Interstate Commerce
Business that take place across states, overseen by the federal government.
Intrastate Commerce
Business that takes place within a state, overseen by the state governments.
Oligopoly
Control of an industry by a small number of companies.
Monopoly
Control of an entire industry by one company or a trust.
Trust
A group of companies that band together to form a monopoly and eliminate competition.
Antitrust Laws
Laws that allow the federal government to break up, regulate, or take over monopolies and trusts.
Contract
A legal agreement between two or more parties to conduct business.
Breach of Contract
The failure of a party to live up to the terms of a contract.
Copyright
A legal grant for the sole right to own a creative property, such as a book or video game.
Patent
A legal grant for the sole right to own an invention.
Trademark
A legally- protected brand name, trade name, or trade characteristic that distinguishes one product from another.
Revenue
Government or business income.
Subsidies
Payments the government gives to businesses to make up for their business losses.
Tax Incentives
Reductions in taxes government gives to businesses to encourage socially responsible behavior.
Monetary System
A system in which goods and services are exchanged indirectly using money as a medium.
Money
Anything that people accept as a standard of payment.
Financial Institution
An organization for managing money, such as a bank, credit union, or brokerage firm.
Bank Account
A record of how much money a person has put into and taken out of a bank.
Deposit
Money put into a bank account.
Withdrawal
Money taken out of a bank account.
Interest
A fee charged for the use of money
Electronic funds transfer (EFT)
The transfer of money from one account to another using computers.
Collateral
Something valuable, such as a house or car, used as guarantee for a loan that the lender can take if the borrower doesn't repay the loan.
Mortgage
Property put up for a loan that the lender can take if the loan is not paid back.
Safety Deposit Box
A place at a bank for storing valuable items.
Federal Reserve System
The central banking system of the United States, also called the Fed.
Define the government's role as regulator.
The government regulates four aspects of the economy: Protecting competition for businesses with laws, protecting business agreements, protecting creative properties, and regulating the production process.
Why was the Federal Trade Commission established?
The government created the Federal Trade Commission to regulate interstate trade.
Explain the Government's role as protector of individuals.
The government gets taxes from citizens for roads, schools, protection of the public like the police, and hospitals. They create laws to protect us, enforce contract, encourages competition.
Define a patent, a copyright, and a trademark.
Patent- A legal grant for the sole right to own an invention.
Copyright- A legal grant for the sole right to own a creative property, such as a book or video game.
Trademark- A legally- protected brand name, trade name, or trade characteristic that distin
For what purpose does the government use the taxes it collects from the public?
To make up the difference between the actual costs of such goods and services and the amount of these goods and services used. They build roads, schools, law enforcement.
What types of products and services are provided by the local government?
protection of the public, social welfare, schools, roads, courts, post offices, and other services.
Why do you think our government wants businesses to succeed?
The government is the largest consumer of businesses.
Does competition improve the quality of products or services that consumers purchase? How?
Yes, better business
Differentiate among the roles of government in business.
The government provides public services, work, and assists business.
Describe the three functions of money.
The three functions of money is, the medium of exchange, standard of value, and store of value.
What are the two characteristics that dollars must have to be accepted as money in our society?
Money must be scarce, divisible, portable and durable.
Why must money be portable?
Money can be used over and over again, and is easy to replace.
How does a debit card work?
It withdraws money from your bank account.
What is the bank's primary source of income?
Storing money for customers in bank accounts.
Why does the government require banks to keep a certain percentage of their deposits on hand?
For just in case someone needs money for a home, or food
Compare the three different types of loans- mortgage, commercial, and individual.
A mortgage loan is a loan used to buy real estate, an Individual loan is made to an individual to pay for personal items like a car, home repairs, or a vacation. A commercial loan is a loan made to businesses to buy supplies and equipment
How does the Federal Reserve control the amount of money in circulation?
The Federal Reserve controls the amount of money in circulation by clearing checks, acting as the federal government's fiscal agent, supervising member banks, regulating the money supply, setting reserve requirements, and supplying paper currency.
Describe the characteristics of a credit union.
Credit Unions offer members a full range of services, including credit cards, checking accounts, and loans. They offer low-interest loans and pay high interest rates on savings accounts, many of them also pay interest on checking accounts.
What is the central banking organization of the United States?
The Federal Reserve System
Banks pay depositors for leaving their money in savings accounts. Why?
The interest earned by the bank is used to pay the interest on savings accounts and to cover the bank's expenses.
Explain how a bank makes a profit by providing loans to its customers.
They earn interest income from the loans.