1142 Definitions

Question 1

production of goods and services

Answer 1

economic activity

Question 2

extended periods that indicate long-range economic direction

Answer 2

trends

Question 3

short-term fluctuations of output around along-term trend

Answer 3

business cycles

Question 4

average annual growth rate of U.S. economy

Answer 4

3-3.5 percent

Question 5

target rate of unemployment

Answer 5

5 to 7 percent

Question 6

income based on producing for others

Answer 6

wages

Question 7

income based on selling one’s own production

Answer 7

revenue

Question 8

lowest sustainable rate of unemployment possible under existing conditions

Answer 8

target rate

Question 9

high point of a business cycle

Answer 9

peak

Question 10

downturn lasting more than two quarters

Answer 10

recession

Question 11

unemployment of more than 12% for more than a year

Answer 11

depression

Question 12

gauges of the health of an entire economy

Answer 12

representative indicators

Question 13

indications of current phase of the economy

Answer 13

coincidental indicators

Question 14

indications of what is likely to occur in 12-15 months

Answer 14

leading indicators

Question 15

Pollution and

Depletion of natural resources

Answer 15

detrimental results of growth

Question 16

Investment
Institutional incentives
Resources
Technological development

Answer 16

Ingredients necessary for economic growth

Question 17

trough and peak = low/high

Answer 17

recession and boom = extremes

Question 18

straight line =

Answer 18

average growth trend

Question 19

the curve on the business cycle graph =

Answer 19

actual growth rate

Question 20

the result of the freedom within a free-enterprise company

Answer 20

Frictional unemployment

Question 21

results from economic changes during a temporary period of time

Answer 21

Seasonal unemployment

Question 22

the result of changes in the economy itself

Answer 22

Structural unemployment

Question 23

a result of fluctuations in economic activity

Answer 23

cyclical unemployment

Question 24

occurs when an employee leaves a job to seek another

Answer 24

frictional unemployment

Question 25

is of most concern to economists and government officials

Answer 25

cyclical unemployment

Question 26

is a reality because of the shift to hourly wages

Answer 26

cyclical unemployment

Question 27

bottom of a recession or depression

Answer 27

trough

Question 28

business owned and managed by a single individual

Answer 28

sole proprietorship

Question 29

business owned by two or more individuals

Answer 29

partnership

Question 30

certificate of ownership in a corporation

Answer 30

share of stock

Question 31

company with a market capitalization of more than $1 billion

Answer 31

large cap company

Question 32

issuing and selling of stock by a company

Answer 32

primary distribution

Question 33

subsequent trading of a corporation's stock

Answer 33

secondary market transaction

Question 34

association of security brokers and dealers

Answer 34

stock exchange

Question 35

computer network that transmits and updates price quotations

Answer 35

NASDAQ

Question 36

act of combining two firms

Answer 36

merger

Question 37

merger of firms in very different industries

Answer 37

conglomerate merger

Question 38

merger between companies in the same industry

Answer 38

horizontal merger

Question 39

merger between firms ahead of or behind each other in the production process

Answer 39

vertical merger

Question 40

act of selling part of a corporation recently acquired

Answer 40

deacquisition

Question 41

type of contract that attempts to correlate a firm's incentives with its managers' incentives

Answer 41

incentive-compatible

Question 42

``` unlimited liability limited life heavy responsibility on owner lowest management cost best able to maximize profits because of personal involvement of owner(s) ```

Answer 42

sole proprietorship | partnership

Question 43

``` limited liability perpetual life requires a state charter highest management cost best able to raise capital issues and sells shares of stock ownership easily transferred generates the most revenue ownership vested in stockholders ```

Answer 43

corporation

Question 44

hiring workers controlling quality communicating with workers and top management meeting objectives

Answer 44

responsibilities of managers

Question 45

division and department managers | is responsible for making operational decisions

Answer 45

middle management

Question 46

the board of directors and top executives | is responsible for making decisions that can affect or alter the course of the corporation

Answer 46

top management

Question 47

how much a person is willing to change the number of hours he works when his wage increases or decreases

Answer 47

incentive effect

Question 48

an action in which a union refuses to purchase a certain product in order to strengthen another union's bargaining position.

Answer 48

secondary boycott

Question 49

the purchase of stocks or bonds for individuals

Answer 49

Saving

Question 50

what a firm spends on capital goods

Answer 50

investment

Question 51

allows firms to write off investment costs more rapidly

Answer 51

accelerated depreciation