companies in the same industry at the same level of production.

Vertically integrated corporation

A company that owns multiple stages of its supply chain, such as production or distribution.

Supply chain

A network of individuals and companies involved in creating a product and delivering it to the consumer.

Capital intensive industry

Industries that require large amounts of capital to start or operate, involving significant investment in expensive assets.

Economies of scale

Cost advantages gained by a company as production increases, allowing fixed costs to be spread over more goods.

Economies of scope

Savings achieved by producing two or more distinct goods, where the combined cost is less than producing each separately.

Fixed cost

Costs that are independent of volume and tend to be based on time rather than quantity produced or sold.

Variable costs

Costs that change as the volume of production changes, typically based on quantity produced or sold.

Interstate commerce act

An 1887 federal law that regulated the railroad industry, requiring reasonable rates and preventing financial discrimination.

National banking acts of 1863 and 1864

Laws that reestablished a central banking system and developed a stable bank-note currency.

Gold standard

A monetary system where the value of currency is defined in terms of gold for exchange.

Hard money

Stable currency that is less prone to inflation and widely accepted for trade.

Soft money

Unsteady currency that is prone to inflation and has less acceptance globally.

Greenbacks

The first national currency of the US, not redeemable for gold or silver, backed by the federal government's credit.

Free silver

The movement promoting unlimited coinage of silver which threatened inflation.

Managerial revolution

The shift of control of large businesses from owners to professional managers, leading to high salaries for corporate leaders.

Sherman anti-trust act of 1890

A federal law prohibiting anticompetitive business practices to protect consumers.

The moving assembly line

A manufacturing system developed by Henry Ford to reduce construction time and costs.

Darwinism

The concept of 'survival of the fittest' applied to socio-economic contexts.

Centralization

Concentration of control of an activity or organization under a single authority.

Fordism

A manufacturing system emphasizing labor specialization, assembly lines, standardized parts, and scientific management.

Bank run

A situation where many customers withdraw money from a bank simultaneously due to concerns about solvency.

Corner the market

Gaining control of a market by acquiring a large portion of a commodity to manipulate its price.

Merger

A voluntary combination of two or more companies to form a single legal entity.

Acquisition

A transaction where one company buys a controlling interest in another company.

Banks and banking

Financial institutions that accept deposits and lend money, facilitating economic activities.

Bankruptcy

A legal process allowing individuals or businesses to resolve debt when financially distressed.

Liquidation

The process of ending a business and distributing its assets to pay off debts.

Bonds

Debt securities representing loans made by investors to borrowers in return for interest.

Branch banking

A banking model where a bank operates multiple locations to enhance accessibility.

Buying on margin

A high-risk investment strategy where investors borrow money to buy securities.

Collateral

An asset pledged by a borrower to guarantee loan repayment.

Commodities

Basic goods sold for consumption or production, also known as primary goods.

Commodity trading

The international exchange of raw materials or primary goods.

Holding companies

Corporations that own and control other companies known as subsidiaries.

Equities

Shares representing ownership in a company, distinguishing them from fixed-income securities.

Securities

Written evidence of ownership, conferring rights to property not currently held.

Federal Reserve System

The central bank of the United States responsible for monetary policy and financial stability.

Federal Reserve Act of 1913

The law that established the Federal Reserve and created a monetary system to address financial stress.

Federal Trade Commission (FTC)

A US agency that protects consumers and promotes competition.

Selling short

A trading strategy where investors sell securities they do not own, intending to buy them back later.

Tariff

A tax on goods or services imported or exported between countries.

Clayton Anti-Trust Act

A 1914 law prohibiting unfair business practices and promoting fair competition.

The Great Merger Movement

A period from 1895 to 1904 marked by numerous mergers forming larger corporations.

The Fair Labor Standards Act

A U.S. law that sets minimum wage, overtime pay, and child labor standards to protect workers.