Name: __________________________________ Econ Unit 5 Study Guide Stocks: are ownership shares of a corporation are called Stockholders elect: a board of directors to act on their behalf. Limited liability for stockholders: meaning that they are not responsible for the debts of the corporation. Financial capital: is the money needed to run a business or enable it to grow larger. Labor unions: provide a better chance to obtain higher pay and better working conditions. Modified union shop: workers do not have to join a union, but can choose to do so. Mediation: is when a third party tries to help the union and the company reach an agreement. Collective bargaining: is when union and company officials meet to discuss the terms of the workers’ new contract. The civilian labor force: is the term for all civilians 16 years old or older who are either working or looking for work. The unemployment rate: is the percentage of the civilian labor force who are not working but are looking for jobs. Antitrust laws: are designed to control monopoly power and to preserve and promote competition. Natural monopoly: occurs when the costs of production are minimized by having one firm produce the product. Real GDP: shows an economy’s production after the distortions of price increases have been removed. An economic expansion occurs when: real GDP goes up. Inflation: is a sustained increase in the general level of prices. Budget: is the blueprint of how the government will raise and spend money. Budget resolution: is a document that totals revenues and spending for the year and sets targets for how much will be spent in various categories. Private goods: are goods that when consumed by one individual, cannot be consumed by another. Merger: when two or more companies form a single business Business Cycle: is the alternating periods of economic growth and decline Budget surplus: when a government spends less than it receives in revenues Budget deficit: when a government spends more than it receives in revenues Balanced budget: when the governments spending equals its revenues FDIC: is the federal corporation that insures individual accounts in financial institutions. Federal Reserve System: is our nation’s central bank. Fiscal Year: is a 12-month period that may or may not match the calendar year. Debt: is the money that has been borrowed but not yet repaid. States subsidize, or pay part of the costs of, a college education for resident students. Social Security: is a government program that provides money to people who are retired or disabled. Payroll taxes: are deducted from a worker’s paycheck to fund Social Security and Medicare.