Some Important Economic Terms: 1. Bond: A certificate of debt (usually interest‐bearing or discounted) that is issued by a government or corporation in order to raise money; the bond issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal. 2. Balance sheet: Record of the financial situation of an institution on a particular date by listing its assets and the claims against those assets. 3. Balance of trade ‐ The part of a nations balance of payments that deals with merchandise (or visible) imports or exports. 4. Closed economy: A closed economy is one in which there are no foreign trade transactions or any other form of economic contacts with the rest of the world. 5. Deflation: Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period. 6. Debenture: Debenture is a loan issued by a firm, involving g a fixed repayment schedule, in terms of both time and interest. 7. Debit: Money paid out from an account either from a withdrawal or a transaction that result in decreasing the cash balance. 8. Equity: Equity is a one financial instrument by which company invite the public to invest their money in the company and investor can become a partner of the company. Generally, when the company have insufficient money to expand its business it comes with equity shares. 9. Economic growth ‐ An increase in the total output of a nation over time. Economic growth is usually measured as the annual rate of increase in a nations real GDP 10. Excise Tax ‐ Taxes imposed on specific goods and services, such as cigarettes and gasoline. 11. Exports ‐ Goods or services produced in one nation but sold to buyers in another nation. 12. Fiscal policy: Fiscal policy defines the use of government spending and revenue collection to influence the economy. 13. Foreign Direct Investment (FDI): Investment of foreign assets directly into a domestic companys structures, equipment, and organizations. It does not include foreign investment into the stock markets 14. Foreign Exchange (FOREX): Foreign Exchange (FOREX) is the arena where a nations currency is exchanged for that of another. 15. GDP: GDP stands for Gross Domestic Product. It is a method of measuring the size of economy of a country. We can define as the total market value of all the goods and services produced in a given period of time in a country. 16. GNP: The total value in money of all finished good and services produced in an economy in one full year, and all net property income from abroad. The GNP growth rate is an important economic indicator for country’s economic development. 17. Imports: commodities (goods or services) bought from a foreign country. 18. Inflation: Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is more demand and less supply of the goods. 19. Mutual Fund: There are accumulation and collection of many different types of shares. It is when investors together want to buy securities as a group, this fund can be called a mutual fund. Each and every investor of this group has a proportional stake in the shares based on the amount he has contributed. 20. Monetary policy: It is the process by which the central bank, or monetary authority of a country controls (i) the supply of money, (ii) availability of money, and (iii) cost of money or rate of interest. 21. National income ‐ The amount of aggregate income earned by suppliers of resources employed to produce GNP; net national product plus government subsidies minus indirect business taxes. 22. Per Capita Income: The total national income divided by the number of people in the nation, It means the share of each individual when the income from the productive activities is divided equally among the citizens. 23. Sales tax ‐ Taxes paid on the goods and services people buy. 24. Stock ‐ A certificate reflecting ownership of a corporation. 25. Tax: A fee charged by a government on a product, income, or activity. If tax is levied directly on personal or corporate income,then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax. 26. VAT: VAT is the indirect tax on the consumption of the goods, paid by its original producers upon the change in goods or upon the transfer of the goods to its ultimate consumers. It is based on the value of the goods, added by the transferor. It is the tax in relation to the difference of the value added by the transferor and not just a profit. All over the world, VAT is payable on the goods and services as they form a part of national GDP. 27. Wholesale Price Index (WPI): The Wholesale Price Index (WPI) takes into account the wholesale prices of identified commodities for calculating rate of inflation
Posted on: Mon, 09 Jun 2014 12:30:13 +0000