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Financial Terms | |
Demand |
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Definition of DemandDemandAn amount desired, in the sense that people are willing and able to pay to obtain this amount. Always associated with a given price.
Related Terms:Aggregate DemandTotal quantity of goods and services demanded. Aggregate Demand CurveCombinations of the price level and income for which the goods and services market is in equilibrium, or for which both the goods and services market and the money market are in equilibrium. Demand DepositA bank deposit that can be withdrawn on demand, such as a deposit in a checking account. Demand depositsChecking accounts that pay no interest and can be withdrawn upon demand. Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Demand LoanA loan which must be repaid in full on demand. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. ![]() Demand master notesShort-term securities that are repayable immediately upon the holder's demand. Demand-Pull InflationInflation whose initial cause is excess demand rather than cost increases. See also cost-push inflation. Demand shockAn event that affects the demand for goods in services in the economy. Excess DemandA situation in which demand exceeds supply. Hedging demandsdemands for securities to hedge particular sources of consumption risk, beyond the usual Money market demand accountAn account that pays interest based on short-term interest rates. Precautionary demand (for money)The need to meet unexpected or extraordinary contingencies with a Speculative demand (for money)The need for cash to take advantage of investment opportunities that may arise. Transaction demand (for money)The need to accommodate a firm's expected cash transactions. ![]() Variable rated demand bond (VRDB)Floating rate bond that can be sold back periodically to the issuer. Warehouse demandThe demand for a part by an outlying warehouse. 45-Degree LineA line representing equilibrium in the goods and services market, on a diagram with aggregate demand on the vertical axis and aggregate supply on the horizontal axis. activity drivera measure of the demands on activities and, ADAggregate demand. Aggregate Expenditure CurveAggregate demand for goods and services drawn as a function of the level of national income. Appraisal rightsA right of shareholders in a merger to demand the payment of a fair price for their shares, as Arms indexAlso known as a trading index (TRIN)= (number of advancing issues)/ (number of declining Balance of PaymentsThe difference between the demand for and supply of a country's currency on the foreign exchange market. Benchmark interest rateAlso called the base interest rate, it is the minimum interest rate investors will Bill of exchangeGeneral term for a document demanding payment. BottleneckA resource whose capacity is unable to match or exceed that of the demand Call a. An option to buy a certain quantity of a stock or commodity for a Capacity utilizationThe proportion of capacity that is able to be utilized to fulfil customer demand for products Capital AccountThat part of the balance of payments accounts that records demands for and supplies of a currency arising from purchases or sales of assets. Commercial draftdemand for payment. company cost of capitalExpected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations. Consumption FunctionThe relationship between consumption demand and disposable income. More generally, it refers to the relationship between consumption demand and all factors that affect this demand. Cost driverThe most significant cause of the cost of an activity, a measure of the demand for an activity Cost-Push InflationInflation whose initial cause is cost increases rather than excess demand. See also demand-pull inflation. Crowding OutDecreases in aggregate demand which accompany an expansionary fiscal policy, dampening the impact of that policy. Current AccountThat part of the balance of payments accounts that records demands for and supplies of a currency arising from activities that affect current income, namely imports, exports, investment income payments such as interest and dividends, and transfers such as gifts, pensions, and foreign aid. Debt FinancingRaising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand. DisequilibriumThe absence of equilibrium. Disequilibrium implies excess demand or excess supply and pressure for change. DraftAn unconventional order in writing - signed by a person, usually the exporter, and addressed to the EquilibriumA position in which there is no pressure for change, where demand and supply are equal. Events of defaultContractually specified events that allow lenders to demand immediate repayment of a debt. Excess SupplyA situation in which supply exceeds demand. expected capacitya short-run concept that represents the Flexible Exchange RateAn exchange rate whose value is determined by the forces of supply and demand on the foreign exchange market. free cash flowGenerally speaking, this term refers to cash flow from Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Insured Retirement PlanThis is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today." management information system (MIS)a structure of interrelated elements that collects, organizes, and communicates Margin callA demand for additional funds because of adverse price movement. Maintenance margin Market clearingTotal demand for loans by borrowers equals total supply of loans from lenders. The market, Market MechanismThe system whereby using prices, the interaction of supply and demand allocates inputs and distributes outputs. Market price of riskA measure of the extra return, or risk premium, that investors demand to bear risk. The Market segmentation theory or preferred habitat theoryA biased expectations theory that asserts that the Material requirements planning (MRP)A computer-driven production methodology materials requirements planning (MRP)a computerbased information system that simulates the ordering and Money supplyM1-A: Currency plus demand deposits Negotiable order of withdrawal (NOW)demand deposits that pay interest. Open-end fundAlso called a mutual fund, an investment company that stands ready to sell new shares to the Optimum selling priceThe price at which profit is maximized, which takes into account the cost behaviour of fixed and variable costs and the relationship between price and demand for a product/service. Oversubscribed issueInvestors are not able to buy all of the shares or bonds they want, so underwriters must Poison putA covenant allowing the bondholder to demand repayment in the event of a hostile merger. Preferred habitat theoryA biased expectations theory that believes the term structure reflects the Price AdjusterA firm that reacts to excess supply or excess demand by adjusting price rather than quantity. Contrast with quantity adjuster. Price FlexibilityEase with which prices adjust in response to excess supply or demand. Promissory NoteWritten promise committing the maker to pay the a specified sum of money either on demand or on some future date, with or without interest. pull systema production system dictated by product sales Quantity AdjusterA firm that reacts to excess supply or excess demand by adjusting quantity rather than price. Contrast with price adjuster. ReclamationA claim for the right to return or the right to demand the return of a security that has been Restructuring ChargesCosts associated with restructuring activities, including the consolidation and/or relocation of operations or the disposition or abandonment of operations or productive assets. Savings depositsAccounts that pay interest, typically at below-market interest rates, that do not have a Say's LawBelief that supply creates its own demand. Sight draftdemand for immediate payment. StockUnits of ownership, also called shares, in a public corporation. Owners of such units, called shareholders, share in the earnings of the company through dividends. The price of a stock is determined by supply and demand in the stock market. Technical analystsAlso called chartists or technicians, analysts who use mechanical rules to detect changes Technical condition of a marketdemand and supply factors affecting price, in particular the net position, Time draftdemand for payment at a stated future date. Trade acceptanceWritten demand that has been accepted by an industrial company to pay a given sum at a future date. Transmission MechanismThe channels by which a change in the demand or supply of money affects aggregate demand for goods and services. Wage FlexibilityEase with which wages adjust in response to excess supply or demand. Zero curve, zero-coupon yield curveA yield curve for zero-coupon bonds; Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |