Economics

Microeconomics is a social science that examines the allocation of resources to produce goods and services, and the distribution of goods and services produced. In the modern era, this involves the study
The 80-20 rule, also known as the Pareto Principle, states that 80% of outcomes arise from 20% of inputs. The idea is applied in business and economics to identify and prioritize the most productive or
A. Michael Spence is an economist who won the 2001 Nobel Prize for his work in market-signaling theory.
Above full-employment equilibrium occurs when a country's gross domestic product (GDP) is higher than normal.
Adam Smith is one of the world's most famous economists. Modern capitalism owes its roots to Adam Smith and his Wealth of Nations, which many consider the single most important economic work in history.
The Affordable Care Act (ACA), which is known formally as the Patient Protection and Affordable Care Act (PPACA) and is also known as "Obamacare" and even the more generic "health care reform," is a bill
Alan Greenspan was the chairman of the Federal Reserve Board of Governors from 1987 to 2006.
A baby boomer is a member of the generation born between 1946 and 1964.
The baby boomer age wave theory, developed by economist Harry S. Dent, Jr., theorizes that the age of the baby boom generation can predict major changes in economic trends.
A bad bank is a new company created to buy poorly-performing assets from another bank.
A bailout is financial help for ailing companies.
The balance of payments (BOP) reflects all payments and obligations to foreigners vs. all payments and obligations received from foreigners. It's a record of all financial flows in and out of a country.
A balanced budget exists when a household's (or country's) revenues are equal to its expenses.
Based in Basel, Switzerland, the Bank for International Settlements (BIS) acts as a bank for central banks around the world.
A bank reserve is a portion of a bank's deposits that are set aside in a liquid account to ensure that the bank has enough cash on hand to fulfill withdrawal requests.
A barter (or bartering) is an exchange between two parties using goods and services for payment instead of currency.
In economics, a basket of goods is a group of items used for price comparisons or other analytical purposes.
The Beige Book is the informal name for the Federal Open Market Committee's (FOMC) ongoing reports titled Summary of Commentary on Current Economic Decisions by Federal Reserve District.
A big box store is a large company that is more efficient but less specialized than other firms in a particular niche or industry.
A black market is the illegal purchase and sale of goods and services.
The Board of Governors is the decision-making body at the Federal Reserve.
In economics, the break-even point is the point at which revenues equal expenses. In investing, the break-even point is the point at which gains equal losses.
Under the Bretton Woods Agreement of 1944, the world's allied industrial countries established a fixed currency exchange rate based on the gold standard. 
The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor is a Federal agency that measures and reports labor market activity, working conditions and price changes in the economy.
/*-->*/ The Bureau of Public Debt is responsible for borrowing the money needed to run the U.S. government. They are also responsible for tracking the total amount of U.S. soverign debt.
The business cycle refers to an economy's periodic patterns of growth, recession, and recovery.
A buyer's market exists when there are more sellers than buyers in the market for a certain good or service.
In the financial world, the phrase "buying power" has two meanings. One is the amount of money a person can use to invest in securities (and that can include  money the investor borrows in order to buy
Capital is anything a business uses to generate income. In simple terms, capital is the potential for any item to create wealth.
A capital account is a national account that shows the changes in a nation's assets. These assets can be physical or financial.
Capital intensive refers to the degree that a company must invest money in physical or financial assets in order to produce a profit.
Capitalism is an economic and social system in which participants privately own the means of production -- called capital. Free market competition, not a central government or regulating body, dictates
A cartel is a group of companies, countries or other entities that agree to work together to influence market prices by controlling the production and sale of a particular product.
A category killer is a large, dominant company that is more efficient but less specialized than other merchants in a particular niche or industry.
/*-->*/ Caveat emptor is Latin for let the buyer beware, meaning the buyer assumes the risk in a transaction.
A central bank is an institution responsible for determining the monetary policy of a nation or group of nations. 
Collusion, also known as price rigging or price fixing,  occurs when several individuals and/or businesses agree to set the price for something. 
Commerce is the exchange of goods, services or commodities on a large scale.
A firm's comparative advantage is its ability to produce a good or service at a lower opportunity cost than another entity.
Also called real GDP, constant-price gross domestic product (GDP) is inflation-adjusted GDP.
The Consumer Confidence Index (CCI) is an index based on the monthly Consumer Conference Board survey that measures consumer sentiment regarding current and future economic conditions. Note that the CCI
Consumer cyclical refers to a stock or group of stocks that are affected by changes in the economic cycle.
Consumer durables are a category of consumer products that do not have to be purchased frequently because they last for an extended period of time (typically more than three years).
The consumer price index (CPI) measures changes in consumer prices. The Bureau of Labor Statistics (BLS) calculates and publishes CPI data monthly. The CPI is the most recognized inflation measure in the
Consumer staples are household necessities -- products that most of us use on an everyday basis and would continue to use with little regard to their cost or the overall economy.
/*-->*/ Country risk is the risk that a foreign government will default on its bonds or other financial commitments. Country risk also refers to the broader notion of the degree to which political and
Critical mass refers to the size a company needs to reach in order to efficiently and competitively participate in the market. This is also the size a company must attain in order to sustain growth and
The crowding out effect describes the idea that large volumes of government borrowing push up the real interest rate, making it difficult or close to impossible for individuals and small companies to
Currency is a medium of exchange for goods or services within an economy.
A cyclical industry is an industry whose performance (revenues, profits, etc.) is tied to the business cycle. Thus, when the economy is grows quickly, the industry does well and vice versa.
Cyclical unemployment is the fluctuating rate of unemployment resulting from swings in the business cycle.
In the finance world, dead presidents are slang for U.S. currency.
When supply and demand are out of equilibrium, the market inefficiency created and the societal cost is known as deadweight loss. When used in economics, deadweight loss will be applied to the deficiency
Decoupling refers to instances in which security prices behave contrary to normally-occurring correlations.
A defensive company is a company that does well or at least remains stable during economic contractions and expansions.
A deficit occurs when expenses exceed revenues, imports exceed exports, or liabilities exceed assets. A deficit is the opposite of a surplus.
Deficit spending is spending that reduces or offsets a surplus. In the business world, the term often refers to situations where expenses exceed revenues, imports exceed exports or liabilities exceed
Deflation describes the general decline in the prices of goods and services in an economy, which in turn increase the purchasing power of money. It is the opposite of inflation, but is not the same as
Demand elasticity is a measure of how sensitive the demand for a product or service is to changes in the price of that product or service. The formula for demand elasticity is: Elasticity = % Change in
Usually associated with currency, a denomination is the value specified on a monetary instrument.
A depression is a sustained downturn in economic activity characterized by high unemployment, decreased output and reduced levels of trade. 
Deregulation occurs when there is a significant decrease or elimination of government regulation over an industry, market, or economy.
A direct cost is any cost related to the production method of a good or service. It is the opposite of an indirect cost.
The discount rate, also known as the Fed discount rate, is the interest rate charged to commercial banks and other institutions on loans from a Federal Reserve bank. This process is a key tool of Federal
The discount window is the method that banks use to borrow money from a central bank on a short-term basis, named after an actual teller window at the Federal Reserve where such transactions used to be
Diseconomies of scale lead the marginal cost of a product to increase as a company grows. This is the opposite of economies of scale which cause the marginal cost for a product to decrease as a result of
A double-dip recession occurs when the economy experiences a recession followed by a brief recovery and then another period of recession.
The Dow Jones Transportation Average (DJTA) is the most widely recognized gauge of the transportation sector. It is also the oldest index used today, even older than its more famous brother, the Dow Jones
The Dow Jones Utilities Average (DJUA) is the most widely cited utilities index in the United States and the most widely recognized gauge of the utilities sector.
A duopoly is a form of oligopoly occurring when two companies (or countries) control all or most of the market for a product or service.
Durable goods are a category of tangible (physical) products that last three years or longer. Typically, these goods are a bit more expensive because they tend to last for long periods of time. Durable
Durables are a category of consumer products that do not have to be purchased frequently because they are made to last a long time (typically more than three years). They are also called durable goods or
Easy money is a phrase that often refers to the presence of low interest rates. In the context of the Federal Reserve, easy money is a method of helping the economy expand by increasing the money supply.
Econometricians are economists who use math and statistics to measure economic data.
Econometrics is the use of math and statistics to measure economic data.
Economic blight occurs when an area of a town shows visible signs of age, disrepair, and crime.
Economic exposure is the risk that a company's cash flow, foreign investments, and earnings may suffer as a result of fluctuating foreign currency exchange rates.
An economic indicator is an index or other data that suggests whether the economy is expanding or contracting.
An economic recovery is a period of economic expansion, typically after a recession.
An economic refugee is a person who moves to another country in search of a higher standard of living.
Economic rent is the minimum amount of money that an owner of land, labor or capital must receive in order to let someone else use that land, labor or capital.
Economic risk is the chance that macroeconomic conditions like exchange rates, government regulation, or political stability will affect an investment, usually one in a foreign country.
An economic stimulus occurs when a federal government attempts to use targeted monetary or fiscal policies to stimulate an economy (especially when it enters a recession or depression).
An economic tsunami is a set of circumstances that produce an event that triggers considerable distress in the financial markets and/or the economy.
Economics is the academic study of the production, distribution, and consumption of goods and services.
Economies of scale is a term that refers to the reduction of per-unit costs through an increase in production volume. This idea is also referred to as diminishing marginal cost.
Economies of scope is a term that refers to the reduction of per-unit costs through the production of a wider variety of goods or services.
An economist is a social scientist devoted to the study of the relationship between human behavior and supply and demand.
In its broadest sense, the economy is the organized system of human activity involved in the production, consumption, exchange, and distribution of goods and services.
Something is elastic when its price varies with the price of another item. It the business world, the term most often refers to how much the price of a good or service changes when the supply of that good
Elasticity is a measure of how much the quantity demanded of a service or good changes in relation to its price, consumer income, or supply.
The elasticity of supply, also known as price elasticity of supply, measures the responsiveness of the quantity supplied to a change in the price of a good, with all other factors remaining the same.
The employment cost index, or ECI, is a quarterly report compiled by the Bureau of Labor Statistics within the U.S. Department of Labor that offers wage and benefit information and provides a leading
Existing home sales is an economic indicator released by the National Association of Realtors. The data reflect the number of homes that have previously been constructed (and therefore accounted for by
Expansionary policy, or expansionary monetary policy, is when the Federal Reserve uses tools at its disposal in order to increase the money supply for the purpose of stimulating or growing the economy.
External debt, otherwise known as foreign debt, is the component of total debt held by creditors of foreign countries, i.e. non-residents of the debtor's country.
In economics, the term factors of production refers to land, labor, and capital: the three inputs that make all commerce possible. Some economists also include entrepreneurship a factor of production.
Factory orders are the dollar value of orders for goods from factories.
The Fair Labor Standards Act (FLSA) contains well-known American labor law standards regarding minimum wage, overtime pay and child labor, among others.
Fair market value is the price at which a willing seller sells a good or service to a willing buyer.
The federal discount rate is the interest rate at which a bank can borrow from the Federal Reserve.
The federal funds rate is the interest rate banks charge each other on loans used to meet reserve requirements. The federal funds rate is often confused with the discount rate, which is the interest rate
Federal Reserve Bank refers to any of the 12 branches of the Federal Reserve System overseeing the implementation of U.S. monetary policy. 
The Federal Reserve Board (FRB), officially called the Federal Reserve Board of Governors, is the Federal Reserve System's primary decision-making body.
A Federal Reserve note is the formal name of U.S. currency.
The Federal Trade Commission (FTC) protects consumers and businesses from practices that can cause markets to become unfair and anti-competitive.
Fiat money refers to any currency lacking intrinsic value that is declared legal tender by a government. 
Fiscal deficits occur when a government's expenditures exceed its revenue.
Fiscal policy refers to a government's spending and taxation policies intended to maintain economic stability, which is indicated by levels of unemployment, interest rates, prices and economic growth.
The Fisher Effect is an economic hypothesis stating that the real interest rate is equal to the nominal rate minus the expected rate of inflation.
A fixed cost is a cost which remains unchanged regardless of a company's level of output or revenue. It is the opposite of a variable cost.
Fixed costs are costs that do not change when the quantity of output changes. Unlike variable costs, which change with the amount of output, fixed costs are not zero when production is zero. 
/*-->*/ A flight to quality is the act of moving capital away from "risky" investments and toward "safer" investments due to uncertainty about the overall economy.
A free market is a type of economy with little to no interference from a central government. Instead, a free market is based on supply (from producers) and demand (from consumers).   The term free market
Free on board (FOB) is a contractual term that refers to the requirement that the seller deliver goods at the seller's cost via a specific route to a destination designated by the buyer.
Frictional unemployment refers to the portion of the unemployment rate that results from labor market turnovers. This unemployment is ongoing and includes job transitions and communication lags between
Game theory is a tool used to analyze strategic behavior by taking into account how participants expect others to behave. Game theory is used to find the optimal outcome from a set of choices by analyzing
GDP gap refers to the disparity between an economy's actual total output and its possible total output.
GDP per capita is a country's gross domestic product (GDP) per person. Essentially, this measures the amount of goods and sales a country produced per person, on average.
A generation gap is a difference in philosophies between generations.
A global recession occurs when global gross domestic product growth is 3% or less.
Countries have built economic partnerships that include trade, investment, capital flow, labor migration, and technology. Globalization is a term used to describe the integration of national economies
The gold standard is a monetary system in which the representative currency is based on a fixed amount of gold held by the central government.
The golden rule is very simple: treat people the way you want to be treated. In the business world, it also refers to fundamental principles of government spending: cover current spending with existing
A Goldilocks Economy is one which enjoys sustained economic growth and low inflation.  This balance is attractive to investors because it allows for a market-friendly monetary policy from the Federal
The Government Accountability Office (GAO) investigates, with congressional approval, the federal government's spending.
In the US, government sponsored enterprises, or GSEs, are quasi-governmental, privately-held entities established to improve, and at times make possible, the flow of credit to specific sectors of the
Greenback is a slang term for the U.S. dollar. This name is derived from the green color of U.S. paper currency.
Gross Domestic Product (GDP) is a quantitative measure of how much an economy produces. It includes the monetary value of both goods and services within a specific nation’s borders. From cars to machinery
Gross national product (GNP) is the sum of all domestic and foreign output created by citizens of a given country. It can be measured by spending or by income. GNP includes activities by citizens and
A hard landing refers to an abrupt downward shift in economic growth resulting from monetary policy.
Hardening refers to stabilization or steady increases in a price level.
Harry Markowitz is a famous economist who won the Nobel Prize in Economics in 1990.
The political world is full of nicknames. Hawks are of particular interest to the business community because they often influence or at least put pressure on various parts of the government to take
The Herfindahl Index, also known as the Herfindahl-Hirschman Index (HHI), measures the market concentration of an industry's 50 largest firms in order to determine if the industry is competitive or
Housing starts is a measure of new private homes built during a given month.  This statistic is viewed as a key economic indicator reflecting the state of the economy.
Hyperinflation is a period of extremely high inflation.
An implementation lag is the time elapsed between an adverse macroeconomic shock and an effort to counter the shock.
In specie is a Latin term describing the provision of an asset in its physical form rather than in the cash value of the asset.
In economic terms, an inefficient market is a market in which securities prices are random and not influenced by past events. The idea is also referred to as weak form efficient-market hypothesis or the
Something is inelastic when its price does not vary with the price of another item. It the business world, the term most often refers to how little the price of a good or service changes when the supply
Infant Industry Theory promotes an economic policy that protects young industries in less developed economies until they become established, financially stronger, and capable of withstanding competitive
An inferior good is a product for which demand goes down as income goes up.
Inflation is the rate at which prices rise and purchasing power falls. It is why something that cost $1 in 1980 cost $2.37 in 2005.
Initial Jobless Claims is a report issued by the U.S. Department of Labor every Thursday at 8:30am EST. 
An interest rate is the cost of borrowing money, or conversely, the income earned from lending money. Interest rates are expressed as percentage of the principal per period.
The International Monetary Fund (IMF) is the central institution embodying the international monetary system and promotes balanced expansion of world trade, reduced trade restrictions, stable exchange
The invisible hand is a theory of economics that refers to the self-regulating nature of the marketplace in determining how resources are allocated based on individuals acting in their own self-interest.
The phrase irrational exuberance was coined by Alan Greenspan, chairman of the Federal Reserve, in a December 5, 1996, speech to the American Enterprise Institute. In the speech, Greenspan asked, “How do
The J curve represents a hypothetical short-term increase in a country's trade deficit that occurs immediately following a decline in the value of its currency.
The J-curve effect refers to a "J" shaped section of a time-series graph in which the curve falls into negative territory and then gradually rises to a higher level than before the decline.
The annual Jackson Hole Economic Summit focuses on prominent economic issues that face the U.S. along with the rest of the world.
The Jackson Hole Economic Symposium, held in Jackson Hole, Wyoming, is a conference focusing on important economic issues that face the United States and the rest of the world.
The job market is the group of individuals seeking employment within an economy.
The Job Openings and Labor Turnover Survey (JOLTS) is the name of a detailed report on the U.S. job market published each month by the Bureau of Labor Statistics.
Jobless claims refer to the unemployment benefits claims filed by unemployed individuals each week.
A jobless recovery refers to a sustained economic upturn accompanied by persistent or increasing unemployment levels.
Jobs growth is a U.S. economic indicator that represents the number of new jobs created in a given month.
The K-percent rule is a monetary theory that states that the Federal Reserve should grow the money supply by a set amount per year ("K percent"). Economist Milton Friedman developed the theory.
An L-shaped recovery refers to substantial losses in economic growth followed by a period of stagnation. Represented graphically, GDP data looks like the letter "L."
Labor intensive is used to describe any production process that requires higher labor input than capital input in terms of cost.
Labor market flexibility is the degree to which a company is able to modify its labor force to maximize productivity.
Labor productivity measures the hourly productive output for a country's economy during a period of time. 
The labor theory of value says that the value of a finished good correlates solely with the number of labor hours required to produce it.
A labor union is an organization that advocates for workers' rights and benefits through collective bargaining.
The Laffer curve is a graphic representation of the relationship between an increasing tax rate and a government's total revenues. The relationship suggests that revenues decline beyond a peak tax rate.
A lagging indicator is a financial gauge that becomes measurable only after an economic shift has taken place.
Laissez faire is a capitalist precept that states that market economies function at optimal efficiency in the absence of government regulation.
The law of large numbers states that as additional units are added to a sample, the average of the sample converges to the average of the population.
The law of supply is the microeconomic theory stating that all else being equal, as the price of a good or service increases, the number of goods or services offered will also increase. The law of supply
A leading indicator is an index, stock, report or other measurement that signals the economy or market's direction in advance. 
Leakage occurs when money leaves an economy. In the investor relations world, leakage also refers to the unauthorized or unanticipated dissemination of information.
The term "Lender of Last Resort" refers to financial institutions or individuals that provide credit and/or liquidity to other financial institutions and/or individuals who have exhausted their remaining
Liquidity trap describes the macroeconomic conditions under which interest rates cannot be pushed any lower, rendering monetary policy ineffective. 
Macro accounting, also called national accounting, is a method of calculating the economic activity of a country or region.
A macro environment is a wide, broad set of economic conditions rather than the conditions in a specific sector or industry within an economy.
A macroeconomic factor is a characteristic, trend or condition that comes from or applies to a broad aspect of an economy rather than a certain population.
Macroeconomics involves the study of aggregate factors such as employment, inflation, and gross domestic product, and evaluating how they influence the economy as a whole.
Macroprudential analysis is analysis of the stability of an economy's financial institutions.
Mancessions indicate that men are having a tougher time finding jobs. This in turn may indicate that traditionally male occupations may be waning, that women have more marketable job skills, or that men
A market is a location where buyers and sellers meet to exchange goods and services at prices determined by the forces of supply and demand.
A market basket is a group of items that simulate the overall price movements in a market.
Market cycles are the periods of growth and decline in a market, sector or industry.
A market disruption is a sharp, rapid weakening of market performance in response to external forces.
A market distortion occurs as a result of a government's involvement in a market through monetary or fiscal policies.
Market dynamics are the interaction of supply and demand as the basis for setting prices.
A market economy is structured to allow market forces to determine prices with little or no government involvement.
A market failure occurs when the supply of a good or service is insufficient to meet demand. This results in an inefficient distribution of resources among market participants.
Market indicators are quantitative factors that predict the future behavior of market indices.
Market jitters refers to apprehension among buyers and sellers resulting in choppy and unpredictable market performance.
Market penetration is the percentage of a target market that consumes a product or service. Market penetration can also be a measure of one company's sales as a percentage of all sales for a product.
Market power refers to a single company's ability to control the market price of a good or service.
Market price is the price of an asset or product as determined by supply and demand.
Market saturation is the maximum sales volume for a product or service under current market conditions assuming a constant level of demand.
Market segmentation theory posits that the behavior of short-term and long-term interest rates are mutually exclusive.
A mature industry has passed the rapid growth stage and has an established pattern of market share, earnings, and profits.
The mean is the average of a series of numbers. 
Mean reversion is the theory that interest rates, security prices, or various economic indicators will, over time, return to their long-term averages after a significant short-term move.
Mergers & acquisitions (M&A) refer to the management, financing, and strategy involved with buying, selling, and combining companies.
Minimum wage is the lowest hourly amount an employer may legally pay an employee. In the United States, the amount varies from state to state.
A Minsky moment refers to a sharp decline in prevailing market sentiment and economic productivity after a long period of widespread optimism.
Monetarism is a well-known macroeconomic school of thought developed by Milton Friedman.
Monetary policy is the means by which the Federal Reserve manipulates the U.S. money supply in order to influence the U.S. economy's overall direction, particularly in the areas of employment, production
Money is a medium of exchange for goods or services within an economy.
A monopoly is a market environment where there is only one provider of a certain economic good or service.
The Nakahara Prize is an award from the Japanese government to Japanese economists under age 45 who have made significant contributions to the world of economics.
Narrow moat refers to the size of a company's competitive advantage. The term is an adaptation of the term "economic moat."
Narrow money is a colloquial term for the total of a country's physical currency plus demand deposits and other liquid assets held by the central bank. The economic term for narrow money is M1.
In economics, a Nash equilibrium occurs when two companies in a duopoly react to each other's production changes until their prices reach an equilibrium. The term is named after John Nash, who is an
National accounting, also called macro accounting, is a method of calculating the economic activity of a country or region.
The National Bureau of Economic Research (NBER) is a private, nonprofit, nonpartisan research organization that studies the economy.
A national currency is simply the currency issued by a country's central bank. Currency is a medium of exchange for goods or services within an economy.
National income accounting is a government accounting system to measure economic activity.
The national savings rate is the percentage of gross domestic product that households, governments and businesses save rather than spend.
Natural unemployment is the level of unemployment always present in an economy as industries expand and contract, as technological advances occur, as new generations enter the labor force and as workers
Negative carry means that the price of borrowing money is higher than the returns earned on borrowed money. It is the opposite of positive carry.
In economics, negative growth usually refers to shrinking gross domestic product (GDP).
Net borrowed reserves are a measure of the difference between what a bank has borrowed from the Federal Reserve and the cash reserves it holds above the required minimum. The opposite of net borrowed
Net debt per capita is a government's total debt (less cash on hand) per person. 
Net domestic product (NDP) represents the net book value of all goods and services produced within a nation's geographic borders over a specified period of time.
A net exporter is a country that sells more to other countries than it buys from other countries. Countries are often net exporters in some industries (natural gas, for example) but net importers in
Net exports are the difference between a country's total value of exports and total value of imports. Depending on whether a country imports more goods or exports more goods, net exports can be a positive
Net free reserves is a measure of how much cash a bank holds above the Federal Reserve's required minimum. The opposite of net free reserves is net borrowed reserves.
A net importer is a country that buys more from other countries than it sells to other countries. Often, countries are net importers in some industries (natural gas, for example) but net exporters in
In banking, the net interest rate spread is the difference between interest earned on loans, securities, and other interest-earning assets and the interest paid on deposits and other interest-bearing
Net lending is an economic measure of whether governments are either providing financial resources to other sectors of the economy or using resources from other sectors of the economy (the latter is
Net national product (NNP) is the market value of a nation's goods and services minus depreciation (often referred to as capital consumption).
The neutrality of money is a theory stating that changes in the money supply only affect prices and wages rather than overall economic productivity.
The new economy refers to the convergence of manufacturing, services and technologies to produce high value-added, technology-enabled, and adaptable industries.
A new paradigm is a new logical framework for understanding a situation. In the financial markets, a new paradigm refers to the shift in the underlying economic rules and factors that affect the markets.
The New York Clearing House Association, founded in 1853, is the country's first and largest bank clearing house. The Clearing House was created to streamline the bank settlement process, which had grown
Also referred to as face value or par value, nominal value is the value shown on the face of a security certificate or instrument, including currency. The concept most commonly applies to stocks and bonds
Non-negotiable refers to something that cannot be bought, sold, exchanged or transferred. Non-negotiable also can refer to a term or condition that is not open to negotiation.
Nonfarm payrolls is an economic indicator released by the Department of Labor on the first Monday of each month at 8:30am EST. The data reflect the change in nonfarm payrolls from the previous month.
The North American Free Trade Agreement (NAFTA) is an agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries.
Obamanomics refers to the economic policies of President Barack Obama.
Occupational labor mobility is the ease with which a workforce can switch industries, retrain for new jobs and transfer to other sectors.
An offer is a communication of interest in buying or selling an asset. In other contexts, it might refer to the act of making something available for sale.
An official settlement account is an account that records transactions of foreign exchange reserves, bank deposits and gold at a central bank.
Okun's gap occurs when a country's actual gross domestic product differs from its predicted gross domestic product when applying Okun's law.
Named after economist Arthur Okun, Okun's law states that for every 1% increase in the employment rate, gross domestic product increases 3%.
Old Economy describes an economy or even a group of industries that does not rely on technology or technological advancement.  
An oligopoly is an economic market whereby a small number of companies or countries generate and control the entire supply of a good or service.
An oligopsony is a market in which only a few buyers purchase all of an industry's output.
A one-stop shop is a single location where all of the needed services for a particular activity are provided.
The Organization for Economic Cooperation and Development (OECD) is an international economic forum that pursues cooperative approaches to common issues affecting individual members as well as the global
The overnight rate is the interest rate banks charge each other on loans for meeting reserve requirements. The overnight rate is frequently confused with the discount rate, which is the interest rate the
Paper money is a medium of exchange for goods or services within an economy. It is printed on paper, rather than in coin form.
The paradox of thrift is an economic theory that states that the more people save, the less they spend and thus the less they stimulate the economy.
A parallel shift in the yield curve occurs when the interest rates among bonds (or T-Bills) with different maturity dates change at the same rate.
The Paris Club is slang for 19 developed countries who meet in Paris to discuss issues with nations to which they have lent money.
Participation rate usually refers to the portion of the economy's working age population that is in the civilian labor market.
Per capita measures help analysts and investors get a better feel for whether a company, country, or other entity is productive, efficient, or profitable. For instance, the per capita measure of GDP
Permanent open market operations (POMO) are used by the Federal Reserve to either add to or drain the capital reserves available in the banking system.
Personal Consumption Expenditures (PCE), or the PCE price index, is a statistic compiled and released quarterly by the U.S. Bureau of Economic Analysis (BEA) that synthesizes a host of data, chief among
The Personal Income and Outlay report is compiled by the U.S. Department of Commerce. The report reflects personal income earned by individuals above the age of 18 working in the United States labor force
The Phillips curve refers to the theory that unemployment rates relate inversely to inflation rates.
A plutocracy is a system of government where the wealthiest people in a country rule or possess the power, and thus govern directly or indirectly. Plutocracy is often linked to the term “dynastic wealth
A predictive indicator is a ratio, index, report or other measurement that signals a company or market's direction in advance. 
A price ceiling is the maximum price a seller can legally charge a buyer for a good or service. Regulators usually set price ceilings.
Price creep refers to a gradual increase in the price of a good or service.
Price discovery refers to the act of determining the proper price of a security, commodity, or good or service by studying market supply and demand and other factors associated with transactions.
Price discrimination is the act of charging different customers different prices for the same good or service.
Price elasticity of demand (PED) is a way to measure the change in the demand for a product or service in response to a change in its price. With most goods, an increase in price will lead to a decrease
Price improvement is the often unexpected event of obtaining a better bid or ask price than the price quoted at the time the buy or sell order is made.
Price inflation is simply an increase in the price of a good or service over time.
Price leadership is the act of setting the price for a good or service in an industry.
In economics, a price maker is a monopolistic company that can dictate the prices of its goods because there are no substitutes for it. In trading, a price maker is a stockholder who controls a large
Also known as collusion or price fixing, price rigging occurs when a group of people or businesses agree to set the price for something. 
In consumer behavior, price sensitivity (also called the elasticity of demand) is the degree to which price affects the sales of a product or service. Thus, the formula for price sensitivity is:Price
Price stickiness refers to the price persistence of a good, service, security or economic measure (like wages) despite changing economic conditions.
A price war is an event whereby two or more companies continually lower prices to undercut each other.
Price-level targeting is an economic strategy whereby a central bank tries to reestablish an overall price level rather than reestablish a particular inflation rate.
"Priced out" refers to something being too expensive. Alternatively, priced out refers to the adjustment in a security's market price in response to new information.
Pricing power is the effect the price of a good or service has on the demand for that good or service.
When financial assets and markets -- as with the broader economy -- fall steadily for an extended period of time, it is known as a primary downtrend, or "bear market."
When financial assets and markets -- as with the broader economy -- move in an upward direction for extended periods of time, it is known as a primary uptrend, or “bull market.”
Pro bono refers to any work or service that someone provides free of charge for the common good.
Procurement is a purchasing process that controls quantity, quality, sourcing and timing to ensure the best possible total cost of ownership.
The Producer Price Index (PPI) is used to measure the change over time of the average price of goods produced domestically.
Productivity refers to the measure of output (e.g. products) from a production process per unit of input (e.g. labor and capital).
Purchasing power is a phrase to describe the quantity of goods or services that a dollar can buy. A decrease in purchasing power is called inflation.
Quantitative easing (sometimes abbreviated "QE") is a strategy used by a central bank -- like the Federal Reserve -- to add more money to that which is in circulation. The premise (which is largely
The quantity theory of money argues that the size of the money supply influences the price of goods.
The Quarterly Services Survey is an estimate of the operating revenue by customer class for communications firms, IT firms, hospitals and nursing services providers.  
Reaganomics is a reference to U.S. president Ronald Reagan's economic policies between 1981 and 1989.
Real gross domestic product, or real GDP, is a measure of the value of all goods and services produced by an economy in a period. Because the value is adjusted for inflation it can separate out the
Real income is inflation-adjusted income or wages.
A recession is two consecutive quarters of declining gross domestic product (GDP)
A stock or other investment is recession resistant when it tends to rise in value when the economy falters (and the markets falter with it). Recession-resistant investments are usually countercyclical,
The reserve ratio is the percentage of deposits that the Federal Reserve requires a bank to keep on hand at a Federal Reserve Bank.
Reserve requirements are Federal Reserve rules that require banks and other financial institutions to keep a strict percentage of their deposits on reserve at a Federal Reserve bank. The Federal Reserve
A run occurs when a flood of depositors withdraw their funds from a bank within a short time frame.
A sacrifice ratio measures the costs of lower economic production as a percentage of the change in inflation. The formula for the sacrifice ratio is: Sacrifice Ratio = Dollar Cost of Production Losses/
A seller's market exists when there are more sellers than buyers in the market for a certain good or service.
A semi-variable cost has characteristics of both fixed costs and variable costs once a specific level of output is surpassed.
The stock market crash of 1929 is the most famous stock market crash of all time. On just one day (October 24, 1929), panicked sellers traded nearly 13 million shares on the New York Stock Exchange (more
Strong-form efficiency is a component of the random walk theory and states that market and securities prices are not random and are influenced by past events. Strong-form efficiency is the opposite of
Structural unemployment is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
A tax treaty is an agreement between two countries regarding how they tax each other's citizens.
A time deposit is an interest-bearing deposit held by a bank or financial institution for a fixed term whereby the depositor can only withdraw the funds after giving notice.
The trade balance, also known as the "balance of trade (BOT)", is the calculation of a country's exports minus its imports.
When the value of a country's imports exceeds the value of its exports, the resulting negative number is called a trade deficit.
When the value of a country's exports exceeds the value of its imports, the resulting positive number is called a trade surplus.
Treasuries refer to all the tradable and negotiable debt obligations issued by a country's government. Broadly speaking, when an investor is referring to "Treasuries," he or she is referring to U.S.
Trickle down theory suggests that a policy of tax cuts and other financial benefits to businesses and rich individuals will indirectly benefit the broader and poor population.
The United States Department of the Treasury protects and manages many American economic and financial systems. The Secretary of the Treasury is the Chief Financial Officer of the U.S. government and is
Uncle Sam is a fictional character who represents the United States government. His predecessor was a character named Brother Jonathan.
Underemployment occurs when one does not have a job that is full-time or that reflects his or her training and financial needs. It is not the same as unemployment, which is the percentage of employable
Unemployment occurs when one does not have a job. In the financial world, the term is often short for unemployment rate, which is the percentage of employable people in a country’s workforce who are over
The unemployment rate measures the percentage of employable people in a country's workforce who are over the age of 16 and who have either lost their jobs or have unsuccessfully sought jobs in the last
Universal banking refers to the practice of offering clients retail banking as well as investment services.
Variable costs are corporate expenses that vary in direct proportion to the quantity of output. Unlike fixed costs, which remain constant regardless of output, variable costs are a direct function of
A Veblen good is a good or service whose demand increases when its price increases. The term is named after economist Thorstein Veblen.
The velocity of money is the average frequency with which a unit of money is spent in an economy.
Vladimir Illyic Ulyanov, also known as Vladimir Lenin, was the first leader of the Soviet Union and a key player in its October Revolution.
Also called “Reaganomics,” voodoo economics is the nickname for the hallmark economic policy of Ronald Reagan, the 40th President of the United States (1981-1989), who was trying to stimulate an economy
A W-shaped recovery refers to two consecutive cycles of economic decline and growth that graphically resemble the letter "W."
Also called cost-push inflation, a wage-price spiral is an economic term that describes how prices increase when wages increase.
Also called cost-push inflation or a wage-price spiral, wage-push inflation is an economic term that describes how prices increase when wages increase.
Wall Street is the name used to describe the place in New York City where much of the United States' financial industry is concentrated. The name "Wall Street" is also used frequently used to describe the
The Walmart effect refers to the economic impact of a large discount retailer on a local market.
Walras's law is the concept that a surplus in one market indicates the presence of a shortage in another.
A war economy centers on producing goods and services that support war efforts.
The random walk theory states that market and securities prices are random and not influenced by past events. The idea is also referred to as weak form efficiency or the weak form efficient-market
A wide economic moat is a significant competitive advantage that is extremely difficult to copy or emulate, thereby creating a barrier to entry for competing firms.
The World Trade Organization (WTO) establishes rules of trade among its member nations. To this end, the WTO also handles trade disputes, monitors trade policies, provides technical assistance for
X-efficiency describes a company's inability to get the maximum output for its inputs due to a lack of competitive pressure.
Zero-bound is a scenario in which the Federal Reserve lowers interest rates to zero or near zero. Traders sometimes also use the term to describe stocks that seem to be quickly losing value.