economic-terms-en-blog

[economic-terms-en-blog]

Honorarium

An honorarium is an ex gratia payment (i.e., a payment made without the giver recognizing himself as having any liability or legal obligation made to a person for his or her services in a volunteer capacity or for services for which fees are not traditionally required. This is used by groups such as schools or Sports clubs to pay coaches for their costs. Another example includes the payment to guest speakers at a conference meeting to cover their travel, accommodation, or preparation time. Christian Church funerals and/or memorial services, are often paid by honorarium, as the minister, musicians, organist, soloist and others of out care do not have a set fee for services to grieving families. Like wise, weddings are often paid through honorarium also. More details Android, Windows

#Economic terms

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Race to the bottom

The race to the bottom is a socio-economic phrase which is used to describe government deregulation of the business environment or taxes in order to attract or retain economic activity in their jurisdictions. An outcome of globalization and free trade, the phenomenon may occur when competition increases between geographic areas over a particular sector of trade and production. More details Android, Windows

#Economic terms

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Homothetic preferences

In consumer theory, a consumer's preferences are called homothetic if they can be represented by a utility function which is homogeneous of degree 1.:146 For example, in an economy with two goods x , y {\displaystyle x,y} , homothetic preferences can be represented by an utility function u {\displaystyle u} that has the following property: for every a > 0 {\displaystyle a>0} : u ( a ⋅ x , a ⋅ y ) = a ⋅ u ( x , y ) {\displaystyle u(a\cdot x,a\cdot y)=a\cdot u(x,y)} In mathematics, a homothetic function is a monotonic transformation of a function which is homogeneous; however, since ordinal utility functions are only defined up to a monotonic transformation, there is little distinction between the two concepts in consumer theory.:147 In a model where competitive consumers optimize homothetic utility functions subject to a budget constraint, the ratios of goods demanded by consumers will depend only on relative prices, not on income or scale. This translates to a linear expansion path in wealth: the slope of indifference curves is constant along rays beginning at the origin.:482 Furthermore, the indirect utility function can be written as a linear function of the wealth w {\displaystyle w} : v ( p x , p y , w ) = v ( p x , p y ) ⋅ w {\displaystyle v(p_{x},p_{y},w)=v(p_{x},p_{y})\cdot w} which is a special case of the Gorman polar form. Hence, if all consumers have (the same) homothetic preferences, the aggregate demand can be calculated by considering a single "representative consumer" who has the same preferences and the same aggregate income.:152–154 More details Android, Windows

#Economic terms

[economic-terms-en-blog]

Dutch disease

This article is about the economic phenomenon. For the disease affecting elm trees, see Dutch elm disease. In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agriculture). The putative mechanism is that as revenues increase in the growing sector (or inflows of foreign aid), the given nation's currency becomes stronger (appreciates) compared to currencies of other nations (manifest in an exchange rate). This results in the nation's other exports becoming more expensive for other countries to buy, and imports becoming cheaper, making those sectors less competitive. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment". The term was coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of the large Groningen natural gas field in 1959. More details Android, Windows

#Economic terms

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Globalization

For other uses, see Globalization (disambiguation). Globalization or globalisation (see spelling differences) is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Advances in transportation (such as the steam locomotive, steamship, jet engine, and container ships) and in telecommunications infrastructure (including the rise of the telegraph and its modern offspring, the Internet, and mobile phones) have been major factors in globalization, generating further interdependence of economic and cultural activities. Though many scholars place the origins of globalization in modern times, others trace its history long before the European Age of Discovery and voyages to the New World. Some even trace the origins to the third millennium BC. Large-scale globalization began in the 19th century. In the late 19th century and early 20th century, the connectivity of the world's economies and cultures grew very quickly. The term globalization is very recent, only establishing its current meaning in the 1970s. In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge. Further, environmental challenges such as global warming, cross-boundary water and air pollution, and overfishing of the ocean are linked with globalization. Globalizing processes affect and are affected by business and work organization, economics, socio-cultural resources, and the natural environment. Academic literature commonly subdivides globalization into three major areas: economic globalization, cultural globalization, and political globalization. More details Android, Windows

#Economic terms

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Hyperinflation

For the medical condition, see Inhalation § Hyperaeration. Certain figures in this article use scientific notation for readability. In economics, hyperinflation occurs when a country experiences very high and usually accelerating rates of inflation, rapidly eroding the real value of the local currency, and causing the population to minimize their holdings of local money. The population normally switches to holding relatively stable foreign currencies. Under such conditions, the general price level within an economy increases rapidly as the official currency quickly loses real value. The value of economic items remains relatively stable in terms of foreign currencies. Unlike low inflation, where the process of rising prices is protracted and not generally noticeable except by studying past market prices, hyperinflation sees a rapid and continuing increase in nominal prices, the nominal cost of goods, and in the supply of money. Typically, however, the general price level rises even more rapidly than the money supply as people try ridding themselves of the devaluing currency as quickly as possible. As this scenario happens, the real stock of money (i.e., the amount of circulating money divided by the price level) decreases. Hyperinflations are usually caused by large persistent government deficits financed primarily by money creation (rather than taxation or borrowing). As such, hyperinflation is often associated with wars, their aftermath, sociopolitical upheavals, or other crises that make it difficult for the government to tax the population. A sharp decrease in real tax revenue coupled with a strong need to maintain the status quo, together with an inability or unwillingness to borrow, can lead a country into hyperinflation. More details Android, Windows

#Economic terms

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Convex preferences

In economics, convex preferences is a property of an individual's ordering of various outcomes which roughly corresponds to the idea that "averages are better than the extremes". The concept roughly corresponds to the concept of diminishing marginal utility without requiring utility functions. More details Android, Windows

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Beneficiary

A beneficiary (also, in trust law, cestui que use) in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example, the beneficiary of a life insurance policy is the person who receives the payment of the amount of insurance after the death of the insured. Most beneficiaries may be designed to designate where the assets will go when the owner(s) dies. However, if the primary beneficiary or beneficiaries are not alive or do not qualify under the restrictions, the assets will probably pass to the contingent beneficiaries. Other restrictions such as being married or more creative ones can be used by a benefactor to attempt to control the behavior of the beneficiaries. Some situations such as retirement accounts do not allow any restrictions beyond death of the primary beneficiaries, but trusts allow any restrictions that are not illegal or for an illegal purpose. The concept of a "beneficiary" will also frequently figure in contracts other than insurance policies. A third-party beneficiary of a contract is a person whom the parties intend to benefit from its provisions but who is not a party to the contract. A software distributor, for example, may seek provisions protecting its customers from infringement claims. A software licensor may include in its agreements provisions that protect those who provided code to that licensor. In the context of development aid, the term "beneficiaries" refer to the persons and the communities that use the project outputs: the entities that development-aid projects. More details Android, Windows

#Economic terms

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Countertrade

Countertrade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in countertrade for accounting purposes. In dealings between sovereign states, the term bilateral trade is used. More details Android, Windows

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Reproduction

In Marxian economics, economic reproduction refers to recurrent (or cyclical) processes. Aglietta views economic reproduction as the initial conditions necessary for economic activity to occur are constantly re-created. Marx viewed reproduction as the means by which society re-created itself, both materially and socially. The recreation of the conditions necessary for economic activity to take place was a key part of that. A capitalist would need to reproduce a certain social hierarchy of workers who owned nothing but their labor power and of others who controlled the capital necessary to make production start. Thus, the process of reproduction would need to recreate workers as workers, and capitalists as capitalists. Economic reproduction involves the physical production and distribution of goods and services, the trade (the circulation via exchanges and transactions) of goods and services, and the consumption of goods and services (both productive or intermediate consumption and final consumption). Karl Marx developed the original insights of Quesnay to model the circulation of capital, money, and commodities in the second volume of Das Kapital to show how the reproduction process that must occur in any type of society can take place in capitalist society by means of the circulation of capital. Marx distinguishes between "simple reproduction" and "expanded (or enlarged) reproduction". In the former case, no economic growth occurs, while in the latter case, more is produced than is needed to maintain the economy at the given level, making economic growth possible. In the capitalist mode of production, the difference is that in the former case, the new surplus value created by wage-labour is spent by the employer on consumption (or hoarded), whereas in the latter case, part of it is reinvested in production. Ernest Mandel additionally refers in his two-volume Marxist Economic Theory to contracted reproduction, meaning production on a smaller and smaller scale, in which case business operating at a loss outnumbers growing business (e.g., in wars, depressions, or disasters). Reproduction in this case continues to occur, but investment, employment, and output fall absolutely, so that the national income falls. In the Great Depression of the 1930s, for example, about one-quarter of the workers became unemployed; as a result of the 2008–9 slump, the unemployed labour force increased by about 30 million workers (a number approximately equal to the total workforce of France, or Britain). More details Android, Windows

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Leaseback

Leaseback, short for 'sale-and-leaseback,' is a financial transaction, where one sells an asset and leases it back for the long-term; therefore, one continues to be able to use the asset but no longer owns it. The transaction is generally done for fixed assets, notably real estate, as well as for durable and capital goods such as airplanes and trains. The concept can also be applied by national governments to territorial assets; prior to the Falklands War, the government of the United Kingdom proposed a leaseback arrangement whereby the Falklands Islands would be transferred to Argentina, with a 99-year leaseback period, and a similar arrangement - also for 99 years - had been in place prior to the handover of Hong Kong to mainland China. Leaseback arrangements are usually employed because they confer financing, accounting or taxation benefits. More details Android, Windows

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Internal rate of return

Not to be confused with Implied repo rate. The internal rate of return (IRR) or economic rate of return (ERR) is a method of calculating rate of return. The term internal refers to the fact that its calculation does not incorporate environmental factors (e.g., the interest rate or inflation). It is also called the discounted cash flow rate of return (DCFROR). In the context of savings and loans, the IRR is also called the effective interest rate. More details Android, Windows

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Domestic market

A domestic market, also referred to as an internal market or domestic trading, is the supply and demand of goods, services, and securities within a single country. In domestic trading, a firm faces only one set of competitive, economic, and market issues and essentially must deal with only one set of customers, although the company may have several segments in a market. The term is also used to refer to the customers of a single business who live in the country where the business operates. There are certain limitations when competing in a domestic market, many of which encourage firms to expand abroad. The main reasons why a business would decide to expand abroad are limited market size and limited growth within the domestic market. More details Android, Windows

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Non-operating income

Non-operating income, in accounting and finance, is gains or losses from sources not related to the typical activities of the business or organization. Non-operating income can include gains or losses from investments, property or asset sales, currency exchange, and other atypical gains or losses. Non-operating income is generally not recurring and is therefore usually excluded or considered separately when evaluating performance over a period of time (e.g. a quarter or year). More details Android, Windows

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Contribution margin

Contribution margin (CM), or dollar contribution per unit, is the selling price per unit minus the variable cost per unit. “Contribution” represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. This concept is one of the key building blocks of break-even analysis. Decomposing Sales as Contribution plus Variable Costs. In the Cost-Volume-Profit Analysis model, costs are linear in volume. In cost-volume-profit analysis, a form of management accounting, contribution margin—the marginal profit per unit sale—is a useful quantity in carrying out various calculations, and can be used as a measure of operating leverage. Typically, low contribution margins are prevalent in the labor-intensive tertiary sector while high contribution margins are prevalent in the capital-intensive industrial sector. More details Android, Windows

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List of manufacturing processes

This tree lists various manufacturing processes arranged by similarity of function. More details Android, Windows

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Venture philanthropy

Venture philanthropy takes concepts and techniques from venture capital finance and business management and applies them to achieving philanthropic goals. More details Android, Windows

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