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Financial Terms | |
Twin Deficits |
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Definition of Twin DeficitsTwin DeficitsThe trade deficit and the government budget deficit.
Related Terms:Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and Balance of Merchandise TradeThe difference between exports and imports of goods. Balance of tradeNet flow of goods (exports minus imports) between countries. Balance of TradeSee balance of merchandise trade. Balanced-Budget MultiplierThe multiplier associated with a change in government spending financed by an equal change in taxes. Basket tradesRelated: Program trades. ![]() Block tradeA large trading order, defined on the New York Stock Exchange as an order that consists of BudgetA detailed schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget. BudgetA plan expressed in monetary terms covering a future period of time and based on a defined budgeta financial plan for the future based on a single level BudgetA set of interlinked plans that quantitatively describe a company’s projected Budget cycleThe annual period over which budgets are prepared. Budget deficitThe amount by which government spending exceeds government revenues. Budget DeficitThe excess of government spending over tax receipts. budget manuala detailed set of documents that provides information ![]() budget slackan intentional underestimation of revenues budget variancethe difference between total actual overhead Budgetary controlThe process of ensuring that actual financial results are in line with targets – see variance budgeted costa planned expenditure budgetingthe process of formalizing plans and committing Capital budgetA firm's set of planned capital expenditures. capital budgetmanagement’s plan for investments in longterm capital budgetList of planned investment projects. Capital budgetingThe process of choosing the firm's long-term capital assets. capital budgetingRefers generally to analysis procedures for ranking Capital BudgetingThe process of ranking and selecting investment alternatives and ![]() capital budgetinga process of evaluating an entity’s proposed Capital budgetingThe series of steps one follows when justifying the decision to purchase capital budgeting decisionDecision as to which real assets the firm should acquire. Cash budgetA forecasted summary of a firm's expected cash inflows and cash outflows as well as its Consolidated Omnibus Budget Reconciliation Act (COBRA)A federal Act continuous budgetinga process in which there is a rolling Counter tradeThe exchange of goods for other goods rather than for cash; barter. DeficitAn excess of liabilities over assets, of losses over profits, or of expenditure over income. DeficitAnegative balance in the retained earnings account that is caused by cumulative DeficitSee budget deficit. financial budgeta plan that aggregates monetary details Flat trades1) A bond in default trades flat; that is, the price quoted covers both principal and unpaid, Flexible budgetA method of budgetary control that flexes, i.e. adjusts the original budget by applying standard flexible budgeta presentation of multiple budgets that Floor traderA member who generally trades only for his own account, for an account controlled by him or Forward tradeA transaction in which the settlement will occur on a specified date in the future at a price Free TradeThe absence of any government restrictions, such as tariffs or quotas, on imports or exports. Government bondSee: government securities. Government National Mortgage Association (Ginnie Mae)A wholly owned U.S. government corporation Government securitiesNegotiable U.S. Treasury securities. Government sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan imposed budgeta budget developed by top management Incremental budgetA budget that takes the previous year as a base and adds (or deducts) a percentage to arrive at Information-motivated tradestrades in which an investor believes he or she possesses pertinent Informationless tradestrades that are the result of either a reallocation of wealth or an implementation of an master budgetthe comprehensive set of all budgetary schedules North American Free Trade Agreement (NAFTA)an agreement among Canada, Mexico, and the United States establishing the North American Free trade Zone, with a resulting reduction in trade barriers operating budgeta budget expressed in both units and dollars participatory budgeta budget that has been developed Planning, programming and budgeting system (PPBS)A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres. Posttrade benchmarksPrices after the decision to trade. Pre-trade benchmarksPrices occurring before or at the decision to trade. Priority-based budgetA budget that allocates funds in line with strategies. program budgetingan approach to budgeting that relates Program tradesAlso called basket trades, orders requiring the execution of trades in a large number of Publicly traded assetsAssets that can be traded in a public market, such as the stock market. Registered traderA member of the exchange who executes frequent trades for his or her own account. Reversing tradeEntering the opposite side of a currently held futures position to close out the position. rolling budgetsee continuous budgeting Rolling budgetsA method of budgeting in which as each month passes, an additional budget month is added such that there is always a 12-month budget. Spot tradeThe purchase and sale of a foreign currency, commodity, or other item for immediate delivery. Structural DeficitThe budget deficit in excess of the deficit that in the long run keeps constant the ratio of the publically held national debt to GDP. Terms of tradeThe weighted average of a nation's export prices relative to its import prices. Terms of TradeThe quantity of imports that can be obtained for a unit of exports, measured by the ratio of an export price index to an import price index. Thinly tradedInfrequently traded. TradeA verbal (or electronic) transaction involving one party buying a security from another party. Once a Trade acceptanceWritten demand that has been accepted by an industrial company to pay a given sum at a future date. Trade creditCredit granted by a firm to another firm for the purchase of goods or services. Trade dateIn an interest rate swap, the date that the counterparties commit to the swap. Also, the date on Trade debtAccounts payable. Trade Deficitdeficit on the balance of merchandise trade. Trade draftA draft addressed to a commercial enterprise. See:draft. Trade houseA firm which deals in actual commodities. Trade LoadingA term used for channel stuffing in the domestic tobacco industry. trade-off theoryDebt levels are chosen to balance interest tax shields against the costs of financial distress. Trade on top oftrade at a narrow or no spread in basis points relative to some other bond yield, usually TradersPersons who take positions in securities and their derivatives with the objective of making profits. Uptick tradeRelated:Tick-test rules World Trade Organization (WTO)the arbiter of global trade that was created in 1995 under the General Agreement on Tariffs and trade; each signatory country has one zero-base budgetinga comprehensive budgeting process Zero-based budgetingA method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies. 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