ESCUELA SUPERIOR POLITCNICA DE CHIMBORAZOENGINEERING IN FINANCE

SUBJECT:

ENGLISH

TOPIC:

ECONOMIC GLOSSARY

BY:

POLET SA MORA

LEVEL: THIRD F

DATE:.2015, JANUARY 28

ECONOMIC GLOSSARY

1ABATEMENT COSTCan be quoted as a cost per unit or the total cost of achieving a given target

2ACCOUNTA statement about activities over a specified period.

3ACQUISITIONExpansion of a company through the purchase of another business.

4ADMINISTRATIONIs to enable the company to survive as a going concern on, if that proves impossible, to get a better price for its assets than inmediate liquidation would produce

5AGGREGATE DEMANDThe total of intended or ex ante attempts to spend on final goods and services produced in a country

6AMORTIZATIONThe building up over a period of a fund to replace a productive asset at the end of its useful life, or to repay a loan; in the case of replacement of physical assets, the amount depends on the expected lifetime of asset and on the rate of inflation.

7ANNUITYA contract by which a financial institucion such as an insurance company agrees to provide a regular income for the remainder of the holder's life. The payments may be fixed in money terms, or index- linked.

8BAD DEBTDebt whose repayment is know to be impossible or unlikely

9BALANCE OF PAYMENTSThe difference between total receipts and expenditure in any category of payments

10BALANCE OF TRADEThe excess of visible exports over visible imports. This is a major, but far from the only, component of the balance of payments on current account.

11BANK LOANA loan from a bank to an individual or firm. Banks overdrafts or personal loans for small amounts are often unsecured, if the costumer is regarded as a good risk.

12BASE RATEThe rate of interest used by commercial banks as a basis for changing for loans.

13BUSINESSAll forms of industrial and commercial profit-seeking activity.

14CAPITALAn imprecise term that, unqualified, generally refers to the resources of an organization or person, as contributed by the owners.

15CAPITAL MOVEMENTSThe movements of foreign currency between countries, mainly through purchases of assets and securities or through making loans.

ECONOMIC GLOSSARY

16CHEQUEDocument which is normally supplied in printed form by an bank, ordering the bank to transfer funds from the drawer's current account to a named payee.

17COMPANYAn enterprise that has been legally incorporated to produce certain goods or provide certain services, or to transact any other type of business.

18CONSUMERSPeople who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

19COSTThe amount of money that has to be expended to acquire something,in most cases its price.

20COST OF PRODUCTIONExpenditure which is incurred by way of payments for rent, mortgages, interest on loans, dividends, salaries and wages, buildings, plant and machinery and raw materials, in the production of a commoditu or a service, including development and marketing costs.

21DEFLATIONA reduction in activity due to lack of effective demand.

22DEMANDThe desire and ability to acquire a good or service. The quantity of a good or service that economic agents are willing to buy at a given price.

23ELASTICITYThe concept is useful because comparisons of proportional changes are independent of the units in which the variables, such as price or quantity, area measured.

24FACTORS OF PRODUCTIONResources used by businesses to produce goods and services

25FINANCIAL INSTITUTIONInvestment trust or insurance company whose work involves lending or investing large sums of money

26FIRST IN FIRST OUTA redundancy policy, in which the people who have been working longest are the first to be made redundant

27FORWARD BUYINGThe act of buying shares, currency, or commodities at today's price for delivery at a later date

28GLOBALIZATIONAlthough there is no one precise definition, the term usually refers to the increased flow of trade, people, investment, technology, culture and ideas among countries.

29HUMAN RESOURCESThe quantity and quality of human effort directed toward producing goods and services

30IMPORTSGoods or services bought from sellers in another nation.

ECONOMIC GLOSSARY

31INFLATIONA sustained and continuous increase in the general price level.

32LAW OF DEMANDThe principle that price and quantity demanded are inversely related

33LAW OF SUPPLYThe principle that price and quantity supplied are directly related.

34MACROECONOMICSThe study of economics concerned with the economy as a whole, involving aggregate demand, aggregate supply, and monetary and fiscal policy.

35MARKETA setting where buyers and sellers establish prices for identical or very similar products, and exchange goods and/or services

36OFFER CURVEIs the locus of optimal plans and is constructed by considerind every feasible set of relative prices. An offer curve can be constructed for a single consumer.

37OPTIMIZATIONThe choice from all possible uses of resources of that which gives the best result. This is often represented by the maximization of benefits or the minimization of losses, in general, the objective function describes what is to be optimized.

38OUTPUTThe result of an economics process that has used inputs to produce a product or service that is available for sale or use elsewhere

39PAID- UP CAPITALThe part of the authorized capital of a company that has actually been paid by shareholders.

40PAY-BACK PERIODThe time period over which a firm requires that ir earns the cost of new equipment in profits if it is to invest, is not an economically rational investment criterion, it passes a project which brings in 101 percent of its cost in the first N years and nothing thereafter

41PRIVADE SECTORThe parts of the economy non run by the goverment. This includes households, sole traders and partnerships, companies, and non-profits organizations.

42PRODUCTIONA process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want

43QUANTITY DEMANDThe amount of a product consumers will purchase at a specific price.

44QUANTITY SUPPLIEDThe amount of a product producers will produce and sell at a specific price.

ECONOMIC GLOSSARY

45RESOURCESThe basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

46SHORTAGEThe situation resulting when the quantity demanded exceeds the quantity supplied of a good or service, usually because the price is for some reason below the equilibrium price in the market.

47TOTAL COSTAll costs associated with producing a good or service; the sum of total fixed costs plus total variable costs.

48UNEMPLOYMENTThe situation in which people are willing and able to work at current wage rates, but do not have jobs.

49WAGEPayments for labor services that are directly tied to time worked, or to the number of units of output produced.

50ZERO PROFITA situation in which profit in an industry is zero, usually as a result offree entry and exit. It may, if firms are not identical, refer only to the marginal firm. And it always means zeroexcessprofit, not that all returns to capital invested in the industry are zero.