Business Terms

Question 1

Elastic

Answer 1

When a small change in price causes a significant change in the quantity demanded

Question 2

Enterprise zone

Answer 2

specially designated areas of a community that provide tax benefits to new businesses locating there and grants for new product development

Question 3

Enterprise

Answer 3

a company that is organized for commercial purposes

Question 4

Commercial

Answer 4

of, relating to, or characteristic of commerce

Question 5

Revenue

Answer 5

The gross amount of money generated by a business

Question 6

Profit

Answer 6

Money left over after paying of liabilities

Question 7

Net income

Answer 7

Same as profit, revenue - expenses

Question 8

Bottom line

Answer 8

AKA profits, the bottom line is a company’s income after all expenses have been deducted from revenues

Question 9

Top line

Answer 9

Total revenue, gross income before expenses are paid

Question 10

Scarcity

Answer 10

When demand is greater than resources

Question 11

Top line growth

Answer 11

The revenue is increasing

Question 12

Bottom line growth

Answer 12

An increase in profits (revenue -expenses)

Question 13

How could one increase bottom line growth?

Answer 13

Increase revenue, or decrease expenses

Question 14

Sole proprietor

Answer 14

also known as a sole trader, is owned by one person and operates for their benefit

Question 15

Partnership

Answer 15

a business owned by two or more people

Question 16

Corporation

Answer 16

an independent legal entity owned by shareholders

Question 17

Is a cooperate tax rate lower or personal income tax rate lower?

Answer 17

Corporate tax rate, this is a benefit of becoming a corporation

Question 18

Is it easier or harder to generate capital when you are a corporation?

Answer 18

It is easier to raise capital because you can sell stock

Question 19

What does it mean when a corporation is double taxed?

Answer 19

A company is taxed when they make the profit, and then when they issue their dividends

Question 20

Interest

Answer 20

Interest is the charge for the privilege of borrowing money, typically expressed as annual percentage rate Read more: Interest Definition | Investopedia http://www.investopedia.com/terms/i/interest.asp#ixzz3wOflTaOy Follow us: Investopedia on Facebook

Question 21

Liability

Answer 21

A company’s legal debts or obligations

Question 22

Limited liability

Answer 22

If a business owner has “limited liability,” it means that he or she is not personally responsible for business debts and obligations of the corporation

Question 23

Manufacturing

Answer 23

is the production of merchandise for use or sale using labour and machines, tools, chemical and biological processing, or formulation

Question 24

Distribution

Answer 24

the process of making a product or service available for use or consumption by a consumer or business user

Question 25

Downsize

Answer 25

Reducing the size of a company by eliminating workers and/or divisions within the company

Question 26

Downsize

Answer 26

Reducing the size of a company by eliminating workers and/or divisions within the company

Question 27

Privately held company

Answer 27

close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders

Question 28

Does a privately held company offer shares of stock to the public?

Answer 28

No, they are not listed on the stock exchange rather the ownership/stock is exchanged privately

Question 29

Stock

Answer 29

Equity stake (ownership)

Question 30

Publicly traded / publicly held company

Answer 30

A corporation whose ownership is dispersed among the general public in the form of shares which is in turn traded through a stock exchange

Question 31

Inflation

Answer 31

A measure of price changes of goods or services. Since the 80's, the inflation rate has been between 1-5% per year

Question 32

What is the US Federal Reserve (aka Fed) and what do they do?

Answer 32

Is the central bank of the US. It regulates and sets interest rates

Question 33

How does the federal reserve manipulate interest rates?

Answer 33

By influencing bond markets through its purchase of government bonds, this helps stabilize economic growth

Question 34

What happens to the economy when interest rates rise?

Answer 34

When interest rates rise, people are motivated to save more (rather than spend), and businesses become more hesitant to borrow money to invest in new innovation. As a result, economic growth slows.

Question 35

Venture capital firm

Answer 35

funds invest in companies in exchange for equity in the companies they invest in, which usually have a novel technology or business model in high technology industries, such as biotechnology and IT

Question 36

Venture capital

Answer 36

is money provided to seed early-stage, emerging and emerging growth companies