Econ Unit 3 Vocab

Sole Proprietorship

a business owned and manage by the same individual

Zoning Law

laws in a city or town that designate certain areas or zones for residential and business use

Liability

the legal obligation to pay debts

General Partnership

a type of partnership in which all partners share equally in both responsibility and liability

Fringe Benefits

payments to employees other that wages or salary

Partnership

business organization owned by two or more persons who agree on a specific division of responsibilities and profits

Limited Partnership

a type of partnership in which only one partner is required to be a general partner which other partners have limited responsibilities

Limited Liability Partnership

a type of partnership in which all partners are limited partners

Assets

the money and other valuables belonging to an individual or business

Business Franchise

a semi independent that pays fees to a parent company in return for the exclusive right to sell a certain product

Royalties

the share of earning given by a franchise as payment to franchiser

Corporation

a legal entity or being owned by an individual stock holders each of whom has limited liability for the firm's debts

Stock

a certificate of ownership in a company

Bond

a formal contract issued by a corporation or other entity that includes a promise to repay borrowed money with interest at fixed intervals

Dividend

the portion of corporate profits paid out to stockholders

Horizontal Merger

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

Vertical Merger

the merger of two or more firms involved in different stages of product the same good or service

Conglomerate

a business corporation merging more than three businesses that produce unrelated products or services

Nonprofit Organization

an institution that functions as a business but does not operate for the purpose of making a profit

Cooperative

a business organization owned and operated by a group of individuals for their shared benefit

Outsourcing

the practice of contracting with another company to do a specific job that would otherwise be done by a company's own workers

Offshoring

the movement of some of a company's operations, or resources of production, to another country

Learning Effect

the theory that education increases efficiency of production and thus results in higher wages

Screening Effect

a theory that suggests that the completion of college signals to employers that a job applicant is intelligent and hard-working

Contingent Employment

temporary and part-time jobs that are given to workers instead of full-time or permanent jobs

Glass Ceiling

an unofficial barrier that sometimes prevents some women and minorities from advancing to the top rank of organizations dominated by men

Labor Union

an organization of workers that tries to improve working conditions, wages, and benefits for its members

Blue-Collar Worker

someone who performs manual labor, often in a manufacturing, and who earns an hourly wage

White-Collar Worker

someone who works in a professional or clerical job and who usually earns a weekly salary

Collective Bargaining

the process in which union and company management meet to negotiate a new labor contract

Mediation

a settlement technique in which a neutral person, the mediator, meets with each side to try to find a solution that both sides will accept

Arbitration

a settlement technique in which a neutral third party listens to both sides and them imposes a decision that is legally binding for both the company and the union

Gross Domestic Product

the total value of all final goods and services produced in a country in a given year

Durable Goods

those goods that last for a relatively long time such as refrigerators cars and dud players

Nondurable Goods

those goods that last a short period of time such as food light bulbs and speakers

Real GDP

GDP expressed in constant or unchanging prices

Depreciation

the loss or the value or capital equipment that results from normal wear and tear

Aggregate Supply

the total amount of goods and services that will be purchased at all possible price levels

Aggregate Demand

the amount of goods and services that will be in the economy that will be purchased at all possible price levels

Recession

a prolonged economic contraction

Depression

a deep recesssion with the features such as hugh unemployment and low economic output

Unemployment Rate

the percentage of a nation's labor force that is unemployed

Underemployed

working at a job for which one is overqualified or working part time when full time work is desired

Inflation

a general increase in prices across an economy

Consumer Price Index

a price index determined by measuring the price of a standard group of goods meant to represent the market basket of a typical urban consumer

Market Basket

a representative collection of goods and services

Demand-Pull Theory

prices can be pulled higher by an increase in aggregate demand that outstrips the available supply of goods in an economy

Cost-Push Theory

occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials

Wage Price Spiral

the process by which rising wages cause higher prices and higher prices cause higher wages

Fixed Income

income that does not increase even when prices go up

Deflation

a sustained drop in the price level