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New Keynesians |
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Definition of New KeynesiansNew KeynesiansEconomists who, like Keynes, believe that for good reason wages and prices are sticky and so prolong recessions, suggesting a need for government policy.
Related Terms:Guaranteed RenewalA promise that a life insurance policy will be renewed without penalty or medical examination after the term has expired. The renewal rate can also be guaranteed. New ClassicalsEconomists who, like classical economists, believe that wages and prices are sufficiently flexible to solve the unemployment problem without help from government policy. New-issues marketThe market in which a new issue of securities is first sold to investors. New moneyIn a Treasury auction, the amount by which the par value of the securities offered exceeds that of New York Stock Exchange (NYSE)Also known as the Big Board or The Exhange. More than 2,00 common Seasoned new issueA new issue of stock after the company's securities have previously been issued. A Yearly Renewable Term InsuranceSometimes, simply called YRT, this is a form of term life insurance that may be renewed annually without evidence of insurability to a stated age. ![]() GMCs (guaranteed mortgage certificates)First issued by Freddie Mac in 1975, GMCs, like PCs, represent Guaranteed insurance contractA contract promising a stated nominal interest rate over some specific time Guaranteed Interest Annuity (GIA)Interest bearing investment with fixed rate and term. Guaranteed Interest Certificate (GIC)Interest bearing investment with fixed rate and term. guaranteed investment certificate (GIC)A GIC is an investment that gives you a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years. GICs are available from banks, trust companies, and other financial institutions. Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a "Soft" Capital RationingCapital rationing that under certain circumstances can be violated or even viewed Absolute AdvantageThe ability to produce a good or service with fewer resources than competitors. See also comparative advantage. Absolute priorityRule in bankruptcy proceedings whereby senior creditors are required to be paid in full ![]() Absolute Right of Returngoods may be returned to the seller by the purchaser without restrictions. Absorption costingA method of costing in which all fixed and variable production costs are charged to products or services using an allocation base. absorption costinga cost accumulation and reporting Absorption costingA methodology under which all manufacturing costs are assigned Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. Accelerated depreciationAny depreciation method that produces larger deductions for depreciation in the accelerated depreciation(1) The estimated useful life of the fixed asset being depreciated is Accelerated depreciationAny of several methods that recognize an increased amount Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. Accomodating PolicyA monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession. Accounting insolvencyTotal liabilities exceed total assets. A firm with a negative net worth is insolvent on ![]() Accounting rate of return (ARR)A method of investment appraisal that measures accounting rate of return (ARR)the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Active portfolio strategyA strategy that uses available information and forecasting techniques to seek a Adjustable rate preferred stock (ARPS)Publicly traded issues that may be collateralized by mortgages and MBSs. After-tax profit marginThe ratio of net income to net sales. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. Agency problemConflicts of interest among stockholders, bondholders, and managers. agency problemsConflicts of interest between the firm’s owners and managers. All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Amortizing interest rate swapSwap in which the principal or national amount rises (falls) as interest rates Annual percentage rate (APR)The periodic rate times the number of periods in a year. For example, a 5% annual percentage rate (APR)Interest rate that is annualized using simple interest. Arithmetic average (mean) rate of returnArithmetic mean return. Asset substitution problemArises when the stockholders substitute riskier assets for the firm's existing Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Barbell strategyA strategy in which the maturities of the securities included in the portfolio are concentrated Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Base interest rateRelated: Benchmark interest rate. Basic business strategiesKey strategies a firm intends to pursue in carrying out its business plan. Beggar-My-Neighbor PolicyA policy designed to increase an economy's prosperity at the expense of another country's prosperity. Benchmark interest rateAlso called the base interest rate, it is the minimum interest rate investors will Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit CommitteesA committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial book rate of returnAccounting income divided by book value. Borrower (Credit Insurance)A consumer who borrows money from a lender. Break-even payment rateThe prepayment rate of a MBS coupon that will produce the same CFY as that of Break-even tax rateThe tax rate at which a party to a prospective transaction is indifferent between entering Broker loan rateRelated: Call money rate. Bullet strategyA strategy in which a portfolio is constructed so that the maturities of its securities are highly Buy-and-hold strategyA passive investment strategy with no active buying and selling of stocks from the Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Canadian Life and Health Insurance Association (CLHIA)An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada. Capitalization RateA discount rate used to find the present value of a series of future cash receipts. sometimes called discount rate. cash burn rateA relatively recent term that refers to how fast a business Cash flow after interest and taxesNet income plus depreciation. Child Insurance Rider (CIR)insurance or insurability provided on current or future children of insured. Classical MacroeconomicsThe school of macroeconomic thought prior to the rise of Keynesianism. Closing purchaseA transaction in which the purchaser's intention is to reduce or eliminate a short position in Co-insuranceIn medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced. Coefficient of determinationA measure of the goodness of fit of the relationship between the dependent and coefficient of determinationa measure of dispersion that Coinsurance effectRefers to the fact that the merger of two firms decreases the probability of default on Cold-Turkey PolicyDecreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism. Collection policyProcedures followed by a firm in attempting to collect accounts receivables. collection policyProcedures to collect and monitor receivables. Combination strategyA strategy in which a put and with the same strike price and expiration are either both Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Comparison universeThe collection of money managers of similar investment style used for assessing compensation strategya foundation for the compensation plan that addresses the role compensation should play in the organization computer integrated manufacturing (CIM)the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system confrontation strategyan organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company ConglomerateA firm engaged in two or more unrelated businesses. Conglomerate mergerA merger involving two or more firms that are in unrelated businesses. ConsolA type of bond that has an infinite life but is not issued in the U.S. capital markets. Consolidated Omnibus Budget Reconciliation Act (COBRA)A federal Act ConsolidationThe combining of two or more firms to form an entirely new entity. ConsolidationA summarization of the financial statements of a parent company and Consortium banksA merchant banking subsidiary set up by several banks that may or may not be of the Contribution RateThe percentage tax charged by a state to an employer to Corporate acquisitionThe acquisition of one firm by anther firm. Corporate bondsDebt obligations issued by corporations. Corporate charterA legal document creating a corporation. Corporate financeOne of the three areas of the discipline of finance. It deals with the operation of the firm Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningFinancial planning conducted by a firm that encompasses preparation of both Corporate processing floatThe time that elapses between receipt of payment from a customer and the Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentrate of return required on a par bond to produce the same after-tax yield to cost leadership strategya plan to achieve the position in a cost of goods manufactured (CGM)the total cost of the Cost of goods soldThe cost of merchandise that a company sold this year. For manufacturing companies, the cost of raw Cost of goods soldSee cost of sales. Cost of goods soldThe cost of the items that were sold during the current period. Cost of goods soldThe accumulated total of all costs used to create a product or service, Cost of goods soldThe charge to expense of the direct materials, direct labor, and Cost of InsuranceThe cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual. Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Coupon RateThe rate of interest paid on a debt security. Generally stated on an Coupon rateThe nominal interest rate that the issuer promises to pay the Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |