| Term | Definition |
| corporation | a form of business ownership that
allows a company by law to exist and
conduct business affairs in its own
name; supported with common and
preferred stock |
| demand deposit | funds deposited in a bank that are
available upon demand
Example: checking account |
| discount rate | the interest rate charged by the Federal
Reserve System for temporary loans to
its member banks |
| Federal Reserve System (Fed) | a United States government agency
whose basic role is to control the
nation’s money supply |
| inflation | a sustained increase in the average level
of prices of goods and services resulting
in a loss of the purchasing power of
money |
| legal tender | currency that may be lawfully offered in
payment of debts |
| money supply | the amount of money in circulation |
| monopolistic competition | a system in which there are only a few
sellers in the marketplace |
| monopoly | exclusive control of a commodity or
service in a particular market |
| oligopoly | the market condition that exists when
only a few sellers have the resources to
produce a particular good, such as an
automobile or aircraft |
| partnership | a business owned by two or more
persons |
| prime interest rate | the interest rate charged by a bank to its
best customers for a short-term loan |
| public utility | a company granted exclusive control of
a good or service offered to the public
Example: electric company |
| pure competition | a market in which many independent
sellers offer the same goods and services |
| pure monopoly | a market in which there is only one
seller of a product
Example: public utilities |
| recession | a decrease in demand for goods and
services and an increase in
unemployment leading to a decline in
the economy; a downturn in the
economy, characterized by a decrease in
business activity |
| sole proprietorship | a business owned by one person |
| time deposit | deposits with specific maturity periods;
usually pay higher interest than demand
deposits
Example: certificates of deposit |
