Quiz 1 Vocab

oligopoly

marker with less sellers who have power to influence prices

fiscal policies

used by the government regarding how it collects and spends revenue

monetary policies

policy used by government to control the size of its money supply

quota

restriction on number of imports

embargo

government order banning exports/imports of a product

tariff

tax on imports

subsidy

government payment to help a domestic business from foreign competition

venture capital companies

groups of small investors who invest money in companies with rapid growth potential

sole proprietorship

business operated by 1 person who is responsible for all debts. tax benefits. more freedom.

general partnership

2 or more owners who share operation and financial responsibility. advantage is able to grow by adding new talent. few legal requirements. disadvantage is unlimited liability.

limited partnership

limited and general partner

limited partner

partner who does not share in management and is liable for their debts in proportion to their investment

general partner

actively manages a firm w unlimited liability

cooperatives

form of ownership in which a group of sole proprietors or partnerships agree to work together for common benefits

corporations

business that is legally considered an entity separate from its owners and is liable for its own debts. can be sued, buy, hold, sell, property, comit crimes and be punished. advantage of limited liability, continuity.

limited liability

legal principal holding investors liable for a firms debts only to the limits of their personal investments. disadvantage is double taxation.

double taxation

taxes payable both by corporation on profits and by shareholders on dividend incomes

private corporation

stock is held by a few and not available to the public

public corporation

stock is widely held and available for sale to general public

s corporation

hybrid of private corporation and partnership. organized and operated like a corporation but treated like a partner for taxes.

limited liability corporation

hybrid of public corporation and partnership where owners are taxed as partners but have limited liability

board of directors

governing body of corporations that reports to shareholders and delegates power to run operations and responsible for sustaining assets

institutional investor

large investor, mutual or pension funds that purchases large blocks of corporate stocks

divestiture

strategy when a company sells 1 or more businesses to focus on another

m-1

measure of money supply that includes only most liquid forms

m-2

all of m-1 plus money that can be easily converted to spendable forms like short-term investments

money market mutual fund

fund of short term low risk financial securities purchased with the pooled assets of investor owners

mutual savings bank

financial institutitions whose depositors are owners sharing its profits

security investment dealer

financial institution that buys and sells stocks and bonds for investors and owns accounts

federal reserve system (the fed)

central bank of the U.S. Acts as the governments bank, serves member comercial banks, controls nations money supply. Has a board of govenors, group reserve banks, and member banks.

monetary policy

management of the nations economic growth by managing the money supply and interest rates

book value of stock

the value of a common stockexpressed as the firms owners equity divided by the number of common shares

dividend

payment to shareholders on a per share basis out of the companies earnings

mutual fund

company that pools cash investments for individuals and organizations to purchase a portfolio of stocks, bonds, and other securities

no-load fund

mutual fund where investors dont pay commisions when buying in or selling out

exchange traded funds (ETF)

bundle of stocks/bonds that are in an index that tracks overall movement of a market, but can be traded like a stock unlike a mutual fund. low initial investment, low operating expenses.

securities

stocks, bonds, mutual funds representing secured or asset based claims by investors against issuers

investment bank

financial institution specializing in issuing and reselling new securities

bull market

period of rising stock prices lasting over 12 months with investor confidence and motivation to buy

bear market

period of falling stock prices w negative investor sentiments. motivation to sell ahead of anticipated losses

PESTEL

Political, Economic, Sociocultural, Technological, Environmental, Legal