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Financial Terms | |
Macroeconomics |
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Definition of MacroeconomicsMacroeconomicsThe study of the determination of economic aggregates such as total output and the price level.
Related Terms:Classical MacroeconomicsThe school of macroeconomic thought prior to the rise of Keynesianism. New ClassicalsEconomists who, like classical economists, believe that wages and prices are sufficiently flexible to solve the unemployment problem without help from government policy. Price-specie-flow mechanismAdjustment mechanism under the classical gold standard whereby Absolute priorityRule in bankruptcy proceedings whereby senior creditors are required to be paid in full accepted quality level (AQL)the maximum limit for the number of defects or errors in a process Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Arm's length priceThe price at which a willing buyer and a willing unrelated seller would freely agree to ![]() Ask priceA dealer's price to sell a security; also called the offer price. Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Basis priceprice expressed in terms of yield to maturity or annual rate of return. batch-level costa cost that is caused by a group of things Bid priceThis is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Clean priceBond price excluding accrued interest. Coefficient of determinationA measure of the goodness of fit of the relationship between the dependent and ![]() coefficient of determinationa measure of dispersion that Confidence levelThe degree of assurance that a specified failure rate is not exceeded. Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a Consumer Price Index (CPI)An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation. Conversion parity priceRelated:Market conversion price Convertible priceThe contractually specified price per share at which a convertible security can be Delivery priceThe price fixed by the Clearing house at which deliveries on futures are in invoiced; also the Devaluation A decrease in the spot price of the currency
Dirty priceBond price including accrued interest, i.e., the price paid by the bond buyer. Dollar price of a bondPercentage of face value at which a bond is quoted. Earnings surprisesPositive or negative differences from the consensus forecast of earnings by institutions Economic assumptionseconomic environment in which the firm expects to reside over the life of the economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic components. Economic defeasanceSee: in-substance defeasance. Economic dependenceExists when the costs and/or revenues of one project depend on those of another. Economic earningsThe real flow of cash that a firm could pay out forever in the absence of any change in Economic exposureThe extent to which the value of the firm will change because of an exchange rate change. Economic incomeCash flow plus change in present value. economic integrationthe creation of multi-country markets Economic lifeThe period over which a company expects to be able to use an asset. economic order quantityOrder size that minimizes total inventory costs. Economic order quantity (EOQ)The order quantity that minimizes total inventory costs. economic order quantity (EOQ)an estimate of the number economic production run (EPR)an estimate of the number Economic rentsProfits in excess of the competitive level. Economic riskIn project financing, the risk that the project's output will not be salable at a price that will Economic surplusFor any entity, the difference between the market value of all its assets and the market Economic unionAn agreement between two or more countries that allows the free movement of capital, Economic Value Added (EVA)Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge economic value added (EVA)a measure of the extent to which income exceeds the dollar cost of capital; calculated economic value added (EVA)Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost economically reworkedwhen the incremental revenue from the sale of reworked defective units is greater than EconomicsThe study of the allocation and distribution of scare resources among competing wants. Effective call priceThe strike price in an optional redemption provision plus the accrued interest to the enterprise resource planning (ERP) systema packaged software program that allows a company to Enterprise resource planning systemA computer system used to manage all company Equilibrium market price of riskThe slope of the capital market line (CML). Since the CML represents the Escalating Price OptionA nonqualified stock option that uses a sliding scale for Event studyA statistical study that examines how the release of information affects prices at a particular time. Exercise priceThe price at which the underlying future or options contract may be bought or sold. Exercise priceThe price set for buying an asset (call) or selling an asset (put). Fair market priceAmount at which an asset would change hands between two parties, both having Fair priceThe equilibrium price for futures contracts. Also called the theoretical futures price, which equals Fair price provisionSee:appraisal rights. Fixed price basisAn offering of securities at a fixed price. Fixed-price tender offerA one-time offer to purchase a stated number of shares at a stated fixed price, Flat price (also clean price)The quoted newspaper price of a bond that does not include accrued interest. Flat price riskTaking a position either long or short that does not involve spreading. Full-Employment OutputThe level of output produced by the economy when operating at the natural rate of unemployment. Full priceAlso called dirty price, the price of a bond including accrued interest. Related: flat price. Futures priceThe price at which the parties to a futures contract agree to transact on the settlement date. Government sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan High priceThe highest (intraday) price of a stock over the past 52 weeks, adjusted for any stock splits. input-output coefficienta number (prefaced as a multiplier Input-output tablesTables that indicate how much each industry requires of the production of each other Invoice priceThe price that the buyer of a futures contract must pay the seller when a Treasury Bond is delivered. KeynesianismThe school of macroeconomic thought based on the ideas of John Maynard Keynes as published in his 1936 book The General Theory of Employment, Interest, and Money. A Keynesian believes the economy is inherently unstable and requires active government intervention to achieve stability. Law of one priceAn economic rule stating that a given security must have the same price regardless of the law of one priceTheory that prices of goods in all countries should be equal when translated to a common currency. Leading economic indicatorseconomic series that tend to rise or fall in advance of the rest of the economy. Level-coupon bondBond with a stream of coupon payments that are the same throughout the life of the bond. Level payThe characteristic of the scheduled principal and interest payments due under a mortgage such that Level PremiumA premium that remains unchanged throughout the life of a policy Level Premium Life InsuranceThis is a type of insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years. Limit priceMaximum price fluctuation Limit priceMaximum price fluctuation Low priceThis is the day's lowest price of a security that has changed hands between a buyer and a seller. Low price-earnings ratio effectThe tendency of portfolios of stocks with a low price-earnings ratio to Market conversion priceAlso called conversion parity price, the price that an investor effectively pays for Market price of riskA measure of the extra return, or risk premium, that investors demand to bear risk. The Market pricesThe amount of money that a willing buyer pays to acquire something from a willing seller, Marketplace price efficiencyThe degree to which the prices of assets reflect the available marketplace material price variancetotal actual cost of material purchased Materials price varianceThe difference between the actual and budgeted cost to Maximum price fluctuationThe maximum amount the contract price can change, up or down, during one MicroeconomicsThe study of firm and individual decisions insofar as they affect the allocation and distribution of goods and services. Minimum price fluctuationSmallest increment of price movement possible in trading a given contract. Also Multilevel bill of materialAn itemization of all bill of material components, including National OutputGDP. negotiated transfer pricean intracompany charge for goods Nominal priceprice quotations on futures for a period in which no actual trading took place. Opening priceThe range of prices at which the first bids and offers were made or first transactions were 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. Option priceAlso called the option premium, the price paid by the buyer of the options contract for the right organizational-level costa cost incurred to support the ongoing Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |