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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.