Economics Chapter 3 Study Guide Flashcard

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Sole proprietorship
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unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States
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Principal
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amount borrowed when getting a loan or issuing a bond
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Depreciation
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gradual wear on capital goods during production
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unlimited Liability
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requirement that an owner is personally and fully responsible for all losses and debts of a business; applies to proprietorship, and general partnerships
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labor union
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organization that works for its members’interests concerning pay, working hours, health coverage, fringe benefits, and other job related matters
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Dividend
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check paid to stockholders, usually quarterly, representing portion of corporate profits
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cash flow
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total amount of new funds the business generates from operations; broadest measure of profits for a firm, includes both net income and non-cash charges
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stock
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certificate of ownership in a corporation; common or preferred stock
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credit union
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nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services
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Inventory
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stock of goods held in reserve;includes finished goods waiting to be sold and raw materials to be used in production
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corporation
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form of business organization recognized by the law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, sue and be sued
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multinational
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corporation producing and selling without regard to national boundaries and whole business activities are located in several different countries
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interest
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payment made for the use of borrowed money; usually paid at periodic intervals for long-term bonds or loans
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consumer cooperative
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nonprofit association performing some kind of economic activity for the benefit of its members
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partnership
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unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm; same as general partnership
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net income
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measure of business profits determined by subtracting all expenses,including taxes, from revenues
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Collective Bargaining
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process of negotiation between union and management representatives over pay,benefits, and job related mattes
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bankruptcy
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court-granted permission to an individual or business to cease or delay payment on some or all debts for a limited amount of time
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Nonprofit
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economic institution that operates like a business but does not seek financial gain;schools,churches,community service organizations

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