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CONCEPTS AND TERMINOLOGIES

Accrual Basis
An accounting method which considers revenues and expenses as they accrue, even though cash would not have been received or paid during the period of accrual.

 

Activity Rate
The labour force of a country is known as the activity rate or participation rate.

 

ADRs
ADR Stands for American Depository Receipt (ADRs) which enables investors based in the USA to invest in stocks of non-US Companies, trading on a non- US stock Exchanges.
ADRs are denominated in dollars.

 

ASSET
Any thing which has a money value owned by an individual or a firm is an asset. It is of three types
i) Tangible Asset: All physical assets such as land, machinery, building, consumer durables etc..(The assets which are in a material form)
ii) Intangible Assets: All non-Physical immaterial assets such as brand names, good-will, credit-worthiness, knowledge.
iii) Financial Assets: All financially valid valuables other than tangibles and intangibles such as currencies bank deposits, bonds, securities, shares, etc.

 

ARCs
Assets Reconstruction companies (ARCs) acquire non-performing assets (NPAs) from banks of financial institutions along with the underlying securities mortgaged and/or hypothecated by the borrowers to the lenders.

 

AUTARKY 
The idea of Self-Sufficiency and no international trade by a country.  None of the countries of the world has been able to produce all the goods and services required by its population at competitive prices, however, some tried to live it up at the cost of inefficiency and comparative poverty.

 

BACK WARDATION
 A term of future trading which means a commodity is valued higher today than in the futures when the situation is opposite, it is known as contango.

 

BALANCE OF PAYMENTS
 A balance sheet of an economy showing its total external transactions with the world-calculated on the principles of accounting-is an annual Concept

 

BALLOON PAYMENT
When the final payment of a debt is more than the previous payments, it is balloon payment

 

BULLION
Precious metals such as gold, silver, and platinum that are traded in the form of bars and coins for investment purposes and are used for jewellery as base metals.

 

CAPITAL
Capital is one of the three main factors of production classified into-physical capital (i.e. factories, machines), Human capital (i.e. training, skill etc)

 

CAPITAl ADEQUACY RATIO
 A regulation on commercial banks, co-operative banks and the non-banking financial companies to maintain a certain amount of capital in relation to their assets.

 

CAPITAL CONSUMPTION
The capital that is consumed by an economy or a firm in the production process also known as depreciation.

 

CAPITAL-OUTPUT RATIO
The ratio indicates how efficient new investment is in contributing to the growth of an economy.

 

CARBON CREDIT
Carbon credits are certificates issued to countries that reduce their emission of GHG (Green-House Gases) which leads to global warming. It is estimated that 60-70 percent of the GHG emission is through fuel combustion in industries like cement, steel, textile, and fertilisers.

 

COMMODITY EXCHANGES
Commodity exchanges are used associations that determine and enforce rule, and set procedures for trading of commodities. The main objective of the exchange is to protect participants from adverse movement in prices by facilitating futures trading in commodities.

 

CONSOLS
This is the abbreviated form of consolidated stock. The government bonds which have no maturity and thus have an indefinite life ィ are tradable on the floors of the stock exchanges.

 

CONSORTIUM
 An adhoc grouping of firms, governments etc. brought together to undertake a particular project by pooling their resources and skills for major construction projects, loans etc.

 

CONSUMER DURABLES
Consumer goods that are consumed over relatively long periods of time rather than immediately such as cars, houses, refrigerators, etc.

 

CONSUMER NON-DURABLES
Consumer goods which yield up all their satisfaction utility at the time of consumption (opposite to the consumer durables)-examples are cheese, pickless, jam etc.

 

CONTAGION
 A situation or an effect of economic problems in one economy spreading to another also known as the domino effect.

 

CSR 
The concept of corporate social responsibility (CSR) is fast gaining popularity among the corporate sector of the world. The CSR acknowledges the debt that the corporates owe to the community within which they operate. It defines the corporates, partnership with social action groups (i.e. the NGO) in providing financial and other resources to support development plans especially among dis advantaged communities.

 

DEBENTURE
An instrument of raising long-term loan by companies, having a maturity period bearing an interest. (upon rate)

 

DEINDUSTRIALISATION
Sustained decrease in the share of the secondary sector in the total output (GDP) of an economy

 

DEMAT ACCOUNT
It is a way of holding securities in electronic or dematerialised form. demat from of shares can be traded online.

 

DEMERGER
The breaking-up a company into more separate companies. such companies are usually formed through mergers.

 

DOMINO EFFECT
An economic situation in which one economic event causes a series of similar events to happen one after the other. For example, experts believe that the falling of share indices around the world in early-2008 was a domino effect of the sub-prime crisis faced by the US economy.

 

DUMPING
Exporting a good at a price lower than its price in the domestic market. To neutralise the effects of dumping the importing country may impose a sur charge on such imports which is known as the anti-dumping duty.

 

e-COMMERCE
Method of buying and selling goods and services over the internet- a kind of direct marketing i.e. without the help of any middle arrangement of sales.

 

ECONOMIES OF SCALE
The long-run reduction in average/unit cost that occurs as the scale of the firms output increases the opposite situation is known as diseconomies of scale.

 

ECONOMIES OF SCOPE
The long run reduction in average/unit cost that accurs as the scope (diversification) of the firms activities increase.

 

ENGEL'S LAW
The law which says that people generally spend a smaller part of their budget on food as their income rise. The idea was suggested by Ernst Engel, a Russian statistician in 1857.

 

ENVIRONMENTAL AUDIT
Assessment of the environmental impact of a firm/ public body through its activities. This is done with an objective to reduce or eliminate the pollution aspect.

 

EQUITY SHARE
A security issued by a company to those who contributed capital in its formation shows ownership in the company. The other terms for it are stock or common stock.

 

ESOPs
Employee stock option plans (ESOPs) is a provision under which a foreign company (i.e. MNC) offers shares to its employees overseas.

 

FCCB
Foreign currency convertible bond (FCCB) is an unsecured instrument to raise long-term loan in foreign currency by an Indian company which converts in to shares of the company on a pre-determined rate.  It is counted as the part of external debt.

 

FREE TRADE
The international trade among an agreed-upon group of countries without any barriers, promoted with the objective of securing international specialisation and an edge in their foreign trade.

 

GREENFIELD INVESTMENT
 An investment by a firm in a new manufacturing plant workshop, office etc.

 

3G-TECHNOLOGY
3G refers to the third generation of developments in wireless technology. It is a collective term for the new communication procedures, standards, and devices that will improve the speed and quality of services on mobiles.

 

HOARDING
An act of unproductive retention of money or goods.

 

J-CURVE EFFECT
The tendency for a country's balance of payments deficit to initially deteriorate following a devaluation of its currency before moving into surplus.

 

JOBBER
 An individual active on the floors on the stock exchanges who buys or sells stocks on his own account a jobbers profit is known as jobbers spread. They are also known as Taravniwalla on the bombay stock exchange(BSE)

 

JUNK BOND
 An informal term denoting the financial securities issued by a company/bidder as a means of borrowing to finance a take over bid. Such securities generally include high-risk, high-interest loans, that is why the term junk is used.
It is also known as mezzanine debt.

 

LAF
The abbreviated form of the Liquidity Adjustment Facility, is part of a financial policy provided to the banks by the RBI in India. The Facility commenced in June 2000 under which the banks operating in India are allowed to park their funds with the RBI for short-term periods. 

 

Premium
This is the amount that the policy holder pays to the insurance company for the benefits provided under an insurance policy.

 

ANNUITY
An agreement sold by a life insurance company that provides fixed or variable payments to the policy holder, either immediately or at a future date.

 

GROUP LIFE INSURANCE
A Life insurance policy issued to a group of people, usually through an employer.

 

L-M SCHEDULE
Here L − M stands for liquidity-money. This is a schedule showing the combinations of levels of nationals income and interest rates where the equilibrium condition for the monetary economy, L = M, holds.

 

LORENZ CURVE
A graph showing the degree of inequality in income and wealth in a given population or an economy.
 It is a rigorous way to measure income inequality

 

NARROW BANKING
Short-term lending in risk-free asset is narrow banking. A suggestion for such banking was given by the Committee on Financial System (CFS) in 1991 for the weak banks of India.

 

NINJA
A mortgage business terminology became common word after the US subprime. Crisis of mid-2007 which is an acronym for the borrowers with no income, no job or assets.

 

NOMINAL VALUE
The value of anything calculated at the current prices. It does not include the effect of inflation during the periods and gives misleading idea of value

 

NORMAL GOODS
The goods whose demand increases as income of the people increases. It is just opposite of inferior goods

 

OIL BONDS
The oil bonds are special bonds issued by the government to partly compensate state-owned oil companies for not increasing the retail Prices of products like LPG and kerosene in line with the rise in crude oil prices.

 

PHILLIPS CURVE
A graphic curve depicting an empiricial observation of the relationship between the level of unemployment and the rate of change of money wages and, by inference, the rate of change of prices.

 

PPP
Purchasing Power Parity (PPP) is a method of calculating the correct/real value of a currency which may be different from the market exchange rate of the currency. Using this method economies may be studied comparatively in a common currency.

 

RETAIL BANKING
A way of doing banking business where the banks emphasise the individual based lending rather than corporate lending also known as high street banking.

 

SEIGNORAGE
 A method of generating resource by a government through printing of fresh notes/ currency notes.

 

SEQUESTRATION
The process under which a third party (the sequestrator) holds a part of the disputed assets bill the dispute is settled.

 

VENTURE CAPITAL
 A private equity capital which lends capital to the entrepreneurs who are innovative and cannot get the required fund from the conventional setup of the lending mechanism. In India, it was the Government of India which did set up the first such fund in 1998 the IVCF.

 

ZERO-COUPON BOND
A bond bearing zero coupon rate (i.e. no interest) sold at a price Lower than its face value and investors getting the face value price at maturity.

 

FOB
This is the abbreviation of free-on-board. When in the balance of payment accounting, only the basic prices of exports and imports of goods (including loading costs) are counted.
 it does not count the cost-insurance-freight (CIF) charges incurred in transporting the goods from one to another country.

 

MACRO & MICRO ECONOMICS 
It is the branch of economics which studies the economy in it total or average term. Micro economics (in Greek language 'micro' means small) looks on the behaviour of the unit i.e. the individual, the house holds, the firms, a specific industry. Which together make up the economy.

 

MARGINAL STANDING FACILITY (MSF)
Operationalised on the lines of the existing liquidity adjustment facility (LAF-Repo) in May 2011 under which all scheduled commercial Banks can avail overnight funds, upto one percent of their Net Demand and Time Liabilities (NDTL) outsiding at the end of the second preceding fornight

 

MARGINAL UTILITY
The increase in satisfaction/utility a consumer derives from the use/consumption of one additional unit of a product in a particular time period. It goes on decreasing i.e. the diminishing marginal utility.

 

MARKET CAPITALISATION
 A term of security market which shows the market value of a company's share. Calculated by multiplying the current price of its share to the total number of share issued by the company.

 

MFBS
In August 2007, the Reserve Bank of India released a Manual on Financial and Banking Statistics (MFBS). First of its kind, which works as a reference, guide and provides a methodological frame-work for compilation of statistical indicators en-compassing various sectors of the economy.

Posted Date : 03-02-2021

గమనిక : ప్రతిభ.ఈనాడు.నెట్లో వచ్చే ప్రకటనలు అనేక దేశాల నుండి, వ్యాపారస్తులు లేదా వ్యక్తుల నుండి వివిధ పద్ధతులలో సేకరించబడతాయి. ఆయా ప్రకటనకర్తల ఉత్పత్తులు లేదా సేవల గురించి ఈనాడు యాజమాన్యానికీ, ఉద్యోగస్తులకూ ఎటువంటి అవగాహనా ఉండదు. కొన్ని ప్రకటనలు పాఠకుల అభిరుచిననుసరించి కృత్రిమ మేధస్సు సాంకేతికతతో పంపబడతాయి. ఏ ప్రకటనని అయినా పాఠకులు తగినంత జాగ్రత్త వహించి, ఉత్పత్తులు లేదా సేవల గురించి తగిన విచారణ చేసి, తగిన జాగ్రత్తలు తీసుకొని కొనుగోలు చేయాలి. ఉత్పత్తులు / సేవలపై ఈనాడు యాజమాన్యానికి ఎటువంటి నియంత్రణ ఉండదు. కనుక ఉత్పత్తులు లేదా సేవల నాణ్యత లేదా లోపాల విషయంలో ఈనాడు యాజమాన్యం ఎటువంటి బాధ్యత వహించదు. ఈ విషయంలో ఎటువంటి ఉత్తర ప్రత్యుత్తరాలకీ తావు లేదు. ఫిర్యాదులు తీసుకోబడవు.

 

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