usmeni

Question 1

EXCHANGE RATES

Answer 1

rate at which one currency can be exchanged for another/ value of another country’s currency

Question 2

DEPRESSION (BC)

Answer 2

major downturn in the business cycle in economic activity, sharp fall in economic growth, employment, profit, interest rates, investments, GDP decreases (recession that lasts longer than 3 years)

Question 3

FINANCIAL STATEMENTS

Answer 3

Formal records of company’s financial activities and position : BALANCE SHEET-shows company’s assets, liabilities and shareholders equity 2.THE INCOME STATEMENT (PROFIT AND LOSS ACCOUNT) shows how much profit or loss does the company make and the difference between incomes and expenditures 3.THE CASH FLOW STATEMENT summarizes the amount of cash entering and leaving a company

Question 4

EUROPEAN UNION

Answer 4

unique political and economic union of 27 sovereign European countries + SINGE/INTERNAL MARKET: makes more competition, consumers have more choice in goods and services and better quality with lower prices, the four freedoms: people, capital goods and services

Question 5

SECURITIES

Answer 5

a contract that can be signed a value and traded : STOCK (representing ownership of a company) , BONDS (a debt agreement) and DERIVATIVES (right to ownership)

Question 6

IMF

Answer 6

organization of 190 countries that secures economic stability, high employment, secures those countries in needed with financial services and resources, reduces poverty around the world, monitors financial policies

Question 7

CENTRAL BANKING

Answer 7

a system in which a central bank manages countries currency, money supply and interest rates, implements monetary policy ensures financial stability and economic growth (ECB, the fed)

Question 8

ANNUAL REPORT

Answer 8

a report which a company makes every year that includes company’s audited accounts, statements of profit or loss and how the management thinks the company will do in the future

Question 9

INVESTMENT BANKS

Answer 9

work with big companies, offering financial advices, they raise capital by issuing stock or shares and bonds. They offer stockbroking and portfolio management to rich corporates or individual clients. They help companies that are involved in mergers or takeovers earning high fees in the process

Question 10

DERIVATIVES

Answer 10

financial instrument that represent right to ownership, their price depends on the movement of another prices and they manage risk and speculate price changes

Question 11

STOCKS

Answer 11

financial instruments that represent ownership of a company

Question 12

BONDS

Answer 12

debt instrument issued by the government, companies or other entities. an official paper that government, company give to you to show that you have lend them money that will pay back to you at a particular interest rate

Question 13

AUDITING

Answer 13

official examination of the businesses financial statements

Question 14

E-COMMERCE

Answer 14

exchange of goods and services and transmission of funds over the internet

Question 15

PROTECTIONISM

Answer 15

the actions of government to help infant industries by taxing imported goods 1.SUBSIDES(money that the government gives to help encourage infant industries) 2.they tax imported goods - CUSTOMS DUTY 3.IMPORT SUBSTITUTION: to replace imported goods with domestic production

Question 16

PROFIT AND LOSS STATEMENT

Answer 16

financial statement that shows how much profit or loss does the company make, the difference between revenues and expenses during a particular period

Question 17

INTERNATIONAL TRADE

Answer 17

exchange of goods and services between countries

Question 18

EXPORTING

Answer 18

selling goods and services to another country

Question 19

IMPORTING

Answer 19

buying goods and services from another country

Question 20

TRADE AGREEMENTS

Answer 20

reduce trade barriers to make trade more easier and efficient

Question 21

BUSINESS CYCLE/TRADE CYCLE

Answer 21

a period when a country’s economy goes from growth/expansion to recession and then bank to growth; GDP alternatively grows and contracts: 1.expansion 2.peak 3.recession 4.depression 5.trough 6.recovery

Question 22

CAUSE OF THE BUSINESS CYCLE

Answer 22

people’s spendings or consumption decisions which are based on expectations whether to spend, borrow or save

Question 23

MERGERS AND ACQUISITIONS

Answer 23

the process where companies combine or one company purchase another

Question 24

MERGER

Answer 24

when two companies combine together and form a single new one-mutual between both companies

Question 25

ACQUISITION

Answer 25

one company buys another usually with mutual agreement

Question 26

TAKEOVER

Answer 26

one company takes control of another by purchasing majority of its shares - without mutual agreement
FRIENDLY-board of directors agrees to a takeover OR HOSTILE

Question 27

RETAIL OUTLETS

Answer 27

where goods and services are sold; supermarkets,hypermarkets,department stores,clik and mortar, brick and mortar, vending machines, mobile shops

Question 28

ACCOUNTING

Answer 28

preparing financial statements showing income and expenditure, assets and liabilities

Question 29

BANKING

Answer 29

business of managing money, saving, borrowing, investing, providing credit, take deposits from people or businesses and then lend money or invest it. they offer services like checking accounts, loans

Question 30

ASSETS

Answer 30

things that a company owns that have a value 1.current 2.fixed(tangible) 3.intangible

Question 31

PEGGED/FIXED EXCHANGE RATE

Answer 31

set by the government or central bank, example of intervention in an economy, does not change before it is centrally decided

Question 32

FLOATING EXCHANGE RATE

Answer 32

determined by the private market only through supply and demand rather than being fixed to another currency, it can fluctuate freely

Question 33

MANAGED FLOATING RATE

Answer 33

example of intervention in the economy, mix of the fixed rate and the floating rate, if the rate changes more than it is allowed the central bank intervenes to stabilize it by buying or selling the currency

Question 34

REASONS FOR TRADE BARRIERS

Answer 34

1.protecting domestic industries 2.protecting jobs (by limiting imports)
3.prevent dumping (when a foreign producers sells goods and services at the price lower than their domestic market to gain market share unfairly

Question 35

TARIFFS

Answer 35

tax on exported or imported goods to protect domestic industries, raise government revenue

Question 36

QUOTAS

Answer 36

limits set by the government on the quantity of a specific product that can be imported or exported to regulate the amount of goods entering and leaving a company

Question 37

CURRENCY

Answer 37

the money in use in a particular country, used as a medium of exchange for goods and services

Question 38

YIELD

Answer 38

how much income is generated from the investment, expressed as a percentage

Question 39

HEDGING

Answer 39

taking actions to reduce the risk of financial losses. Buying insurance

Question 40

WTO

Answer 40

international organization that deals with rules of trade between nations, helps with trade agreements and fair trade

Question 41

IPO

Answer 41

when a private company offers its shares for the first time to the public, this allows company to raise capital by selling ownership stakes to investors

Question 42

BOND ISSUER

Answer 42

a government (government bonds) or a company (corporate bonds) that borrows money by selling bonds