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ECONOMY

American Stock Exchange
One of the key stock exchanges in the U.S., it consists mainly of stocks and bonds of companies that are small to medium-sized, compared with the shares of large corporations traded on the New York Stock Exchange
Antitrust law
Policy or action that seeks to curtail monopolistic powers within a market
Arbitration
Estimate of the property value or of the extent of damage by an authorized person; performed to determine the value of the property at the time of the loss
Balance of trade
That part of a nation's balance of payments dealing with imports and exports-that is, trade in goods and services-over a given period; if exports of goods exceed imports, the trade balance is said to be "favorable"; if imports exceed exports, the trade balance is said to be "unfavorable"
Bank rate
Rate a central bank lends money to the domestic banking system
Bear market
Any market in which prices are in a declining trend
Bond
Certificate reflecting a firm's promise to pay the holder a periodic interest payment until the date of maturity and a fixed sum of money on the designated maturing date
Budget deficit
Amount each year by which government spending is greater than government income
Budget surplus
Amount each year by which government income exceeds government spending
Bull market
Market in which there is a continuous rise in stock prices
Capital
Physical equipment (buildings, equipment, human skills) used in the production of goods and services (also used to refer to corporate equity, debt securities, and cash)
Capital market
Market in which corporate equity and longer-term debt securities (those maturing in more than one year) are issued and traded
Capitalism
Economic system in which the means of production are privately-owned and controlled and which is characterized by competition and the profit motive
Central bank
Principal monetary authority in the U.S.; responsible for such key functions as issuing currency and regulating the supply of credit in the economy
Consumer price index (CPI)
Measures the prices of consumer goods and services and is a measure of the pace of U.S. inflation; published monthly by the U.S. Department of Labor
Depression
Severe decline in general economic activity in terms of magnitude and/or length
Deposit insurance
U.S. government backing of bank deposits up to a certain amount-currently, $100,000
Deregulation
Lifting of government controls over an industry
Discount rate
Interest rate paid by commercial banks to borrow funds from Federal Reserve Banks
Dividend
Money earned on stock holdings; usually, it represents a share of profits paid in proportion to the share of ownership
Dow Jones Industrial Average
Stock price index, based on 30 prominent stocks, that is a commonly used indicator of general trends in the prices of stocks and bonds in the U.S.
Economic growth
An increase in a nation's capacity to produce goods and services
Electronic commerce
Generally, refers to buying and selling of goods and services and the transfer of funds on the Internet
Exchange rate
Rate, or price, at which one country's currency is exchanged for the currency of another country
Exports
Goods and services that are produced domestically and sold to buyers in another country
Export subsidy
Lump sum given by the government for the purpose of promoting an enterprise considered beneficial to the public welfare
Fast track
Procedures enacted by the U.S. Congress under which it votes within a fixed period on legislation submitted by the president to approve and implement U.S. international trade agreements
Federal Reserve Bank
One of the 12 operating arms of the Federal Reserve System, located throughout the U.S. that together with their 25 branches carry out various functions of the U.S. central bank system
Federal Reserve System
Principal monetary authority (central bank) of the U.S., which issues currency and regulates the supply of credit in the economy; it is made up of a seven-member Board of Governors in Washington, DC, 12 regional Federal Reserve Banks and their 25 branches
Fiscal policy
Federal government's decisions about the amount of money it spends and collects in taxes to achieve full employment and non-inflationary economy
Free enterprise system
An economic system characterized by private ownership of property and productive resources, the profit motive to stimulate production, competition to ensure efficiency, and the forces of supply and demand to direct the production and distribution of goods and services
Free trade
Absence of tariffs and regulations designed to curtail or prevent trade among nations
Fringe benefit
Indirect, non-cash benefit provided to employees by employers in addition to regular wage or salary compensation, such as health insurance, life insurance, profit-sharing, etc.
Futures
Contracts that require delivery of a commodity of specified quality and quantity, at a specified price, on a specified future date
Gold standard
Monetary system in which currencies are defined in terms of a given weight of gold
Gross domestic product
Total value of a nation's output, income or expenditure produced within its physical boundaries
Human capital
Health, strength, education, training and skills that people bring to their jobs
Imports
Goods or service that are produced in another country and sold domestically
Intellectual property
Ownership, as evidenced by patents, trademarks and copyrights, conferring the right to possess, use or dispose of products created by human ingenuity
Market economy
National economy of a country that relies on market forces to determine levels of production, consumption, investment and savings without government intervention
Mixed economy
Economic system in which both the government and private enterprise play important roles with regard to production, consumption, investment and savings
Monetary policy
Federal Reserve System actions to influence the availability and cost of money and credit as a means of helping to promote high employment, economic growth, price stability and a sustainable pattern of international transactions
Money supply
Amount of money (coins, paper currency, and checking accounts) that is in circulation in the economy
New York Stock Exchange
World's largest exchange for trading stocks and bonds
Price fixing
Actions, generally by a several large corporations that dominate in a single market, to escape market discipline by setting prices for goods or services at an agreed-on level
Prime rate
Interest rate that commercial banks charge their most credit-worthy customers; rate tends to become standard for the banking industry when a major bank raises or lowers its rate
Privatization
Act of turning previously government-provided services over to private sector enterprises
Productivity
Ratio of output (goods and services) produced per unit of input (productive resources) over some period of time
Recession
Falling of business activity
Regulation
Formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of a certain industry or activity
Revenue
Amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise; the top line or gross income figure from which costs are subtracted to determine net income
Securities and Exchange Commission (SEC)
Independent, non-partisan, quasi-judicial regulatory agency that administers federal securities laws that protect investors and ensure that they have access to disclosure of all material information concerning publicly traded securities
Social Security
U.S. government pension program that provides benefits to retirees based on their own and their employers' contributions to the program while they were working
Standard of living
Minimum of necessities, comforts or luxuries considered essential to maintaining a person or group in customary or proper status or circumstances
Subsidy
Economic benefit, direct or indirect, granted by a government to domestic producers of goods or services, often to strengthen their competitive position against foreign companies
Supply
Schedule of how much producers are willing and able to sell at all possible prices during some time period
Tariff
Duty levied on goods transported from one customs area to another either for protective or revenue purposes
Trade deficit
Amount by which a country's merchandise exports exceed its merchandise imports
Trade surplus
Amount by which a country's merchandise exports exceed its imports
Venture capital
Investment in a new, generally possibly risky, enterprise