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Types of Business Organizations
Money and Banking
Saving and Investing
Saving and Investing II
Types of Business Organizations II
100
Owner makes all decisions, keeps all profits, is solely responsible for debts, and owns all capital, few regulations, easy to start up.
What is sole proprietorship?
100
Permanent, transferable, easily divided, standard, limited supply, accepted everywhere
What are the six characteristics of money?
100
These represent loans that an investor gives to a company or government that must be repaid to the investor over time. Usually the investor receives the original amount of the loan as well as interest.
What are bonds?
100
The advantages of these are that they are low risk (meaning the chances of getting your money back are pretty much guaranteed), they are paid a fixed amount of interest over a period of time at regular intervals, and investors can sometimes purchase them at a discount. The disadvantage is that the rate of return (amount profited) is usually lower than other investments.
What are advantages/disadvantages of bonds?
100
These are created when one firm is able to dominate the market and no other firm is able to enter the market. A company that is a monopoly is the only seller in the market and buyers are literally at the mercy of the company to obtain the product.
What are monopolies?
200
Co-owners share the profits, make economic decisions together, assist in the business’ success. In many cases, each partner shoulders an equal amount of the responsibilities, each a portion of the start-up costs out of their own pockets, and in some types of this, co-owners are responsible for the debts that are incurred from doing business.
What is a partnership?
200
The goal of this agency is to make sure that enough money remains in circulation to meet the needs of the people. It also stabilizes the economy by keeping the money supply stable.
What is the Federal Reserve?
200
These are accounts that are similar to savings accounts but the money invested is "locked in" for a specific period of time, sometimes as much as five years.
What are certificates of deposit?
200
The advantages are that investors receive higher interest than they would on a savings account. The disadvantages are that they are not insured by the government through the FDIC (Federal Deposit Insurance Corporation) like other deposits in banks are insured. Therefore, they are considered higher risk than a savings account since you may not get your money back if the business goes bankrupt.
What are advantages/disadvantages of money market mutual funds?
200
These are markets that are dominated by a few large companies that enjoy high profits. These companies have the potential to raise prices and lower production, making the market less than perfect or competitive.
What are oligopolies?
300
Two companies that produce the same product in the same market combine or merge.
What is a horizontal merger?
300
They store money for consumers, lend money to entrepreneurs and consumers, pay depositors interest, issue credit cards, and offer investment services and electronic banking options.
What are services banks provide?
300
These are special mutual funds that are established by businesses. Individuals invest their money and the businesses buy other higher yield investments like bonds and stocks.
What are money market mutual funds?
300
The advantages are that they can cost little and investors can choose among terms of maturity and they have relatively low risk. The disadvantages are that you give up some liquidity (ability to easily and quickly convert to cash) of your money for a certain period of time and while the interest earned is higher than a savings account, it is also lower than other types of investments.
What are advantages/disadvantages of certificates of deposit?
300
AT&T, Microsoft
What are examples of monopolies?
400
Corporations buy other corporations that are involved in the production of goods and services that are totally unlike the others.
What is a conglomerate?
400
Banks can help boost the economy by lending more money to consumers, and they can help decrease economic output by lowering the number of loans they give to consumers. A business' ability to expand relies greatly on banks and other commercial lenders. Often, businesses need capital (money in the form of loans) to increase operations and, hopefully, increase profits. Often, banks will grant loans to businesses but with many stipulations attached. Banks can affect consumers through the interest rates and the terms of the loans they provide. Their decisions have a huge impact on the types of homes bought and the types of cars driven.
What is financial effects of banks on household and individuals?
400
These are shares of ownership that investors can purchase from companies. Businesses may want to expand their operations so they sell these shares. When investors buy shares, they own a piece of the corporation and can be involved in making decisions regarding the corporation.
What are stocks?
400
The advantages are that holders receive dividends and can sell this at a capital gain. The disadvantages are that the firms may earn lower profits than expected which can impact the value of the stocks. This means that investors may experience a capital loss if they wind up selling this for less than they paid for it originally. So for this reason, these are one of the riskiest investments.
What are advantages/disadvantages of stocks?
400
Large airlines like United Airlines and Delta, soda companies like Coca Cola and Pepsi
What are oligopolies?
500
Two or more companies that produce different components of the same good or service combine or merge.
What is vertical merger?
500
Commercial banks, credit unions, and savings banks all offer checking and savings account services to customers and provide loans. Finance companies do not offer these services but do offer loans to consumers, usually charging higher interest. Whereas commercial banks, savings banks, and finance companies generally offer services to the population at large, credit unions require membership.
What are different types of financial institutions?
500
When you give your money to a financial institution or other intermediaries to “store” or invest, these organizations (such as your local bank) are then able to lend your money to entrepreneurs who want to expand their businesses. Investment therefore supports our economy by providing the necessary funds for businesses to expand, creating new products and new markets, and providing new services resulting in creating jobs and stimulating the economy.
What is the economic impact of investing in stocks and bonds?
500
People are able to profit from their decisions and actions in the economy. Such profit is the encouragement that leads some people to invest their money.
What are the affects of investing on the American Free Enterprise System?
500
Three-fourths of all businesses in the United States are these, but only conduct about six percent of the total sales conducted in the United States in a year. While this type accounts for the majority of businesses owned in the U.S., their impact on sales is small.
What are sole proprietorships?