Macro midterm 2 study guide
Macro midterm 2 study guide 102
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One Day of Notes
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One Day of Notes
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One Day of Notes
verified elite notetaker
One Day of Notes
verified elite notetaker
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This 11 page Study Guide was uploaded by Eli Geranios on Wednesday January 28, 2015. The Study Guide belongs to 102 at Washington State University taught by Mark Gibson in Fall. Since its upload, it has received 71 views. For similar materials see Macroeconomics in Economcs at Washington State University.
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Date Created: 01/28/15
Chapter 7 Criminal Law and Cyber Crime 12915 518 PM Felony punishment by death or prison sentence Ianger that 1 year Misdemeanor punishable by fine or prison less than one year Actus Reus Guilty act What was done to harm society is referred to as the actus reus Mens Rea Wrongful mental state You must be in the required mental state or intent when committing a crime in order to be prosecuted Recklessness he or she consciously disregards a substantial and unjustifiable risk Criminal Negligence involves the mental state in which the defendant takes an unjustified substantial and foreseeable risk that results in harm Can still be negligent if not aware of risk but should have been aware Federal Criminal Code Over 4000 crimes listed in the federal criminal code many of which do not require a specific mental state 4th Amendment Search and Seizure Law enforcement must obtain a search warrant with probable cause in order to violate an individuals 4th amendment rights and search and seize private property Use of technology to track individuals still requires a warrant Probable Cause To obtain a search warrant law enforcement officers must convince a judge that they have reasonable grounds or probable cause to believe a search will reveal a specific illegality Burglary Property Crime Breaking and entering the dwelling of another with the intent to commit a felony Larceny Property Crime The unlawful taking and carrying away of someone else s personal property with the intent to permanently deprive the owner of possession Robbery Violent Crime The taking of money personal property or any other article of value from a person by means of force or fear Embezzlement WhiteCollar Crime When a person who is entrusted with another person s property fraudulently appropriates it Not Larceny because the wrongdoer does not physically take the property from the possession of another SelfDefense Criminal Liability Defense Deadly Force only authorized when the defender reasonable believes that imminent death or grievous harm will otherwise result Nondeadly force authorized with intent to protect individuals their property or other property Necessity Defense A criminal act is necessary to prevent an even greater harm Duress Defense Wrongful threat of one person induces another person to perform an act that he or she would not otherwise have performed Duress is said to negate the mental state necessary to commit a crime because the defendant was forced or compelled to commit the act under threat Entrapment A defense designed to prevent police officers or other government agents from enticing persons to commit crimes on order to later prosecute them Procedural Steps in a Criminal Case A B C D E Arrest Booking Initial Appearance Case can go to either a grand jury or preliminary hearing next lst Grand Jury 2nd Indictment a written document issued by the grand jury to formally charge the defendant with a crime a Preliminary Hearing b Information A formal Criminal Charge made by the prosecutor Arraingnment Defendant is brought before the court and offered a plea Trial Jurisdiction for Cyber Crimes Worms Hacker Botnet Virus Traditional geographical jurisdiction still applies however the application is very difficult for law enforcement due to the difficulty in tracing locations of many offenders A software program that is capable of reproducing itself as it spreads from one computer to the next Someone who uses one computer to break in to another Networks of computers that have been appropriated by hackers without the knowledge of their owners A form of malware that is able to reproduce itself and cause havoc if it gains access to a computer or network Chapter 8 International Law 12915 518 PM International Customs Evidence of a general practice accepted as law Many international agreements form as an extension of prior customary agreements Principle of Comity Legal Reciprocity One nation will defer and give effect to the executive legislative and judicial acts of another country as long as the acts are consistent with the law and public policy of the accommodating nation Act of State Doctrine The judicial branch of one country will not examine the validity of public acts committed by a recognized foreign government within the latter s own territory Doctrine of Sovereign Immunity When conditions are satisfied the doctrine of sovereign immunity exempts foreign nations from the jurisdiction of US Courts Not immune if 0 Foreign state waives immunity 0 Foreign state has engaged in commercial activity which has a direct effect in the US 0 Foreign state has committed a tort in the US or violated certain international laws United Nations Regarding International Law The UN has the power to adopt nonbinding resolutions and declarations that embody principles of international law UN also has made considerable progress in establishing uniformity in international trade and commerce World Trade Organization Works to regulate international trade and minimize trade barriers Each member country is required to treat other nations as well as they treat the nation which has the most important trade value for them US Antidiscrimination laws Have wide application May subject firms in foreign nations to their provisions as well as protect foreign consumers and competitors from violations committed by US citizens Any conspiracy that has a substantial effect on the US is within the jurisdiction of the Sherman antitrust act US workers abroad are still protected by US Antidiscrimination laws The US laws apply extraterritorially Price Fixing Pricefixing is illegal and regulated under the Sherman Anti trust act Price fixing is the agreement between competitors to sell at an agreed upon price which is generally an unfair price to the consumer or other competitors Confiscation and Expropriation Confiscation occurs when a foreign state claims property illegally without providing the individual with just compensation Expropriation occurs when just compensation is awarded Licensing A US firm may license a foreign manufacturing company to use its copyrighted patented or trademarked intellectual property or trade secrets Joint Venture A US firm purchasing partial ownership in a foreign operation the rest is owned locally or by another foreign entity Distribution agreement Contract setting out the terms and conditions of the distributorship such as price currency supply and method of payment Franchise A form of licensing in which the franchisor grants license to the franchisee to use its trade name trademarks etc Franchising allows the franchisor to maintain greater control over the business operation than is possible under other licensing agreements Wholly Owned Subsidiary A US firm establishing a firm in a foreign country When it is established the parent company remains in the USgt and maintains complete ownership of all of the facilities in the foreign country as well as total authority and control over all phases of the operation Chapter 17 Small Business Organizations 12915 518 PM Sole Proprietorship A business where the owner is the business A 1man operation Business lives dies succeeds and fails as a reflection of the sole proprietor Pays only personal income taxes avoids double taxation Sole proprietor has the flexibility to due essentially anything with the business they wish Proprietor claims all profits however also undertakes all liability for business s acUons Partnership An association of two or more persons to carry on as coowners of a business for profit Uniform Partnership Act UPA Definition Essential Elements 0 Sharing of profits or losses 0 Joint ownership of business 0 Equal right to be involved in management Generally formed through a partnership agreement which lays out the agreed upon duties and responsibilities of each partner However partnerships can be created without a partnership agreement in which case the UPA provides guidance Taxed as a passthrough entity in which the profits are passedthrough the business and taxed as a part of the partners income Fiduciary duties Under the UPA partners owe the duties of loyalty and care to all other partners Duty of loyalty o Requires a partner to account to the partnership for any property profit or benefit derived by the partner in the conduct of the partnership s business or from the use of its property UPA Duty of Care 0 Refraining from grossly negligent or reckless conduct intentional misconduct or a knowing violation of the law UPA Fiduciary duties cannot be waived via the partnership agreement Dissociation Occurs when a partner ceases to be a associated in the carrying on of the partnership business A partner always has the power to dissociate but does not always have the right Events that cause dissociation o Partner s voluntary expressing will to withdraw An event specified in the partnership agreement Unanimous vote by other partners Order of court or arbitrator Partner declaring bankruptcy OOOO Dissolution Termination of a partnership Generally brought on by acts of partners operation of law or judicial decree Winding up 0 Process of collecting liquidating and distributing the partnership assets Occurs when a partnership is dissolving Good faith Partners must act in good faith during wind up process and not protect or hide assets to avoid liability or punishments Franchise An arrangement in which the owner of intellectual property such as a trademark trade name or copyright licenses others to use it in the selling of goods or services Chapter 18 Limited Liability 12915 518 PM Limited Liability Company LLC A hybrid that combines the limited liability aspects of a corporation and the tax advantages of a partnership Owners of an LLC are called Members Governed by state statutes no uniform laws Closest thing is the ULLCA Are shielded from liability similar to corporations Corporate veil can be pierced under the alterego theory commingling of assets LLC can be sued like a person Members are only liable for the amount of their investments Formation of an LLC Articles of organization must be filed with the central state agency where the LLC is located Articles must include address name how the LLC will be managed etc Management of an LLC LLC s can either be managermanaged through the election of a manager or membermanaged with all members participating and making decisions through majority votes A member can be elected as the managed in a managermanaged LLC Operating Agreement The members of an LLC can decide how to operate the various aspects of the business by forming an operating agreement Agreements are not required though strongly encouraged in most states Agreement typically contains 0 How LLC will be managed How profits will be divided How membership interests will be transferred Whether dissociation of a member will trigger dissolution Whether formal meetings will be held How voting rights will be apportioned OOOOO Fiduciary Duties Managers in manager managed LLC s owe fiduciary duties to the members Members owe fiduciary duties to each other Dissolution and Dissociation When a member chooses to dissociate they have the right to have their interest bought for a fair market price within 120 days by the LLC If a member dies or otherwise dissociates the other members may continue to carry on the LLC business unless the operating agreement provides otherwise Courts have the right to force dissolution in certain cases Winding Up Collecting liquidating and distributing the LLC s assets after dissolution Debts paid first 9 investors investments returned 9 profits distributed to members equally or in accordance to the operating agreement Reasonable acts may be committed on behalf of the LLC by members during winding up process Limited Liability Partnership LLP Hybrid form of business designed mostly for professionals who normally do business as partners in a partnership State statutes are not uniform LLP s laws vary state to state LLP is allowed to be taxed as a passthrough entity for the partners Differs from an LLC as partners are not liable for the actions of their partners They are still Liable for their own actions and are liable if they knowingly observed the partner committing the wrongful act Limited Partnership LP A business form which limits the liability of only some of its members General Partner 0 Assumes management responsibility for the partnership and has full responsibility for the partnership and for all its debts Limited Partner 0 Contributes cash or other property and owns an interest in the firm but is not involved in management responsibilities and is not personally liable for partnership debts beyond the amount of his or her own investment 0 Partner forfeits limited liability by choosing to take part in management Formation 0 Must have a general partner limited partner and sign a certificate of limited partnership in order to be formed Certificate must be filed with a state official Fiduciary Duties 0 Limited Partners have essentially the same rights as general partners aside from the right to management Both owe normal partnership duties to each other Dissociation and Dissolution o A general partner has the right to dissociate or dissolve the partnership unless the partnership agreement states otherwise Limited partners must give 6 month notice prior to dissociating BuySell Agreement Provides for one or more partners to buy out the other or others should the situation warrant Chapter 19 Corporations 12915 518 PM How to Incorporate Select a state of incorporation Secure the corporate name Prepare the articales of incorporation File the articles of incorporation with the secretary of state Types of corporations Domestic Corporations foreign and alien corporations 0 Domesticoperating in state operating in different states alien operating outside the country Public Corporation 0 Formed by the government to meet some political or governmental purpose Publicly Held Corporation 0 Any corporation whose shares are publicly traded in a securities market such as new york sock exchange or NASDAQ Nonprofit corporations Close Corporations 0 One whose shares are held by members of a family or by relatively few people 0 Operated like a partnership Most decisions can be made by the shareholders if they all agree in writing 0 Problems for close corporations Commingling of corporate and personal funds Failure to hold board of directors meetings and record the minutes Shareholders continuous use of corporate property S Corporations close corp that meets following requirements 0 Must be domestic 0 Must not be a member of an affiliated group of corporations 0 Shareholders must be individuals estates or certain trusts and tax exempt organizations 0 No more than 100 shareholders 0 Only one class of stock 0 No shareholder may be a nonresident alien Professional corporations Benefit Corporations 0 Forprofit corporation that seeks to have a material positive impact on society De Jure corporations If a corporation has substantially complied with all conditions precedent to incorporation the corporation is said to have de jure existence Secretary of states filing of articles of incorporation is generally proof enough for de jure existence De Facto Corporation A corporation which incorrectly attempted to incorporate can still be considered a de facto corporation by the courts if 0 A statute exists in which the corporation can be validly incorporated 0 Party makes a good faith attempt to comply with statutes 0 Parties have already undertaken to do business as a corporation Rights of corporations Promoters In the absence of express constitutional statutory or other prohibitions the corporation has the implied power to perform all acts reasonable necessary to accomplish its corporate powers Ultra Vires beyond the power Acts competed by a corporation that are beyond its implied or express powers Less prevalent in modern corporation formation but in essence a promoter completes the necessary jobs prior to incorporation Campaigns for investments enters preformation agreements etc Board of Directors Ultimate authority in every corporation Directors authorize major policy decisions select and remove corporate officers and make financial decisions Directors meet when mandated by the corporations bylaws or by their past planning and vote to make decisions A quorum must be present each directors vote is equal and the majority wins in the voting process Rights of Directors 0 Right to Participation in all meetings 0 Right to inspection of the corporations books and facilities 0 Right to indemnification reimbursement of legal costs if a director is being sued Duties of Directors 0 Duty of Care good faith best interest of corp etc o Duty to make informed decisions on corporate matters 0 Duty to exercise reasonable supervision when delegating work to officers and employees 0 Directors are expected to attend board meetings and have their votes cast If a director has a dissenting vote and has it recorded during the meeting but the vote passes and the decision later turns out to hold the company liable the members with dissenting votes are rarely held liable 0 Business Judgment Rule a corporate director or officer will not be liable to the corporation or to its shareholders for honest mistakes ofjudgment and bad business decisions 0 Duty of loyalty requires directors and officers to subordinate their personal interests tot the welfare of the corporation 0 Directors have the fiduciary duty to make a full disclosure of any potential conflicts of interest that may arise in any corporate transaction Shareholders Shareholders have no responsibility for the daily management of the corporation although they are ultimately responsible for choosing the board of directors which does have such control Shareholders must approve fundamental changes affecting the corporation before the changes can be implemented Shareholders meeting must occur at least annually Special meetings may be called to deal with urgent matters Shareholder voting a quorum must be present which generally means over 50 of the outstanding shares are present Rights 0 Stock certificates evidence of ownership of a specific number of shares in a corporation 0 Preemptive Rights a shareholder receives a preference over all other purchasers to subscribe to or purchase a prorated share of a new issue of stock Allows shareholders to maintain proportionate interest in the corp 0 Stock Warrants rights to buy stock at a stated price by a specified date 0 Dividend a distribution of corporate profits or income ordered by the directors and paid to the shareholders in proportion to their respective shares in the corporation 0 Right to proportional profit distribution upon dissolution o Shareholder s Derivative Suit when the corporation is harmed by the actions of a 3rd party and the corporate directors fail to bring a lawsuit against the 3rd party the shareholders can bring a derivative suit on behalf of the corporation
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