Active Market :-It is a stock exchange term .it is used for a particular stock of share in which there are regular and frequent dealings. This is a term used by exchange which specifies the particular stock or share which deals in frequent and regular transactions. It helps the buyers to obtain reasonably large amount any time.
Administered Price : - When the price of an item or item or a commodity are decided by the central power, generally the government or any other agency and not on the basic of demand and supply, such types of price and called Administered Price.
Ad-velorem Tax : - Ad velorem tax is a kind of indirect tax in which goods are taxed by the there values .in the case of Ad velorem tax the tax amount is calculated as the proportion of the price of the goods .Value added tax (VAT ) is an ad velorem tax. In other wards when the tax is determinate on the basics of value of a commodity, it is known as Ad-Velorem tax.
Amalgamation : It means ‘merger’. As and when necessity arises two or more companies are merged into a large organization. The old firms completely lose their identity when the merger takes place.
Appreciation : Appreciation means an increase in the value of something e.g. stock of raw materials or manufactured good. It also includes an increase in the traded value of currency. It is an increase in the value of assets over a particular time period. Example: Land, Building, paintings etc. Appreciation is just opposite to depreciation. When the prices rise due to inflation, appreciation may occur.
Arbitration :-Where there is an industrial dispute, the Arbitration comes of the force. The judgment is given by the Advalorem both the parties have to accept and honor the Advalorem. Advalorem is the settlement of .labor dispute that takes place between employer and the employees.
Action: - Who a commodity is sold by auction, the bids are made by the buyers who so ever make the highest bid, get the commodity which is being sold. The buyers make the bid taking into consideration the quality and quantity of the commodity
Autarchy: - it means self-sufficiency and –reliance of an economy autarchy in an abdicator of self-sufficiency. It means that the country itself can satisfy the needs of its population without making imports from other countries.
Balance of payment :- it is the difference between country payments and receipt from other countries during a year .in other words the balance of payment show the relation ship between the one country’s total payment to all other countries and its total receipt from them .Balance of payment not only includes visible export and import but also invisible trade like shipping ,banking ,insurance ,tourism, payment of interest on foreign debts.
Balance of trade: - it refers to thee relationship between the values of country’s imports and its export’s i.e. the visible balance. Balance of trade refers to the total of country‘s export commodities and total value of imports commodities .Thus balance of trade includes only visible trade i.e. movement of goods (export and imports of goods).
Balance of trade is part of balance of payment statement.
Balance sheet:-Balance sheet is a statement showing the assets and liabilities of a business certain date. Balance sheet helps in estimate the real financial situation of a firm.
Bank:- Bank is a financial institution .it accept funds on current account and saving account .it also lends money .the bank pays the cheque drawn by customer against current or saving bank account .The bank is a trader that deals in money and credit
Bank draft: - Banker's draft (Demand Draftiest a negotiable claim drawn upon a bank. Draft are as good as cash .The draft cannot be returned unpaid .Draft is issued when a customer shown his unwillingness to accept cheque in payment for his service or mercantile goods .Bank draft is safer than a cheque.
Bank Rate: - It is a situation in which a person is unable to discharge his debt obligations.
Basket of Currency:-In this system the exchange value of a country’s currency is fixed in terms of some major international currencies Indian. Rupee is value against US Dollar, British Pound, Japanese Yen, French Franc and German Deutsche Mark. India opted for this system in 1975.
Bankruptcy:- It is a situation in which a person is unable to discharge his debt obligations.
Bear and Bull:- These terms are used in stock exchange 'Bears' is an individual who sell share in a hope that the stock's price would fall” Bull' is an individual who buys share in a hope that the stock's price would rise.
Bill of Exchange:- It is an unconditional order in writing addressed by one person to another requiring the addressee to pay on demand or at a fixed future time a certain sum of money to the order of this specified person or to the bearer.
Birth Rate :- Birth Rate (or cube Birth Rate ) is number of the births per thousand of the population a period .usually a year .only live births are include in the calculation of birth rate
Black Money:-.it is unaccounted money which is concealed from tax authorities. All illegal economic activities are debit with this black money .Black money creates parallel economy. It puts an adverse pressure on equitable distribution of wealth and income in the economy.
Blue Chip: - The most reliable industrial share on a stock exchange .It is concerned with such equity share whose purchase is extremely safe it is a safe investment .it does not involve any risk.
Blue Collar Jobs:- These jobs are concerned with factory .person who are unskilled and depend upon manual jobs that require physical strain on human muscle are said to be engaged in blue collar jobs .in the age of machinery, such jobs are on the decline these days.
Boom: - The point at which price and employment are the maximum the trade is also at its highs point and beyond this no upward Movement is possible.
Bounty: - it is a subsidy paid by the government to exporters .It reduces the price of exportable goods and hence act as incentive to enhance exports.
Brain -Drain: - It means the draft of intellectuals of a country to another country .Scientist Doctors and technology expert generally go to other prominent countries of the world to better their lot and earn huge sums of money. This Brain -Drain deprives a country of its genius and capabilities.
Bridge Loan:- A loan made by a bank for a short period to make up for a temporary shortage of cash .on the part of borrower ,mostly the companies for example ,a business organizations wants to installed a new companies with new equipments etc. While his present installed company or equipments etc. are not yet disposed off. Bridge loan covers this period between the buying the new and disposing of the old one.
Broad Banding: - it means providing more flexibility to manufacturers to produce wider variety of product with same raw material mix so as to ensure optimum capacity.
Budget: - it is a document containing a preliminary approved plan of public revenue and public expenditure .it is a comparative table giving the account of the receipt to be realized and of the expenses to be incurred.
Budget Deficit: - Budget deficit is the difference between the estimated public expenditure and public revenue. The government meets the deficit by way of printing new currency or by borrowing .Budget may take a shape of deficit when the public revenue falls short to public expenditure.
Buffer stock:-These are the stock (generally of primary goods) accumulated by a government agency when supply is plentiful These stock are released in case of shortage of supply .in India food corporation of India (FCI)accumulates food grains as buffer stocks.
Bullion: - It is gold or silver having a specific degree of purity. Generally it is in the form of gold or silver bars.
Bull Market: - it is a market where the speculators buy share or commodities in anticipation of rising price. This market enables the speculators to resale such share and make a profit.
Buoyancy: - in the inflationary period, the increase in tax revenue is know as buoyancy .when the government fails to check inflation, it concerns with the revenue from taxation in the period of inflation.
Buyer's Market: - When the market is favorable to buyer's market this situation occurs when their is a change from boom to recession i.e. demand is less than supply
Call Money: - It is a loan that is a made for an every short period of a few days only or for a week .It carries a low rate of interest .in case of stock exchange market the duration of the call money may be for a fortnight.
Capital: - The stock of gods which are used in production and which themselves have been produced .It is one of the major factors of production .the other being land, labour and entrepreneurship.
Capitalism: - The economic system based on free enterprise and private profit capitalism is an economic system in which all means of production are owned by private individuals self-profit motive is the guiding feature for all the economic conditions activities under capitalism .Under pure capitalist system is based on "Laissez-FAIRE system I.E. no state intervention, sovereignty of consumer prevails in this system.
Capital Market: - It is a market for long term loans .Capital market is the market which gives medium term and old term loans. It is different from money market which deals only in short term loans.
Cash Reserve Ratio(CRR):- It refers to that portion of banker's total cash reserve which they are statutorily required to hold with the B.S.I The commercial bankers are required to keep a certain amount of cash reserve at the central bank .i.e. RBI .this percentage amount is called CRR. It influences the commercial bank's volume of credit because variation in CRR affects the liquidity position of the banks and hence their ability to lend.
Celling Price: - This is the maximum limit fixed generally by government or its agency .Beyond it the price cannot raise.
Cheap Money: - in indicates a situation when bank rate and other rates of interest are low.
Cheque: - Cheque is an order in writing issued by the drawer to a bank if the customer has sufficient amount in his account, the cheque is paid by the bank cheque are used in place of cash money.
Clearing House:-Clearing houses an institution which helps to settle the mutual in datedness that occurs among the members of its organization.
Closed Economy: - closed economy refers to the economy having no foreign trade (i.e. export and import) such economic depend exclusively on their own internal domestic resources and have no dependence on out side world.
Core industries: - core industries include strategic basic and critical industries which remain generally under state control, e.g. defence, iron and steel fertilizers etc.
Core sector :- Economy needs basic infrastructure for accelerating development of infrastructure industries like cement ,iron and steel, petroleum, heavy machinery etc. can only ensure the development of the economy as a whole such industries are core sector industries
Corporate Tax: - it is a direct tax levied on company's profit it is calculated on profit after interest and allowance (i.e. capital allowance) have been deducted.
Cost Price Index (CPI):-It is used for measuring cost of living and it covers large numbers of commodities than wholesale price index (WPI) which is used for measuring rate of inflammation.
Credit control: - it implies the measures employed by central bank of a country to control of credit in the banks.
Credit Rating:-it is the assessed credit worthiness of prospective customer
Credit Rationing: - Credit rational takes place when the banks discriminates between the borrowers credit rationing empires
The bank to land to someone and refuse to lend others. In this way credit rationing restricts lending on the part of bank.
Credit Squeeze: - Monetary authorities restrict credit as and when required .This credit restriction is called credit squeeze in other words when the credit control is very tight and restrict, this situation is know as credit squeeze.
Custom Duty:- it implies tax on imports custom duty is a duty that is imposed on the products received from exporting nations of the word it is also calls protective duty as it product the home industries.
Cyclical Unemployment: - It is that phase of unemployment which appears due to the occurrence of the downward phase of the trade cycle such an employment is redacted or eliminated when the business cycle turns up again.
Death Rate: - Death Rate Signifies the number of death in a year per thousand of the population .it is mostly know as crude death rate .life expectancy will have a high crude death rate.
Debentures:- it is a document which enlists the terms or condition of a loan .The debenture are used by corporate sector (Companies) The debenture holder are to be paid a fixed annual rate of interest and they have the first claim on the asserts of a company as creditors.
Decentralization: - Decentralization means the establishment of various units of the same industry at difference place .Large scale organization or industry can not be run at one particular place or territory. In order to increase the efficiency of the industry, various unit at different places are located the efficiency of the industry, various unit at difference places are located.
Deed: - it is a written contract signed under legal seal.
Deflation: - it is just opposite to inflation .Thus deflation is a fall in the general price level over a particular period of time.
Depreciation:-it is the reduction in the value of the fixed asset due to wear and tear.
Demand Draft: - it is the reduction in the value of a fixed asset due to wear and tear.
Depreciation: - it is just opposite to: Boom” it implies a state of economy when lack of demand result in heavy unemployment and stagnation in economy.
Devaluation: - It is the reduction in the official rate of a currency in terms of a foreign currency Indian rupee has been devalued thrice in 1949, 1966 and 1991.
Direct Tax:- it is a tax whose burden cannot be shifted i.e. the burden of direct tax is borne by the person on whom it is initially fixed e.g.-Personal income tax, social security tax paid by employees, death tax etc.
Dividend: - It is earnings on stock paid to shareholders
Dumping: - it means selling goods in international market at a price which is lower than that in domestic or home market.
Elasticity of demand: - the responsiveness of demand of a commodity to the change in its price is known as elasticity of demand.
Embargo: - it means prohibition of entry of goods from certain countries into a particular country.
Engel’s Law:- Ernest Engel, the 19th centaury germen statistician, analyzed the budget data of working families and established a relationship between the families income and expenditure .According to the law” When a family income increase the percentage of its income spent on food decreases”.
Exchange Rate: - the rate at which certain banks will exchange one country for another.
Excise Cost: - Tax imposed on the manufacture, sale of the consumption of various commodities, such as taxes on textiles, cloth, liquor etc. Factor Cost:-it is the sum total of amount paid to four main factor of production i.e. Land (rent), Labor (Compensation of employees), Capital (interest), entrepreneurship (Profit) it is exclusive of taxes or subsidies.
Floating of a currency:-When the exchange value of a currency in terms of other currencies is not fixed officially, that currency is said to be floating
Foreign Exchange Reserves: - Foreign Exchange Reserve of a country includes foreign currency assets and interest bearing bonds help by it. In India it also includes SDR and value of gold.
Free Market: - it means a market where price of a commodity is determined by free play of the demand and supply
Free Trade: - it implies absence of any protective tariffs or trade barriers by any economy with respect to export and import
Gresham’s law: - if not limited in quantity: bad money drives god money out of circulation this statement was given by economist sir Thomas Gresham, the economic advisor of Queen Elizabeth.
Gross Domestic Product (GDP): it is the aggregate of total flow of goods and service produced by an economy in a year.
Gross National product (GNP) Gross domestic product plus net factor income from abroad is equal to Gross National Product.
Hot Money: - it is volatile money which comes easily but can also go out easily e.g. Portfolio investment.
Indirect Tax: - taxes levied on goods purchased by the consumer (and exported by the producer) for which the tax payer’s liabilities varies in proportion to the quantity of particular goods purchased or sold.
Inflation: - it is a sustained increase in general price level over a particular period of time. It reduces the purchasing power of money.
Interim Budget: - it is an addition to the general budget and is presented as a part of it through the financial year.
International Monetary Fund (IME) It is a multinational institution set up in 1945. It started working as an independent organization in 1947 .it seeks to maintain cooperative and orderly currency arrangement between member countries with the aim of promoting increased international trade and BOP equilibrium.
I. O.U. It means “I owe you “it is non –negotiable promissory note indicating the debt owed by one party to another.
Joint Stock Company: - it is a form of company in which a number of people contribute funds to financial a firm in return for “Share” in the company
Laissez –Faire: - it is an economic doctrine which emphasizes the superiority of free markets over state’s interference in economic affairs.
Legal Tender: - The currency (Coins and bank notes) which have to be accepted in payment.
Liquidation: - Winding up of company by selling assets and paying liabilities: any remaining money goes to owners.
Market Value: - The market value of an equity share is the price at which it is trade in the market. This price can be easily established for a company that is listed on the stock market and actively traded. For a company that is listed on the stock market but traded very infrequently, it is the difficult to obtain a reliable market quotation .for a company that is not listed on the stock market. One can merely conjecture as to what its market price would be if were traded.
Merchant Banking: - In Merchant Banking banks act as “Underwriter” and does business on behalf of corporate sector .such banking helps in larger participation of people in capital market e.g. ICICI.
MODVAT: - The modified system of value added taxation is based on the idea of tax final products and not input that o into production
Money Market: - It is a market engaged in short –term lending and borrowing of money linking together the financial institution, companies and the government.
Monopoly: - It is a type of market structure having one seller and money buyers. There is a lack of substitute products and entry of new firms into market is not possible.
MoU:-The concept of Memorandum of Understanding (MoU) was introduced in 1988 .The main objective of MoU is reduce the quantity of control and increase the quality of accountability .the emphasis is on achieving the negotiated and agreed objectives rather than interfering in the day-to-day affairs .Over the years, the MoU system has grown at a steady rate, from 4 MoU in 1987-88 to 108 MoUs in 1997-98.
Mutual Fund: - it is a form of collective investment that is useful in spreading risks and optimizing returns.
National Income: - it is equal to the total money value of goods and service produced over the given time period less capital consumption
Net Domestic Product(NDP) The money value of a nation’s annual output of goods service, less capital consumptions (depreciation experienced in producing that output.
Net National Product (NNP) Net National Product is equal to net domestic product plus net factor income from aboard.
Octroi : - it is an internal tariff system among different region of a country
Per Capita Income:-It implies income per person. It is obtained by dividing national income of country by its population.
Plastic Money :- it refers to use of instruments like” Credit cards” instead of cash in business transaction .it is called so because credit cards are made of plastic .Plastic money also carries information about its holder in coded form which makes it theft proof .No one ,but the holder is able to use the card.
Portfolio: - Various share etc. help by institution or individual is called portfolio.
Poverty Line:- The poverty line has been fixed by the planning commission on the basis an average daily intake of 2400 calories per person in rural areas and 2100 calories in urban areas .in monetary terms the poverty line is commented to be Rs 76 per month in rural and Rs 88 in urban areas in terms of 1979-80 prices.
Reflation: - it is an increase in the level of National Income and output Reflation is often deliberately brought about by the authorities in order to secure full employment and to increase the rate of economic growth.
Recession: - Recession cycle characterized by a modest downturn in the level of economic activity means fall up of demand
Schedule Bank: - it is a bank included in the second schedule of RBI it has a minimum cash reserve of “Rs 5 lakh”
SDRs (Special Drawing Rights) The SDR is a reserve asset created within the frameworks of the international Monitory fund in an attempt to increase international liquidity and forming a part of country’s official reserve along with gold reserve position in the IMF & Convertible Foreign Currencies. It is also known as “Paper Gold”
SEBI: - It was set up in 1988 by the Government of India to regulate the operations market of India .The SEBI stands for security and Exchange Board of India
Self Reliance :-self reliance ,in short ,can mean attainment of economic independence which ,in turn ,implies capability to sustain a higher rate of growth of economy essentially with the help of the domestic resource.
Seller’s Market: - It is market situation which exists for a short time period .During this period there is an excess demand for good and services a current price which forces price up to the advantage of the seller.
Sensex:- The stock Exchange Sensitive index (Popularly referred to as the SENSEX) reflects the weighted arithmetic average of the price relative of a group of share include in the index of sensitive share .for example Bombay stock exchange sensitive index is a group of 30 sensitive shares.
Shares:- These are the equal portions of the capital of a limited company share in a company do not carry fixed rate of interest .the holder of the ordinary share carry the residual risk of the business.
They rank after debenture holders and preference shareholder for the payment of dividends and they are liable for losses, although this liability is limited to value of the shares and the limit of guarantee given by them. Preference share are such share of a company on which interest is paid before any others, and owners have prior right to repayment of capital is wound up.
Share Capital : - Money raised by issuing of shares is called .share capital.
Share index : - It is the statistical indicator of overall share values, based on selected group.
VAT : - It seeks to tax the value added at every stage of manufacturing and sale with a provision of refunding the amount of VAT already paid at earlier stages to avoid double taxation.
