Economic Encyclopedia

Lower-Class/Working Class

"Working class" is a socioeconomic term used to describe persons in a social class marked by jobs that provide low pay, require limited skill, or physical labor. Typically, working-class jobs have reduced education requirements. Unemployed persons or those supported by a social welfare program are often included in the working class.

Violations of the Law of One Price

- Transportation Costs - Transaction Costs - Legal Restrictions - Market Structure

10 Countries with the Most Natural Resources

1. China 2. Saudi Arabia 3. Canada 4. India 5. Russia 6. Brazil 7. The United States 8. Venezuela 9. The Democratic Republic of Congo 10. Australia

Types of Environmental Degradation

1. Deterioration 2. Destruction 3. Extinction 4. Pollution

Real Estate Brokers

1. Determine the market value of properties. 2. Listing and advertising the property for sale. 3. Showing the property to prospective buyers. 4. Advising clients about offers, provisions and related matters. 5. Submitting all offers to the seller for consideration.

Stock Sectors

1. Energy 2. Materials 3. Industrials 4. Consumer Discretionary 5. Consumer Staples 6. Health Care 7. Financials 8. Information Technology 9. Telecommunications Services 10. Utilities 11. Real Estate

Free Cash Flows

1. Excess of operating cash flow over capital expenditure is considered as free cash flow. 2. Calculated separately than the cash flow statement. 3. Measures the liquidity available to investors and increases the value of a company.

Factors of Production (2/2)

1. Land 2. Labor 3. Capital 4. Entrepreneurship

Sometimes a real estate broker works for a buyer.....

1. Locating all properties in the buyer's desired area sorted by price range and criteria. 2. Preparing an initial offer and purchase agreement for a buyer who decides to make an offer for a property. 3. Negotiating with the seller on behalf of the buyer. 4. Managing inspections on the property and negotiating repairs. 5. Assisting the buyer through to closing and taking possession of the property.

3 Most Important Factors In Buying A Home

1. Location 2. Price 3. Type of Home

Top 10 Most Expensive Cities in the U.S.

1. New York City 2. San Francisco 3. Honolulu 4. Boston 5. Washington D.C. 6. Oakland 7. San Jose 8. San Diego 9. Los Angeles 10. Miami

Facts about Proprietorships

1. Pro: The owner is in complete control and gets all of the profits. 2. Con: The owner's personal finances and business finances are one and the same. 3. Most of the businesses in the U.S. are sole proprietorships.

5 Types of Real Estate

1. Residential 2. Commercial 3. Industrial 4. Raw land 5. Special use

Top 10 Countries with the Highest Incomes

1. United States 2. Luxembourg 3. Switzerland 4. Germany 5. Australia 6. Norway 7. Austria 8. Belgium 9. Netherlands 10. Canada

401k

A 401(k) plan is a tax-advantaged, defined-contribution retirement account offered by many employers to their employees. It is named after a section of the U.S. Internal Revenue Code. Workers can make contributions to their 401(k) accounts through automatic payroll withholding, and their employers can match some or all of those contributions. The investment earnings in a traditional 401(k) plan are not taxed until the employee withdraws that money, typically after retirement. In a Roth 401(k) plan, withdrawals can be tax-free.

Federal Housing Administration (FHA)

A Federal Housing Administration (FHA) loan is a mortgage that is insured by the Federal Housing Administration (FHA) and issued by an FHA-approved lender. FHA loans are designed for low-to-moderate-income borrowers; they require a lower minimum down payment and lower credit scores than many conventional loans. In 2020, you can borrow up to 96.5% of the value of a home with an FHA loan. This means you'll need to make a down payment of 3.5%. You'll need a credit score of at least 580 to qualify. If your credit score falls between 500 and 579, you can still get an FHA loan as long as you can make a 10% down payment.1 With FHA loans, your down payment can come from savings, a financial gift from a family member, or a grant for down-payment assistance.

Roth 401k

A Roth 401(k) is an employer-sponsored investment savings account that is funded with after-tax dollars up to the plan's contribution limit. This type of investment account is well-suited for people who think they will be in a higher tax bracket in retirement than they are now, as withdrawals are tax-free. The traditional 401(k) plan, by contrast, is funded with pretax money, which results in a tax on future withdrawals.

Treasury Bills (T-Bills)

A Treasury Bill (T-Bill) is a short-term debt obligation backed by the U.S. Treasury Department with a maturity of one year or less. Treasury bills are usually sold in denominations of $1,000 while some can reach a maximum denomination of $5 million. The longer the maturity date, the higher the interest rate that the T-Bill will pay to the investor.

Medicare

A U.S. federal government health insurance program that subsidizes healthcare services. The plan covers people age 65 or older, younger people who meet specific eligibility criteria, and individuals with certain diseases. Medicare is divided into different plans that cover a variety of healthcare situations—some of which come at a cost to the insured person. While this allows the program to offer consumers more choice in terms of costs and coverage, it also introduces complexity for those seeking to sign up.

Bailout

A bailout is the injection of money into a business or organization that would otherwise face imminent collapse. Bailouts can be in the form of loans, bonds, stocks, or cash. Some loans require reimbursement—either with or without interest payments. Bailouts typically go to companies or industries which directly impact the health of the overall economy, rather than just one particular sector or industry.

Beach House

A beach house is a house on or near a beach, sometimes used as a vacation or second home for people who commute to the house on weekends or during vacation periods.

Bear Market

A bear market is when a market experiences prolonged price declines. It typically describes a condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment. Bear markets are often associated with declines in an overall market or index like the S&P 500, but individual securities or commodities can also be considered to be in a bear market if they experience a decline of 20% or more over a sustained period of time—typically two months or more. Bear markets also may accompany general economic downturns such as a recession. Bear markets may be contrasted with upward-trending bull markets.

Blockchain

A blockchain​ is a public ledger that records all Bitcoin​ transactions, eliminating the need for a third party to process payments.Think of it as a full history of banking transactions. Blocks, or the most recent transactions being recorded, are like an individual banking statement. Each completed block is added to the chain, and another block begins, forming the constantly growing blockchain. Bitcoin isn't regulated by a central authority. Instead, its users dictate and verify transactions when one person pays another for goods or services. The completed transaction is publicly recorded into the blockchain, where it's verified by other Bitcoin users. Blockchain is seen as Bitcoin's main technological innovation, since it provides proof of each transaction. It can review transaction histories to determine how much value a particular address owned at any time. Each computer that's connected to the Bitcoin network receives a copy of the blockchain upon joining the network. Blockchain info provides access to the entire Bitcoin blockchain.

Bond

A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower.

Bond Rating

A bond rating is a way to measure the creditworthiness of a bond, which corresponds to the cost of borrowing for an issuer. These ratings typically assign a letter grade to bonds that indicates their credit quality. Private independent rating services such as Standard & Poor's, Moody's Investors Service, and Fitch Ratings Inc. evaluate a bond issuer's financial strength, or its ability to pay a bond's principal and interest, in a timely fashion.

Bonus

A bonus is a financial compensation that is above and beyond the normal payment expectations of its recipient. Bonuses may be awarded by a company as an incentive or to reward good performance. Typical incentive bonuses a company can give employees include signing, referral, and retention bonuses. Companies have various ways they can award employee bonuses, including cash, stock, and stock options.

Broker

A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members. Brokers provide that service and are compensated in various ways, either through commissions, fees or through being paid by the exchange itself.

Budget

A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money.

Bull Market

A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities. Because prices of securities rise and fall essentially continuously during trading, the term "bull market" is typically reserved for extended periods in which a large portion of security prices are rising. Bull markets tend to last for months or even years.

Serverance

A bundle of pay and benefits offered to an employee upon being laid off from a company. ... The amount of money received is usually based on the length of employment prior to termination and may include payment for unused vacation and sick days, and unreimbursed business expenses.

Business Model

A business model is a company's core strategy for profitably doing business. Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses. The two levers of a business model are pricing and costs. When evaluating a business model as an investor, ask whether the idea makes sense and whether the numbers add up.

Industrials Sector

A category of stocks of companies who produce capital goods used in construction and manufacturing. Businesses in the industrial goods sector make and sell machinery, equipment, and supplies that are used to produce other goods rather than sold directly to consumers.

Energy Sector

A category of stocks that relate to producing or supplying energy. The energy sector or industry includes companies involved in the exploration and development of oil or gas reserves, oil and gas drilling, and refining. The energy industry also includes integrated power utility companies such as renewable energy and coal.

Closed Economy

A closed economy is one that has no trading activity with outside economies. The closed economy is therefore entirely self-sufficient, which means no imports come into the country and no exports leave the country. The goal of a closed economy is to provide domestic consumers with everything they need from within the country's borders.

Public University

A college that gets money from the state.

Mom-and-Pop

A colloquial term used to describe a small, family-owned, or independent business. Mom-and-pop stores are often operations that struggle to compete with more substantial establishments, such as big-box retailers, who generally boast more buying power than smaller players. In the last few years, "shop local" and "shop small" have been used as slogans in marketing campaigns.

Commission

A commission is a service charge assessed by a broker or investment advisor for providing investment advice or handling purchases and sales of securities for a client. There are important differences between commissions and fees, at least in the way these words are used to describe professional advisors in the financial services industry. A commission-based advisor or broker makes money by selling investment products such as mutual funds and annuities and conducting transactions with the client's money. A fee-based advisor charges a flat rate for managing a client's money. This may be either a dollar amount or a percentage of assets under management (AUM). Sales between family members are often gifts of equity, which are not commission-based.

Commodity

A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade. They tend to change rapidly from year to year. Examples: -Grains -Gold -Beef -Oil -Natural Gas

Community Banks

A community bank is a depository or lending institution that primarily serves businesses and individuals in a small geographic area. Community banks tend to emphasize personal relationships with their customers. These smaller banks typically don't have the product range or branch networks available at larger institutions, and often provide loans to local businesses and individuals who may not qualify based on the more standardized criteria used by big banks.

Company

A company is a legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise. A company may be organized in various ways for tax and financial liability purposes depending on the corporate law of its jurisdiction. The line of business the company is in will generally determine which business structure it chooses such as a partnership, proprietorship, or corporation. These structures also denote the ownership structure of the company. They can also be distinguished between private and public companies. Both have different ownership structures, regulations, and financial reporting requirements.

Real Estate Investment Trust (REIT)

A company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.

Ecosystem

A complex network or interconnected system.

Condominium or Condo

A condominium, often shortened to condo in the United States and in most Canadian provinces, is a type of living space similar to an apartment but independently sellable and therefore regarded as real estate.

Convenience Good

A consumer item that is widely available and purchased frequently with minimal effort. Because a convenience good can be found readily, it does not typically involve an intensive decision-making process. Convenience goods, such as newspapers and candy, are different than specialty goods, such as cars, which are more expensive and often carry a greater opportunity cost for the consumer.

Corporate Income Tax

A corporate tax is tax on the profits of a corporation. The taxes are paid on a company's operating earnings, which is revenue minus cost of goods sold (COGS), general and administration (G&A) expenses, selling and marketing, research and development, depreciation, and other operating costs. Corporate tax rates vary widely by country, with some countries considered to be tax havens due to their low rates. Corporate taxes can be lowered by various deductions, government subsidies, and tax loopholes, and so the effective corporate tax rate, the rate a corporation actually pays, is usually lower than the statutory rate, the stated rate before any deductions.

Corporation

A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Some refer to it as a "legal person".

Credit Card

A credit card is a type of payment card that is issued by a financial company and it lets cardholders borrow funds with which to pay for goods and services. With a few simple precautions, credit cards can be a very easy and safe way to make payments online. Because credit cards have very strong consumer protections, they are widely considered to be one of the safest ways to conduct transactions online. Essentially, the consumer has little to no liability for fraudulent purchases. Because of the Fair Credit Billing Act, in the event of fraudulent charges or mistakes, your liability to $50. You are liable for zero dollars if you report a card lost or stolen before it is used fraudulently.

Credit Rating(s)

A credit rating is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. A credit rating can be assigned to any entity that seeks to borrow money—an individual, a corporation, a state or provincial authority, or a sovereign government. Individual credit is scored by credit bureaus such as Experian, Equifax, and TransUnion on a three-digit numerical scale using a form of Fair Isaac Corporation (FICO) credit scoring. Credit assessment and evaluation for companies and governments is generally done by a credit rating agency such as S&P Global, Moody's, or Fitch Ratings. These rating agencies are paid by the entity that is seeking a credit rating for itself or one of its debt issues.

Credit Rating

A credit rating is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. A credit rating can be assigned to any entity that seeks to borrow money—an individual, corporation, state or provincial authority, or sovereign government.

Creditor

A creditor is an entity (person or institution) that extends credit by giving another entity permission to borrow money intended to be repaid in the future. A business that provides supplies or services to a company or individual and does not demand payment immediately is also considered a creditor, based on the fact that the client owes the business money for services already rendered. Creditors can be classified as either personal or real. People who loan money to friends or family are personal creditors. Real creditors such as banks or finance companies have legal contracts with the borrower, sometimes granting the lender the right to claim any of the debtor's real assets (e.g., real estate or cars) if they fail to pay back the loan.

Crop

A crop is a plant or animal product that can be grown and harvested extensively for profit or subsistence. Crops may refer either to the harvested parts or to the harvest in a more refined state. Most crops are cultivated in agriculture or aquaculture.

Customer

A customer is an individual or business that purchases another company's goods or services. Customers are important because they drive revenues; without them, businesses cannot continue to exist. All businesses compete with other companies to attract customers, either by aggressively advertising their products, by lowering prices to expand their customer bases or developing unique products and experiences that customers love, think Apple, Tesla, Google or TikTok.

Debit Card

A debit card is a type of payment card that deducts money directly from a consumer's checking account to pay for a purchase. A debit card is sometimes called a bank card or check card. They offer many of the same conveniences as a credit card, and in some instances, they have the same consumer protections as credit cards. A debit card draws cash for a specific purchase directly from a bank account and transfers it to an account held by the seller. Most online merchants will accept debit card purchases.

Dependent

A dependent is a qualifying person other than the taxpayer or their spouse who entitles a taxpayer to claim a dependency exemption on their tax return. A taxpayer that can demonstrate that they have a dependent may also be able to use this filing status to qualify for certain tax credits. Tests in the Internal Revenue Code (IRC) establish a person's eligibility to be a taxpayer's dependent for the purpose of dependency claims.

Developing Economies

A developed economy is typically characteristic of a developed country with a relatively high level of economic growth and security. Standard criteria for evaluating a country's level of development are income per capita or per capita gross domestic product, the level of industrialization, the general standard of living, and the amount of technological infrastructure.

Tools

A device or implement, especially one held in the hand, used to carry out a particular function.

Dividend

A dividend is the distribution of some of a company's earnings to a class of its shareholders, as determined by the company's board of directors. Common shareholders of dividend-paying companies are typically eligible as long as they own the stock before the ex-dividend date. Dividends may be paid out as cash or in the form of additional stock.

Down Payment

A down payment is a type of payment, often in cash, made in the early stages of a purchase of an expensive good or service. The payment represents a percentage of the full purchase price. In some cases, the down payment is not refundable if the deal falls through because of the purchaser. In most cases, the purchaser makes financing arrangements to cover the remaining amount owed to the seller.

Dual Economy

A dual economy is the existence of two separate economic sectors within one country, divided by different levels of development, technology, and different patterns of demand.

Factories

A factory, manufacturing plant or a production plant is an industrial site, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another.

Farm

A farm is an area of land that is devoted primarily to agricultural processes with the primary objective of producing food and other crops; it is the basic facility in food production.

Financial Institution

A financial institution (FI) is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange. Financial institutions encompass a broad range of business operations within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers. Financial institutions can vary by size, scope, and geography.

Firm

A firm is a for-profit business organization—such as a corporation, limited liability company (LLC), or partnership—that provides professional services. Most firms have just one location. However, a business firm consists of one or more physical establishments, in which all fall under the same ownership and use the same employer identification number (EIN).

Fiscal Year (FY)

A fiscal year is a one-year period that companies and governments use for financial reporting and budgeting. A fiscal year is most commonly used for accounting purposes to prepare financial statements. Although a fiscal year can start on January 1st and end on December 31st, not all fiscal years correspond with the calendar year. For example, universities often begin and end their fiscal years according to the school year. A fiscal year is important to publicly-traded corporations and their investors since it includes revenue and earnings making year-to-year comparisons possible. For tax purposes, the Internal Revenue Service (IRS) allows companies to be either calendar-year taxpayers or fiscal-year taxpayers.

Fiscal Year

A fiscal year is a one-year period that companies and governments use for financial reporting and budgeting. A fiscal year is most commonly used for accounting purposes to prepare financial statements. Although a fiscal year can start on January 1st and end on December 31st, not all fiscal years correspond with the calendar year. For example, universities often begin and end their fiscal years according to the school year. A fiscal year is important to publicly-traded corporations and their investors since it is the period over which revenue and earnings are measured, making year-to-year comparisons possible. For tax purposes, the Internal Revenue Service (IRS) allows companies to be either calendar-year taxpayers or fiscal-year taxpayers.

Fixed Cost

A fixed cost is one that does not change with an increase or decrease in sales or productivity and must be paid regardless of the company's activity or performance.

Flat Tax

A flat tax system applies the same tax rate to every taxpayer regardless of income bracket. Typically, a flat tax applies the same tax rate to all taxpayers with no deductions or exemptions allowed.

Liberal Arts

A form of education pioneered by President Charles W. Eliot at Harvard University, whereby students chose from a range of electives, shaping their own curricula as they developed skills in research, critical thinking, and leadership.

Free-Trade

A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought.

Neighborhood

A geographically localized community within a larger city, town, suburb or rural area. Neighborhoods are often social communities with considerable face-to-face interaction among members.

Production Possibility Frontier (PPF)

A graph that shows all the combinations of goods and services that can be produced if all of society's resources are used efficiently.

European Union (EU)

A group of European countries that participate in the global economy; use the Euro; members include 28 countries. Goal of the EU was to create a barrier-free trade zone and a more efficient market-place.

Market Development

A growth strategy that identifies and develops new market segments for current products. A market development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments.

House

A house is a single-unit residential building, which may range in complexity from a rudimentary hut to a complex, structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air conditioning systems.

Housing Bubble

A housing bubble, or real estate bubble, is a run-up in housing prices fueled by demand, speculation, and exuberant spending to the point of collapse. Housing bubbles usually start with an increase in demand, in the face of limited supply, which takes a relatively extended period to replenish and increase. Speculators pour money into the market, further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices—and the bubble bursts. A housing bubble a sustained but temporary condition of over-valued prices and rampant speculation in housing markets. The U.S. experienced a major housing bubble in the 2000s caused by inflows of money into housing markets, loose lending conditions, and government policy to promote home-ownership. A housing bubble, as with any other bubble, is a temporary event and has the potential to happen at any time market conditions allow it.

Housing Unit

A housing unit is a single unit within a larger structure that can be used by an individual or household to eat, sleep, and live. The unit can be in any type of residence, such as a house, apartment, or mobile home, and may also be a single unit in a group of rooms. Essentially, a housing unit is deemed to be a separate living quarter where the occupants live and eat separately from other residents of the structure or building. They also have direct access from the building's exterior or through a common hallway.

Labor Contract

A labor contract is a legal agreement that establishes the rules that govern the relationship between an employer and employee. Also known as a labor agreement, a labor contract is a binding legal agreement that establishes the rules and regulations that will govern the relationship between an employer and an employee.

Labor Unions

A labor union, officially known as a "labor organization," is an entity formed by workers in a particular trade, industry, or company for the purpose of improving pay, benefits, and working conditions. Also called a "trade union" or a "worker's union," a labor union selects representatives to negotiate with employers in a process known as collective bargaining. When successful, the bargaining results in an agreement that stipulates working conditions for a period of time. Labor unions may also advocate for legal, social, and political measures for the country as a whole.  Labor unions are often industry-specific and tend to be most common today among public sector (government) employees and those in manufacturing, mining, construction, and transportation. In 2019, 14.6 million U.S. wage and salary workers were members of unions. Union membership was five times more common among public than private sector workers.  Rises and falls in union membership have been linked to economic conditions. When there is full employment and rising wages, unions usually experience decline, particularly among younger workers. In times of recession, union membership becomes more attractive.

Unionization

A labor union, officially known as a "labor organization," is an entity formed by workers in a particular trade, industry, or company for the purpose of improving pay, benefits, and working conditions. Also called a "trade union" or a "worker's union," a labor union selects representatives to negotiate with employers in a process known as collective bargaining. When successful, the bargaining results in an agreement that stipulates working conditions for a period of time. Labor unions may also advocate for legal, social, and political measures for the country as a whole.

Landlord

A landlord is an individual, business, or other entity who owns real estate and subsequently rents or leases the property to another party in return for rent payment. The renting party is called a tenant or leaseholder. Landlords typically provide the necessary maintenance or repairs during the rental period, while the tenant is responsible for the cleanliness and general upkeep of the property. Specific duties and obligations of each party will be spelled out in a lease agreement.

Layoff

A layoff describes the act of an employer suspending or terminating a worker, either temporarily or permanently, for reasons other than an employee's actual performance. A layoff is not the same thing as an outright firing, which may result from worker inefficiency, malfeasance, or breach of duty.

Lease

A lease is a contract outlining the terms under which one party agrees to rent property owned by another party. It guarantees the lessee, also known as the tenant, use of an asset and guarantees the lessor, the property owner or landlord, regular payments for a specified period in exchange. Both the lessee and the lessor face consequences if they fail to uphold the terms of the contract. It is a form of incorporeal right.

Living Wage

A living wage refers to a theoretical income level that allows an individual or family to afford adequate shelter, food, and other basic necessities. The goal of a living wage is to allow employees to earn enough income for a satisfactory standard of living and to prevent them from falling into poverty. Economists suggest that a living wage should be substantial enough to ensure that no more than 30% of it gets spent on housing, and this amount will often be substantially higher than the legal minimum wage.

Luxury Good/Item

A luxury item is not necessary to live, but it is deemed highly desirable within a culture or society. Demand for luxury goods increases when a person's wealth or income increases. Typically, the greater the percentage increase in income, the greater the percentage increase in luxury item purchases. Since luxury goods are expensive, wealthy people are disproportionate consumers of luxury goods. Those who are not wealthy don't usually buy luxury goods since a greater percentage of their income goes to need-based expenses in order to live. Luxury goods can be considered conspicuous consumption, which is the purchase of goods mainly or solely to show off one's wealth.

Market Place

A market is a place where buyers and sellers can meet to facilitate the exchange or transaction of goods and services. Markets can be physical like a retail outlet, or virtual like an e-retailer. Other examples include the black market, auction markets, and financial markets.

Elasticity of Demand

A measure of how consumers react to a change in price.

Gini Index

A measure of the distribution of income across a population developed by the Italian statistician Corrado Gini in 1912. It is often used as a gauge of economic inequality, measuring income distribution or, less commonly, wealth distribution among a population. The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are theoretically possible due to negative income or wealth.

Minimum Wage

A minimum wage is the lowest wage per hour that a worker may be paid, as mandated by federal law. It is a legally mandated price floor on hourly wages, below which non-exempt workers may not be offered or accept a job.

Mobile Home (Manufactured Home)

A mobile home is a prefabricated structure, built in a factory on a permanently attached chassis before being transported to site.

Modernization Theory

A model of economic and social development that explains global inequality in terms of technological and cultural differences between nations.

Monopoly

A monopoly refers to when a company and its product offerings dominate a sector or industry. Monopolies can be considered an extreme result of free-market capitalism in that absent any restriction or restraints, a single company or group becomes large enough to own all or nearly all of the market (goods, supplies, commodities, infrastructure, and assets) for a particular type of product or service. The term monopoly is often used to describe an entity that has total or near-total control of a market.

Mortgage-Backed Security

A mortgage-backed security (MBS) is an investment similar to a bond that is made up of a bundle of home loans bought from the banks that issued them. Investors in MBS receive periodic payments similar to bond coupon payments. The MBS is a type of asset-backed security. As became glaringly obvious in the subprime mortgage meltdown of 2007-2008, a mortgage-backed security is only as sound as the mortgages that back it up. An MBS may also be called a mortgage-related security or a mortgage pass-through.

Mutual Fund

A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities. Mutual funds give small or individual investors access to diversified, professionally managed portfolios at a low price. Mutual funds are divided into several kinds of categories, representing the kinds of securities they invest in, their investment objectives, and the type of returns they seek. Mutual funds charge annual fees (called expense ratios) and, in some cases, commissions, which can affect their overall returns. The overwhelming majority of money in employer-sponsored retirement plans goes into mutual funds.

State

A nation or territory considered as an organized political community under one government.

Parent Company

A parent company is a company that has a controlling interest in another company, giving it control of its operations. Parent companies can be either hands-on or hands-off owners of its subsidiaries, depending on the amount of managerial control given to subsidiary managers, but will always maintain a certain level of active control.

Payroll Tax

A payroll tax is a percentage withheld from an employee's pay by an employer who pays it to the government on the employee's behalf. The tax is based on wages, salaries, and tips paid to employees. Federal payroll taxes are deducted directly from the employee's earnings and paid to the Internal Revenue Service (IRS).

Penny Stocks

A penny stock typically refers to the stock of a small company that trades for less than $5 per share. Though some penny stocks trade on large exchanges such as the New York Stock Exchange (NYSE), most trade via over-the-counter (OTC) transactions through the electronic OTC Bulletin Board (OTCBB) or through the privately-owned OTC Markets Group. There is no trading floor for OTC transactions. Quotations are also all done electronically. A penny stock refers to a small company's stock that typically trades for less than $5 per share. Although some penny stocks trade on large exchanges such as the NYSE, most penny stocks trade over the counter through the OTC Bulletin Board (OTCBB). While there can be sizable gains in trading penny stocks, there are also equal risks of losing a significant amount of an investment in a short period.

Pension Fund

A pension plan is a retirement plan that requires an employer to make contributions to a pool of funds set aside for a worker's future benefit. The pool of funds is invested on the employee's behalf, and the earnings on the investments generate income to the worker upon retirement. In addition to an employer's required contributions, some pension plans have a voluntary investment component. A pension plan may allow a worker to contribute part of his current income from wages into an investment plan to help fund retirement. The employer may also match a portion of the worker's annual contributions, up to a specific percentage or dollar amount.

Supplier

A person or organization that provides something needed such as a product or service.

Urban Development

A planned urban development refers to a real estate development that integrates residential and commercial buildings with open spaces in a single project. It can be loosely considered as a planned unit development (PUD), which uses the same acronym and for all intents and purposes is interchangeable.

Power Center

A power center is a large (250,000 to 750,000 square ft.) outdoor shopping mall that usually includes three or more "big box" stores. This type of property might include smaller retailers and restaurants that are either free-standing or located in strip plazas and surrounded by a shared parking lot. Power centers are built for the convenience of motorists. Unlike traditional indoor shopping malls and standalone big box stores, power centers often have distinctive architectural features.

Head Start Program (1965)

A program of the United States Department of Health and Human Services that provides comprehensive early childhood education, health, nutrition, and parent involvement services to low-income children and families. The program's services and resources are designed to foster stable family relationships, enhance children's physical and emotional well-being, and establish an environment to develop strong cognitive skills.

Progressive Tax

A progressive tax is based on the taxpayer's ability to pay. It imposes a lower tax rate on low-income earners than on those with a higher income. This is usually achieved by creating tax brackets that group taxpayers by income ranges. The income tax system in the U.S. is considered a progressive system.

Medicaid

A public health insurance program in the United States that provides health care coverage to low-income families or individuals. It covers doctor visits, hospital stays, long-term medical care, custodial care, and other health-related costs.

Real Estate Agent

A real estate agent is a licensed professional who arranges real estate transactions, putting buyers and sellers together and acting as their representative in negotiations. Real estate agents usually are compensated completely by a commission—a percentage of the property's purchase price—so their income depends on their ability to close a deal. In almost every state a real estate agent must work for or be affiliated with a real estate broker (an individual or a brokerage firm), who is more experienced and licensed to a higher degree.

Receipt

A receipt is a written acknowledgment that something of value has been transferred from one party to another. In addition to the receipts consumers typically receive from vendors and service providers, receipts are also issued in business-to-business dealings as well as stock market transactions. For example, the holder of a futures contract is generally given a delivery instrument, which acts as a receipt in that it can be exchanged for the underlying asset when the futures contract expires.

Refinance

A refinance, or "refi" for short, refers to the process of revising and replacing the terms of an existing credit agreement, usually as it relates to a loan or mortgage. When a business or an individual decides to refinance a credit obligation, they effectively seek to make favorable changes to their interest rate, payment schedule, and/or other terms outlined in their contract. If approved, the borrower gets a new contract that takes the place of the original agreement.

Rainy Day Funds

A reserved amount of money to be used in times when regular income is disrupted or decreased in order for typical operations to continue.

Retail Trader

A retail investor, also known as an individual investor, is a non-professional investor who buys and sells securities or funds that contain a basket of securities such as mutual funds and exchange traded funds (ETFs). Retail investors execute their trades through traditional or online brokerage firms or other types of investment accounts. Retail investors purchase securities for their own personal accounts and often trade in dramatically smaller amounts as compared to institutional investors. An institutional investor is an umbrella term for larger-scale investments by professional portfolio and fund managers who might manage a mutual fund or pension fund.

Royalty

A royalty is a legally-binding payment made to an individual, for the ongoing use of his or her originally-created assets, including copyrighted works, franchises, and natural resources. But royalties are predominantly associated with musicians, who receive such payments whenever their originally-recorded songs are played on the radio or television, used in movies, performed at concerts, bars, and restaurants, or consumed via streaming services. In most cases, royalties are revenue generators specifically designed to compensate the owners of songs or properties, when they license out their assets for another party's use.

Sales Tax

A sales tax is a consumption tax imposed by the government on the sale of goods and services. A conventional sales tax is levied at the point of sale, collected by the retailer, and passed on to the government. A business is liable for sales taxes in a given jurisdiction if it has a nexus there, which can be a brick-and-mortar location, an employee, an affiliate, or some other presence, depending on the laws in that jurisdiction.

Economic Sector

A sector is an area of the economy in which businesses share the same or a related product or service. It can also be thought of as an industry or market that shares common operating characteristics. Dividing an economy into different sectors allows for more in-depth analysis of the economy as a whole.

Cycle

A series of events that happen over and over again.

Food Chain

A series of steps in which organisms transfer energy by eating and being eaten.

Side Hustle

A side job, also informally called a side hustle or side gig, is an additional job that a person takes in addition to their primary job in order to supplement their income.

Social Welfare System

A social welfare system provides assistance to individuals and families in need. The types and amount of welfare available to individuals and families vary depending on the country, state, or region. In the U.S., the federal government provides grants to each state through the Temporary Assistance for Needy Families (TANF) program.

Sole Proprietorship

A sole proprietorship is an unincorporated business with only one owner who pays personal income tax on profits earned. Sole proprietorships are easy to establish and dismantle, due to a lack of government involvement, making them popular with small business owners and contractors. Many sole proprietorships end up getting restructured into an LLC, in sync with the company's expansion.

Special Purpose Aquisition Company (SPAC)

A special purpose acquisition company (SPAC) is a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. Also known as "blank check companies," SPACs have been around for decades. In recent years, they've become more popular, attracting big-name underwriters and investors and raising a record amount of IPO money in 2019. In 2020, as of the beginning of August, more than 50 SPACs have been formed in the U.S. which have raised some $21.5 billion.

Stakeholder

A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers. However, with the increasing attention on corporate social responsibility, the concept has been extended to include communities, governments, and trade associations.

Single-Family Home

A stand-alone house is a free-standing residential building. It is sometimes referred to as a single-family home, as opposed to a multi-family residential dwelling.

Stock

A stock (also known as equity) is a security that represents the ownership of a fraction of a corporation. This entitles the owner of the stock to a proportion of the corporation's assets and profits equal to how much stock they own. Units of stock are called "shares." Stocks are bought and sold predominantly on stock exchanges, though there can be private sales as well, and are the foundation of many individual investors' portfolios. These transactions have to conform to government regulations which are meant to protect investors from fraudulent practices. Historically, they have outperformed most other investments over the long run. These investments can be purchased from most online stock brokers. Stock investment differs greatly from real estate investment.

Stock Ticker

A stock ticker reports transaction and price data for a security, updated continuously throughout the day. A stock ticker typically reports on the most active securities or ones making headlines on a given day. The ticker typically shows the ticker symbol, the price change and percentage change from the previous session's close, and often the volume of the shares being traded. Some tickers color code information to reflect the direction of the price, with green for higher, red for lower, and a neutral color like gray or tan for no change.

Building

A structure with a roof and walls, such as a house, school, store, or factory.

Subsidy

A subsidy is a benefit given to an individual, business, or institution, usually by the government. It is usually in the form of a cash payment or a tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.

Substitutes

A substitute is a product or service that can be easily replaced with another by consumers. In economics, products are often substitutes if the demand for one product increases when the price of the other goes up. Substitutes provide choices and alternatives for consumers while creating competition and lower prices in the marketplace.

Fund

A sum of money saved or made available for a particular purpose.

Food Web

A system of interlocking and interdependent food chains.

Tax Brackets

A tax bracket refers to a range of incomes subject to a certain income tax rate. Tax brackets result in a progressive tax system, in which taxation progressively increases as an individual's income grows: Low incomes fall into tax brackets with relatively low income tax rates, while higher earnings fall into brackets with higher rates.

Tax Credit

A tax credit is an amount of money that taxpayers can subtract from taxes owed to their government. Unlike deductions and exemptions, which reduce the amount of taxable income, tax credits reduce the actual amount of tax owed. The value of a tax credit depends on the nature of the credit; certain types of tax credits are granted to individuals or businesses in specific locations, classifications, or industries.

Tax Returns

A tax return is a form or forms filed with a tax authority that reports income, expenses, and other pertinent tax information. Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. In most countries, tax returns must be filed annually for an individual or business with reportable income, including wages, interest, dividends, capital gains, or other profits.

Trade War

A trade war happens when one country retaliates against another by raising import tariffs or placing other restrictions on the other country's imports.

Trader

A trader is an individual who engages in the buying and selling of financial assets in any financial market, either for himself or on behalf of another person or institution. The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer-term time horizon, while traders tend to hold assets for shorter periods of time to capitalize on short-term trends.

Trade School

A type of higher learning school that focuses on job skill training for specific career fields rather than academics in liberal arts.

Unemployment Insurance (UI)

A type of state-provided insurance that pays money to individuals on a weekly basis when they lose their job and meet certain eligibility requirements. Typically, those who have either quit their job or were fired for a just cause are not eligible for UI. In other words, someone was separated from their job due to the lack of available work and at no fault of their own can usually qualify for unemployment benefits.

Invention

A unique or novel device, method, composition or process. The invention process is a process within an overall engineering and product development process. It may be an improvement upon a machine or product or a new process for creating an object or a result.

Acre

A unit of land area equal to 4,840 square yards.

Vacation Home

A vacation home is a secondary dwelling, other than the owner's principal residence, and is used primarily for recreational purposes including vacations or holidays. Also known as a recreational or secondary property or residence, a vacation home is often situated in a different location from the owner's primary residence. Because vacation homes are only used at certain times of year, many owners rent out these dwellings when they are not using them.

Venture Capitalists

A venture capitalist (VC) is a private equity investor that provides capital to companies exhibiting high growth potential in exchange for an equity stake. This could be funding startup ventures or supporting small companies that wish to expand but do not have access to equities markets. Venture capitalists are willing to risk investing in such companies because they can earn a massive return on their investments if these companies are a success. VCs experience high rates of failure due to the uncertainty that is involved with new and unproven companies.

Weak Dollar

A weak dollar refers to a downward price trend in the value of the U.S. dollar relative to other foreign currencies. The most commonly compared currency is the Euro, so if the Euro is rising in price compared to the dollar, the dollar is said to be weakening at that time. Essentially, a weak dollar means that a U.S. dollar can be exchanged for smaller amounts of foreign currency. The effect of this is that goods priced in U.S. dollars, as well as goods produced in non-US countries, become more expensive to U.S. consumers.

Housing Market Index (HMI)

A widely watched gauge of the outlook for the U.S. Housing Sector; a valuable indicator used. by financial analysts, the Federal Reserve, policymakers, economic analysts, and the news media. The HMI is based on a survey completed by NAHB builder members every month.

Unofficial Strike

A work stoppage by union members that is not endorsed by the union and that does not follow the legal requirements for striking. Workers engaging in unofficial strikes have little legal recourse if they are fired and do not receive strike pay. An unofficial strike is also called a wildcat strike or an unofficial industrial action.

Yield Curve

A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates. The slope of the yield curve gives an idea of future interest rate changes and economic activity. There are three main types of yield curve shapes: normal (upward sloping curve), inverted (downward sloping curve) and flat.

Inefficient Market

According to economic theory, an inefficient market is one in which an asset's prices do not accurately reflect its true value, which may occur for several reasons. Inefficiencies often lead to deadweight losses. In reality, most markets do display some level of inefficiencies, and in the extreme case an inefficient market can be an example of a market failure. The efficient market hypothesis (EMH) holds that in an efficiently working market, asset prices always accurately reflect the asset's true value. For example, all publicly available information about a stock should be fully reflected in its current market price. With an inefficient market, in contrast, all the publicly available information is not reflected in the price, suggesting that bargains are available or that prices could be over-valued.

Advanced Economies

Advanced economy is a term used by the International Monetary Fund (IMF) to describe the most developed countries in the world. While there is no established numerical convention to determine whether an economy is advanced or not, they are usually defined as having a high level of gross domestic product (GDP) per capita, as well as a very significant degree of industrialization. Advanced economies are also sometimes referred to as developed, industrialized and mature economies.

Advertisement/Advertising

Advertising is the attempt to influence the buying behavior of customers or clients with a persuasive selling message about products and/or services. In business, the goal of advertising is to attract new customers by defining the target market and reaching out to them with an effective ad campaign.

Algorithm Trading

Algorithmic trading is a process for executing orders utilizing automated and pre-programmed trading instructions to account for variables such as price, timing and volume. An algorithm is a set of directions for solving a problem. Computer algorithms send small portions of the full order to the market over time. Algorithmic trading makes use of complex formulas, combined with mathematical models and human oversight, to make decisions to buy or sell financial securities on an exchange. Algorithmic traders often make use of high-frequency trading technology, which can enable a firm to make tens of thousands of trades per second. Algorithmic trading can be used in a wide variety of situations including order execution, arbitrage, and trend trading strategies.

Liabilities

Amounts owed to creditors.

Distributor

An agent who supplies goods to stores and other businesses that sell to consumers.

Algorithm

An algorithm is set of instructions for solving a problem or accomplishing a task. Every computerized device uses algorithms to perform its functions. Algo trading, also known as automated trading or black-box trading, uses a computer program to buy or sell securities at a pace not possible for humans. Since prices of stocks, bonds, and commodities appear in various formats online and in trading data, the process by which an algorithm digests scores of financial data becomes easy. Computer algorithms make life easier by trimming the time it takes to manually do things. In the world of automation, algorithms allow workers to be more proficient and focused. Algorithms make slow processes more proficient. In many cases, especially in automation, algos save companies money.

Allowance

An allowance is an amount of money given or allotted usually at regular intervals for a specific purpose.

Apartment

An apartment, or flat, is a self-contained housing unit that occupies only part of a building, generally on a single story.

Assembly Line

An assembly line is a production process that divides labor by breaking up the manufacture of a product into steps that are completed in a pre-defined sequence. Assembly lines were used in the late 1800s when workers used pulley systems to move products from one station to the next. Ransom Olds used that system to manufacture his Curved Dash Oldsmobile. Henry Ford created the first moving assembly line, combining Olds' idea with conveyor belts, to mass-produce the Model T in 1913. The modern assembly line is used in many different industries, increasing output, cutting down costs, and boosting profits.

Supply-Side Economics

An economic concept whereby increasing the supply of goods leads to economic growth. Also defined as supply-side fiscal policy, the concept has been applied by several U.S. presidents in attempts to stimulate the economy. Comprehensively, supply-side approaches target variables that bolster an economy's ability to supply more goods and services.

Business Inventories

An economic figure that tracks the dollar amount of inventories held by retailers, wholesalers, and manufacturers across the nation. Business inventories is the short version term for "Manufacturing and Trade Inventories and Sales," a monthly report released by the U.S. Department of Commerce.

Moral Economy

An economy that is based on goodness, fairness, and justice, as opposed to one where the market is assumed to be independent of such concerns.

Private University

An educational institution of higher education which is not supported by public taxes. May be independent or church related.

Equities Market

An equity market is a market in which shares of companies are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy. It gives companies access to capital to grow their business, and investors a piece of ownership in a company with the potential to realize gains in their investment based on the company's future performance.

Implicit Costs

An implicit cost is a cost that exists without the exchange of cash and is not recorded for accounting purposes. Implicit costs represent the loss of income but do not represent a loss of profit. These costs are in contrast to explicit costs, which represent money exchanged or the use of tangible resources by a company. Examples of implicit costs include a small business owner who may forgo a salary in the early stages of operations to increase revenue.

Innovation

An improvement of an existing technological product, system, or method of doing something.

Increasing Returns to Scale

An increasing returns to scale occurs when the output increases by a larger proportion than the increase in inputs during the production process.

Independent Contractor(s)

An independent contractor is a self-employed person or entity contracted to perform work for—or provide services to—another entity as a nonemployee. As a result, independent contractors must pay their own Social Security and Medicare taxes. In addition, an entity that uses the services of an independent contractor is not required to provide them with employment benefits, such as health insurance and employer-sponsored retirement accounts, that the entity might otherwise provide were the contractor an employee. The payer must correctly classify each payee as either an independent contractor or employee. Another term for an independent contractor is "freelancer."

Individual Retirement Account (IRA)

An individual retirement account (IRA) is a tax-advantaged account that individuals use to save and invest for retirement. The Internal Revenue Service (IRS) also uses the term "individual retirement arrangements (IRAs) to broadly refer to individual retirement accounts, individual retirement annuities and other trusts and custodial accounts that act as a personal savings plan with tax advantages for setting aside money for retirement. There are several types of IRAs—Traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs. Each has different rules regarding eligibility, taxation, and withdrawals.

Materials Sector

An industry category made up of businesses engaged in the discovery, development, and processing of raw materials. The sector includes companies engaged in mining and metal refining, chemical products, and forestry products.

Initial Public Offering (IPO)

An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes share premiums for current private investors. Meanwhile, it also allows public investors to participate in the offering.

Political Economy

An interdisciplinary branch of the social sciences that focuses on the interrelationships among individuals, governments, and public policy.

Inverted Yield Curve

An inverted yield curve represents a situation in which long-term debt instruments have lower yields than short-term debt instruments of the same credit quality. An inverted yield curve is sometimes referred to as a negative yield curve. The yield curve is a graphical representation of yields on similar bonds across a variety of maturities, also known as the term structure of interest rates. A normal yield curve slopes upward, reflecting the fact that short-term interest rates are usually lower than long-term rates. That is a result of increased risk and liquidity premiums for long-term investments. When the yield curve inverts, short-term interest rates become higher than long-term rates. This type of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession. Because of the rarity of yield curve inversions, they typically draw attention from all parts of the financial world.

Investment

An investment is an asset or item acquired with the goal of generating income or appreciation. Appreciation refers to an increase in the value of an asset over time. When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth. An investment always concerns the outlay of some asset today—time, money, or effort—in hopes of a greater payoff in the future than what was originally put in. For example, an investor may purchase a monetary asset now with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.

Foreign Direct Investment (FDI)

An investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company. However, FDIs are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies.

Official Strike

An official strike is one that complies with the required legal processes for declaring and carrying out a strike or other work stoppage. Official strikes are considered protected concerted action under the National Labor Relations Act, but whether any particular strike counts as official or not can depend on rulings by the National Labor Relations Board. Workers engaged in an official strike enjoy better legal protections against dismissal or retaliation by their employer.

Overheated Economy

An overheated economy is one that has experienced a prolonged period of good economic growth and activity that has led to high levels of inflation (from increased consumer wealth). This sharp rise in prices causes inefficient supply allocations as producers overproduce and create excess production capacity in an attempt to capitalize on the high levels of wealth. Unfortunately, these inefficiencies and inflation will eventually hinder the economy's growth and can often be a precursor to a recession.

Town

An urban area that has a name, defined boundaries, and local government, and that is generally larger than a village and smaller than a city.

Urban Center

An urban area, or built-up area, is a human settlement with a high population density and infrastructure of built environment. Urban areas are created through urbanization and are categorized by urban morphology as cities, towns, conurbations or suburbs.

City

An urban settlement that has been legally incorporated into an independent, self-governing unit.

Dividend Yield

Annual dividends / Price per share

Antitrust

Antitrust laws are regulations that encourage competition by limiting the market power of any particular firm. This often involves ensuring that mergers and acquisitions don't overly concentrate market power or form monopolies, as well as breaking up firms that have become monopolies. Antitrust laws also prevent multiple firms from colluding or forming a cartel to limit competition through practices such as price fixing. Due to the complexity of deciding what practices will limit competition, antitrust law has become a distinct legal specialization.

Improvement

Any conditions or changes to the land or a building that affects the property's value is called an improvement. Improvements of a private nature (such as homes and nature) are referred to as improvements on the land.

Commercial Real Estate

Any property used exclusively for business purposes, such as apartment complexes, gas stations, grocery stores, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theaters.

Industrial Real Estate

Any property used for manufacturing, production, distribution, storage, and research and development. Examples include factories, power plants, and warehouses.

Residential Real Estate

Any property used for residential purposes. Examples include single-family homes, condos, cooperatives, duplexes, townhouses, and multifamily residences with fewer than five individual units.

Technology

Anything that helps us produce things faster, better or cheaper. ... In this sense, processes like assembly line production or creating medical vaccines are considered technologies.

Arbitrage

Arbitrage is the simultaneous purchase and sale of the same asset in different markets in order to profit from tiny differences in the asset's listed price. It exploits short-lived variations in the price of identical or similar financial instruments in different markets or in different forms. Arbitrage exists as a result of market inefficiencies and it both exploits those inefficiencies and resolves them.

Funds

Are businesses engaged in the investing of pooled capital of investors.

Trusts

Are fiduciary arrangements in which a third party holds assets on behalf of beneficiaries.

Corporations

Are legal entities that are separate and distinct from its owners and provide the same rights and responsibilities as a person.

Associations

Are vague and often misunderstood legal entities based on any group of individuals who join together for business, social, or other purposes as a continuing entity. (This may or may not be taxable depending on structure and purpose.)

Digital-Service Taxes

As a result, in 2018, the European Commission (EC) proposed a temporary Digital Services Tax (DST) to be imposed a rate of 3% on revenues derived from online advertising services, receipts or income from digital intermediary activities, and sales of user-collected data.

Reading a Balance Sheet

Assets = Liabilities + Shareholders' Equity

Non-Current Assets

Assets that are not turned into cash easily, are expected to be turned into cash within a year, and/or have a lifespan of more than one year.

Economic Automation

Automation enables firms to produce goods for lower costs. Automation leads to significant economies of scale - important in industries which require high capital investment. Automation enables firms to reduce number of workers, and this limits the power of trades unions and potentially disruptive strikes.

Bargaining

Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price and exact nature of a transaction. If the bargaining produces agreement on terms, the transaction takes place. Bargaining is an alternative pricing strategy to fixed prices.

Housing Price Index (HPI)

Based on transactions involving conventional and conforming mortgages on single-family properties. It is a weighted, repeat sales index, measuring average price changes in repeat sales or refinancings on the same properties.

Big Tech Industry

Big Tech, also known as the Tech Giants, Big Five, or S&P 5, are the largest and most dominant companies in the information technology industry of the United States, namely Amazon, Apple, Facebook, Google, and Microsoft.

Biotechnology & Pharmaceutical Companies

Biotechnology (biotech) companies derive their products from the extraction or manipulation of living organisms. Pharmaceutical companies create medicines from chemicals and synthetic processes. In the world of investing, these both are important industry sectors with very different risk profiles despite their overarching similarities.

Bitcoin (or "BTC")

Bitcoin is a digital currency that was created in January 2009. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto.  The identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority. Bitcoin is a type of cryptocurrency. There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to. All bitcoin transactions are verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin is very popular and has triggered the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins. Bitcoin is commonly abbreviated as "BTC."

Brand (Identity)

Brand identity is the visible elements of a brand, such as color, design, and logo, that identify and distinguish the brand in consumers' minds. Brand identity is distinct from brand image. The former corresponds to the intent behind the branding and the way a company does the following—all to cultivate a certain image in consumers' minds: Chooses its name Designs its logo Uses colors, shapes, and other visual elements in its products and promotions Crafts the language in its advertisements Trains employees to interact with customers Brand image is the actual result of these efforts, successful or unsuccessful.

Building Activity Indicators

Building activity indicators are economic reports or indexes that provide analysts and investors with information about the present and projected level of demand for residential, commercial, and industrial construction. Commercial and industrial building activity includes the construction of hotels, office buildings, multi-family residences, schools, hospitals, and other institutional buildings. Residential activity includes new housing permits for single-family homes or multi-unit dwellings. Popular Indicators: 1. New Housing Starts 2. New Home Sales 3. Pending Home Sales 4. Architectural Billings Index 5. Construction Spending 6. NAHB/Wells Fargo Housing Market Index 7. U.S. Census New Residential Construction & Sales Indices

Buy-to-Cover

Buy to cover refers to a buy trade order that closes a trader's short position. Short positions are borrowed from a broker and a buy to cover allows the short positions to be "covered" and returned to the original lender. The trade is made on the belief that a stock's price will decline, so shares are sold at a higher price and then bought back at a lower price. Buy to cover orders are generally margin trades.

Economic Segregation

By job, by room, by location, by firm.

Depreciation

Calculated and deducted from most of these assets, which represents the economic cost of the asset over its useful life.

Prop 22

California Proposition 22 (Prop 22), officially known as the "App-Based Drivers as Contractors and Labor Policies Initiative," was approved by California voters in the Nov. 3, 2020, general election. Prop 22 defines app-based transportation and delivery drivers as independent contractors, and also adopts certain labor and wage policies that apply only to app-based drivers and to companies such as Uber, Lyft, and DoorDash.

Capital Expenditure

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company. Making capital expenditures on fixed assets can include repairing a roof, purchasing a piece of equipment, or building a new factory. This type of financial outlay is also made by companies to maintain or increase the scope of their operations.

Capital Flows

Capital flows refer to the movement of money for the purpose of investment, trade, or business operations. Inside of a firm, these include the flow of funds in the form of investment capital, capital spending on operations, and research and development (R&D). On a larger scale, a government directs capital flows from tax receipts into programs and operations and through trade with other nations and currencies. Individual investors direct savings and investment capital into securities, such as stocks, bonds, and mutual funds.

Capital Market(s)

Capital markets are venues where savings and investments are channeled between the suppliers who have capital and those who are in need of capital. The entities that have capital include retail and institutional investors while those who seek capital are businesses, governments, and people. Capital markets are composed of primary and secondary markets. The most common capital markets are the stock market and the bond market. Capital markets seek to improve transactional efficiencies. These markets bring those who hold capital and those seeking capital together and provide a place where entities can exchange securities.

Welfare Capitalism

Capitalism that includes social welfare policies. Welfare capitalism is also the practice of businesses providing welfare services to their employees.

Investing Cash Flow

Cash generated from the sale and purchase of investments.

The Cost of Hiring a New Employee

Cash-strapped businesses often hesitate to start hiring, even when they need workers, due to the actual cost of hiring employees. It's easy to forget that the cost of taking on a new employee means more than just their salary, which can be substantial all by itself. But once you factor in the cost of recruiting, training, and more, the dollars start adding up.

Renewable Energy

Clean energy has gained traction and investment dollars over the years and is likely to be a growing part of the energy sector in the future. Examples of renewable energy include wind and solar.

Mining Companies

Coal companies could be classified as energy companies since coal is used to power plants, including nuclear.

Structural Enemployment

Comes about through technological change in the structure of the economy in which labor markets operate.

Financing Cash Flow

Comes from conducting financing activities such as repaying capital etc.

Commerce

Commerce is the conduct of trade among economic agents. Generally, commerce refers to the exchange of goods, services, or something of value, between businesses or entities. From a broad perspective, nations are concerned with managing commerce in a way that enhances the well-being of citizens, by providing jobs and producing beneficial goods and services. Commerce has existed from the early days of human civilization when humans bartered goods to the more complex development of trade routes and corporations. Today, commerce refers to the macroeconomic purchases and sales of goods and services by organizations. Commerce is a subset of business that focuses on the distribution aspect of business as opposed to the production side. The buying or selling of a single item is known as a transaction, whereas all the transactions of that item in an economy are known as commerce. Commerce leads to the prospering of nations and an increased standard of living, but if left unchecked or unregulated, it can lead to negative externalities. E-commerce is a variant of commerce in which goods are sold electronically via the Internet.

Current Liabilities

Company's liabilities that will come due, or must be paid, within one year. Includes shorter-term borrowings, such as the latest interest payment on a 10-year loan.

(Economic) Moat

Conceptualized and named by Warren Buffett, an economic moat is a distinct advantage a company has over its competitors which allows it to protect its market share and profitability. It is often an advantage that is difficult to mimic or duplicate (brand identity, patents) and thus creates an effective barrier against competition from other firms.

City

Conglomeration of people and buildings clustered together to serve as a center of politics, culture, and economics

Accounts Receivable

Consist of the short-term obligations owed to the company by its clients.

Workday

Consists of the time when an employee begins performing her principal activities and the time she stops performing her principal activities including any walk time after the start of the first principal activity and just before the end of the last principal activity.

Construction Spending

Construction spending is an economic indicator that measures the amount of spending toward new construction. The U.S. Department of Commerce's Census Bureau releases the monthly Value of Construction Put in Place Survey (VIP), which looks at residential and non-residential construction in the private sector, as well as state and federal construction spending. Construction spending is an economic indicator that measures monthly expenditures toward new construction. Construction spending encompasses various construction-related expenses such as labor, materials, and engineering work. The U.S. Census Bureau provides a monthly construction spending report; broken down by public and private construction and residential and non-residential. Nearly 50% of all construction spending in the U.S. comes from the housing sector.

Consumer Discretionary

Consumer discretionary is a term for classifying goods and services that are considered non-essential by consumers, but desirable if their available income is sufficient to purchase them. Examples of consumer discretionary products can include durable goods, high-end apparel, entertainment, leisure activities, and automobiles. Companies that supply these types of goods and services are usually either called consumer discretionaries or consumer cyclicals.

Consumer Staples

Consumer staples are essential products that include typical products such as foods & beverage, household goods, and hygiene products; but the category also includes such items as alcohol and tobacco. These goods are those products that people are unable—or unwilling—to cut out of their budgets regardless of their financial situation. Consumer staples are considered to be non-cyclical, meaning that they are always in demand, year-round, no matter how well the economy is—or is not—performing. As such, consumer staples are impervious to business cycles. Also, people tend to demand consumer staples at a relatively constant level, regardless of their price.

Photosynthesis

Conversion of light energy from the sun into chemical energy.

Inventory Turnover

Cost of Sales/ Inventory

Rural

Countryside.

Creative Destruction

Creative destruction describes the deliberate dismantling of established processes in order to make way for improved methods of production. Creative destruction is most often used to describe disruptive technologies such as the railroads or, in our own time, the internet. The term was coined in the early 1940s by economist Joseph Schumpeter, who observed real-life examples of creative destruction, such as Henry Ford's assembly line.

Currency

Currency refers to paper money or coins that are in circulation. But currency is actually only a small piece of the monetary economy and just one consideration when looking at the total money supply (currency is in use when in coins, paper-bills, and credit cards are exchanged).

Current Ratio

Current Assets/ Current Liabilities

Quick Ratio

Currents Assets - Inventory/ Current Liabilities

Environmental Degradation

Damage to or destruction of the natural environment.

Day Trader/Trading

Day traders are traders who execute intraday strategies to profit off relatively short-lived price changes for a given asset. Day traders employ a wide variety of techniques in order to capitalize on market inefficiencies, often making many trades a day and closing positions before the trading day ends. Day trading is often characterized by technical analysis and requires a high degree of self-discipline and objectivity. Day trading can be a lucrative undertaking, but it also comes with a high degree of risk and uncertainty.

Long-term Liabilities

Debts and other non-debt financial obligations, which are due after a period of at least one year from the date of the balance sheet.

Default

Default is the failure to repay a debt including interest or principal on a loan or security. A default can occur when a borrower is unable to make timely payments, misses payments, or avoids or stops making payments. Individuals, businesses, and even countries can fall prey to default if they cannot keep up their debt obligations.

Demand-Side Economics

Demand-side economics refer to Keynesian economists' belief that demand for goods and services drive economic activity. A core characteristic of demand-side economics is aggregate demand. Government can generate demand for goods and services if people and businesses are unable to.

Deregulation

Deregulation is the reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Over the years the struggle between proponents of regulation and proponents of no government intervention have shifted market conditions. Finance has historically been one of the most heavily scrutinized industries in the United States.

Destructive Creation

Destructive creation refers to circumstances in which innovation results in more damage to the economy than beneficial outcomes. Destructive creation was coined as a play on Joseph Schumpeter's famous term creative destruction, which suggests that innovation leads to productive changes in economic growth. For example, when computers were invented, they replaced typewriters and increased efficiency. As a result, the economy profited. In other words, there was little downside to this innovation. In contrast, destructive creation is when innovation leads to negative, net social and economic outcomes, though it might still benefit the originator or end users of the new innovation.

Devaluation of Currency

Devaluation is the deliberate downward adjustment of a country's currency value. The government issuing the currency decides to devalue a currency. Devaluing a currency reduces the cost of a country's exports and can help shrink trade deficits. Problem! Making imports more expensive can lessen competition and make things more expensive at home.

Direct Investment

Direct investment is more commonly referred to as foreign direct investment (FDI). FDI refers to an investment in a foreign business enterprise designed to acquire a controlling interest in the enterprise. The direct investment provides capital funding in exchange for an equity interest without the purchase of regular shares of a company's stock.

Disposable Income

Disposable income is net income. It's the amount left over after taxes. Discretionary income is the amount of net income remaining after all basic necessities are covered. Economists monitor these numbers at a macro level to see how consumers are saving, spending, and borrowing.

Diversification

Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk. The rationale behind this technique is that a portfolio constructed of different kinds of assets will, on average, yield higher long-term returns and lower the risk of any individual holding or security.

Chapter 11 Bankruptcy

During a Chapter 11 proceeding, the court will help a business restructure its debts and obligations. In most cases the firm remains open and operating. Many large U.S. companies file for Chapter 11 bankruptcy and stay afloat. Such businesses include automobile giant General Motors, the airline United Airlines, retail outlet K-mart, and thousands of other corporations of all sizes. Corporations, partnerships, and limited liability companies (LLCs) usually file Chapter 11, but in rare cases individuals with a lot of debt who do not qualify for Chapter 7 or 13 may be eligible for Chapter 11.23 However, the process is not a speedy one.

Easy Money $

Easy money, in academic terms, denotes a condition in the money supply and monetary policy where the U.S. Federal Reserve allows cash to build up within the banking system—as this lowers interest rates and makes it easier for banks and lenders to loan money. Therefore, it's easier for borrowers to secure loans from banks and lenders.

Economies of Scale

Economies of scale are cost advantages reaped by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods. Costs can be both fixed and variable. The size of the business generally matters when it comes to economies of scale. The larger the business, the more the cost savings. Economies of scale can be both internal and external. Internal economies of scale are based on management decisions, while external ones have to do with outside factors.

Education

Education is the process of facilitating learning, or the acquisition of knowledge, skills, values, morals, beliefs, and habits. Educational methods include teaching, training, storytelling, discussion and directed research.

First Law of Thermodynamics

Energy can be transferred and transformed, but it cannot be created or destroyed.

Engineering

Engineering is the use of scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings.

Entrepreneurship (FOP)

Entrepreneurship is the secret sauce that combines all the other factors of production into a product or service for the consumer market.

Environmental Economy

Environmental economics is an area of economics that studies the financial impact of environmental policies. Environmental economists perform studies to determine the theoretical or empirical effects of environmental policies on the economy. This field of economics helps users design appropriate environmental policies and analyze the effects and merits of existing or proposed policies.

Euro

Euro notes are the legal tender in the form of paper banknotes that can be used in exchange for goods and services in the eurozone. Euro notes come in seven denominations: 5; 10; 20; 50; 100; 200; and 500 euros. The supply of euro notes is controlled by the European Central Bank (ECB), and the notes were first issued in 2002.

Defense Spending

Every dollar spent on defense is a dollar not spent on other public services. On the other hand, dollars spent on the military wind up in the private sector as payment for goods and services the military requires. Military spending may skew civilian technology development, but talent and applications flow both ways.

Eviction

Eviction describes the civil process by which a landlord may legally remove a tenant from their rental property. Eviction may occur when the tenant's rent has not been paid, when the terms of the rental agreement have been breached, or in certain other situations that are permitted by law.

Tangible Assets

Examples: Machinery, computers, buildings and land.

Trade

Exchange of goods and services between individuals, groups, or entities.

Trading

Exchanging one thing for another.

Investing

Expend money with the expectation of achieving a profit or material result by putting it into financial plans, shares, or property, or by using it to develop a commercial venture.

Explicit Costs

Explicit costs are normal business costs that appear in the general ledger and directly affect a company's profitability. Explicit costs have clearly defined dollar amounts, which flow through to the income statement. Examples of explicit costs include wages, lease payments, utilities, raw materials, and other direct costs.

Factors of Production (1/2)

Factors of production are the inputs needed for the creation of a good or service.

Fiat Money

Fiat money is a government-issued currency that isn't backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies. One danger of fiat money is that governments will print too much of it, resulting in hyperinflation.

Incentive

Financial motivations for people to take certain actions.

Finanical Performance

Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. The term is also used as a general measure of a firm's overall financial health over a given period. Analysts and investors use financial performance to compare similar firms across the same industry or to compare industries or sectors in aggregate.

Finished Goods

Finished goods are products that have completed production and are ready for sale. Retailers typically refer to this inventory as "merchandise." Common examples of merchandise include electronics, clothes, and cars held by retailers.

Economic Ecosystem

Flow of Money

Effective Tax Rate Formula

For an individual: Total Tax // Taxable Income For a corporation: Total // Earnings Before Taxes

Foreign Investment

Foreign investment involves capital flows from one country to another, granting the foreign investors extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment or an equity stake large enough to enable the foreign investor to influence business strategy. A modern trend leans toward globalization, where multinational firms have investments in a variety of countries.

Partnerships

Formal arrangements in which two or more parties cooperate to manage and operate a business.

Free Rider Problem

Free riding is considered a failure of the conventional free market system. The problem occurs when some members of a community fail to contribute their fair share to the costs of a shared resource. Their failure to contribute makes the resource economically infeasible to produce. When everyone can consume a resource in unlimited amounts. When no one can limit anyone else's consumption. When someone has to produce and maintain the resource. That is, it's not a natural lake, it's a swimming pool, and someone had to undertake its construction and maintenance.

Full Employment

Full employment is an economic situation in which all available labor resources are being used in the most efficient way possible. Full employment embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time. True full employment is an ideal—and probably unachievable—situation in which anyone who is willing and able to work can find a job, and unemployment is zero. It is a theoretical goal for economic policymakers to aim for rather than an actually observed state of the economy. In practical terms, economists can define various levels of full employment that are associated with low but non-zero rates of unemployment.

(Gross) National Income (GNI)

GNI is the total amount of money earned by a nation's people and businesses. It is used to measure and track a nation's wealth from year to year. The number includes the nation's gross domestic product plus the income it receives from overseas sources. GNI is an alternative to gross domestic product (GDP) as a means of measuring and tracking a nation's wealth and is considered a more accurate indicator for some nations.

Game Theory

Game theory is a theoretical framework to conceive social situations among competing players and produce optimal decision-making of independent and competing actors in a strategic setting. Using game theory, real-world scenarios for such situations as pricing competition and product releases (and many more) can be laid out and their outcomes predicted. Scenarios include the prisoner's dilemma and the dictator game among many others. According to game theory, the actions and choices of all the participants affect the outcome of each.

Garnishment of Wages

Garnishment, or wage garnishment, is when money is legally withheld from your paycheck and sent to another party. It refers to a legal process that instructs a third party to deduct payments directly from a debtor's wage or bank account. Typically, the third party is the debtor's employer and is known as the garnishee. Federal law prohibits employers from firing a worker to avoid processing a garnishment payment. Garnishments are used for debts such as unpaid taxes, monetary fines, child support payments, and defaulted student loans.

Factor-Price Equalization Theorem

Given certain conditions and assumptions, free trade equalizes not only product prices but also the prices of individual factors between the two countries.

Globalization

Globalization is the spread of products, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade.

Gold

Gold prices reveal the true state of U.S. economic health. When gold prices are high, that signals the economy is not healthy. Investors buy gold as protection from either an economic crisis or inflation. Low gold prices mean the economy is healthy — making stocks, bonds, or real estate more profitable investments. Gold prices reflect the beliefs of commodities traders. If they think the economy is doing poorly, they will buy more gold. If they think the economy is doing well, they will buy less gold. Gold prices reveal what savvy investors know about economic health. Here are examples of how that works.

Intangible Assets

Goodwills, patents, or copyright.

Protectionism (Economic & Political Term)

Government measures that limit imports into a country with the intent of protecting commerce within the country against foreign competition.

Government

Governments have the capacity to make broad changes to monetary and fiscal policy, including raising or lowering interest rates, which has a huge impact on business. They can boost the currency, which temporarily lifts corporate profits and share prices, but ultimately lowers values and spikes interest rates. Governments can intervene when companies or entire segments of the economy are flailing, or threatening to undermine the whole economic system, by providing bailouts. Governments can create subsidies, taxing the public and giving the money to an industry, or tariffs, adding taxes to foreign products to lift prices and make domestic products more appealing. Higher taxes and fees, and greater regulations can stymie businesses or entire industries.

Gross National Product (GNP)

Gross national product (GNP) is an estimate of total value of all the final products and services turned out in a given period by the means of production owned by a country's residents. GNP is commonly calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports and any income earned by residents from overseas investments, minus income earned within the domestic economy by foreign residents. Net exports represent the difference between what a country exports minus any imports of goods and services.

Current Assets

Have a lifespan of one year or less, meaning they can be converted to cash easily. Such asses include cash and cash equivalents, accounts receivable and inventory.

Hedge Fund

Hedge funds are alternative investments using pooled funds that employ different strategies to earn active returns, or alpha, for their investors. Hedge funds may be aggressively managed or make use of derivatives and leverage in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark). It is important to note that hedge funds are generally only accessible to accredited investors as they require less SEC regulations than other funds. One aspect that has set the hedge fund industry apart is the fact that hedge funds face less regulation than mutual funds and other investment vehicles.

Home Equity

Home equity is the value of a homeowner's interest in their home. In other words, it is the real property's current market value (less any liens that are attached to that property). The amount of equity in a house—or its value—fluctuates over time as more payments are made on the mortgage and market forces impact the current value of the property.

Human Capital

Human capital is an intangible asset or quality not listed on a company's balance sheet. It can be classified as the economic value of a worker's experience and skills. This includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality. The concept of human capital recognizes that not all labor is equal. But employers can improve the quality of that capital by investing in employees—the education, experience, and abilities of employees all have economic value for employers and for the economy as a whole. Human capital is important because it is perceived to increase productivity and thus profitability. So the more a company invests in its employees (i.e., in their education and training), the more productive and profitable it could be.

Renewable

Hydropower Biofuels such as ethanol Wind power Solar power

Gig Economy

In a gig economy, temporary, flexible jobs are commonplace and companies tend to hire independent contractors and freelancers instead of full-time employees. A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

Production Function

In economics, a production function gives the technological relation between quantities of physical inputs and quantities of output of goods.

Capital (FOP)

In economics, capital typically refers to money. But money is not a factor of production because it is not directly involved in producing a good or service. Instead, it facilitates the processes used in production by enabling entrepreneurs and company owners to purchase capital goods or land or pay wages. For modern mainstream (neoclassical) economists, capital is the primary driver of value.

FAANG Stocks

In finance, "FAANG" is an acronym that refers to the stocks of five prominent American technology companies: Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX); and Alphabet (GOOG) (formerly known as Google).

Cleantech

In finance, the term cleantech—short for clean technology—is used to refer to various companies and technologies that aim to improve environmental sustainability. Usage of the term has varied over the years, with some users treating it synonymously with terms such as "green technology" to refer to renewable energy sources, new methods of recycling, and other environmentally-friendly practices. In other cases, the term refers to methods of reducing the negative environmental impact of otherwise conventional technologies such as coal power or natural gas. In this context, terms such as "clean coal" or "clean energy" are commonly used, although many environmentalists question the validity of this usage.

Promotion

In terms of a career, a promotion refers to the advancement of an employee's rank or position in a hierarchical structure. In marketing, promotion refers to a different sort of advancement. A sales promotion entails the features—via advertising and/or a discounted price—of a particular product or service. Product promotions can also be classified as "sales" or "specials."

Subsidiary

In the corporate world, a subsidiary is a company that belongs to another company, which is usually referred to as the parent company or the holding company. The parent holds a controlling interest in the subsidiary company, meaning it has or controls more than half of its stock. In cases where a subsidiary is 100% owned by another firm, the subsidiary is referred to as a wholly owned subsidiary. Subsidiaries become very important when discussing a reverse triangle mortgage.

Urban

In, relating to, or characteristic of a city or town.

Land

Includes undeveloped property, vacant land, and agricultural land (farms, orchards, ranches, and timberland).

Income Tax

Income tax is a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. By law, taxpayers must file an income tax return annually to determine their tax obligations.1 2 Income taxes are a source of revenue for governments. They are used to fund public services, pay government obligations, and provide goods for citizens.

Infrastructure

Infrastructure is the general term for the basic physical systems of a business, region, or nation. Examples of infrastructure include transportation systems, communication networks, sewage, water, and electric systems. These systems tend to be capital intensive and high-cost investments, and are vital to a country's economic development and prosperity. Projects related to infrastructure improvements may be funded publicly, privately, or through public-private partnerships. In economic terms, infrastructure often involves the production of public goods or production processes that support natural monopolies.

Institutional Unemployment

Institutional unemployment is unemployment that results from long-term or permanent institutional factors and incentives in the economy.

Intellectual Capital

Intellectual capital is the value of a company's employee knowledge, skills, business training, or any proprietary information that may provide the company with a competitive advantage. Intellectual capital is considered an asset, and can broadly be defined as the collection of all informational resources a company has at its disposal that can be used to drive profits, gain new customers, create new products, or otherwise improve the business. It is the sum of employee expertise, organizational processes, and other intangibles that contribute to a company's bottom line. Some of the subsets of intellectual capital include human capital, information capital, brand awareness, and instructional capital.

Inventory

Inventory is the term for the goods available for sale and raw materials used to produce goods available for sale. Inventory represents one of the most important assets of a business because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders. Important: Holding inventory for long periods of time is disadvantageous given storage costs and the threat of obsolescence.

Shortage

Is a condition where the quantity demanded is greater than the quantity supplied at the market price. Increase in demand (outward shift in the demand curve): For example, a sudden heatwave leads to an unexpected demand for energy that cannot be met. Decrease in supply (inward shift in supply curve): For example, an unexpected freeze results in the destruction of orange crops leading to a drastic reduction in the supply of orange juice. Government intervention: Shortages can also be the result of government-imposed price ceilings.

Ratio Analysis

Is the quantitative analysis of financial information from a company's financial statements or share price.

Job Opening(s)

Jobs offers listed from various empl

Junk Bonds

Junk bonds are bonds that carry a higher risk of default than most bonds issued by corporations and governments. A bond is a debt or promise to pay investors interest payments along with the return of invested principal in exchange for buying the bond. Junk bonds represent bonds issued by companies that are financially struggling and have a high risk of defaulting or not paying their interest payments or repaying the principal to investors. Junk bonds are also called high-yield bonds since the higher yield is needed to help offset any risk of default.

Key Performance Indicators (KPIs)

Key performance indicators (KPIs) measure a company's success versus a set of targets, objectives, or industry peers. KPIs can be financial, including net profit (or the bottom line, gross profit margin), revenues minus certain expenses, or the current ratio (liquidity and cash availability). KPIs can also be more anecdotal, measuring foot traffic in a store, employee retention, repeat customers, and quality of customer experience, among others.

Keynesian Economics

Keynesian economics is a macroeconomic economic theory of total spending in the economy and its effects on output, employment, and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run. Keynes's theory was the first to sharply separate the study of economic behavior and markets based on individual incentives from the study of broad national economic aggregate variables and constructs. Based on his theory, Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Subsequently, Keynesian economics was used to refer to the concept that optimal economic performance could be achieved—and economic slumps prevented—by influencing aggregate demand through activist stabilization and economic intervention policies by the government.

Labor Market Flexibility

Labor market flexibility is an important part of the labor market. It allows companies to make certain decisions about changing their labor force as a response to fluctuations in the market and to help boost production. Organizations can make modifications to their labor pool based on certain factors such as employee hiring and firing, compensation and benefits, and working hours and conditions. Companies do not have carte blanche, however, to implement a flexible labor market because of laws and policies that protect employees and the labor pool.

Labor Mobility

Labor mobility refers to the ease with which laborers are able to move around within an economy and between different economies. It is an important factor in the study of economics because it looks at how labor, one of the major factors of production, affects growth and production. There are two primary types of labor mobility: geographic and occupational. Geographic mobility refers to a worker's ability to work in a particular physical location, while occupational mobility refers to a worker's ability to change job types.

Labor (FOP)

Labor refers to the effort expended by an individual to bring a product or service to the market. Again, it can take on various forms.

Real Estate

Land along with any permanent improvements attached to the land, whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges. Real estate is a form of real property. It differs from personal property, which are things not permanently attached to the land, such as vehicles, boats, jewelry, furniture, and farm equipment.

Land (FOP)

Land has a broad definition as a factor of production and can take on various forms, from agricultural land to commercial real estate to the resources available from a particular piece of land. Natural resources, such as oil and gold, can be extracted and refined for human consumption from the land. Cultivation of crops on land by farmers increases its value and utility. For a group of early French economists called the physiocrats who pre-dated the classical political economists, the land was responsible for generating economic value.

Indestructibility

Land is durable and indestructible.

Land

Land, in the business sense, can refer to real estate or property, minus buildings, and equipment, which is designated by fixed spatial boundaries. Land ownership might offer the titleholder the right to any natural resources that exist within the boundaries of their land. Traditional economics says that land is a factor of production, along with capital and labor.

Retire

Leave one's job and cease to work, typically upon reaching the normal age for leaving employment.

Home

Legally, a home is a person's permanent primary residence—even if they aren't currently living there. A physical location is still legally considered a home if there is an intention to return and the resident has not claimed someplace else as their legal place of permanent or principal residence. A home can determine everything from the taxes one pays to one's citizenship status to the laws one follows.

Location or Area Preference

Location refers to people's choices and tastes regarding an area, based on factors like convenience, reputation, and history. Location is one of the most important economic characteristics of land (thus the saying "location, location, location!")!

Logistics

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. Logistics management involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility. Logistics managers are referred to as logisticians. "Logistics" was initially a military-based term used in reference to how military personnel obtained, stored, and moved equipment and supplies. The term is now used widely in the business sector, particularly by companies in the manufacturing sectors, to refer to how resources are handled and moved along the supply chain.

Macroeconomics

Macroeconomics is a branch of economics that studies how an overall economy—the market or other systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.

Manual Labor

Manual labor or manual work is physical work done by people, most especially in contrast to that done by machines, and also to that done by working animals. It is most literally work done with the hands, and, by figurative extension, it is work done with any of the muscles and bones of the body.

Manufacturing

Manufacturing is the processing of raw materials or parts into finished goods through the use of tools, human labor, machinery, and chemical processing. Large-scale manufacturing allows for the mass production of goods using assembly line processes and advanced technologies as core assets. Efficient manufacturing techniques enable manufacturers to take advantage of economies of scale, producing more units at a lower cost. Manufacturing is a value-adding process allowing businesses to sell finished products at a higher cost over the value of the raw materials used. It is often reported on by the conference board, and well examined by economists.

Government Regulations

Many sectors of the business world have long complained about government regulation. Corporations and their spokespeople often denounce government rules as irrational impediments to profits, economic efficiency, and job creation. Unsurprisingly, many firms have used loopholes, moved operations abroad, and violated antitrust laws as they attempted to deal with regulations. In reality, American businesses have both prospered and suffered due to an ever-increasing number of rules and a complicated tax code. As a result, the relationship between firms and the government can be either collaborative or adversarial. More importantly, the rules have protected consumers from exploitative practices.

Government Regulations

Many sectors of the business world have long complained about government regulation. Corporations and their spokespeople often denounce government rules as irrational impediments to profits, economic efficiency, and job creation. Unsurprisingly, many firms have used loopholes, moved operations abroad, and violated antitrust laws as they attempted to deal with regulations. In reality, American businesses have both prospered and suffered due to an ever-increasing number of rules and a complicated tax code. As a result, the relationship between firms and the government can be either collaborative or adversarial. More importantly, the rules have protected consumers from exploitative practices. Below, we'll look at some of these regulations to see why their impacts on businesses can be difficult to determine.

Market Capitalization

Market capitalization refers to how much a company is worth as determined by the stock market. It is defined as the total market value of all outstanding shares. To calculate a company's market cap, multiply the number of outstanding shares by the current market value of one share. Companies are typically divided according to market capitalization: large-cap ($10 billion or more), mid-cap ($2 billion to $10 billion), and small-cap ($300 million to $2 billion).

Market Dynamics

Market dynamics are forces that will impact prices and the behaviors of producers and consumers. In a market, these forces create pricing signals which result from the fluctuation of supply and demand for a given product or service. Market dynamics can impact any industry or government policy.

Market Forces

Market forces are the factors that influence the price and availability of goods and services in a market economy, i.e. an economy with the minimum of government involvement. Market forces push prices up when supply declines and demand rises, and drive them down when supply grows or demand contracts.

Market Liquidity

Market liquidity refers to the extent to which a market, such as a country's stock market or a city's real estate market, allows assets to be bought and sold at stable, transparent prices. In the example above, the market for refrigerators in exchange for rare books is so illiquid that, for all intents and purposes, it does not exist. The stock market, on the other hand, is characterized by higher market liquidity. If an exchange has a high volume of trade that is not dominated by selling, the price a buyer offers per share (the bid price) and the price the seller is willing to accept (the ask price) will be fairly close to each other. Investors, then, will not have to give up unrealized gains for a quick sale. When the spread between the bid and ask prices grows, the market becomes more illiquid. Markets for real estate are usually far less liquid than stock markets. The liquidity of markets for other assets, such as derivatives, contracts, currencies, or commodities, often depends on their size, and how many open exchanges exist for them to be traded on.

Marketing/Advertisement

Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. Marketing includes advertising, selling, and delivering products to consumers or other businesses. Some marketing is done by affiliates on behalf of a company. Professionals who work in a corporation's marketing and promotion departments seek to get the attention of key potential audiences through advertising. Promotions are targeted to certain audiences and may involve celebrity endorsements, catchy phrases or slogans, memorable packaging or graphic designs and overall media exposure.

Mass Production

Mass production is the manufacturing of large quantities of standardized products, often using assembly lines or automation technology. Mass production facilitates the efficient production of a large number of similar products. Mass production is also referred to as flow production, repetitive flow production, series production, or serial production. In mass production, mechanization is used to achieve high volume, detailed organization of material flow, careful control of quality standards, and division of labor. An early example of the demand for standardized products in large quantities came from military organizations and their need for uniforms and other supplies. Precision machining equipment has led to large-scale demand for mass-produced products created cheaply with small workforces. Mass production is the manufacturing of large quantities of standardized products, often using assembly lines or automation technology. Mass production has many advantages, such as producing a high level of precision, lower costs from automation and fewer workers, higher levels of efficiency, and prompt distribution and marketing of an organization's products. Henry Ford, founder of the Ford Motor Company, developed the assembly line technique of mass production in 1913.

Mechanization

Mechanization is the process of changing from working largely or exclusively by hand or with animals to doing that work with machinery.

Median Home-Price

Midway price between the least expensive and most expensive home sold in an area during a given period.

Money

Money is an economic unit that functions as a generally recognized medium of exchange for transactional purposes in an economy. Money provides the service of reducing transaction cost, namely the double coincidence of wants. Money originates in the form of a commodity, having a physical property to be adopted by market participants as a medium of exchange. Money can be: market-determined, officially issued legal tender or fiat moneys, money substitutes and fiduciary media, and electronic cryptocurrencies.

Money Management

Money management refers to the processes of budgeting, saving, investing, spending, or otherwise overseeing the capital usage of an individual or group. The predominant use of the phrase in financial markets is that of an investment professional making investment decisions for large pools of funds, such as mutual funds or pension plans. Money management can also refer more narrowly to "investment management" and "portfolio management."

Outside Money

Money that is not a liability for anyone "inside" the economy. It is held in an economy in net positive amounts. Examples are money that is backed by gold, and assets denominated in foreign currency or otherwise backed up by foreign debt, like foreign cash, stocks or bonds.

Inverse Relationship between Bond & Interest Rates

Most bonds pay a fixed interest rate that becomes more attractive if interest rates fall, driving up demand and the price of the bond. Conversely, if interest rates rise, investors will no longer prefer the lower fixed interest rate paid by a bond, resulting in a decline in its price.

Multi-Family Home

Multi-family residential is a classification of housing where multiple separate housing units for residential inhabitants are contained within one building or several buildings within one complex. Units can be next to each other, or stacked on top of each other. A common form is an apartment building.

NASDAQ

Nasdaq is a global electronic marketplace for buying and trading securities. It was the world's first electronic exchange. Most of the world's technology giants, including Apple and Facebook, are listed on the Nasdaq. It operates in 25 markets, one clearing house, and five central securities depositories in the US and Europe.

Natural Resource(s)

Natural resources such as lumber, coal, or gold are the basis of all production.

Neoliberalism

Neoliberalism is a policy model that encompasses both politics and economics and seeks to transfer the control of economic factors from the public sector to the private sector. Many neoliberalism policies enhance the workings of free market capitalism and attempt to place limits on government spending, government regulation, and public ownership. Neoliberalism is often associated with the leadership of Margaret Thatcher-the prime minister of the U.K. from 1979 to 1990 and leader of the Conservative Party from 1975 to 1990-and Ronald Reagan, the 40th president of the U.S. (from 1981 to 1989). More recently, neoliberalism has been associated with policies of austerity and attempts to cut government spending on social programs.

Earnings Per Share (EPS)

Net Income - Preferred Dividends / Average Outstanding Shares

Return on Equity

Net Income/ Equity

Net Profit Margin

Net Income/ Revenue

Working Capital Turnover

Net Sales/ Working Capital

(New) Home Sales

New Home Sales, also known as "new residential sales," is an economic indicator that measures sales of newly built homes. New Home Sales is viewed as a lagging indicator of demand, but is still closely watched by investors for clues about the broader movements in the economy. New Home Sales data is based on a representative sample of home sales and is driven by factors such as household income, unemployment, and interest rates.

Uniqueness

No two parcels of land can be exactly the same. Even though they may share similarities, every parcel differs geographically.

Nominal Wage

Nominal wages are wages expressed in a monetary form, and which do not take into account changes in prices - in contrast to real wages, which do.

County

Normally the largest territorial and political subdivision of a state.

Occupation Segregation

Occupational segregation is the distribution of workers across and within occupations, based upon demographic characteristics, most often gender. Other types of occupational segregation include racial and ethnicity segregation, and sexual orientation segregation. These demographic characteristics often intersect.

Sector Investing

Offers targeted exposure to the stocks of companies in specific segments of the economy and can help you pursue growth, diversify your portfolio, and manage risks.

Pipeline & Refining

Oil and natural gas must be delivered from the production site to a refinery to be refined into a final product such as gasoline. Companies within this portion of the energy sector are called mid-stream providers.

Permanence of Investment

Once land is improved, the total capital and labor used to build the improvement represents a sizable fixed investment. Even though a building can be razed, improvements like drainage, electricity, water, and sewer systems tend to be permanent because they can't be removed (or replaced) automatically.

Real Property

One of the two main classifications of property, is the interests, benefits and rights inherent in the ownership of real estate.

Purchasing Power Parity (PPP)

One popular macroeconomic analysis metric to compare economic productivity and standards of living between countries is purchasing power parity (PPP). PPP is an economic theory that compares different countries' currencies through a "basket of goods" approach.

Operating Cost

Operating costs are associated with the maintenance and administration of a business on a day-to-day basis. Operating costs include direct costs of goods sold (COGS) and other operating expenses—often called selling, general, and administrative (SG&A)—which includes rent, payroll, and other overhead costs, as well as raw materials and maintenance expenses. Operating costs exclude non-operating expenses related to financing such as interest, investments, or foreign currency translation. The operating cost is deducted from revenue to arrive at operating income and is reflected on a company's income statement. Formula: Cost of goods sold + Operating expenses

Opportunity Cost

Opportunity cost is the forgone benefit that would have been derived by an option not chosen. To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others. Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.

Suburban

Outside of a city.

Outsourcing

Outsourcing is the business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company's own employees and staff. Outsourcing is a practice usually undertaken by companies as a cost-cutting measure. As such, it can affect a wide range of jobs, ranging from customer support to manufacturing to the back office. Outsourcing was first recognized as a business strategy in 1989 and became an integral part of business economics throughout the 1990s. The practice of outsourcing is subject to considerable controversy in many countries. Those opposed argue that it has caused the loss of domestic jobs, particularly in the manufacturing sector. Supporters say it creates an incentive for businesses and companies to allocate resources where they are most effective, and that outsourcing helps maintain the nature of free-market economies on a global scale.

Home Ownership (Owner Occupancy)

Owner-occupancy or home-ownership is a form of housing tenure in which a person, called the owner-occupier, owner-occupant, or home owner, owns the home in which they live. The home can be a house, such as a single-family house, an apartment, condominium, or a housing cooperative. In addition to providing housing, owner-occupancy also functions as a real estate investment.

Passive Income

Passive income is earnings from a rental property, limited partnership, or other business in which a person is not actively involved. The IRS has specific rules for what it calls material participation, which determine whether a taxpayer has actively participated in business, rental, or other income-producing activity. A taxpayer can claim a passive loss against income generated from passive activities. Comes in three types: Passive, Portfolio, & Active.

Payment

Payment is the transfer of money, goods, or services in exchange for goods and services in acceptable proportions that have been previously agreed upon by all parties involved. A payment can be made in the form of services exchanged, cash, check, wire transfer, credit card, or debit card.

Labor

People with all their efforts, abilities, and skills (work).

Income Per Capita

Per capita income is a measure of the amount of money earned per person in a nation or geographic region. Per capita income helps determine the average per-person income to evaluate the standard of living for a population. Per capita income as a metric has limitations that include its inability to account for inflation, income disparity, poverty, wealth, or savings.

Depreciation

Per the matching principle of accounting, depreciation ties the cost of using a tangible asset with the benefit gained over its useful life. There are many types of depreciation, including straight-line and various forms of accelerated depreciation. Accumulated depreciation refers to the sum of all depreciation recorded on an asset to a specific date. The carrying value of an asset on the balance sheet is its historical cost minus all accumulated depreciation. The carrying value of an asset after all depreciation has been taken is referred to as its salvage value.

Non-renewables

Petroleum products and oil Natural gas Gasoline Diesel fuel Heating oil Nuclear

Place

Place refers to the distribution of the product. Key considerations include whether the company will sell the product through a physical storefront, online, or through both distribution channels. When it's sold in a storefront, what kind of physical product placement does it get? When it's sold online, what kind of digital product placement does it get?

Gambling

Playing games of chance for money.

Population Density

Population density is a statistic that tells you how many people live in a certain area. ... This type of measurement is called arithmetic density, and is reported as the total number of people per land area.

Price Elasticity of Demand

Price elasticity of demand is a measurement of the change in consumption of a product in relation to a change in its price.

Price

Price refers to how much the company will sell the product for. When establishing a price, companies must consider the unit cost price, marketing costs, and distribution expenses. Companies must also consider the price of competing products in the marketplace and whether their proposed price point is sufficient to represent a reasonable alternative for consumers.

Private Equity

Private equity is an alternative investment class and consists of capital that is not listed on a public exchange. Private equity is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity. Institutional and retail investors provide the capital for private equity, and the capital can be utilized to fund new technology, make acquisitions, expand working capital, and to bolster and solidify a balance sheet.

Components to Marketing

Product Price Place Promotion

Product

Product refers to an item or items the business plans to offer to customers. The product should seek to fulfill an absence in the market, or fulfill consumer demand for a greater amount of a product already available. Before they can prepare an appropriate campaign, marketers need to understand what product is being sold, how it stands out from its competitors, whether the product can also be paired with a secondary product or product line, and whether there are substitute products in the market.

Productivity

Productivity, in economics, measures output per unit of input, such as labor, capital or any other resource - and is typically calculated for the economy as a whole, as a ratio of gross domestic product (GDP) to hours worked. Labor productivity may be further broken down by sector to examine trends in labor growth, wage levels and technological improvement. Corporate profits and shareholder returns are directly linked to productivity growth. At the corporate level, where productivity is a measure of the efficiency of a company's production process, it is calculated by measuring the number of units produced relative to employee labor hours or by measuring a company's net sales relative to employee labor hours.

Promotion

Promotion, the fourth P, is the integrated marketing communications campaign. Promotion includes a variety of activities such as advertising, selling, sales promotions, public relations, direct marketing, sponsorship, and guerrilla marketing. Promotions vary depending on what stage of the product life cycle the product is in. Marketers understand that consumers associate a product's price and distribution with its quality, and they take this into account when devising the overall marketing strategy.

Property Rights

Property rights define the theoretical and legal ownership of resources and how they can be used. These resources can be both tangible or intangible and can be owned by individuals, businesses, and governments. In many countries, including the United States, individuals generally exercise private property rights or the rights of private persons to accumulate, hold, delegate, rent, or sell their property. In economics, property rights form the basis for all market exchange, and the allocation of property rights in a society affects the efficiency of resource use.

Property Tax

Property tax is a tax paid on property owned by an individual or other legal entity, such as a corporation. Most commonly, property tax is a real estate ad-valorem tax, which can be considered a regressive tax. It is calculated by a local government where the property is located and paid by the owner of the property. The tax is usually based on the value of the owned property, including land. However, many jurisdictions also tax tangible personal property, such as cars and boats. The local governing body will use the assessed taxes to fund water and sewer improvements, and provide law enforcement, fire protection, education, road and highway construction, libraries, and other services that benefit the community. Deeds of reconveyance do not interact with property taxes.

Commercial Real Estate

Property that is used exclusively for business-related purposes or to provide a workspace rather than as a living space, which would instead constitute residential real estate. Most often, commercial real estate is leased to tenants to conduct income-generating activities. This broad category of real estate can include everything from from a single storefront to a huge shopping center. Commercial real estate includes several categories, such as retailers of all kinds, office space, hotels & resorts, strip malls, restaurants, and healthcare facilities.

Special Purpose

Property used by the public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools.

Quality of Life

Quality of life is a highly subjective measure of happiness that is an important component of many financial decisions. Factors that play a role in the quality of life vary according to personal preferences, but they often include financial security, job satisfaction, family life, health, and safety. Financial decisions can often involve a tradeoff wherein quality of life is decreased in order to save money or earn more money, or, conversely, quality of life can be increased by spending more money.

Quantitative Easing

Quantitative easing (QE) is a form of unconventional monetary policy in which a central bank purchases longer-term securities from the open market in order to increase the money supply and encourage lending and investment. Buying these securities adds new money to the economy, and also serves to lower interest rates by bidding up fixed-income securities. It also expands the central bank's balance sheet. When short-term interest rates are either at or approaching zero, the normal open market operations of a central bank, which target interest rates, are no longer effective. Instead, a central bank can target specified amounts of assets to purchase. Quantitative easing increases the money supply by purchasing assets with newly-created bank reserves in order to provide banks with more liquidity.

Research & Development (R&D)

R&D represents the activities companies undertake to innovate and introduce new products and services or to improve their existing offerings. R&D allows a company to stay ahead of its competition. Companies in different sectors and industries conduct R&D; pharmaceuticals, semiconductors, and technology companies generally spend the most.

Ranch

Ranch is a domestic architectural style originating in the United States. The ranch-style house is noted for its long, close-to-the-ground profile, and wide open layout

Materials

Raw materials are materials or substances used in the primary production or manufacturing of goods. Raw materials are commodities that are bought and sold on commodities exchanges worldwide. Traders buy and sell raw materials in what is called the factor market because raw materials are factors of production as are labor and capital.

Raw Materials

Raw materials are unprocessed materials used to produce a good.

Types of Inventory

Raw materials, Work-in-Progess, Finished goods.

Real Estate Sector

Real estate also refers to producing, buying and selling real estate. Real estate affects the U.S. economy by being a critical driver of economic growth.

Real Estate Industry

Real estate is a critical driver of economic growth in the U.S. In fact, housing starts—the number of new residential construction projects in any given month—released by the U.S. Census Bureau is a key economic indicator. The report includes building permits, housing starts, and housing completions data, divided into three different categories: 1. Single-family homes 2. Homes with 2-4 units 3. Multifamily buildings with five or more units, such as apartment complexes

Real Wage

Real wages are wages adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wages or unadjusted wages.

New Money

Recently acquired wealth through own efforts.

Vertical Monopoly

Refers to an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need.

Land (1/2)

Refers to the earth's surface down to the center of the earth and upward to the airspace above, including trees, minerals, and water.

Reinvestment

Reinvestment is the practice of using dividends, interest, or any other form of income distribution earned in an investment to purchase additional shares or units, rather than receiving the distributions in cash.

Pollution

Release of harmful materials into the environment.

Opportunity Cost/ Tradeoff

Represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics.

Inventory

Represents the company's raw materials, work-in-progress goods and finished goods.

Retail Sales

Retail sales tracks consumer demand for finished goods by measuring the purchases of durable and non-durable goods over a defined period of time. The measurement of retail sales tracks consumer demand for finished goods by measuring the purchases of durable and non-durable goods over a defined period of time. Data on retail sales is compiled once a month by the U.S. Bureau of the Census and includes sales from all food service and retail stores. An accurate measure of retail sales is vital for gauging the economic health of the U.S. because consumer spending accounts for two-thirds of gross domestic product (GDP). Examples (but not limited to): Apparel Department stores Food and beverage stores Electronics and appliances Furniture stores Gas stations Car dealers

Price-Earnings Ration (P/E)

Share Price / Earnings Per Share

Silicon Valley

Silicon Valley is a region in the south San Francisco Bay Area, made notable by the number of technology companies that started and are headquartered there, including Apple, Alphabet Inc.'s Google, Facebook, and Netflix. The term rose to prominence in the 1970s in reference to the regional businesses' development of and technological reliance on the silicon transistor, which is used in all modern microprocessors. A global center of technological innovation, Silicon Valley as a phrase refers to the industry and the companies that call it home, as well as to an innovative mindset, entrepreneurial spirit, and a lifestyle founded on technologically based wealth.

Skilled Labor

Skilled labor is a segment of the workforce that has specialized know-how, training, and experience to carry out more complex physical, or mental tasks than routine job functions. Skilled labor is generally characterized by higher education, expertise levels attained through training and experience, and will likewise correspond with higher wages.

Small-Business

Small and mid-size enterprises (SMEs) are businesses that maintain revenues, assets or a number of employees below a certain threshold. Each country has its own definition of what constitutes a small and medium-sized enterprise (SME). Certain size criteria must be met and occasionally the industry in which the company operates in is taken into account as well.

Socio-economics

Social economics is a branch of economics—and a social science—that focuses on the relationship between social behavior and economics. Social economics consists of two broad perspectives that, though opposite in their approach, can be thought of as complementary. The first, pioneered by Nobelist Gary Becker, applies the basic theoretical and applied tools of neoclassical microeconomics to areas of human behavior not traditionally considered as part of economics proper, such as crime and punishment, drug abuse, marriage, and family decisions. The second, applies the ideas of other social sciences, such as sociology, psychology, and identity group studies to subjects of an economic nature like consumer behavior or labor markets. These practitioners of social economics use history, current events, politics, and other social sciences to predict social trends that could potentially impact the economy.

Social Media

Social media is a computer-based technology that facilitates the sharing of ideas, thoughts, and information through the building of virtual networks and communities. By design, social media is Internet-based and gives users quick electronic communication of content. Content includes personal information, documents, videos, and photos. Users engage with social media via a computer, tablet, or smartphone via web-based software or applications.

Social Media Marketing

Social media marketing (SMM) is the use of social media websites and social networks to market a company's products and services. Social media marketing provides companies with a way to reach new customers, engage with existing customers, and promote their desired culture, mission, or tone. Also known as "digital marketing" and "e-marketing," social media marketing has purpose-built data analytics tools that allow marketers to track how successful their efforts are.

Socialism

Socialism is a populist economic and political system based on public ownership (also known as collective or common ownership) of the means of production. Those means include the machinery, tools, and factories used to produce goods that aim to directly satisfy human needs.

Soil

Soil is a mixture of organic matter, minerals, gases, liquids, and organisms that together support life. Earth's body of soil, called the pedosphere, has four important functions: as a medium for plant growth. as a means of water storage, supply and purification. as a modifier of Earth's atmosphere.

Chemicals

Some companies specialize in refining oil and gas into specialty chemicals, although many larger oil producers such as Exxon Mobil are integrated energy producers, meaning they produce multiple types of energy and control the entire process.

Specialization

Specialization is a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency. Many countries, for example, specialize in producing the goods and services that are native to their part of the world, and they trade them for other goods and services. This specialization is thus the basis of global trade, as few countries have enough production capacity to be completely self-sustaining.

Stakeholder Capitalism

Stakeholder capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders. Among the key stakeholders are customers, suppliers, employees, shareholders and local communities. Under this system, a company's purpose is to create long-term value and not to maximize profits and enhance shareholder value at the cost of other stakeholder groups. Supporters of stakeholder capitalism believe that serving the interests of all stakeholders, as opposed to only shareholders, is essential to the long-term success and health of any business. Notably, they make the case for stakeholder capitalism being a sensible business decision in addition to being an ethical choice. Examples: - Paying fair wages - Reducing the CEO-worker pay ratio - Ensuring safety in the workplace - Lobbying for higher tax rates and avoiding tax loopholes - Providing good customer service - Engaging in honest marketing practices - Investing in local communities - Preventing environmental damage

Standard of Living

Standard of living is the material well being of the average person in a given population. It is typically measured using gross domestic product (GDP) per capita. Standard of living and quality of life utilize some of the same data, but standard of living represents a more physical aspect of life while quality of life represents the more intangible aspects. One alternative standard of living data set is the Human Development Index (HDI), which uses many factors from life expectancy and education, to gross national income (GNI), and homicide rates

State Income Tax

State income tax is a direct tax levied by a state on your income. Income is what you earned in or from the state. In your state of residence it may mean all your income everywhere. Like federal tax, state income tax is self-assessed, which means taxpayers file required state tax returns.

State Income Tax

State income tax is a direct tax levied by a state on your income. Income is what you earned in or from the state. In your state of residence, it may mean all your income everywhere. Like federal tax, state income tax is self-assessed, which means taxpayers file required state tax returns.

Factor Price Equalization Theorem

States that the prices of identical factors of production, such as the wage rate or the rent of capital, will be equalized across countries as a result of international trade in commodities.

Strategic Management

Strategic management is the management of an organization's resources to achieve its goals and objectives. Strategic management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization. Understanding Strategic Management Strategic management is divided into several schools of thought. A prescriptive approach to strategic management outlines how strategies should be developed, while a descriptive approach focuses on how strategies should be put into practice. These schools differ on whether strategies are developed through an analytic process, in which all threats and opportunities are accounted for, or are more like general guiding principles to be applied.

Student Loan Debt

Student debt is typically incurred when a student uses loans to cover the portion of tuition that has not otherwise been paid for through their own assets, grants, loans taken out by parents or guardians, or by scholarships. While it is possible for students to save money to put towards the cost of higher education, the escalating price of that education at many institutions increasingly narrows the plausibility of covering such costs without some form of financial assistance.

Swing Trading

Swing trading involves taking trades that last a couple of days up to several months in order to profit from an anticipated price move. Swing trading exposes a trader to overnight and weekend risk, where the price could gap and open the following session at a substantially different price. Swing traders can take profits utilizing an established risk/reward ratio based on a stop loss and profit target, or they can take profits or losses based on a technical indicator or price action movements.

Tax-Exempt Income

Tax-exempt interest is interest income that is not subject to federal income tax. In some cases, the amount of tax-exempt interest a taxpayer earns can limit the taxpayer's qualification for certain other tax breaks. The most common sources of tax-exempt interest come from municipal bonds or income-producing assets inside of Roth retirement accounts.

American Recovery and Reinvestment Act (ARRA) 2009

The American Recovery and Reinvestment Act of 2009 (ARRA) was a piece of fiscal stimulus legislation passed by the U.S. Congress in response to the Great Recession of 2008. It is more commonly known as the "stimulus package of 2009" or simply the "Obama stimulus." The ARRA package included a series of federal government expenditures aimed at countering the job losses associated with the 2008 recession. Tax relief for families, including withholding reductions up to $800 per family and a nearly $70 billion extension of the alternative minimum tax.  Over $120 billion in new spending on infrastructure projects.  Healthcare expansion, including $87 billion in aid to states to help cover additional recession-related Medicaid costs. Over $100 billion in education spending, including teacher salary support and Head Start programs.

American Dream

The American dream is the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American dream is achieved through sacrifice, risk-taking, and hard work, rather than by chance. Examples: Home ownership (property rights), Education, and Declaration of Independence... "We hold these truths to be self-evident, that all are created equal, that they are endowed by their creator with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness."

Brexit

The British Exit from the European Union.

Consumer Confidence Index (CCI)

The Consumer Confidence Index (CCI) is based on the premise that if consumers are optimistic, they will spend more and stimulate the economy but if they are pessimistic then their spending patterns could lead to a recession.

Dow Jones Industrial Average (DJIA)

The Dow Jones Industrial Average (DJIA), also known as the Dow 30, is a stock market index that tracks 30 large, publicly-owned blue-chip companies trading on the New York Stock Exchange and the NASDAQ. The Dow Jones is named after Charles Dow, who created the index in 1896 along with his business partner Edward Jones. The DJIA is the second oldest U.S. market index; the first was the Dow Jones Transportation Average. The DJIA was designed to serve as a proxy for the health of the broader U.S. economy.

Export-Import Bank

The Export-Import Bank (EXIM) is the United States export credit agency, tasked with fostering international trade by American businesses by financing export and import operations. The EXIM provides finance and insurance services to support U.S. business activity in countries where geopolitical or commercial risk makes obtaining private financing difficult or impossible. Its loans, loan guarantees, and insurance are given to foreign buyers to finance purchases of products from American exporting businesses.

The Federal Reserve

The Federal Reserve was founded by U.S. Congress in 1913. Its creation was precipitated by repeated financial panics that afflicted the U.S. economy over the previous century, leading to severe economic disruptions due to bank failures and business bankruptcies. A crisis in 1907 led to calls for an institution that would prevent panics and disruptions. Referred to simply as the Fed, it has broad power to take measures to ensure there is financial stability in the system. It is also the main regulator of the country's financial institutions. Banks will often turn to the Fed as a last resort where they can borrow money when there is nowhere else to go.

Income-based Housing

The GI Bill, also known as the Serviceman's Readjustment Act of 1944, was enacted by Congress and signed into law by former President Franklin D. Roosevelt to provide various benefits to World War II veterans. Today, the GI Bill refers to any U.S. Department of Veterans Affairs education benefit, such as education grants and stipends, earned by active-duty service members, veterans, and their families.

Great Depression *(1929-1946)

The Great Depression was the greatest and longest economic recession in modern world history. It began with the U.S. stock market crash of 1929 and did not end until 1946 after World War II. Economists and historians often cite the Great Depression as the most catastrophic economic event of the 20th century.

Great Recession (2007-2009)

The Great Recession was the sharp decline in economic activity during the late 2000s. It is considered the most significant downturn since the Great Depression. The term Great Recession applies to both the U.S. recession, officially lasting from December 2007 to June 2009, and the ensuing global recession in 2009. The economic slump began when the U.S. housing market went from boom to bust, and large amounts of mortgage-backed securities (MBS's) and derivatives lost significant value.

HMI as it relates to the Overall state of the economy

The HMI displays a close correlation with U.S. single-family housing starts, which refers to the start of construction on privately-owned homes. Housing starts data are key indicators of how the U.S. economy is faring and are supplied monthly by the U.S. Census Bureau.

International Monetary Fund (IMF)

The International Monetary Fund (IMF) is an international organization that promotes global economic growth and financial stability, encourages international trade, and reduces poverty.

Laffer Curve

The Laffer Curve describes the relationship between tax rates and total tax revenue, with an optimal tax rate that maximizes total government tax revenue. If taxes are too high along the Laffer Curve, then they will discourage the taxed activities, such as work and investment, enough to actually reduce total tax revenue. In this case, cutting tax rates will both stimulate economic incentives and increase tax revenue. The Laffer Curve was used as a basis for tax cuts in the 1980's with apparent success, but criticized on practical grounds on the basis of its simplistic assumptions, and on economic grounds that increasing government revenue might not always be optimal.

New York Stock Exchange (NYSE)

The New York Stock Exchange (NYSE), which dates back to 1792, is the largest stock exchange in the world based on the total market capitalization of its listed securities.  Many of the oldest publicly traded U.S. companies are listed on the Big Board, the nickname for the NYSE. The Intercontinental Exchange now owns the NYSE, having purchased the exchange in 2013.

OECD (Organization for Economic Cooperation and Development)

The OECD is variously referred to as a think tank or a monitoring group. Its stated goal is to shape policies that foster prosperity, equality, opportunity and well-being for all.  Over the years, it has dealt with a range of issues, including raising the standard of living in member countries, contributing to the expansion of world trade, and promoting economic stability. The OECD was established on Dec. 14, 1960, by 18 European nations, plus the United States and Canada.  It has expanded over time to include members from South America and the Asia-Pacific region. It includes most of the world's highly developed economies.

Producer Price Index (PPI)

The PPI is different from the CPI in that it measures costs from the viewpoint of industries that make the products whereas the CPI measure prices from the perspective of consumers. The BLS separates PPI data into three main areas of classification namely industry, commodity, and commodity-based final and intermediate demand (FD-ID). The PPI is considered an objective tool for adjusting prices in long-term purchasing agreements.

Russell 2000

The Russell 2000 index measures the performance of the 2,000 smaller companies that are included in the Russell 3000 Index, which itself is made up of nearly all U.S. stocks. The Russell 2000 is widely regarded as a bellwether of the U.S. economy because of its focus on smaller companies that focus on the U.S. market. Many investors compare small-cap mutual fund performance against the movements of the Russell 2000 index. It is seen as better reflecting opportunities in that entire sub-section of the market than narrower indices, which may contain biases or more stock-specific risks that can distort performance. The S&P SmallCap 600 from Standard & Poor's is similar to the Russell 2000 but is not as widely referenced.

S&P 500

The S&P 500 Index, or the Standard & Poor's 500 Index, is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S. It is not an exact list of the top 500 U.S. companies by market capitalization because there are other criteria to be included in the index. The index is widely regarded as the best gauge of large-cap U.S. equities. Other common U.S. stock market benchmarks include the Dow Jones Industrial Average, or Dow 30, and the Russell 2000 Index, which represents the small-cap index. The S&P does not currently provide the total list of all 500 companies on its website, outside of the top 10. Many of the top companies in the S&P 500 include technology firms and financial businesses.

Securities and Exchange Commission (SEC)

The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of the securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States. It also approves registration statements for bookrunners among underwriting firms.

Betting

The act of gambling money on the outcome of a race, game, or other unpredictable event.

Destruction

The act of taking down or destroying something that was built.

Construction

The act or process of building, erecting, or constructing buildings, roads, or other structures.

Cash Flow

The amount of cash flowing in and out of the company. In order to keep a record of cash flows, organizations prepare a cash flow statement. Cash flow statements provide cash based information, whereas an income statement provides actual-based information.

Shareholders' Equity

The amount of money initially invested into the company plus any retained earnings, and it represents a source of funding for the business.

(Modern) Medicine

The art, science, and practice of caring for a patient and managing the diagnosis, prognosis, prevention, treatment or palliation of their injury or disease. Medicine encompasses a variety of health care practices evolved to maintain and restore health by the prevention and treatment of illness.

Automotive Industry

The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of the world's largest industries by revenue.

County

The basic administrative unit of local government.

Agriculture

The business sector encompassing farming and farming-related commercial activities. The business involves all the steps required to send an agricultural good to market: production, processing and distribution. It is an important component of the economy in countries with arable land, since agricultural products can be exported.

Operating Cash Flow (OCF)

The cash generated from day-to-day activities of the company.

Water Cycle

The continuous process by which water moves from Earth's surface to the atmosphere and back.

Cost of Living

The cost of living is the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time period. The cost of living is often used to compare how expensive it is to live in one city versus another. The cost of living is tied to wages. If expenses are higher in a city, such as New York, for example, salary levels must be higher so that people can afford to live in that city.

Wage Gap

The difference between the amount paid to different groups of people for their work

Extinction

The diminishing of a conditioned response; occurs in classical conditioning when an unconditioned stimulus (US) does not follow a conditioned stimulus (CS); occurs in operant conditioning when a response is no longer reinforced.

Dotcom Bubble

The dotcom bubble, also known as the internet bubble, was a rapid rise in U.S. technology stock equity valuations fueled by investments in internet-based companies during the bull market in the late 1990s. During the dotcom bubble, the value of equity markets grew exponentially, with the technology-dominated Nasdaq index rising from under 1,000 to more than 5,000 between the years 1995 and 2000. In 2001 and through 2002 the bubble burst, with equities entering a bear market.

Earned Income Tax Credit (EITC)

The earned income credit (EIC) is a tax credit that helps certain U.S. taxpayers with low earned incomes to report for the tax year. The EIC reduces the amount of tax owed on a dollar-for-dollar basis and may result in a refund to the taxpayer if the amount of the credit is greater than the amount of tax owed.

Business Climate

The economic and professional environment surrounding an industry or group of business enterprises. This includes the government and political attitude toward such businesses, their support for labor organizations, and their financial stability, among other aspects.

Effective Tax Rate

The effective tax rate is the percent of their income that an individual or a corporation pays in taxes. The effective tax rate for individuals is the average rate at which their earned income, such as wages, and unearned income, such as stock dividends, are taxed. The effective tax rate for a corporation is the average rate at which its pre-tax profits are taxed, while the statutory tax rate is the legal percentage established by law.

Energy Sector

The energy sector is a category of stocks that relate to producing or supplying energy. The energy sector or industry includes companies involved in the exploration and development of oil or gas reserves, oil and gas drilling, and refining. The energy industry also includes integrated power utility companies such as renewable energy and coal.

Mining

The extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef or placer deposit. These deposits form a mineralized commodity that is of economic interest to the miner.

Federal Income Tax

The federal income tax is the tax levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities. Federal income taxes are applied to all forms of earnings that make up a taxpayer's taxable income, such as employment earnings or capital gains.

Federal Poverty Line (FPL)

The federal poverty level (FPL), or the "poverty line", is an economic measure used to decide whether the income level of an individual or family qualifies them for certain federal benefits and programs.

Financial Sector

The financial sector is a section of the economy made up of firms and institutions that provide financial services to commercial and retail customers. This sector comprises a broad range of industries including banks, investment companies, insurance companies, and real estate firms.

Flat Yield Curve

The flat yield curve is a yield curve in which there is little difference between short-term and long-term rates for bonds of the same credit quality. This type of yield curve flattening is often seen during transitions between normal and inverted curves. The difference between a flat yield curve and a normal yield curve is that a normal yield curve slopes upward.

Food Industry

The food industry is a complex, global network of diverse businesses that supplies most of the food consumed by the world's population.

Shareholder Capitalism

The form of capitalism in which the interests of one stakeholder, the shareholder, dominate over all others. Companies operate with the sole purpose of maximizing profits and returning the highest possible dividends to shareholders.

Gold Standard

The gold standard is a monetary system backed by the value of physical gold. Gold coins, as well as paper notes backed by or which can be redeemed for gold, are used as currency under this system. The gold standard was popular throughout human civilization, often part of a bi-metallic system that also utilized silver. Most of the world's economies have abandoned the gold standard since the 1930s and now have free-floating fiat currency regimes.

Healthcare Sector

The healthcare sector consists of businesses that provide medical services, manufacture medical equipment or drugs, provide medical insurance, or otherwise facilitate the provision of healthcare to patients.

Quaternary Sector

The knowledge-based part of the economy, which typically includes knowledge-oriented economic sectors such as information technology; media; research and development; information-based services such as information-generation and information-sharing; and knowledge-based services such as consultation, education, financial planning, blogging, and designing; intellectual pursuits (education).

Law of Demand

The law of demand is one of the most fundamental concepts in economics. It works with the law of supply to explain how market economies allocate resources and determine the prices of goods and services that we observe in everyday transactions. The law of demand states that quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded. This occurs because of diminishing marginal utility. That is, consumers use the first units of an economic good they purchase to serve their most urgent needs first, and use each additional unit of the good to serve successively lower valued ends.

Diminishing Returns

The law of diminishing marginal returns is a theory in economics that predicts that after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output. For example, a factory employs workers to manufacture its products, and, at some point, the company operates at an optimal level. With all other production factors constant, adding additional workers beyond this optimal level will result in less efficient operations.

Law of One Price

The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered. The law of one price states that in the absence of friction between global markets, the price for any asset will be the same. The law of one price is achieved by eliminating price differences through arbitrage opportunities between markets. Market equilibrium forces would eventually converge the price of the asset.

Law of Supply

The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa. The law of supply says that as the price of an item goes up, suppliers will attempt to maximize their profits by increasing the quantity offered for sale.

Law of Supply & Demand

The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa. The law of supply says that as the price of an item goes up, suppliers will attempt to maximize their profits by increasing the quantity offered for sale. The law of supply says that a higher price will induce producers to supply a higher quantity to the market. Supply in a market can be depicted as an upward sloping supply curve that shows how the quantity supplied will respond to various prices over a period of time. Because businesses seek to increase revenue, when they expect to receive a higher price, they will produce more.

Transloading

The long-distance transfer of goods often involves transloading, or moving goods from one mode of transit to another en route to the final destination. Trucks, trains, planes, and container ships all may be used to transport containers of goods from their sources to their destinations. Many companies now outsource their shipping systems to logistics companies.

(Market) Price

The market price is the current price at which an asset or service can be bought or sold. The market price of an asset or service is determined by the forces of supply and demand. The price at which quantity supplied equals quantity demanded is the market price.

Middle-Class

The middle class is a description given to individuals and households who typically fall between the working class and the upper class within a socio-economic hierarchy. In Western cultures, persons in the middle class tend to have a higher proportion of college degrees than those in the working class, have more income available for consumption, and may own property. Those in the middle class often are employed as professionals, managers, and civil servants.

Normal Yield Curve

The normal yield curve is a yield curve in which short-term debt instruments have a lower yield than long-term debt instruments of the same credit quality. This gives the yield curve an upward slope. This is the most often seen yield curve shape, and it's sometimes referred to as the "positive yield curve." Analysts look to the slope of the yield curve for clues about how future short-term interest rates will trend. When there is an upward sloping yield curve, this typically indicates an expectation across financial markets of higher interest rates in the future; a downward sloping yield curve predicts lower rates.

Work-In-Progress

The partially finished goods waiting for completion and resale; work-in-progress inventory is otherwise known as inventory on the production floor. For example, a half-assembled airliner or a partially completed yacht would be work-in-process.

Secondary Sector

The portion of the economy concerned with manufacturing useful products through processing, transforming, and assembling raw materials.

Primary Sector

The portion of the economy concerned with the direct extraction of materials from Earth's surface, generally through agriculture, although sometimes by mining, fishing, and forestry.

Tertiary Sector

The portion of the economy concerned with transportation, communications, and utilities, sometimes extended to the provision of all goods and services to people in exchange for payment.

Poverty

The poverty gap is a ratio showing the average shortfall of the total population from the poverty line—the minimum level of income required to secure the basic necessities for survival. In other words, it reflects the intensity of poverty in a nation.

Geographical Pricing

The practice of adjusting an item's sale price based on the location of the buyer. Sometimes the difference in the sale price is based on the cost to ship the item to that location. But the difference may also be based on what amount the people in that location are willing to pay. Companies will try to maximize revenue in the markets in which they operate, and geographical pricing contributes to that goal.

Horizontal Monopoly

The process of a company increasing production of goods or services at the same part of the supply chain. A company may do this via internal expansion, acquisition or merger. The process can lead to monopoly if a company captures the vast majority of the market for that product or service.

Socialization

The process of internalizing the norms and ideologies of society. Socialization encompasses both learning and teaching and is thus "the means by which social and cultural continuity are attained". Socialization is strongly connected to developmental psychology.

Buying a Restaurant

The purchase price of a restaurant depends on the quality, the location and the profitability of the establishment. The quality of the building can save you thousands on potential remodeling costs and repairs.

Inventory Turnover

The ratio showing how many times a company has sold and replaced inventory during a given period. A slow turnover implies weak sales and possibly excess inventory, while a faster ratio implies either strong sales or insufficient inventory. Formula = Sales / Average Inventory A calculation that estimates the value or number of a particular good or set of goods during two or more specific time periods.

Premium

The specified amount of payment required periodically by an insurer to provide coverage under a given insurance plan for a defined period of time.

Sticky Wage Theory

The sticky wage theory hypothesizes that employee pay tends to respond slowly to changes in company performance or to the economy. According to the theory, when unemployment rises, the wages of those workers that remain employed tend to stay the same or grow at a slower rate rather than falling with the decrease in demand for labor. Specifically, wages are often said to be sticky-down, meaning that they can move up easily but move down only with difficulty. The theory is attributed to the economist John Maynard Keynes, who called the phenomenon "nominal rigidity" of wages.

Stock Market

The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Such financial activities are conducted through institutionalized formal exchanges or over-the-counter (OTC) marketplaces which operate under a defined set of regulations. There can be multiple stock trading venues in a country or a region which allow transactions in stocks and other forms of securities.

Thermodynamics

The study of energy transformations that occur in a collection of matter.

International Economy

The study of the politics of trade, monetary, and other economic relations among nations, and their connection to other transnational forces.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates.

Information Technology (IT) Sector

The technology sector is the category of stocks relating to the research, development, or distribution of technologically based goods and services. This sector contains businesses revolving around the manufacturing of electronics, creation of software, computers, or products and services relating to information technology.

Telecommunications Sector

The telecommunication sector is made up of companies that make communication possible on a global scale, whether it is through the phone or the Internet, through airwaves or cables, through wires or wirelessly. These companies created the infrastructure that allows data in words, voice, audio, or video to be sent anywhere in the world. The largest companies in the sector are telephone (both wired and wireless) operators, satellite companies, cable companies, and Internet service providers.

Fortune 500

The term Fortune 500 refers to a list of 500 of the largest companies in the United States compiled by Fortune magazine every year. Companies are ranked by their annual revenues for their respective fiscal years. This list includes both public and private companies using publicly available revenue data. To be a Fortune 500 company is widely considered to be a mark of prestige.

Audit

The term audit usually refers to a financial statement audit. A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent. The audit can be conducted internally by employees of the organization or externally by an outside Certified Public Accountant (CPA) firm.

Business Model

The term business model refers to a company's plan for making a profit. It identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses. Business models are important for both new and established businesses. They help new, developing companies attract investment, recruit talent, and motivate management and staff. Established businesses should regularly update their business plans or they'll fail to anticipate trends and challenges ahead. Business plans help investors evaluate companies that interest them.

Commercial

The term commercial refers to activities of commerce—business operations intended for an exchange on the market with the goal of earning profits. The non-commercial activity also exists in the form of non-profit organizations or government agencies. In financial markets, the term is used to describe a trading activity that is hedged using derivatives contracts.

Mobile Advertisement

The term mobile advertising refers to any form of advertising that appears on mobile devices such as smartphones and tablet computers. Companies advertise on these devices through text ads via SMS or through banner advertisements that appear embedded on a mobile website. They may also be found through downloaded apps including mobile games.

Social Capital

The term social capital refers to a positive product of human interaction. The positive outcome may be tangible or intangible and may include useful information, innovative ideas, and future opportunities. It can be used to describe the contribution to an organization's success that can be attributed to personal relationships and networks, both within and outside an organization. It can also be used to describe the personal relationships within a company that help build trust and respect among employees, leading to enhanced company performance.

Startup

The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists.

Upper-Class

The term upper class refers to a group of individuals who occupy the highest place and status in society. These people are considered the wealthiest, lying above the working and middle class in the social hierarchy. Individuals who make up the upper class have higher levels of disposable income and exert more control over the use of natural resources. While the upper class makes up a small percentage of the overall population, it controls a disproportionately large amount of the overall wealth.

Textile Industry

The textile industry is primarily concerned with the design, production and distribution of yarn, cloth and clothing. The raw material may be natural, or synthetic using products of the chemical industry. Cotton is the world's most important natural fiber.

Gentrification

The transformation of a city neighborhood from low value to high value. Gentrification is also viewed as a process of urban development in which a neighborhood or portion of a city develops rapidly in a short period of time, often as a result of urban-renewal programs. This process is often marked by inflated home prices and displacement of a neighborhood's previous residents.

Telecommunication

The transmission of information by various types of technologies over wire, radio, optical or other electromagnetic systems.

Utilities Sector

The utilities sector refers to a category of companies that provide basic amenities, such as water, sewage services, electricity, dams, and natural gas.

World Economy

The world economy or the global economy is the economy of all humans of the world, referring to the global economic system which includes all economic activities which are conducted both within and between nations, including production, consumption, economic management, work in general, exchange of financial values and trade of goods and services.

Oil & Gas Energy Production

These are the companies that drill, pump, and produce oil and natural gas. Production typically involves pulling oil out of the ground.

Economic Discrimination

These factors can include job availability, wages, the prices and/or availability of goods and services, and the amount of capital investment funding available to minorities for business.

High-Frequency Trading (HFT)

These strategies use sophisticated algorithms to exploit small or short-term market inefficiencies up to several thousand times in a single day.

Day Trading Strategy: Scalping

This strategy attempts to make numerous small profits on small price changes throughout the day, and may also include identifying short-lived arbitrage opportunities.

Day Trading Strategy: Range Trading

This strategy primarily uses support and resistance levels to determine buy and sell decisions. This trading style may also go by the name swing trading if positions are held for weeks rather than hours or days.

Day Trading Strategy: News-based Trading

This strategy typically seizes trading opportunities from the heightened volatility around news events and headlines.

Financial Leverage Ratio

Total Assets/ Total Equity

Debt Ratio

Total Debt/ Total Assets

Decimal Odds

Total Payout = Stake x Decimal Odd Number. Example: Donald Trump 4.00 and Joe Biden 1.30 If you wager $100 on Donald Trump: $100 x 4.00 = $400; Net Profit = $300. If you wager $100 on Joe Biden: $100 x 1.30 = $130; Net Profit = $130.

Total Housing Expense

Total housing expense is the sum of a homeowner's monthly mortgage principal and interest payments plus any other monthly expenses associated with their home such as insurance, taxes or utilities. Total housing expense is a key component in the calculation of a borrower's housing expense ratio which is used in the underwriting process for a mortgage loan.

Fractional Odds

Total payout = [Stake x (Numerator/Denominator) + Stake where the numerator is a fractional odd. Example: Golden State Warriors: 10/11 Odds to win NBA CHAMPIONSHIP. [$100 x (10/11) ] = If You Win You Will Receive: original stake ($100) + fraction of your original stake for every every dollar amount (10/11 of $100 or $90.91). Original Stake = $100 Profit = $91 Total Payout = $191

Tourism

Tourism is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours.

Town House

Townhouses are multi-floor homes that share one to two walls with adjacent properties but have their own entrances. In the suburbs, townhouses are often uniform homes built in a distinct community that may have its own homeowners' association.

Transportation

Transport, or transportation, is the movement of humans, animals and goods from one location to another. In other words, the action of transport is defined as a particular movement of an organism or thing from a point A to a point B. Modes of transport include air, land, water, cable, pipeline and space.

Treasury Bonds (T-Bonds)

Treasury bonds (T-bonds) are fixed-rate U.S. government debt securities with a maturity range between 10 and 30 years. T-bonds pay semiannual interest payments until maturity, at which point the face value of the bond is paid to the owner. Along with Treasury bills, Treasury notes, and Treasury Inflation-Protected Securities (TIPS), Treasury bonds are one of four virtually risk-free government-issued securities.

Treasury Yield

Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations. Looked at another way, the Treasury yield is the effective interest rate that the U.S. government pays to borrow money for different lengths of time. Treasury yields don't just influence how much the government pays to borrow and how much investors earn by buying government bonds. They also influence the interest rates that individuals and businesses pay to borrow money to buy real estate, vehicles, and equipment. Treasury yields also tell us how investors feel about the economy. The higher the yields on 10-, 20- and 30-year Treasuries, the better the economic outlook.

Trickle-Down Theory

Trickle-down economics, or "trickle-down theory," states that tax breaks and benefits for corporations and the wealthy will trickle down to everyone else. It argues for income and capital gains tax breaks or other financial benefits to large businesses, investors, and entrepreneurs to stimulate economic growth. The argument hinges on two assumptions: All members of society benefit from growth, and growth is most likely to come from those with the resources and skills to increase productive output.

Community College

Type of college with up to 2-year programs leading to certificates, diplomas, or associate degrees.

2019 Federal Budget

U.S. Budget (2019)

U.S. Federal Government Tax Revenue

U.S. federal tax revenue is the total tax receipts received by the federal government each year. Most of it is paid either through income taxes or payroll taxes.

American Odds

Underdog is given a + and Favorite is given a - Example: Duke vs Syracuse. Duke -760 Syracuse +585 If one were to bet on Syracuse to win the game as the underdog, that person would be wagering $100 + $585 if Syracuse were to win the game for a total payout of $685. If one were to bet on Duke to win the game as the favorite, that person would be wagering $100 for + 760 if Duke were to win the game for a total payout of $860.

Unemployment Formula

Unemployed/Labor Force * 100 = %

Income Inequality

Uneven distribution of income across an economy. Causes can vary by: region, gender, education, social status

Unskilled Labor

Unskilled labor is used to refer to a segment of the workforce associated with a limited skill set or minimal economic value for the work performed. Unskilled labor is generally characterized by a lower educational attainment, such as a high school diploma, GED or lack thereof, and typically results in smaller wages. Work that requires no specific education level or specialized experience is often available to the unskilled labor force.

Value

Value is the monetary, material, or assessed worth of an asset, good, or service. "Value" is attached to a myriad of concepts including shareholder value, the value of a firm, fair value, and market value.

Variable Cost

Variable costs, like the name implies, are comprised of costs that vary with production.

Cash Equivalents

Very safe assets that can readily converted into cash, such as U.S. Treasuries.

EU-Vietnam Free Trade Agreement

Vietnam is the EU's 17th trade in goods partner and the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN). The EU's main exports to Vietnam are high tech products, including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products. Vietnam's main exports to the EU are telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture. With a total foreign direct investment stock of €6.1 billion (2017), the EU is one of the largest foreign investors in Vietnam. The largest sector of investment by the EU is industrial processing and manufacturing.

Volatility

Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index. In the securities markets, volatility is often associated with big swings in either direction. For example, when the stock market rises and falls more than one percent over a sustained period of time, it is called a "volatile" market. An asset's volatility is a key factor when pricing options contracts.

Wall Street

Wall Street is a street located in the lower Manhattan section of New York City that is the home of the New York Stock Exchange or NYSE. Wall Street has also been the historic headquarters of some of the largest U.S. brokerages and investment banks. Today, Wall Street is used as an umbrella term to describe the financial markets and the companies that trade publicly on exchanges throughout the U.S.

How Container Shipping Works

Water is the CHEAPEST mode of transportation; containers have lowered the cost of insurance and made theft near impossible; shipping costs have decreased drastically over the years.

Wealth Tax

Wealth tax is a tax based on the market value of owned assets. Although many developed countries choose to tax wealth, the United States has historically favored taxing income. Recently, however, the immense and increasing disparity in wealth in the United States—as of 2018 the wealthiest 10% owned 70% of the country's wealth while the richest 1% owned 32%, according to Federal Reserve Board—caused politicians such as Bernie Sanders and Elizabeth Warren to propose a wealth tax in the run-up to the 2020 Presidential election.

Natural Disaster

Weather data suggest that natural disasters are on the rise, due in part to climate change and increased building in vulnerable areas. Businesses often suffer direct expenses, such as the cost of renovating damaged property and equipment, as well as indirect expenses from lost revenue. Researchers have found that the economic impact tends to be regional and fairly short-lived—even larger storms have had a relatively small impact on domestic GDP.

Scarcity

While land isn't considered rare, the total supply is fixed.

Immobility

While some parts of land are removable and the topography can be altered, the geographic location of any parcel of land can never be changed.

Wholesaleing

Wholesaling is the act of buying goods in bulk from a manufacturer at a discounted price and selling to a retailer for a higher price, for them to repackage and in turn resell in smaller quantities at an even higher price to consumers. Due to the large quantities purchased from the manufacturer at a discounted price, the wholesaler can also pass on this discount to retailers. The retailer sells at a price that reflects the overall cost of doing business.

Wholesaling

Wholesaling is the act of buying goods in bulk from a manufacturer at a discounted price and selling to a retailer for a higher price, for them to repackage and in turn resell in smaller quantities at an even higher price to consumers. Due to the large quantities purchased from the manufacturer at a discounted price, the wholesaler can also pass on this discount to retailers. The retailer sells at a price that reflects the overall cost of doing business.

Deterioration

Worsening; decline.

Yield

Yield is a return measure for an investment over a set period of time, expressed as a percentage. Yield includes price increases as well as any dividends paid, calculated as the net realized return divided by the principal amount (i.e. amount invested). Higher yields are perceived to be an indicator of lower risk and higher income, but a high yield may not always be a positive, such as the case of a rising dividend yield due to a falling stock price.

Zero Bound

Zero-bound is an expansionary monetary policy tool where a central bank lowers short-term interest rates to zero, if needed, to stimulate the economy. A central bank that is forced to enact this policy must also pursue other, often unconventional, methods of stimulus to resuscitate the economy.

Zombie Companies

Zombies are companies that earn just enough money to continue operating and service debt but are unable to pay off their debt. Such companies, given that they just scrape by meeting overheads (wages, rent, interest payments on debt, for example), have no excess capital to invest to spur growth. Zombie companies are typically subject to higher borrowing costs and may be one just event—market disruption or a poor quarter performance—away from insolvency or a bailout. Zombies are especially dependent on banks for financing, which is fundamentally their life support. Zombie companies are also known as the "living dead" or "zombie stocks."

Zoning Laws

Zoning refers to municipal or local laws or regulations that govern how real property can and cannot be used in certain geographic areas. For example, zoning laws can limit commercial or industrial use of land in order to prevent oil, manufacturing, or other types of businesses from building in residential neighborhoods. These laws can be modified or suspended if the construction of a property will serve to help the community advance economically.

Phillips Curve

an economic concept developed by A. W. Phillips stating that inflation and unemployment have a stable and inverse relationship. The theory claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment. However, the original concept has been somewhat disproven empirically due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment.

Top 20 Biggest Economies in the world today (2020)

1. United States 2. China 3. Japan 4. Germany 5. India 6. United Kingdom 7. France 8. Italy 9. Brazil 10. Canada 11. Russia 12. South Korea 13. Spain 14. Australia 15. Mexico 16. Indonesia 17. Netherlands 18. Saudi Arabia 19. Turkey 20. Switzerland

Free Market Capitalist Economy

An economy where the government imposes few or no restrictions and regulations on buyers and sellers.

Capital

Capital is a term for financial assets, such as funds held in deposit accounts and/or funds obtained from special financing sources. Capital can also be associated with capital assets of a company that requires significant amounts of capital to finance or expand.

Electronic Commerce (E-Commerce)

Electronic commerce or e-commerce is a business model that lets firms and individuals buy and sell things over the internet. E-commerce operates in all four of the following major market segments: Business to business Business to consumer Consumer to consumer Consumer to business

Frictional Unemployment

Occurs as a result of people voluntarily changing jobs within an economy.

Old Money

Old money is "the inherited wealth of established upper-class families" or "a person, family, or lineage possessing inherited wealth".

Retail Sales

Retail sales tracks consumer demand for finished goods by measuring the purchases of durable and nondurable goods over a defined period of time.

Property Taxes

Significant annual expense. The amount of the property tax is dependent upon the value of the property itself. Exemptions include its use and local property tax rate. Property assessments are conducted annually or when there's a change in legal ownership. Property can be used for residential, commercial, farm, or other purposes.

Working-Age Population

The working-age population is the total population in an area that is considered able and likely to work based on the number of people in a predetermined age range. The working-age population measure is used to give an estimate of the total number of potential workers within an economy.

Cyclical Unemployment

Variation in the number of unemployed workers over the course of economic upturns and downturns.

401k Plan

A 401(k) plan is a tax-advantaged, defined-contribution retirement account offered by many employers to their employees. It is named after a section of the U.S. Internal Revenue Code. Workers can make contributions to their 401(k) accounts through automatic payroll withholding, and their employers can match some or all of those contributions. The investment earnings in a traditional 401(k) plan are not taxed until the employee withdraws that money, typically after retirement. In a Roth 401(k) plan, withdrawals can be tax-free.

Treasury Notes (T-Notes)

A Treasury note (T-note for short) is a marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. Treasury notes are available from the government with either a competitive or noncompetitive bid. With a competitive bid, investors specify the yield they want, at the risk that their bid may not be approved; with a noncompetitive bid, investors accept whatever yield is determined at auction.

Bank

A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.

Capital Gains Tax

A capital gains tax is a tax on the growth in value of investments incurred when individuals and corporations sell those investments. When the assets are sold, the capital gains are referred to as having been "realized." The tax doesn't apply to unsold investments or "unrealized capital gains," so stock shares that appreciate every year will not incur capital gains taxes until they are sold, no matter how long you happen to hold them.  Day traders and others taking advantage of the greater ease of trading online need to be aware that any profits they make from buying and selling assets held less than a year are not just taxed--they are taxed at a higher rate. The U.S. capital gains tax only applies to profits from the sale of assets held for more than a year, referred to as "long term capital gains." The rates are 0%, 15%, or 20%, depending on your tax bracket. Short-term capital gains tax applies to assets held for a year or less, and are taxed as ordinary income.  Taxable capital gains for the year are reduced by the amount of capital losses incurred in that year. A capital loss is when you sell an investment for less than you purchased it for. The total of long-term capital gains minus any capital losses is known as the "net capital gain," which is the amount capital gains taxes are assessed on.

Central Bank (The Fed)

A central bank is a financial institution that is responsible for overseeing the monetary system and policy of a nation or group of nations, regulating its money supply, and setting interest rates. Central banks enact monetary policy, by easing or tightening the money supply and availability of credit, central banks seek to keep a nation's economy on an even keel. A central bank sets requirements for the banking industry, such as the amount of cash reserves banks must maintain vis-à-vis their deposits. A central bank can be a lender of last resort to troubled financial institutions and even governments.

Command Economy

A command economy is a system where the government, rather than the free market, determines what goods should be produced, how much should be produced, and the price at which the goods are offered for sale. It also determines investments and incomes. The command economy is a key feature of any communist society. Cuba, North Korea, and the former Soviet Union are examples of countries that have command economies, while China maintained a command economy for decades before transitioning to a mixed economy that features both communistic and capitalistic elements.

Common Resource

A common resource (or the "commons") is any scarce resource, such as water or pasture, that provides users with tangible benefits but which nobody in particular owns or has exclusive claim to. A major concern with common resources is overuse, especially when there are poor social-management systems in place to protect the core resource.

Complementary Good

A complementary good or service is an item used in conjunction with another good or service. Usually, the complementary good has little to no value when consumed alone, but when combined with another good or service, it adds to the overall value of the offering. A product can be considered a complement when it shares a beneficial relationship with another product offering, for example, an iPhone and the apps used with it.

Copay

A copay is a fixed out-of-pocket amount paid by an insured for covered services. It is a standard part of many health insurance plans. Insurance providers often charge co-pays for services such as doctor visits or prescription drugs. Copays are a specified dollar amount rather than a percentage of the bill, and they are usually paid at the time of service. Not all medical services ask you for a copay. For example, some insurance companies do not require a copay for annual physicals.

Credit Default Swaps (CDS)

A credit default swap (CDS) is a financial derivative or contract that allows an investor to "swap" or offset his or her credit risk with that of another investor. For example, if a lender is worried that a borrower is going to default on a loan, the lender could use a CDS to offset or swap that risk. To swap the risk of default, the lender buys a CDS from another investor who agrees to reimburse the lender in the case the borrower defaults. Most CDS will require an ongoing premium payment to maintain the contract, which is like an insurance policy.

Fixed Rate Loan

A fixed-rate mortgage is a home loan with a fixed interest rate for the entire term of the loan. Once locked-in, the interest rate does not fluctuate with market conditions.

Mixed Economy

A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. According to neoclassical theory, mixed economies are less efficient than pure free markets, but proponents of government interventions argue that the base conditions required for efficiency in free markets, such as equal information and rational market participants, cannot be achieved in practical application.

Mortgage

A mortgage is a debt instrument, secured by the collateral (usually a House) of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are also known as "liens against property" or "claims on property." With a fixed-rate mortgage, the borrower pays the same interest rate for the life of the loan.

Recession

A recession is a period of declining economic performance across an entire economy that lasts for several months. Businesses, investors, and government officials track various economic indicators that can help predict or confirm the onset of recessions, but they're officially declared by the NBER. A variety of economic theories have been developed to explain how and why recessions occur. Typically defined as 2 quarters of declining GDP

Sale

A sale is a transaction between two or more parties in which the buyer receives tangible or intangible goods, services, or assets in exchange for money. In some cases, other assets are paid to a seller. In the financial markets, a sale can also refer to an agreement that a buyer and seller make regarding the price of a security.

Shadow Banking

A shadow banking system is the group of financial intermediaries facilitating the creation of credit across the global financial system but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions. Examples of intermediaries not subject to regulation include hedge funds, unlisted derivatives, and other unlisted instruments, while examples of unregulated activities by regulated institutions include credit default swaps.

Supply Chain(s)

A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer. Companies develop supply chains so they can reduce their costs and remain competitive in the business landscape.

Adjustable Rate Loan

An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan.

Economy

An economy is the large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated. The production, consumption, and distribution of goods and services are used to fulfill the needs of those living and operating within the economy, which is also referred to as an economic system. An economy is the large set of inter-related production and consumption activities that aid in determining how scarce resources are allocated. In an economy, the production and consumption of goods and services are used to fulfill the needs of those living and operating within it. Market-based economies tend to allow goods to flow freely through the market, according to supply and demand.

Exchange Traded Fund (ETF)

An exchange traded fund (ETF) is a basket of securities that trade on an exchange, just like a stock. ETF share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds that only trade once a day after the market closes. ETFs can contain all types of investments including stocks, commodities, or bonds; some offer U.S. only holdings, while others are international. ETFs offer low expense ratios and fewer broker commissions than buying the stocks individually.

Import

An import is a good or service bought in one country that was produced in another. Imports and exports are the components of international trade. If the value of a country's imports exceeds the value of its exports, the country has a negative balance of trade (BOT), also known as a trade deficit.

Debt

Any amount a borrower owes a lender. The borrower pays the lender money interest based on risk levels: If a borrower has a high risk of not being able to pay back the lender then the borrower will have a higher interest rate and vice versa. Debt allows a borrower to make a high-valued purchase at a time when they lack the amount of funds to do so.

Legal Tender

Anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages. The national currency is legal tender in practically every country. A creditor is legally obligated to accept legal tender toward repayment of a debt. Legal tender is established by a statute which specifies the thing to be used as legal tender and the institution that is authorized to produce and issue it to the public

Bankruptcy

Bankruptcy is a legal proceeding involving a person or business that is unable to repay their outstanding debts. The bankruptcy process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common. All of the debtor's assets are measured and evaluated, and the assets may be used to repay a portion of outstanding debt.

Business Cycle

Business cycles are comprised of concerted cyclical upswings and downswings in the broad measures of economic activity—output, employment, income, and sales. The alternating phases of the business cycle are expansions and contractions (also called recessions). Recessions start at the peak of the business cycle—when an expansion ends—and end at the trough of the business cycle, when the next expansion begins. The severity of a recession is measured by the three D's: depth, diffusion, and duration, and the strength of an expansion by how pronounced, pervasive and persistent it is.

Business Ethics

Business ethics is the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities. The law often guides business ethics, but at other times business ethics provide a basic guideline that businesses can choose to follow to gain public approval.

Consumer Spending

Consumer spending (70% of GDP) is the total money spent on final goods and services by individuals and households for personal use and enjoyment in an economy. Contemporary measures of consumer spending include all private purchases of durable goods, nondurable goods, and services. Consumer spending can be regarded as complementary to personal saving, investment spending, and production in an economy.

Contract Theory

Contract theory is the study of how people and organizations construct and develop legal agreements. It analyzes how parties with conflicting interests build formal and informal contracts, even tenancy. Contract theory draws upon principles of financial and economic behavior as different parties have different incentives to perform or not perform particular actions. It is also useful for understanding forward contracts, and other legal contracts and their provisions. It also includes an understanding of letters of intent and memorandums of understanding.

Consumer Financial Protection Bureau (CFPB)

Created in 2010, the Consumer Financial Protection Bureau (CFPB) is a regulatory agency charged with overseeing consumer-related financial products and services. Some goals of the CFPB include preventing financial harm to consumers, educating and empowering them on financial topics, and providing data-driven insights. Individuals interested in financing for higher education, retirement, or homeownership can all find resources provided by the CFPB. Contrary to the bill that set up the agency, the Supreme Court of the United States (SCOTUS) ruled Jun. 29, 2020, that the President may remove the CFPB director for any reason.

Credit Markets

Credit market refers to the market through which companies and governments issue debt to investors, such as investment-grade bonds, junk bonds, and short-term commercial paper. Sometimes called the debt market, the credit market also includes debt offerings, such as notes and securitized obligations, including collateralized debt obligations (CDOs), mortgage-backed securities, and credit default swaps (CDS).

Economic Stimulus

Economic stimulus refers to targeted fiscal and monetary policy intended to elicit and economic response from the private sector. Economic stimulus is a conservative approach to expansionary fiscal and monetary policy that relies on encouraging private sector spending to make up for losses of aggregate demand. Fiscal stimulus measures are deficit spending and lowering taxes; monetary stimulus measures are produced by central banks and may include lowering interest rates. Economists still argue over the usefulness of coordinated economic stimulus, with some claiming that in the long run it can do more harm than short-term good.

Economics

Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources. Economics focuses on the actions of human beings, based on assumptions that humans act with rational behavior, seeking the most optimal level of benefit or utility. The building blocks of economics are the studies of labor and trade. Since there are many possible applications of human labor and many different ways to acquire resources, it is the task of economics to determine which methods yield the best results.

Fiscal Policy

Fiscal policy refers to the use of government spending and tax policies to influence economic conditions, especially macroeconomic conditions, including aggregate demand for goods and services, employment, inflation, and economic growth.

Income

Income is money that an individual or business receives in exchange for providing labor, producing a good or service, or through investing capital. Individuals most often earn income through wages or salary. Businesses earn income from selling goods or services above their cost of production. Tax authorities treat income earned through various means differently.

Inflation

Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time. The rise in the general level of prices, often expressed as a percentage means that a unit of currency effectively buys less than it did in prior periods.

Insurance

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured. Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or her property, or from liability for damage or injury caused to a third party.

Inventory

Inventory is the term for the goods available for sale and raw materials used to produce goods available for sale. Inventory represents one of the most important assets of a business because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders.

Microeconomics

Microeconomics is the social science that studies the implications of incentives and decisions, specifically about how those affect the utilization and distribution of resources. Microeconomics shows how and why different goods have different values, how individuals and businesses conduct and benefit from efficient production and exchange, and how individuals best coordinate and cooperate with one another. Generally speaking, microeconomics provides a more complete and detailed understanding than macroeconomics.

Money

Money is an economic unit that functions as a generally recognized medium of exchange for transactional purposes in an economy. Money provides the service of reducing transaction cost, namely the double coincidence of wants. Money originates in the form of a commodity, having a physical property to be adopted by market participants as a medium of exchange.

Negative Interest Rates

Negative interest rates occur when borrowers are credited interest rather than paying interest to lenders. While this is a very unusual scenario, it is most likely to occur during a deep economic recession when monetary policy and market forces have already pushed interest rates to their nominal zero bound.

New Economy

New economy is a buzzword to describe new, high-growth industries that are on the cutting edge of technology and are believed to be the driving force of economic growth and productivity. A new economy was first declared in the late 1990s as hi-tech tools, particularly the Internet and increasingly powerful computers, made their way into the consumer and business marketplace. The new economy was seen as a shift from a manufacturing and commodity-based economy to one that used technology to create new products and services at a rate that the traditional manufacturing economy could not match.

Payroll

Payroll is the total of all compensation a business must pay to its employees for a set period of time or on a given date. It is usually managed by the accounting or human resources department of a business; small-business payrolls may be handled directly by the owner or an associate. Increasingly, payroll is outsourced to specialized firms that handle paycheck processing, employee benefits and insurance, and accounting tasks such as tax withholding. Payroll can also refer to the list of employees of a business and the amount of compensation due to each of them. It is a major expense for most businesses and is almost always deductible, meaning the expense can be deducted from gross income lowering the taxable income of the company. Payroll can differ from one pay period to another because of overtime, sick pay, and other variables.

Political Economy

Political economy is an interdisciplinary branch of the social sciences that focuses on the interrelationships among individuals, governments, and public policy.

Privatization

Privatization occurs when a government-owned business, operation, or property becomes owned by a private, non-government party. Note that privatization also describes the transition of a company from being publicly traded to becoming privately held. This is referred to as corporate privatization.

Rent Expenses

Rent expense is the cost incurred by a business to utilize a property or location for an office, retail space, factory, or storage space. Rent expense is a type of fixed operating cost or an absorption cost for a business, as opposed to a variable expense. Rental expenses are often subject to a one- or two-year contract between the lessor and lessee, with options to renew.

Small Business

Small and mid-size enterprises (SMEs) are businesses that maintain revenues, assets or a number of employees below a certain threshold. Each country has its own definition of what constitutes a small and medium-sized enterprise (SME). Small and mid-size enterprises (SMEs) play an important role in the economy, employing vast numbers of people and helping to shape innovation. Governments regularly offer incentives, including favorable tax treatment and better access to loans, to help keep them in business.

10-Year Treasury Note

The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. The U.S. government partially funds itself by issuing 10-year Treasury notes.

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living. The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.

The Great Recession (2007-09)

The Great Recession was the sharp decline in economic activity during the late 2000s. It is considered the most significant downturn since the Great Depression. The term Great Recession applies to both the U.S. recession, officially lasting from December 2007 to June 2009, and the ensuing global recession in 2009. The economic slump began when the U.S. housing market went from boom to bust, and large amounts of mortgage-backed securities (MBS's) and derivatives lost significant value.

U.S. Treasury

The U.S. Treasury is a government department in charge of managing all federal finances. It is responsible for collecting taxes, paying bills, managing currency, government accounts, and public debt. The Department of the Treasury enforces finance and tax laws, as well as issuing treasury bonds, considered to be the safest and most liquid securities worldwide.

U.S. Dollar

The USD (United States dollar) is the official currency of the United States of America as well as many other territories and regions. The United States dollar is the most-used currency in the world and has a rich and varied history. The USD plays an important role in the world economy and has its own index, the USDX. The bulk of global foreign-exchange trades involve the USD. The USD is also considered the world's most stable currency.

Housing Market

The housing market is a good example of how supply and demand works within an industry. When the demand for housing is high, but supply is low, home prices often rise. When there is a glut of housing available in a market, homeowners may lower their prices due to less demand in the market.

Knowledge Economy

The knowledge economy is a system of consumption and production that is based on intellectual capital. In particular, it refers to the ability to capitalize on scientific discoveries and basic and applied research. This has come to represent a large component of all economic activity in most developed countries. In a knowledge economy, a significant component of value may thus consist of intangible assets such as the value of its workers' knowledge or intellectual property.

Labor Force

The labor force participation rate is a measure of an economy's active workforce. The formula for the number is the sum of all workers who are employed or actively seeking employment divided by the total noninstitutionalized, civilian working-age population.

Labor Market

The labor market, also known as the job market, refers to the supply of and demand for labor, in which employees provide the supply and employers provide the demand. It is a major component of any economy and is intricately linked to markets for capital, goods, and services.

Paycheck Protection Program (PPP)

The main stimulus for small businesses in the CARES Act is the Paycheck Protection Program (PPP), not to be confused with the economic theory of purchasing power parity. The $659 billion funded under the Small Business Administration (SBA)—Business Loans Program Account is intended to provide loans to businesses to guarantee eight weeks of payroll and other costs to help those businesses remain viable and allow their workers to pay their bills.

Money Supply

The money supply is all the currency and other liquid instruments in a country's economy on the date measured. The money supply roughly includes both cash and deposits that can be used almost as easily as cash. Governments issue paper currency and coin through some combination of their central banks and treasuries. Bank regulators influence money supply available to the public through the requirements placed on banks to hold reserves, how to extend credit and other regulation.

Prime Rate

The prime rate is the interest rate that commercial banks charge their most creditworthy corporate customers. The rates for mortgages, small business loans, and personal loans are based on prime. The most important and most used prime rate is the one that the Wall Street Journal publishes daily.

Savings

The savings rate is a measurement of the amount of money, expressed as a percentage or ratio, that a person deducts from his disposable personal income to set aside as a nest egg or for retirement. In economic terms, saving is a choice to forego some current consumption in favor of increased future consumption, so the savings rate reflects a person or group's rate of time preference. The savings rate is also related to the marginal propensity to save.

Sharing Economy

The sharing economy involves short-term peer-to-peer transactions to share use of idle assets and services or to facilitate collaboration. The sharing economy often involves some type of online platform that connects buyers and seller. The sharing economy is rapidly growing and evolving but faces significant challenges in the form of regulatory uncertainty and concerns about abuses.

Stock Market/Exchange

The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place.

Commercial Bank

The term commercial bank refers to a financial institution that accepts deposits, offers checking account services, makes various loans, and offers basic financial products like certificates of deposit (CDs) and savings accounts to individuals and small businesses. A commercial bank is where most people do their banking. Commercial banks make money by providing and earning interest from loans such as mortgages, auto loans, business loans, and personal loans. Customer deposits provide banks with the capital to make these loans.

Housing Starts

The term housing starts refers to the number of new residential construction projects that begin during any particular month. As such, it is a key economic indicator. Housing start statistics are released on or around the 17th of each month by the U.S. Commerce Department. The report includes building permits, housing starts, and housing completions data—all of which are compiled from surveys of homebuilders across the country.

Gross Domestic Product (GDP)

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country's economic health. Formula = G + I + C + X-M G = Government spending I = Investment C = Consumption X-M = Exports - Imports

Unemployment Rate

The unemployment rate is the percent of the labor force that is jobless. It is a lagging indicator, meaning that it generally rises or falls in the wake of changing economic conditions, rather than anticipating them. When the economy is in poor shape and jobs are scarce, the unemployment rate can be expected to rise. When the economy is growing at a healthy rate and jobs are relatively plentiful, it can be expected to fall.

10 Year Treasury Yield

Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations. Looked at another way, the Treasury yield is the effective interest rate that the U.S. government pays to borrow money for different lengths of time.

Universal Banks

Universal banking is a term for banks that offer a wider variety of services than their competitors, or when compared with traditional banks. Universal banking is not yet common in the United States, but it's growing; right now, banks in the United States focus more exclusively on investments than their European counterparts. Banks in a universal system may still choose to specialize in a subset of banking service, even though they technically offer much more to their client base.

Universal Basic Income (UBI)

Universal basic income is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement. The idea of universal basic income has gained momentum in the U.S. as automation increasingly replaces workers in manufacturing and other sectors of the economy.

Wage

Wage expense is the cost incurred by companies to pay hourly employees. This line item may also include payroll taxes and benefits paid to employees. Wage expense may be recorded as a line item in the expense portion of the income statement. 1 in 4 Americans live on a poverty wage; a Quarter of Americans can't earn learn a living wage (those seeking employment); the cost of medical and education has increased astronomically since 1995 (outpacing wage growth) Potential Policy Solutions: increase investment infrastructure, create more post-high school job opportunities, and career opportunities

Factor Payments

Wages + Interest + Rent + Profit

Welfare

Welfare refers to government-sponsored assistance programs for individuals and families in need, including programs as health care assistance, food stamps, and unemployment compensation. Welfare programs are typically funded through taxation. In the U.S., the federal government provides grants to each state through the Temporary Assistance for Needy Families (TANF) program. Eligibility for benefits is based on a number of factors, including income levels and family size.

Intellectual Property

a broad categorical description for the set of intangible assets owned and legally protected by a company from outside use or implementation without consent. An intangible asset is a non-physical asset that a company owns. Beijing has been accused by the U.S. and other nations of forcing IP transfers among Big Tech companies that do business in China.