Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
ECON Unit 3 Test
Mr. Stickler's Liberty Christian Economics A & B Unit 3 Test Flashcards
| Question | Answer |
|---|---|
| What is a "stop order" and what is the benefit of using it when buying stocks? | This type of order is an order to sell stock when the price reaches a certain point. This ensures a greater chance of being able to sell stock at a certain price. It limits an investor's losses. |
| What is a "limit order" and what is the benefit of using it when buying stocks? | This type of order is an order to buy a set number of shares of stock at a specified price. This ensures that investors buy stock at the price they're comfortable paying. |
| What does the term "P/E Ratio" mean? | It stands for "Profit - to - Earnings Ratio". |
| What does the P/E Ratio of a stock tell an investor? | It tells investors how a stock's current price relates to its per - share earnings. It is calculated by dividing the Earnings Per Share (EPS) by the current Market Value per Share. |
| What is the difference between a "horizontal" and a "vertical" merger? | A horizontal mergers occur when firms that make the same kind of product join forces. Vertical mergers occur when companies involved in different stages of manufacturing or marketing join forces. (Pg. 78) |
| What is a "conglomerate"? | This is a firm that has at least four businesses, each making unrelated products and more responsible for a majority of its sales. (Pg. 76) |
| How are "conglomerates" formed? | These are formed when corporations become very large through mergers and acquisitions. (Pg. 76) |
| What are "multinationals"? Give one (1) example. | A "multinational" is a corporation that has manufacturing or service operations in a number of different countries. One example is the General Motors Corporation. (Pgs. 76 & 77) |
| What is a "corporation"? | This is a form of business organization recognized by law as a separate legal entity with all the rights of an individual. (Pg. 67) |
| What is a "proprietorship"? | This is also called a "sole proprietorship". It is a business owned and run by a single person. They are the smallest kind of business. (Pg. 62) |
| List one (1) advantage and one (1) disadvantage of a "proprietorship". | Advantage = They are very easy to set up. Disadvantage = The owner has "unlimited liability", which means that if the business fails, they are solely responsible for any and all debts that remain. (Pgs. 62 & 63) |
| What is a "partnership"? | This is a kind of business owned by two or more people. (Pg. 64) |
| What are the two (2) kinds of "partnerships"? | 1.) "General partnership" - all partners are responsible for the management & financial obligations of the business. 2.) "Limited partnership" - At least one partner is not active in the daily running of the business. (Pgs. 64 & 64) |
| List one (1) advantage and one (1) disadvantage of a partnership. | 1.) Advantage - Ease of management. 2.) Each partner is fully responsible for the acts of all other partners. If one partner causes the firm to suffer a loss, all partners are fully & personally responsible. (Pgs. 65 & 66) |
| What is a "stock"? | An ownership certificate for a corporation. (Pg. 67) |
| What is a "dividend"? | This is money - usually in the form of a check - that transfers a portion of a corporation's earnings to each stockholder. (Pg. 67) |
| What is a "common stock"? List one (1) benefit of having a common stock. | It represents basic ownership of a corporation. One benefit is that people who own common stock usually get one vote for each share of stock. (Pg. 67) |
| What is a "preferred stock"? | This is a share of stock that does not carry with it any voting privileges within the corporation. (Pg. 68) |
| What is a "bond"? | This is a written promise to repay the amount of money a person borrows at a later date. (Pg. 69) |
| What is the difference between a "stock" and a "mutual fund"? | A share of stock represents ownership in one (1) particular corporation or business while a share in a mutual fund includes investments in many different corporations or sectors of the stock market. |
| How are "mutual funds" operated? | These are operated by large financial corporations such as T. Rowe Price. Each mutual fund has an "investment manager" assigned to make decisions about which stocks to buy or sell. |
| What does the term "depreciation" refer to? | This term refers to the noncash charge that firms (corporations) take for the general wear and tear on its capital goods (such as machinery and other equipment it owns). (Pg. 73) |
| What are "non-profit organizations"? | These are organizations that work in a businesslike way to promote the collective interests of its members rather than seeking any type of financial gain. (Pg. 79) |
| What are "labor unions"? | These are organizations that workers form to protect and represent its member's interests in various employment matters (such as pay and benefits). (Pg. 81) |
| What is "collective bargaining"? | This term refers to times when unions participate in negotiations with management over pay, working hours, benefits, health care coverage, etc. (Pg. 80) |
| What is a "chamber of commerce"? | This is an organization that promotes the welfare of its member businesses. They sponsor activities ranging from educational programs to lobbying for favorable business legislation. (Pg. 81) |
Created by:
sticklerpjpII
Popular Economics sets