Financial Glossary – Business Terms and Definitions

ABA Routing Number – a unique, nine-digit number that is present on a check or deposit slip in the USA. ABA stands for the American Bankers Association. The number identifies the bank or financial institution that issued the check.

Aback – the whole term ‘to be taken aback’ means to be shocked and surprised. So much so, that you could imagine the listener taking a step back after hearing the news, information, etc. I could say, for example: “John, who was always at the bottom of the class, was taken aback when his science teacher told him that he came top.”

Abatement – in the world of finance, business and law, the term refers to either the elimination or reduction of something, usually something undesirable such as a fine, payment, or harmful substance. Property tax abatement, for example, is the temporary elimination or reduction of property taxes – usually introduced in an attempt to boost the real estate and construction sectors, and/or the whole economy. Noise abatement is a procedure – often done at airports – to reduce noise levels.

Abbrochment – or abbroachment, occurs when a business entity or individual monopolizes a market by buying products wholesale (in bulk) before they come to market, with the aim of selling them at much higher prices in the retail market. To abbroach is to hoard a product until you are the only one to supply it, and sell it at a higher-than-normal price.

ABC Agreement – a contract between a brokerage firm and one of its employees regarding the New York Stock Exchange’s (NYSE’s) membership. It is called an ABC Agreement because it includes three possible options for the employee should he or she leave the firm one day. The options include transferring the membership to another employee, selling it to another employee (proceeds go to the firm), or keeping the membership as long as the leaving employee is willing to purchase a new one for an employee chosen by the firm.

Abenomics – refers to the economic policies introduced by the Japanese Prime Minister Shinzō Abe after he won the December 2012 general election. Abenomics focuses on monetary and economic growth strategies to promote private investment.

Absolute Advantage – refers to what one country, company or person can produce at a better/faster rate than another. If I can make 3 shirts per day and Tom can produce 4, he has an absolute advantage over me in the world of shirt-making. The concept was first introduced by economist Adam Smith in the eighteenth century when talking about international trade.

Account – this word has many meanings, both in the world of business and everyday language. In banking it could mean a bank account or a bank-client arrangement, in accounting it is the separate pages in the ledger were entries are posted, while in commerce it could be a supplier-customer agreement with credit terms, etc. The word comes from Old French ‘Acont’, which originated from the Latin noun ‘Computus’ (calculation) and verb ‘Computare’(calculate).

Account-Based Selling – a strategic sales approach that focuses on targeting high-value accounts with personalized strategies. Instead of reaching out to a broad audience, ABS tailors efforts to engage specific organizations, aligning sales and marketing teams to deliver customized solutions that address the unique needs and challenges of each account.

Accountant – a person who is qualified to prepare audits, advise on taxes, and finalize the accounts of companies, individuals, organizations, and other entities. Accountants prepare the annual reports of companies and also their financial statements. Some of them advise on business strategies and investments.

Accounting – the work done by accountants in keeping financial records of individuals, companies and other entities. It means the same as accountancy. It is concerned primarily with methods for recording financial transactions, keeping financial records, performing internal audits, and advising on taxation matters.

Accounting Ratios – also called financial ratios, are sets of figures within a company’s financial statements that we use to compare present-past performance, how the business fares with competitors, whether it is profitable, if it is able to pay its debts, and how financially healthy the commercial enterprise is overall.

Accounts Payable (A/P) – means unpaid bills. The term refers to all the money a company owes suppliers that delivered goods or services on credit (receive now and pay later). It is the opposite of accounts receivable.

Accrual – in accounting the term refers to entering an expense or income when the invoice is received/sent or the service is being provided/received, rather than when the money is paid or received. In finance, accrual means the adding together of different investments or interest over a specified period. The verb ‘to accrue’ means to grow in amount or increase in number over a period of time.

Accrued Interest – the interest that a security accumulates since the principal investment (or since the previous coupon payment). It is also the interest that has built up on a loan.

Accumulated Benefit Obligation (ABO) – an estimate of what the present value of an employee’s pension is if the employee stops work.

Accuracy – the degree to which an expression or measurement conforms to a true value or standard. It also has to do with correctness or freedom of error. Scientists differentiate it from precision.

Acquisition – in business, the term means a takeover. In other words, buying a company. If Company A buys Company B, it acquires Company B – it is an acquisition or a takeover.

Active Market – a market with a lot of buyers and sellers; so there is heavy trading volume. In an active market, the difference between the bid and ask price (spread) is smaller than in markets where less trading is taking place. An active market is very liquid, and can withstand huge purchases without the price of a stock being disproportionately affected. That is why pension funds, hedge funds, investment banks and other large-volume traders prefer them.

Active Portfolio Strategy – an investment strategy that attempts to increase the value of a portfolio by using a wide range of methods to evaluate which bonds or stocks will generate the most gains.

Activist Investor – a person or group that buys up lots of shares in a company so that they can influence management decisions. The activist investor remains a minority shareholder. Also known as an activist shareholder.

Actuary – somebody who analyzes risk – the chances of something unpleasant like a death, accident or severe weather event happening. He or she also calculates what the financial consequences of the event, were it to occur, might be. There are two main categories: Life Actuary and Non-Life Actuary.

Adaptive Selling – a sales technique where salespeople adjust their strategies to meet the unique needs and behaviors of each customer. It involves understanding customer problems, preferences, and social status, then tailoring the sales approach to offer relevant solutions effectively.

Addiction – the condition of being dependent or addicted to a drug, other substance, activity, or thing. The addict has a compulsive need for a habit-forming activity or substance which is harmful.

Additive Manufacturing – a process of joining materials to create 3D objects from 3D model data. It involves adding layer after layer until the product is finished. 3D printing is a type of additive manufacturing. It is the opposite of subtractive manufacturing.

Add-on Selling – a sales strategy where customers are encouraged to buy additional, complementary products or services alongside their primary purchase, aiming to enhance customer satisfaction and increase revenue.

Adjustable-Rate Mortgage – a home loan with interest rates that ‘adjust’, i.e. they can fluctuate, usually depending on how the central banks sets the base rate. This is more of a US term – in the UK and other English-speaking countries, people say ‘variable-rate mortgage’.

Administrator – somebody who makes sure that an office, company or organization operates efficiently. He or she is in charge of all the paperwork – the administration – as well as some other organizational operations. A good administrator needs to be highly organized and have people skills. The word may also refer to somebody in charge of an insolvent company, or the person who is appointed by a court to deal with a deceased individual’s estate.

Advanced Economy – a developed country. A country whose economy is more developed than those of less industrialized nations. We also use the terms industrialized country and more economically developed country.

Advertainment – a term used to describe media (such as movies, TV shows, etc.) that incorporates elements of advertising.

Advertising – the business of attracting people’s attention and encouraging them to purchase a good or service. Advertising is also used to invite people to join a movement or vote a particular way during elections. Adverts are placed in newspapers, magazines, trade journals, on the radio and TV, and online. Advertising has been around for thousands of years.

Affiliate Business Model – a performance-based strategy where individuals or companies earn commissions by promoting another company’s products or services. Affiliates drive traffic or sales through marketing efforts, using unique links, and receive a percentage of the revenue generated from their referrals. It’s a low-risk, scalable model widely used in digital marketing.

Affiliate Marketing – a type of revenue sharing in which the seller pays commission to another website. The other website sends visitors, leads, or customers to the seller’s website. Affiliate marketing has been around much longer than the Internet. However, these days, nearly all of it occurs online.

Afford – to be able to pay for something and not struggle financially afterwards. If you cannot afford to go anywhere on vacation, you stay at home. The term also means to provide, as in: “The living room affords a fantastic view of the bay.”

Affordable – the adjective of ‘to afford.’ If something is affordable it means that you can spare enough money to buy it without struggling financially.

A Fortiori Analysis – a way of dealing with doubt and uncertainty that strengthens the case for a preferred choice. If I prefer Option A, I should go through the pros of Option B – and even give additional weight to each of Option B’s advantages. If Option A still seems like the better solution, I will be more certain that my choice was the right one.

After-Tax Profit Margin – a financial measurement ratio that is derived from dividing net income after taxes by net sales. It shows the percentage of revenue after the costs of all goods have been deducted.

Agency – in the world of business and government, an agency is a specialized entity. A travel agency, for example, specializes in selling air tickets, hotel rooms, car rentals, tours, etc. A government agency, such as the FDA, for example, specializes in ensuring the safety and efficacy of medications and medical devices.

Agent Bank – a bank that acts on behalf of other entities, such as banks, people, companies or organizations. Also known as an agency bank.

Agile working – an organizational approach that seeks to find the most effective way to get work done without tying people to time and place. It aims for maximum flexibility within minimum constraints. The focus is more on how well people achieve tasks than on when and where they perform them.

Agreement Corporation – a type of bank that is allowed to operate in international business – in agreement to the terms of the Edge Act.

Agricultural Robot – a robot designed for use in the agriculture industry. Also known as an agribot.

Air Pollution – or atmospheric pollution includes the release of particulates and chemicals into the atmosphere. Some gasses, such as CFCs, carbon monoxide, sulfur dioxide, and nitrogen oxides are pollutants.

Algorithm – a sequence of instructions for completing tasks. The sequence’s order is significant. Algorithms, in computing, tell processors what to do.

Alternative Investment – a fairly loose term that generally refers to investments that do not include stocks, bonds or cash (traditional asset classes). Alternative investments may include antiques, property, art, stamps, coins, commodities, infrastructure, etc.

Ambassador – an important diplomat who works in a foreign country representing his or her country there. He or she is the head of an embassy. Ambassadors may also be special envoys for organizations or charities. In business, a brand ambassador or corporate ambassador is hired by a company to represent a brand in a positive light.

Ambition – a lasting desire to get somewhere in life, achieve something, reach a goal. Ambition is typically accompanied by determination, motivation, and an internal drive.

American Depositary Receipts – these are stocks of companies based outside the United States that trade in US stock markets. Also known as ADRs.

American Depositary Shares – shares of a foreign-based company that Americans can buy and sell in the US. They are traded in US dollars. These types of shares are issued by American depositary banks under agreement with the foreign issuing company. Also known as an ADS.

The American Dream – refers to the belief that anyone, regardless of background or circumstances, can achieve success and upward mobility in the U.S. through hard work, determination, and opportunity. It embodies ideals of freedom, equality, and the pursuit of prosperity and personal fulfillment.

American Economic Association – a US professional organization with 18,000 members. Just over half of them are academics, while the rest come from industry, business, local and federal governments. It claims to be completely non-partisan.

Amortization – this term can refer to either the repayment schedule of a loan, or the spreading of capital expenses for intangible assets over a given period.

Amortizing Loan – also known as an amortized loan, is one with scheduled regular installments that pay both principal and interest.

Analyst – anybody who performs analysis of a topic. There are many types, including accounting analysts, business analysts, investment analysts and systems analysts. Their jobs are similar to those of a doctor – they examine a company (patient), find out what’s wrong (diagnosis), and determine what needs to be done (treatment).

Analytics – the process of analyzing data to extract meaningful insights for informed decision-making and strategic planning.

Anchor Text – the visible, clickable part of a hyperlink in digital content, guiding users and informing search engines about the linked page’s topic.

Angel Investor – a person who invests his or her own money in a start-up business. Usually, they invest in exchange for part-ownership of the nascent company, or convertible debt. Also called a business angel, angel, or seed investor.

Anglo-Saxon Capitalism – a term commonly used to describe a type of capitalism that is prevalent in English-speaking nations, i.e. the US, UK, Canada, Ireland, Australia and New Zealand. Taxes are lower, there is less government intervention, and regulations less limiting, compared to the German and Nordic models.

Annual General Meeting – often referred to by the initials AGM or simply as Annual Meeting, is a yearly gathering of a company’s or organization’s members. In a company’s AGM, shareholders and the Board of Directors are present. During the AGM, shareholders vote on several issues, including strategy, new members of the Board and getting rid of current Board members. The directors inform the shareholders about the business’ profits or losses, why it performed how it did, and what its strategy is.

Annual Percentage Rate of Charge (APR) – the yearly rate that it costs for a company or individual to borrow money. It expresses the interest rate for a whole year instead of just a monthly fee/rate. The term is also used in retail, when consumers are offered credit terms.

Annual Percentage Yield – also known as APY, is the effective annual rate of interest earned, including the effect of compounding. It is expressed as an annualized rate, based on a 365-day year.

Annual Report – a document reported by companies that provides a picture of their financial position, performance, and other corporate information. The report is given to shareholders.

Annuity – a terminating stream of fixed payments that is paid out over a specific period of time.

Antique – a collectible item, such as furniture, artwork, or decor, that is at least 100 years old, valuable, often cherished for its craftsmanship, historical significance, aesthetic appeal, and its ability to connect the present with the past.

A Posteriori – one of the two ways of gaining knowledge – the other way is a priori. A posteriori knowledge is the same as ’empirical knowledge’, i.e. knowledge we gain through experience – observing things as they happen or listening to others’ experiences. A priori knowledge is through pure logic, ideas, or analyzing concepts, and not through experiences.

Appliance – a device, contraption, or piece of equipment that has been designed for a specific function. Most appliances are for household use. However, computer/IT appliances are also common in businesses.

Application (App) – a computer software application that typically people download onto their smartphones or tablets. However, we can also use the term for desktop or Web applications. In most cases, it is a program with a specific task.

Applied Economics – involves understanding economic theories, trying them out in real world situations, and also using this data to make economic predictions.

Appraisal Fee – a fee to evaluate the market value of a house – a fee that estimates how much a property is worth.

Appreciation – in business/finance and economics, the term refers to the increase in value of an asset such as real estate, a commodity, a currency, an antique, stocks, collectibles, or intellectual property.

Aquaculture – the practice of breeding, raising, and harvesting aquatic organisms like fish, shellfish, and seaweed in controlled environments. It serves various purposes, including food production, habitat restoration, scientific research, and supplying ornamental species for aquariums and ponds.

Arbitrage – buying something in one place at one price and selling it somewhere else at a higher price – the buying and selling is done simultaneously. If it is not done simultaneously it is not arbitrage. The person who does this is an arbitrageur.

Arbitration – a non-judicial process for settling disputes. Rather than a judge in a court there is an arbitrator(s). The arbitrator makes the final decision, which is binding. A hearing may have one or more arbitrators – usually an odd number to prevent there being a tie. Arbitration is much cheaper and faster than litigation (using the courts) and has been shown to be effective in preventing major conflicts, and even wars between nations.

Article 50 – a clause in the 2007 Lisbon Treaty which any EU member state can invoke when it has decided to leave the trading bloc. The Treaty became law in 2009. When the UK invokes Article 50, separation negotiations begin, and should, in theory, end within two years.

Artificial Intelligence – or AI refers to software technologies that make computers or robots think and behave like human beings. Artificial intelligence contrasts with our natural intelligence. AI is becoming more common in business and production processes, as well as in our homes.

Artificial Neural Network – a computational system modeled after the neural networks in the human brain, designed to simulate the way humans learn. It consists of interconnected nodes or neurons that process and transmit signals, enabling the machine to learn from data inputs, recognize patterns, and make predictions or decisions.

Asset – anything tangible or intangible that has a positive economic value that can be converted to cash (such as property or stocks).

Asset Allocation – the way a portfolio is spread across a range of different investment classes so that they do not all rise and decline in tandem (together).

Asset Class – a broad group of securities people invest in. The components of an asset class behave in a similar way in the marketplace and are subject to the same laws. The main asset classes are cash equivalents, stocks and fixed income.

Asset Management – the managing of clients’ money and assets so that as much profit as possible is made. Clients may be rich people, governments, companies and other organizations.

Asset Stripping – the practice of purchasing a company and then selling off its assets in bits to different buyers. The target company’s total net worth is lower than the individual value of each asset (added up). The acquiring company is called a corporate raider.

Assumable Mortgage – allows a buyer to take over the seller’s existing home loan, including the interest rate, loan balance, and repayment terms. This option is usually available with government-backed loans like FHA, VA, or USDA, providing potential savings if current interest rates are higher than the existing loan’s rate.

Audit – a formal examination/inspection of an organization’s accounts, often by an independent auditor. Anything can be audited, not just accounts. In the world of business and finance, a company’s accounts are audited. By law, publicly-listed companies in most countries must be audited periodically.

Augmented Reality (AR) – technology that adds information to a person’s field of vision. If you are in Paris, for example, and see a building, you can point your smartphone at it. If your phone as a Paris AR App, you will see the name of the building on its screen, plus perhaps the name of its architect, etc. It is not the same as virtual reality – it is quite different.

Austerity – an economic policy that reduces government spending and raises taxes, typically employed to reduce budget deficits.

Austrian Economics – a school of thought that started with Carl Menger (1840-1921), the founder of the Austrian School of Economics, which promotes laissez-faire economics and liberalism. They believe the market can find its own path and that the government should not intervene.

Autarky – the concept that a country should become self-sufficient and not import or export, i.e. not trade with other nations. An autarky is a closed economy – it is isolationist. In every case, leaders who have pursued a policy of autarky have ended up seeing their country fall behind trading nations – their citizens became relatively poorer and had fewer goods and services available. The quality of products and services is considerably lower in a closed economy than in countries that import and export.

Authorized Capital – the maximum number of shares a company is allowed to sell to investors. Most firms do not issue their total authorized capital. Also known as authorized stock, registered capital or authorized share capital.

Authorized Stock – the maximum amount of shares a company is permitted to make available and sell to the public, according to what is stipulated in its Articles of Incorporation in the US and Canada and Memorandum of Association in the UK and much of the Commonwealth.

Auto Financing – methods of borrowing money to buy a car, also called vehicle financing and car financing. The money is lent by a bank, credit union or other financial institution. Auto financing is used widely by both individual purchasers and companies. Companies tend to go for contract hire, because of the tax and cash flow benefits.

Automated Bond System (ABS) – an electronic bond information and trading platform that tracks the prices of inactive bonds on the New York Stock Exchange.

Automated Customer Account Transfer Service (ACATS) – an automated system that helps facilitate the transfer of assets from one trading account to another.

Automated Teller Machine (ATM) – a computerized device that allows customers of banks to withdraw cash from their accounts and perform a limited set of other transactions such as check balances.

Automation – a system, method or technique of controlling or operating a process by highly automatic means, using electronic devices such as computers and artificial intelligence. It also refers to the device – a mechanical device – operated electronically that functions automatically, without an operator’s continuous input. The aim of automation is to boost efficiency and reduce human intervention to a minimum. There is concern that automation will become so sophisticated that human labor will be superfluous and we will all be jobless.

Autonomous Vehicle – a vehicle that can move and guide itself without human input. Autonomous vehicles are also known as “driverless vehicles”.

Avatar – an embodiment of a person or concept, for example in a digital world. The word comes from the Sanskrit term for the descent of a Hindu god to Earth. With advances in technology, avatars are evolving into digital humans.

Average Selling Price (ASP) – the average price that companies sell something for or customer pay for it. The ASP typically covers a specific period. A good’s ASP can vary, depending on its life cycle and what type of product it is.

Award – a prize, money, or other form of recompense that acknowledges achievement, merit, or need. The word can also be a verb such as in to award a contract or grant.

B2B – stands for Business-to-Business. It is a business model in which the seller only sells to other companies rather than individual consumers. When it sells to individual consumers, we call it B2C, i.e., business-to-consumer.

B2C – stands for Business-to-Consumer. In this business model, sellers sell directly to individual consumers rather than companies. When the seller targets other companies, we call it B2B, i.e., business-to-business.

B2E – stands for Business-to-Employee. It is a business model where a company provides digital tools and resources directly to its employees to improve their work experience and efficiency.

B2G – stands for business-to-government. It refers to companies providing services or selling goods to the government, government agencies, or the public sector. Defense contractors, for example, are mainly involved in B2G activities.

Baby Boomers – men and women born between 1946 and about 1964, during the period of rapid economic growth following the Second World War. During this period, birth rates were considerably higher – that is why it is called the baby boom era. More than 76 million babies were born in the United States during the baby boom.

Backdoor Listing – a way for unlisted companies to become publicly listed, i.e. to be listed in a formal stock exchange such as the New York Stock Exchange, Nasdaq, or the London Stock Exchange. The unlisted company seeks out a listed shell company and acquires it – this gets it into the stock exchange ‘through the back door’.

Backdoor Selling – the art of asking carefully crafted questions to people in a company in order to glean information that can give the seller (supplier) an edge over the competition. Backdoor selling is a technique used by companies in a competitive bidding situation. Sales people usually target employees in other departments – those not involved in purchasing – because they are more likely to innocently divulge sensitive information. Backdoor selling, or back door selling, may also mean violating a business agreement with a customer – for example, selling directly to Company B in Territory A after signing a contract with Company A, which states that the supplier will only sell directly to Company A in Territory A.

Backed Currency – a currency that is supported by a commodity, such as silver or gold. The value of that currency is directly linked to how much of a commodity the government or central bank has stored in its vaults. The gold standard, which the US left in the 1970s and the UK in the 1930s, is an example of a backed currency. It is the opposite of a fiat currency.

Back End – the parts of a company with which customers, other players in the marketplace, the press, and members of the public rarely come into contact. It contrasts with the front end, which communicates with customers and other external people and organizations. Back end sales are repeat sales – additional sales after the first one, by the same customer. In information technology, a back end application or program is one that services indirectly in support of front end services.

Background Check – a process that checks out a person’s identity, address, work history, academic qualifications, etc. They are typically carried out by employers, landlords, and lenders.

Backlink – a phrase, word, button, or image that has a link that if clicked takes the user to your website. We also call them inbound links or incoming links. They are important for good SEO, as long as they are good backlinks.

Back Office – the part of a company whose employees rarely meet customers or other outsiders. The term ‘back office’ is more commonly used in investment banking and many other types of financial firms than ‘back end’. Investment banking is said to have three offices: 1. Front Office. 2. Middle Office. 3. Back Office.

Back to Back – in business, the term refers to any transaction, document, agreement, or contract in which all the features of one appear identically or mirrored in another. A back-to-back letter of credit, for example, is one opened in favor of another beneficiary which has the same stipulations and features as a previous one.

Back-End Ratio – one of the income qualification ratios that banks and other lenders use when determining whether to approve or turn down a mortgage application. Also known as the total obligations ratio, it is calculated by adding up all monthly loan and mortgage payments, home insurance premiums, plus property taxes, and dividing the total by gross income. If the total represents more than 36% to 43% of gross income, the mortgage applicant is unlikely to get his or her loan approved.

Backup – the process of copying data to a secondary location for the purpose of recovery in case the original data is lost or damaged.

Bad Credit – if you have bad credit it means that you have a history of not paying bills on time. It means that your credit score is low. People with an extremely low credit score did not pay back some debts at all. The higher your credit score the easier it is to get a bank loan or buy something on credit.

Bad Debt – a loan or account receivable that will not be paid. Companies write off bad debts usually as expenses. Also known as a bad loan or delinquent loan.

Bailout – the act of providing financial resources to a business or economy that is failing (to save it from going bust or defaulting). Following the 2008 financial crisis, several companies, especially major banks, were bailed out by the taxpayer in North America and Europe.

Balance of Trade – also known as the Trade Balance, is the difference in value between a country’s exports and imports over a certain period.

Balance Sheet – shows the financial status of a person, company or organization at a particular moment in time; usually at the end of a reporting period such as a financial year, quarter or half-year. Essentially, it is a snapshot of the entity at a given date and provides important pieces of financial information for lenders, creditors, investors, management, suppliers and other interested parties.

Balloon Loan – see Bullet Loan.

Balloon Mortgage – this is a home loan where regular, small payments are made every month over several years, and then either one giant payment or a few large ones are made at the end of the term. Also known as a balloon loan or a balloon payment mortgage.

Bank – a financial institution that is licensed to receive people’s deposits and offer loans. A bank makes money by charging more interest on its loans than it pays on customers’ deposits. There are two types of banks – commercial banks and investment banks.

Bank Capital – the storage of cash and safe assets that financial institutions hold as a cushion to protect their creditors in case assets are liquidated. The more capital a bank has, the better it can withstand financial crises.

Bank Draft – this is a type of check (UK: cheque) where the funds are taken directly from the bank. Also known as a banker’s draft, bank check or teller’s check. The payee’s name is written on the document. Bank drafts are generally used for larger payments, or when the payee will not accept a personal check.

Bankers’ Bank – a financial institution that provides services to community banks in the United States. It belongs to a group of community banks and aims to help them compete more effectively with the larger institutions.

Bankmail – an agreement between a bank and a company that the bank will not fund a rival’s acquisition plan. The agreement may be between the bank and a company wishing to acquire, or the prey, i.e. the target-firm in a hostile takeover attempt.

Banknote – a piece of paper money used by consumers, retailers and other businesses. It is issued by a central bank, which promises to pay the bearer the sum stated on demand. Physical currency in circulation consists of banknotes and coins. Also called a bill in North America or a note in the UK/Ireland.

Bank of England – or BoE is the central bank of the United Kingdom. It is in charge of Britain’s money and how that money operates within the country.

Bank Rate – the rate at which a country’s central bank lends money to its domestic financial institutions. Commercial banks base their own interest rates (what they charge their customers) on the bank rate. Also known as the base rate, or federal discount rate in the United States.

Bank Reference – a confidential statement from a bank about one of its customers, telling the inquirer whether this person or company is a good risk for a specific financial commitment. Also known as a banker’s reference, and within financial institutions as a status inquiry.

Bank Run – when huge numbers of depositors (bank customers) start withdrawing their money because they have lost faith either in the bank, the banking system, or the overall economy. Also known as a run on the bank.

Bankruptcy – a term used to define an entity or person that is unable to pay back debts that it owes to creditors. This is a legal status which is initiated by a court order (typically by the debtor).

Banksters – bankers who work recklessly, dishonestly or fraudulently. The word is a portmanteau (blend) of bankers and gangsters. The term appeared in the early 1930s in the United States.

Bank Statement – a document listing all transactions in a customer’s bank account over a specified period (usually one month). Also called an account statement.

Bank Stress Test – this is an analysis or a simulation of events to determine how well a financial institution would cope with a financial crisis. Since 2008, most banking authorities globally have required their banks to undergo stress tests.

Banner – a flag or long piece of cloth with a coat of arms, slogan, logo, sports team image, advert, or other kind of message. They are very popular in public demonstrations/protests, major events, and marketing campaigns.

Barcode – a computer-readable pattern of parallel vertical lines of varying thickness that acts like a unique fingerprint for a product. The code is often printed on the item itself or its packaging. Manufacturers, distributors, retailers, blood banks, and many other types of organization use barcoding to track and keep stock of goods. The range of uses is growing.

Barriers to entry – obstacles or hurdles that new businesses have to overcome when trying to break into a new market. Some barriers to entry are very high and make it nearly impossible for startups to get a look in. When barriers are high monopolies are more common. The opposite of ‘barriers to exit’.

Barter – a system in which people buy and sell things without using money. They exchange goods or services for other products or services. A person, for example, might exchange a chicken for one hour of a plumber’s time. The word is also a verb. As a verb, apart from meaning ‘buying/selling things without using money,’ may also mean ‘to haggle.’

Basel Accords – a list of banking regulation recommendations that were created to make sure that banks globally operate responsibly.

Basel Committee on Banking Supervision (BCBS) – the international regulatory body of banking. The committee is in charge of creating banking regulation recommendations (the Basel Accords).

Bear Market / Bearish Trend – a downward-moving trend of in market prices (it is the opposite of a bull market).

Behavioral Economics – a branch of economics that applies elements of psychology to explain why humans, who tend to be irrational animals, make certain spending decisions.

Behavioral Selling – a sales strategy that leverages the analysis of customer behaviors and psychological triggers to tailor sales approaches, creating personalized interactions that enhance customer satisfaction and drive sales effectiveness.

Benchmarking – the process of comparing one’s business processes and performance metrics to industry bests or best practices from leading companies to identify areas for improvement.

Beneficiary – an individual or entity designated to receive benefits or assets from a will, trust, insurance policy, or other financial instruments, ensuring the transfer of wealth or benefits according to the grantor’s wishes.

Benefits – extra compensation an employer gives its employees (on top of their salary). Examples include a non-contributory pension scheme, health insurance, bonuses, company car, and a subsidized canteen.

Bespoke – means tailor made or custom made. If I make something from scratch according to the tastes, preferences, or instructions of a customer, it is a bespoke item. Bespoke suits contrast with off the rack (USA) or off the peg (UK) suits.

Beta – more commonly known as The Beta, is a measure of an asset’s volatility; how much more or less it fluctuates compared to the market average. If something has a Beta of less than 1, it is likely to fluctuate less than the market average. Conversely, a Beta greater than one means its fluctuations in price will probably exceed the market average. Gold usually has a Beta greater than one, while Treasury Bills have a Beta of less than 1. Also known as the Beta Coefficient or β.

Better Business Bureau (BBB) – an organization containing 112 local BBBs in the United States, Canada and Mexico. It aims to foster honest and responsive relationships between businesses and customers, instill consumer confidence, and contribute towards a trustworthy marketplace for all.

Betting – the action of gambling money or other possessions on the outcome of something. It is the practice or act of playing games of chance for a stake. The stake is usually money. Betting, also called gambling, has been around for thousands of years.

Bid – an offer to buy something or a proposal to complete a service or work package in return for payment. Bidding is what people do at auctions, when they compete for contracts, make offers to buy shares, or seek to acquire companies.

Big Society Capital – an entity that was set up by the British Government in April 2012. It is an independent financial institution set to help grow the social investment market.

Bioenergy – renewable energy produced from biomass – organic matter that can be used to produce heat, transportation fuels, and electricity.

Billboards – large outdoor advertising structures prominently placed to attract attention from drivers and pedestrians. They display bold visuals and messages, aiming to capture interest and create a lasting impression within seconds, promoting products, services, or events to a wide audience.

Biomass – or biomass energy refers to obtaining energy by burning wood, plants, and other organic matter. We can also convert the matter into biofuel or biogas. Biomass is renewable energy; the source of the energy never runs out.

Bitcoin -the world’s first completely decentralized digital-payment system, it is a digital currency that can be exchanged without any sort of central authority.

Black Economy – a part of the economy that is not registered. All work and business dealings are done on a cash-only basis. There are no receipts, the income is never declared, and no taxes are paid. It is also known as the shadow economy, hidden economy, underground economy, or informal sector. A significant proportion of the GDP of developing countries comes from the black economy.

Black Hat – in cybersecurity, the term refers to a hacker who violates computer security for malice or personal gain, often causing data breaches and system damage.

Black Market – the part of the economy where goods and services are traded illegally. The Black Market does not necessarily mean the products are illegal, but the activity definitely is. Also known as the underground market or underground economy.

Block Explorer – an online tool that cryptocurrency users utilize. It allows you to search through the blockchain. With the block explorer, you can view balances, track transfers, check confirmations, and view network statistics. Each explorer works only for a specific blockchain. A Bitcoin block explorer, for example, won’t work on a Litecoin blockchain.

Blocks – part of a blockchain. Blocks are records or individual ledgers while the blockchain is the equivalent of the whole ledger book. Blocks hold batches of valid transactions; they are hashed and encoded into a hash tree. Cryptocurrencies, for example, use the blockchain network system.

Blockchain – a list of records that is growing all the time. We refer to the records as ‘blocks.’ The blocks are linked and secured using special codes, i.e., cryptography. Each block has a hash point with a timestamp and transaction data. Blockchains are the backbone of cryptocurrencies.

Block Trade – a large-scale securities transaction negotiated privately, often by institutional investors (pension funds, mutual funds, etc.), outside of open market operations..

Blog – short for Weblog. It is an online diary or journal that members of the public can view. The blogger writes about his or her experiences, opinions, and other events. Some small news websites refer to themselves as blogs.

Blue Chip Companies – these are companies that are considered to be reliable, they have a history of performing well financially.

Blue Chip Stocks – stocks that are from blue chip companies (well known and financially strong companies that operated for many years). These stocks normally show resilience in important market indexes.

Blue-Collar Worker – a person who does manual rather than clerical work. Blue-collar workers work in factories, workshops, or trades. Their work demands physical skills. The term contrasts with white-collar workers, who work in offices.

Blue Economy – the sustainable use of ocean resources to promote economic growth, create jobs, and improve livelihoods while ensuring the health and longevity of marine ecosystems. It includes sectors like renewable energy, sustainable fisheries, marine biotechnology, and eco-friendly tourism, all aimed at balancing economic development with environmental protection.

Blue Ocean Strategy – a marketing strategy in which a company tries to leave its currently-saturated market (red ocean) and enters a ‘blue ocean.’ A blue ocean is a market with no rivals, i.e., virgin territory. Two INSEAD professors, Renée Mauborgne and W. Chan Kim, introduced the strategy in a 2005 book.

Bluetooth –  the brand name of a technology standard for secure, simple wireless communication. It allows electronic devices to send and receive data over short distances without wires. A typical example is streaming audio from a smartphone to wireless headphones.

Board of Directors –  a group of people who are elected as representatives of the shareholders to establish much of company policy as well as making decisions on key issues.

Bond– a bond is issued by large organizations (such as companies or governments) to borrow money. The issuer of the bond is obliged to to pay the holder interest and/or to pay back the principal in the future.

Bonus – 1. Extra money an employer gives to an employee because the employee performed well. 2. Extra money employees get because the employer had a good year. 3. Money that a company gives its shareholders when it has had a good year. 4. Money that insurance companies give customers when they make a good profit.

Bookkeeper – a person who records a company’s financial transactions, i.e., money coming in and going out. They work in bookkeeping. It is not the same as an accountant (accountants studied many more years).

Bookkeeping – the occupation or activity of maintaining records of an individual’s, company’s, or other entity’s financial transactions. It is part of the umbrella term accounting. People involved in bookkeeping are bookkeepers.

Book-to-Bill Ratio – a measurement that tells us whether customer demand is slackening or growing. Any book-to-bill ratio that is greater than one suggests demand is outstripping supply. This measurement is followed widely in the semiconductor manufacturing industry. Also known as the BB ratio or BO/BI ratio.

Boss – an individual who is in charge of at least one person. A boss may be a junior supervisor, a departmental manager, a regional manager, a director, or the CEO of a giant corporation. The person you report to at work is your boss. The verb ‘to boss’ means to tell people what to do. A ‘bossy’ person is always giving orders.

Bot – also called a web robot or Internet bot, is a software programe that carries out automated tasks (scripts) online. They typically perform repetitive and simple tasks and represent over half of all online activity.

Bottom Line – in the world of finance, the term refers to net profit, net income, net earnings, or earnings per share (EPS), because they appear at the bottom of a company’s financial statement. In other situations it can mean the final outcome, money owed, or the minimum amount accepted.

Bottom-Up Investing – a strategy focusing on individual company analysis to select stocks, regardless of broader market or economic trends, emphasizing the company’s fundamentals, financial health, and growth prospects.

Bounce Rate – a measure of the proportion/percentage of web page visitors who leave the website instead of going to other pages within the same site. Webmasters aim for the lowest bounce rate possible. Some pages, such as contacts, checkout and customer support, always have high bounce rates.

Brainstorming – a technique in which a group of people get together and generate new ideas for a specific issue, problem, or challenge. They are common in the world of business.

Brand – one of the most important aspects of a company is a brand. A brand is “the image and personality of a product” that a company portrays – in the form of slogans, logos, etc.

Brand Identity – all the components that make your brand what it is and shape how people perceive it.

Brand Image – the perception of a company or product held by consumers, shaped by associations, experiences, and the overall impression made by the brand’s identity, marketing, and reputation.

Brand Intelligence – the process of collecting, analyzing, and interpreting data related to a brand’s performance, reputation, and market position. It provides insights into customer perceptions, competitive standing, and market trends, enabling businesses to make informed decisions that enhance brand strength, customer engagement, and overall success.

Brand Management – involves using methods to improve the reputation of a certain brand or product.

Brand Loyalty – when consumers have a specific preference for a certain brand or product.

Breach of Contract – occurs when one party fails to perform their duties or obligations as specified in the agreement, leading to potential legal consequences or damages for the non-complying party.

Brent Crude – a trading classification of sweet light crude oil. It is one of the main benchmark prices for oil in the world.

Brexin – the opposite of Brexit. Brexin means BRitain staying IN the European Union. Linguists say that Brexin as a term makes no sense – it should not include the word ‘exit’ within it.

Brexit – stands for Britain exiting the European Union. The term uses the first two letters of ‘Britain’, plus the whole word ‘Exit‘. A supporter of Brexit is called a Brexiteer. The opposite of Brexit is Brexin. Somebody who regrets voting for Brexit is said to Bregret his or her action.

Bribery – the offering, giving, receiving, or soliciting of something of value as a means of influencing the actions of an individual in a position of power or authority.

BRIC – an acronym for “Brazil, Russia, India, and China”. A report by Goldman Sachs predicted that the four BRIC economies would be wealthier than the current world powers by 2050.

Bridge Loan – a short-term loan used by a person or company in order to secure a transaction or get short-term working capital, until an asset is sold or expected funds come in. Known as a bridging loan in the UK.

Broadband – a high-capacity data transmission technique that uses a wide bandwidth to transport a massive number of signals (messages) simultaneously. As far as lay people are concerned, broadband means very fast Internet connection.

Broad Money – a measure of the money supply that usually (but now always) refers to M3. It includes currency and coins, as well as demand deposits at commercial banks, and other assets that can easily be converted into cash.

Brochure – a slim magazine or book that has information about a product, service, or company. Most brochures have images interspersed with pieces of text.

Broker – an intermediary who helps broker (effect) a transaction between a buyer and a seller. He or she usually specializes in a particular business, such as real estate or insurance. The broker charges a commission – usually a percentage of the total – for his or her services.

Brokerage Firm – a financial institution that acts as an intermediary between buyers and sellers of securities like stocks and bonds, offering investment services, trading platforms, and advice to clients.

Brown Goods – relatively light electronic appliances such as radios, audio equipment, computers, TVs, game consoles, and media players. We also call them light consumer electronic durables or consumer electronics.

Budget – used as a noun, verb or adjective, the word has several meanings. 1. An estimate of the overall costs of a project. 2. A forecast of expenses and income over a specific period. 3. How much money a person, business or any entity has for a project, product or department. 4. Cheap, as in ‘a budget flight’.

Budget Deficit – also known as a Fiscal Deficit, occurs when the government has spent more than it earns in taxes. It is the opposite of a Budget Surplus.

Bulk – 1. In large amounts (purchasing/selling). 2. Something that is very big. 3. Large mass. 4. The most of something, as in “the bulk of the problem lies in….” 5. In a gym, the verb to bulk up means to become more muscular.

Bullet Loan – a loan with a large ‘balloon’ payment at the end. The principal is not paid until the end of the term (maturity). In some cases, interest is paid in all the installments, but the principal is never paid until maturity. Also called a balloon loan.

Bully – a person who intimidates or harms another person deliberately and usually habitually. They do this on purpose. In most cases, the bully sees the victim as vulnerable, i.e., an easy target. Bullying exists at schools, the military, and in the workplace.

Bull Market / Bullish Trend – an upward moving trend of market prices that are increasing in value (it is the opposite of a bear market). An investor who is bullish expects share prices to go up.

Bundle-Selling – a marketing strategy where multiple products or services are packaged together and sold at a combined price, often lower than the total cost of purchasing each item separately, aiming to increase sales volume, clear inventory, and enhance customer value.

Bureaucracy – a system in which important decisions are carried out by state officials instead of elected representatives. It also refers to red tape.

Business – the word has many meanings, such as the act of buying and selling goods and services, a company, market sector, to be occupied and unavailable, to be deadly serious, issues to be dealt with, and to do a bowel movement when talking about one’s pet.

Business Acumen – a skill that experts say can be learned. People with business acumen are able to see the ‘big picture’, make good judgments and take quick decisions that usually lead to positive outcomes.

Business Administration – the term may refer either to a university course or the management of a business. At university, there are graduate and post-graduate business administration courses. Business administration in a company includes managing its finance, marketing, human resources, and business operations. It also includes accounting.

Business Agent – a person who manages the business affairs of an individual, company, union or organization. Virtually all successful professional athletes, musicians, actors, authors and artists have a business agent. They may also handle their client’s public relations, travel arrangements and personal investments.

Business Analysis – 1. (Countable noun) An investigation into a company’s operations. 2. (Uncountable noun) A research discipline that identifies a business’ needs and determines solutions to problems.

Business Angel – a wealthy, entrepreneurial individual who invests money in early-stage start-up companies in return for a percentage ownership in the business. Some are just sleeping partners while others are actively involved in the firm they have invested in. Also known as an angel investor.

Business Case – a persuasive explanation on how a business decision will improve a product or business. It is either a written document or verbal presentation which describes a problem, possible options to address it, and reasons why one of them is the best choice. It should also include a warning of what might happen if no action is taken.

Business Consultant – a professional who helps companies solve problems, improve efficiency, and achieve their goals by offering expert advice in areas such as management, strategy, operations, or marketing. They provide fresh perspectives and specialized knowledge to drive growth and improve business performance.

Business Cycle – also known as a boom-bust cycle, refers to the alternating periods of recession and recovery caused by fluctuations in production and trade in a market economy.

Business Deal – an agreement between parties to exchange services, goods, or other valuable considerations, often seeking mutual benefit and requiring execution and compliance by all involved.

Business Development – the creation of long-term value through customers, markets, and relationships, focusing on opportunities for growth in sales, partnerships, and strategic expansion.

Business Driver – a process, component, resource, or rationale that influences a company’s performance. Some business drivers are under our control, while others, such as political unrest or the national economy, are not.

Business Ethics – the moral principles that act as guidelines for the conduct and decision-making of a business and its employees, ensuring integrity in their professional actions.

Business Finance –  the money required to start, run, or expand a business.

Business Growth – the process through which a business expands. This may be the result of gaining new customers, existing customers spending more on your products, breaking into new markets, or raising prices.

Business Hours – the hours during which office people work, which is generally from 9am to 5pm in English-speaking countries, Japan and most advanced economies. The term could also refer to the times shops and/or banks are open.

Business Incubator – also known as a Startup Incubator, is an organization that supports early-stage companies with resources and services to help them grow.

Business Intelligence (BI) – a set of techniques and tools used to transform unintelligible raw data into meaningful and useful information which company managers and directors can use to give their business an edge in the marketplace.

Business Liability Insurance – a type of insurance companies have to protect them against claims for damages or injury due to negligence. There are three types: Professional Liability Insurance, Product Liability Insurance, and General Liability Insurance.

Business Loan – a type of financing specifically designed to help businesses cover expenses such as startup costs, equipment purchases, expansion, or managing cash flow. It typically requires repayment with interest over a set period and may be secured by collateral or based on creditworthiness.

Business Manager – a person who oversees and supervises a company’s (or department’s) activities and employees. In smaller companies the business manager may be in charge of all operations.

Business Model – a business’ plan for making money. It shows how a firm creates value for itself while selling products or services to customers. For example, the business model of a restaurant is to cook meals and sell them to hungry people who will pay money for them.

Business Objective – explains in detail how a company plans to reach its goal. A business’ goal is a less specific term for where it plans to be one day, while its objective describes how it plans to get there. ‘We want to be the largest bicycle maker in the world one day,’ is an example of a goal. ‘We will increase sales by 3% per quarter over the next 12 months and open two factories in Canada and Mexico by March next year,’ is an example of an objective.

Business Park – an area of land where several companies have their offices. They are usually located in suburban areas or just outside a city. Also known as an office park.

Business Plan – a document that summarizes business goals, strategies, and financial forecasts.

Business Sectors – distinct areas of industry within an economy, characterized by similar business activities and services. Examples include the automotive, pharmaceutical, and retail sectors. The term also refers to a part of the economy where individuals and private companies operate (for profit), in contrast with the public sector.

Business School – a university faculty/department or independent institution that teaches degree and postgraduate level courses on business administration, business management, and other specialized business-related topics. Also called a school of business, school of business administration or school of management.

Business Strategy – a roadmap for achieving a company’s objectives through competitive positioning and resource allocation. It is a plan outlining how a company will achieve its goals and gain competitive advantage.

Business Travel – traveling on behalf of one’s business or employer. Work-related or business-related travel. Each journey is a business trip. It does not include commuting or traveling short distances.

Business Trip – a long-distance journey for work puposes. The employer pays for the business traveler’s ticket, accomodation, etc. The general term is business travel.

Business Venture – a start-up enterprise pursued with innovation, strategic planning, and risk to achieve growth and profitability. The term may also refer to a an expansion project in an existing company.

Buyer Persona – a fictional representation of an ideal customer, crafted from market research and real data about existing customers. It includes demographic details, behavior patterns, motivations, and goals. This tool helps businesses understand their target audience better, enabling more effective marketing, product development, and customer service strategies.

Buyer’s Market – when supply exceeds demand and goods or services take longer to sell and generally fetch a lower price. In a buyer’s market, the purchaser has the upper hand. Also known as a soft market.

Buyout – the acquisition of a controlling interest in a company, where the buyer gains majority ownership and thus, control over its operations and decisions.

C2C – stands for consumer-to-consumer or customer-to-customer. It refers to the exchange of goods and services among consumers. In other words, one member of the public selling something to another member of the public. It contrasts with B2C, i.e., business-to-consumer.

C-Level Executives – or C-Suite Executives are top corporate officers in a company. The ‘C’ stands for ‘Chief’, as in CEO (Chief Executive Officer) or CIO (Chief Information Officer).

CAGR, – which stands for Compound Annual Growth Rate, is the measure of an investment’s annual growth over a specific period, accounting for compounding.

Call to Action – a sales, marketing, and advertising term that refers to a sentence, phrase, or graphic image that attempts to encourage consumers to take action. The aim might be to get them to buy something, ask for more information, subscribe, request a free demo or trial, etc.

Canvassing – calling people by telephone or visiting them door-to-door. Canvassing is cold calling, i.e., the person opening the door or answering the telephone does not know the visit or call is going to happen. People canvass during election campaigns, to recruit new members, to sell things, or to raise awareness. Market researchers sometimes canvass when they are gathering data.

Capital – the assets (other than labor and land) needed for production. Examples include machinery, buildings and vehicles. It also refers to money used to start up a business or expand one, as well as funds used for investments.

Capital Adequacy Ratio (CAR) How CAR is calculated – expresses how capable a bank can absorb losses. It is determined by calculating the ratio of capital to risk.

Capital Appreciation – an increase in the market value of an asset. This occurs when the market price for an asset is higher than what the investor originally paid for.

Capital Assets – things that a business needs to produce its goods or deliver services, like machinery, computer equipment, vehicles, etc. Capital gains tax must be paid if a capital asset is sold.

Capital Controls – measures taken by either a central bank or government to restrict the amount of money flowing in or out of a country. They may include tariffs, volume restrictions, legislation, and minimum-stay requirements.

Capital Flight – when huge quantities of money flow out of a country because its citizens and foreign investors have lost confidence in the economy. Reasons include defaulting on an important debt, a steep increase in taxes, political instability, or a natural disaster.

Capital Flows – the movement of investment money in and out of nations. It does not include money that businesses and individuals use to pay for imported goods. The term includes, for example, the international movement of money in and out of stock and bond markets.

Capital Formation – the expansion of capital goods through savings, which results in economic growth. Capital goods are things like buildings, equipment, machinery, tools, vehicles that are used for producing goods and providing services. Also known as capital accumulation.

Capital Gain – when you sell a capital asset for more than you bought it for, you have made a capital gain. If you sell it for less, it is a capital loss. In most countries, people have to pay capital gains tax.

Capital Goods – products and things that are used to produce goods and services. Examples include buildings, computers, machinery, equipment, vehicles, etc.

Capital Growth – the increase in value of an investment or asset over time. It is measured by comparing an asset’s original value with what it is worth today. Also known as capital appreciation.

Capitalism – an economic system in which industry, trade and production are mainly owned privately and operated to generate profit.

Capitalization – this term has several meanings. 1. The provision of capital for a business. 2. The conversion of assets or income into capital. 3. A quantitative assessment of a firm’s capital structure. 4. Writing or printing words using capital letters, or starting each word with a capital letter.

Capital Markets – markets where long-term debt or equity-backed securities are traded. Funds from savers are directed to companies, organizations and government that require medium- and long-term finance.

Capital Project – a huge project that lasts a long time, costs a lot of money, and is usually extremely complex. Companies undertake capital projects to improve or create a capital asset. When publicly funded, capital projects are usually infrastructure projects.

Capitulation – in the financial markets, it occurs when investors “give up” and many of them sell off their shares in huge numbers. When it occurs, it tends to do so when the market bottoms out.

Captain of Industry – a leading business person who apart of amassing a great fortune, has contributed positively to his or her country and its people by creating jobs, boosting production, improving productivity, or founding colleges, museums and centers of culture. A robber baron, on the other hand, also got rich, but usually at the expense of his/her people and nation.

Captive Market – a group of potential buyers who have to purchase a particular product because there is a lack of choice. The seller has a monopoly. People buying food and drink in sports stadiums, movie theaters, and airports are part of a captive market.

Carbon capture and storage (CCS) – CSS refers to the capture of carbon dioxide (CO2) and its transportation to a safe location for storage.

Carbon Dioxide – or CO₂ is a colorless and odorless gas. Carbon dioxide is vital for life on Earth. CO₂ is also a greenhouse gas. In other words, it helps keep the planet’s surface warm. There is a global effort to reduce CO₂ emissions.

Carbon Market – an environmental policy device that makes businesses and countries pay for carbon emission. Governments set a cap on how much CO2 each company can emit. Those that exceed their cap can purchase leftover allowances from low polluters. Also known as carbon emissions trading, emissions trading, or carbon trading.

Carbon Tax – A carbon tax is an environmental tax on the emissions of carbon dioxide – a heat-trapping “greenhouse” gas. It is a form of carbon pricing.

Career – a job or occupation that you undertake for a major period in your life. Vocations such as the police or medicine are careers. Not all jobs are careers.

Cargo – goods or (agricultural) produce transported by ship, train, motorized vehicles, or airplanes. Freight means the same as cargo. Livestock (cattle, chickens, etc.) may also be classed as cargo when they are being transported.

Car Insurance – a contract between you, a car owner, and an insurance company, in which the insurer protects you in case of an accident. The insurance policy covers, for example, the car repair or replacement costs and medical expenses related to personal injuries.

Cash – the most liquid asset there is. In layman’s terms it means just coins, notes and traveler’s checks. Technically, short-term deposits, checks and other negotiable instruments are also considered as cash.

Cash Accounting – a method of bookkeeping in which payments and receipts are entered on the day they occur, instead of when the orders are placed. More commonly used by smaller enterprises. Contrasts with accrual accounting.

Cash Against Documents – an arrangement in which the buyer, typically an importer, may only collect goods delivered by the seller (exporter) after paying the related bill of exchange in full.

Cash Conversion Cycle (CCC) – measures how long it takes invested money to start appearing in a firm’s cash flow. CCC measures liquidity risk when a company grows. Also known as net operating cycle or cash cycle.

Cash Cow – refers to a brand (product), company division or business that makes good profits in a mature market and does not require heavy reinvestment. The cash cow generally has a leading market share.

Cash Crop – a crop a farmer sells to get money, as opposed to a subsistence crop, which feeds the farmer and his family.

Cash Equivalents – assets than can be rapidly turned into cash; they are highly liquid, are very short term, and have a high credit quality. They are normally grouped with cash (cash and cash equivalents) in a company’s financial statement.

Cash Flow – an expense or revenue stream that increases or decreases a cash account over a specified period.  It is the flow of money in and out of an organization, business, or an account.

Cashier – an employee who operates the cash register in a store, movie theater, hotel, hairdresser or other type of business. In the UK it also means a bank employee who deals directly with customers (US: bank teller). In accountancy, a cashier is the person in charge of disbursing and receiving payments.

Cashier’s Check – a check guaranteed by a bank, drawn directly on a customer’s account. The bank assures the receiver that the amount stated will be paid. Also known as a banker’s draft, treasurer’s check, or teller’s check.

Cash Management – managing the amount of money a company receives and pays out and when these receipts and payments occur. It is also a service banks offer to customers, usually their larger corporate ones.

Cash Market – a public market where financial products or commodities are purchased and delivered immediately (up to two working days from trade date). Also known as the spot market or physical market. It contrasts with the futures market.

Cash Ratio – calculated by adding up all cash and cash equivalents, and dividing the total by all current liabilities. It is one of several ways of measuring a company’s liquidity. Also called cash asset ratio or cash coverage ratio.

Cash Register – a machine used in stores, restaurants and other businesses to store money and record the amount received from each sale. It also prints out a receipt. In the UK it is also called a till.

Catfishing – pretending to be someone you are not by setting up a fake social media account. The catfish develops romantic relationships with victims – which can last many years. Their aim is to extract money from them by deception – to con them.

CBD (Cannabidiol) – one of the cannabis plant’s active substances. It is the second most prevalent substance of the cannabis or marijuana plant. CBD, which was discovered in 1940, is a phytocannabinoid. Studies have shown that it could be used for the treatment of epilepsy, pain, and possibly other neurological disorders.

Celebrity Endorsement – a marketing strategy where famous individuals promote products, brands, or services, leveraging their fame and influence.

Central Bank – an institution that is in charge a country’s currency, interest rates, and money supply. It is not the same as a commercial bank. It is in charge of how money functions in a country, or a group of countries as is the case with the European Central Bank.

Certificate of Deposit – an interest-bearing, short- or medium-term debt instrument issued by a bank. It is a type of promissory note commonly sold in the USA and other countries by banks, credit unions and thrift institutions. It offers greater interest rates than bank savings accounts. There are many different types of certificates of deposit (CDs), including callable CD, traditional CD, zero-coupon CD, bump-up CD, liquid CD and brokered CD.

Certificate of Origin (CO) – a document with information about a product’s origin, i.e., where it was made. It also has information on its destination. The document helps countries determine whether they must levy a tariff on the product.

CPA (Certified Public Accountant) – the most highly qualified individual in the world of accountants in the USA and many other English-speaking nations. The equivalent professional in the UK, Ireland, and some other Commonwealth countries is a Chartered Accountant.

CFD in Derivative Trading – CFD (Contract For Difference) is an extremely popular type of derivative trading. Traders can speculate on rising and declining prices and make money. If their predictions are wrong, they can also lose money.

Chairman – a general term for an individual in charge of a meeting. The head of the board of directors of a company is also a chairman. Some organizations prefer to use the term chair or chairperson.

Challenger Bank – a small or young bank that is competing against the giant high street banks, such as the Big 5 in the UK. Challenge banks have become much more common since the 2007/8 global financial crisis, with central banks such as the Bank of England loosening regulations and trying to encourage more competition.

Challenger Selling – a sales approach where salespeople teach customers, tailor their sales pitches to specific needs, and take control of the conversation. This method emphasizes challenging the customer’s current thinking to offer new insights and drive better outcomes.

Champagne Stock – a stock that greatly rises in value over a very short period of time. During that short period, the share price will typically have doubled or tripled.

Channel Sales – a distribution method where a company utilizes third-party entities, such as distributors, resellers, or affiliates, to sell its products or services to end customers, extending market reach, reducing direct selling costs, and leveraging external expertise.

Chartered Accountant – the most highly qualified person in the field of accountancy. It is the US equivalent of a CPA (certified public accountant) and exists in the UK, Ireland, and several Commonwealth nations.

Chatbots – bots that chat with humans online, and thanks to artifial intelligence, interact just like we do. They are also called Chatterbots or Talkbots.

Chattel Mortgage – a type of loan in which a movable personal property is put up as security. Chattel could be a car, cattle, machinery, a boat, or any personal possession that is movable. While the loan is being repaid the lender owns the possession that was used as security.

Chief Executive Officer (CEO) – the most senior corporate officer or administrator. The CEO is in charge of managing a for-profit or non-profit organization. Some companies (and countries) use the term ‘President’ with the same meaning.

Chief Financial Officer (CFO) – a ‘c-executive’ who maintains and tries to boost a company’s long-term financial health and status. He or she is the highest ranking corporate officer in a company who specializes in finance. In the UK, people generally refer to this person as the financial director.

Chief Human Resources Officer (CHRO) – an organization’s top executive in charge of human resources. The CHRO used to report to the COO or CFO, but is more likely to report to the CEO today.

Chief Information Officer (CIO) – the executive responsible for the management of technology. He or she makes sure that the information available within the company is relevant and easy to use. We also refer to this position as CDIO (Chief Digital Information Officer) and Information Technology Director.

Chief Investment Officer (CIO) – an executive (often board level) who heads investments in a company or financial institution. They are in charge of managing and supervising all investment activities, maintaining good investor relations, managing pension investments, and working with outside analysts.

Chief Marketing Officer (CMO) – the top marketing executive in a company. This person is in charge of developing, implementing, and overseeing marketing and advertising programs. CMOs report to the company’s Chief Executive Officer (CEO).

Chief Operating Officer (COO) – a company executive who oversees all the ongoing business operations. We also use the terms Director of Operations, Operations Director, and Chief Operations Officer. This person reports directly to the CEO (Chief Executive Officer). It is usually the second-highest position in a company.

Chief Technology Officer (CTO) – a top executive who is in charge of a company’s technological needs. We may also refer to this person as the Chief Technical Officer. CTOs work closely with the Chief Informaiton Officer (CIO).

Christmas – a Christian festival when billions of people celebrate the birth of Jesus Christ. Most workers in Europe, Australasia, the Americas, and many other countries have a holiday from work and school. The weeks leading up to Christmas are important for retailers. In fact, many retailers would collapse if they missed their Christmas sales.

Churn Rate – also known as the Customer Attrition Rate, Customer Turnover Rate, or Customer Defection Rate, is the percentage of customers who stop using a company’s product or service over a specific period.

Circular Economy – an economy that aims to get rid of waste, overconsumption of Earth’s resources, carbon emissions, and pollution. When a country moves towards a circular economy or circularity, it is going green.

Claim – commonly means to assert that something is true. Also has several meanings as a noun, such as to award claims for compensation, or to make a claim on an insurance policy.

Classic – a common English word with several meanings, including ancient literature, a work of excellence, and a reliable source. The term can also describe events or objects that are typical, traditional, noteworthy, or historically significant.

Classical Economics – an economic school of thought that emerged after Adam Smith wrote the book ‘The Wealth of Nations’. Classical economists believe that the government should not intervene in the market, because it is better at find its own way toward a natural equilibrium.

Client – a customer with whom you build a relationship. When a customer makes a purchase, the seller then focuses on the next one. With a client it is different, you see him or her again and again – it is a longer term relationship. In most cases, the term client can be replaced by customer, but not the other way round. However, lawyers, psychologists and people who offer advice have clients, and not customers. In computing, the client is the device that communicates with a server.

Client-Centric – or ‘customer-centric’, refers to a method of doing business where the client or customer is at the center of the company’s effort. The customer is king. The commercial enterprise concentrates on the client rather than the product or sales. Client-centric businesses tend to be more successful and achieve better growth and profits than those with other cultures.

Customer-Centric Selling – a sales strategy that focuses on understanding and addressing the unique needs, preferences, and challenges of each customer. This approach builds stronger relationships, enhances customer satisfaction, and tailors solutions to meet individual customer requirements, ultimately driving higher sales and loyalty.

Climate Change – the term refers to the long-term shift in our planet’s weather patterns and average temperatures. Global warming, when average temperatures rise, is a type of climate change. If temperatures across the planet declined, that would also be a climate change matter, but not a global warming one.

Closed Economy – a country that does not trade with other nations. There are no imports or exports. A closed economy is an autarky. It is the opposite of an open economy. Closed economies claim they are self-sufficient and do not wish to or need to engage in international trade. Today, entirely closed economies do not exist.

Closed fund – a mutual fund that has stopped issuing shares to new investors, mainly because it has grown too big.

Cloud Computing – a type of computing where files and other data are stored in remote computers rather than your own hard drive. Data is stored and shared in ‘the cloud’, which basically means the Internet. Imagine an external hard drive in ‘the sky’, with ‘the sky’ being remote servers on the Internet.

Code – a system for shortening messages or making them secret. To read a coded message you need a key that unlocks the code. The term also has meanings in other fields, such as mathematics, computing, and standards of behavior.

Collaborative Selling – a sales strategy where sellers and customers work closely together, leveraging expertise from both sides to co-create tailored solutions that address the customer’s specific needs, fostering trust, long-term relationships, and mutual success.

Collateral – a possession (asset) that a borrower offers as security on a loan. Collateral lowers the risk for the lender and also allows them to reduce the interest rate on the loan.

Collateralized Debt Obligation (CDO) – a security that turns individual fixed-income assets into a product that can be sliced into different products and then sold. CDOs are structured financial products backed by a pool of loans.

Coinsurance – has several meanings: 1. The sharing of risk between insurer and insured – in health insurance similar to copayment or copay, but copayment is a fixed amount while coinsurance is a percentage that the insurance firm pays. 2. The sharing of risks between two or more title insurance companies. 3. In the real estate business, coinsurance is imposed by the insurer on the insured – a type of penalty – for under-insuring, under-declaring or under-reporting the property’s value.

Combined Ratio – a calculation that tells us how profitable an insurance company is in its underwriting operations. The measurement excludes investment income. Typically expressed in percentage terms, any figure below 100% means it is profitable.

Command Economy – an economy in which the supply of goods and services as well as their prices are regulated and controlled by central government, and not market forces. Central government has planners who decide which goods and services are produced, as well as their distribution. Also called a centralized economy, planned economy or controlled economy. It is the opposite of a market economy.

Commerce – a component of business that focuses on the purchasing and selling of products and services for money or other products (barter). The term is synonymous with ‘trade’. Humans have been involved in commercial activities for many tens of thousands of years. The Internet brought e-commerce (electronic commerce), which is dramatically changing how most of us do business.

Commercial Bank – a financial institution that takes people’s, companies’ and organization’s deposits, and lends its customers money in the form of loans, in contrast with investment banks, which deal with securities, mergers and acquisitions, and asset management.

Commercial Paper – an unsecured money market instrument that is issued  as a promissory note. It is a short-term loan taken out in the form of an IOU that can be traded.

Commodities – raw materials and primary agricultural products. A product or substance that we buy and sell in huge quantities, such as coffee, grain, metals, oil, etc. Types of energy, such as electricity, are also commodities.

Commodity Market – a market where raw materials and primary agricultural products (commodities), rather than manufactured goods, are bought and sold. It is similar to the equity market, but instead of buying and selling stocks, investors trade in commodities.

Common Stock – a type of security that serves as evidence of part ownership of a company. Common stockholders usually have voting rights, but are only paid dividends after preferred stockholders have been paid. Known in the UK as ordinary shares. Also called voting shares.

Communication – the act of imparting, conveying, or exchanging information or emotions by uttering sounds, writing words, flag signs, smoke signals, etc. One entity conveys data to another. The entities could be humans, animals, or smart machines.

Competitive Advantage – when a business has an edge over another in the provision of a certain good or service. For example, Mercedes has a competitive advantage over most other luxury car-makers because its automobiles break down less often and maintain their value. Being able to sell a product at a lower price than competing companies is another example of competitive advantage.

Competitive Analysis – also known as Competitor Analysis, involves assessing your industry rivals to identify their strengths, weaknesses, strategies, and market position to inform and improve your business approach.

Competitive Differentiation – the strategy of distinguishing a company’s products or services from others in the market, emphasizing unique attributes that appeal to customers. This approach involves highlighting superior features, quality, service, and other key factors that provide a competitive edge.

Competitive Dynamics – the continuous interplay of actions and reactions among companies in a competitive market. These interactions include strategic moves like product launches, pricing changes, and market expansions. Understanding these dynamics helps businesses anticipate competitor actions, develop effective strategies, and maintain or enhance their market position.

Competitive Intelligence – the systematic collection and analysis of information about competitors and market trends. It enables organizations to make informed decisions, predict industry shifts, and identify opportunities and threats by closely observing and understanding the marketplace dynamics.

Competitive Landscape – an analysis of how companies in a specific industry perform relative to each other, focusing on competitors’ strengths, weaknesses, market position, and strategies. It includes analyzing direct competition, indirect competition, and substitute products or services.

Competitive Pressures – forces that challenge a company’s market position, compelling them to innovate, improve efficiency, and strategically respond to rivals.

Competitive Pricing – also known as Competitor-Based Pricing, is a strategy where businesses set prices based on the prices of their competitors. This approach aims to attract customers by offering more attractive prices than rivals, either by matching, undercutting, or exceeding competitor prices to highlight superior value.

Competitive Strategy – a long-term action plan crafted by a company to gain a competitive advantage over its rivals, by efficiently allocating its resources to deliver a unique mix of value to customers and achieve market leadership.

Compound Interest – the addition of interest to the principal sum of a loan or deposit, where the interest that accrues also earns interest. This process results in exponential growth of the initial investment over time, significantly increasing the future value.

Computer-Aided Design – also known as CAD, refers to computer software that helps designers create, modify and optimize designs. It replaces drafting by hand with an automated and efficient process. A growing number of professions are today using CAD. An architect would find it extremely difficult to function properly in today’s environment without computer-aided design software.

Communism – a social, political and economic system in which, in principle, the workers (state or government) control the production of food, goods and services, and there are no different social classes.

Commute – can be a verb or noun. The verb means to travel to and from work. People who do this are commuters. An example of a noun may be: “I saw a strange incident during my commute.”

Commuter – a person who travels between home and work on a regular basis.

Company – an organization or any entity that makes or sells goods or services in order to make a profit. A small minority of companies are non-profit. The term is synonymous with ‘firm’ and ‘corporation’. There are many different types of companies.

Company Secretary – the person responsible for making sure the company operates according to the law and is managed correctly. This is a senior position. Since the turn of the century, the breadth and importance of the role of the company secretary has expanded considerably. The term Corporate Secretary is more commonly used in North America.

Comparative Advantage – an economic theory put forward by the 18th century British economist David Ricardo in which two nations are better off specializing and trading with each other than trying to be completely self-sufficient, even if one of the countries has superior productivity in making all goods. The products that the country opts not to make should be imported. Ricardo’s Comparative Advantage illustrated the advantages of international trade by comparing Portugal’s economy with England’s.

Compensation – either refers to money and other benefits that are paid to an employee for work done, or money that is paid to somebody to make up for something that has been lost or damaged or some problem. The term also has non-business meanings, which the article covers briefly.

Competition – in business, a situation in which suppliers of goods and services strive to be the most successful. They try to beat each other. They compete for the consumer’s business.

Competitor – somebody, a business or entity that is trying to win or do better than the others. In many cases, the focus is to compete successfully against just one adversary – often called a rival. Competitors are vital components of a free market economy.

Compliance – the ability to comply or adhere to a set of rules, regulations, standards, policies, or orders. It means the same as adherence. The verbs are to comply (with) and to adhere (to). There is compliance when a company conforms to a set of rules.

Compound Effect – the process where an investment grows over time as earnings from the principal are reinvested to generate more earnings, leading to exponential growth. The term is also used for personal development.

Comprehensive Insurance – a type of car (vehicle) insurance that covers you for all types of damage, and not just the collision damage to the other party’s car. The policyholder is also covered against theft, fire, floods, broken glass, rockslides, vandalism, tsunamis, earthquakes and all non-collision events. ‘Third Party, Fire and Theft’ insurance only covers you for damage to the other car plus fire and theft.

Con – a trick to get somebody’s money or to get them to do something. Con artists deceive people, i.e., they use tricks and deception, usually to get people’s money. A con may also be slang for ‘convict’ or ‘conservative.’ Con is the opposite of ‘pro’ when talking about advantages vs. disadvantages.

Conceptual Selling – a sales approach that prioritizes understanding and addressing the specific needs and challenges of the customer. By engaging in detailed conversations, salespeople gather insights to offer tailored solutions, fostering trust and building long-term relationships for better sales outcomes.

Conference – an event with lots of people who get together to discuss a specific topic. The people at the conference confer, i.e., exchange ideas and information.

Confidentiality – the state of keeping information secret. Confidentiality is the noun of the adjective Confidential. If something is top secret, it is confidential, in other words, confidentiality is a priority.

Conglomerate – a corporate group consisting of several different companies. In most cases, the companies operate in different markets. Berkshire Hathaway, for example, is a conglomerate; it wholly owns or has a significant stake in dozens of companies.

Consolidation – combining two separate companies (merger) and creating a new entity, a process of maturation in the market, when a company reduces the number of outstanding shares (reverse share split), in information technology when resources are shared among several users and applications, to get stronger, to show the financial results of a group of companies in one set of figures, a loan that is used to combine all the payments on other loans.

Consortium – an alliance of individuals, companies, organizations or even governments that get together to achieve a common objective that benefits them all. The plural is consortia or consortiums. In the travel industry, consortia are formed so that each member can get better deals and prices and offer their clients more than they could on their own.

Construction – the process of building or assembling infrastructure, involving planning, design, and management of materials and labor to create structures like buildings, roads, and bridges.

Consultative Selling – a sales approach that prioritizes building relationships with customers to understand their needs and provide solutions tailored to their specific challenges.

Consumer – a person, organization or economic entity that buys or hires goods or services. The consumer purchases the product or service, and does not sell it on or use it to manufacture something else.

Consumer behavior – the study of the process involved when people, groups, or other economic entities buy and dispose of goods. Consumer behavior also applies to behaviors when purchasing services. In other words, it is the process we go through when we buy and discard something.

Consumer Confidence – an economic indicator that measures how optimistic/pessimistic consumers are regarding the state of the economy and their own financial situation. Consumer confidence is closely monitored by most sectors of the economy.

Consumer Confidence Index (CCI) – an economic indicator that measures consumers’ optimism or pessimism about the economy, based on their views of current and future business conditions, employment, and personal finances, influencing spending and saving behaviors.

Consumer Goods – products that consumers buy and consume. We buy consumer goods for our own use – we do not make other things with them that we then sell. We also call them final goods.

Consumer Power – the capacity of individuals to shape market outcomes and corporate actions through their purchasing choices, advocating for quality, fairness, sustainability, and ethical business practices.

Consumer Preferences – the specific likes, dislikes, priorities, and values that guide consumers’ choices in purchasing products or services, shaped by factors like price, quality, brand loyalty, cultural and social influences, as well as personal tastes and environmental concerns.

Consumer Price Index (CPI) – an index that represents changes in the price level of a market basket of consumer goods and services bought by households. The aim is to measure the change in the prices of goods and services.

Consumer Sentiment – reflects individuals’ confidence in the economy and their personal financial prospects, deeply influencing their spending and saving habits. It’s measured through surveys, with changes indicating shifts in economic conditions and consumer behavior, guiding businesses and policymakers in decision-making processes.

Consumer Surplus – the difference between how much a consumer paid for a product (market price) and how much he or she would be willing to pay (his/her highest acceptable purchasing price). Along with Producer Surplus, it forms part of the Economic Surplus. Consumer surplus is a measure of the welfare that consumers gain from buying products and services.

Consumption – the process of buying/using goods and services. It is the basic foundation of economics. The consumption of a car refers to how many miles per gallon it does. Consumption used to mean tuberculosis. The term has many meanings.

Content Marketing – an innovative approach to marketing that focuses on creating and distributing content that online viewers find useful, engaging and interesting. The aim is to engage potential customers with material that answers or addresses their questions. The brand is woven into the material, thus boosting brand awareness, and ultimately sales.

Contract – a written agreement between two or more parites. The agreement may be oral (spoken) or in written form. Written contracts are easier to enforce.

Contrarian Investing – refers to behaving like a bear in a market full of bulls, and like a bull in a market full of bears. Going against the herd in the investing world.

Control Group – a group of people who are matched as closely as possible with the experimental group. However, the control group is not exposed to any experimental treatment. Researchers then compare the results of the two groups.

Conversion Rate – the percentage of visitors to a website who end up taking a desired action such as buying something, filling in a form, adding their signature to a petition, subscribing to a newsletter, becoming members of an association, downloading software, or requesting a free sample. The term is also used in exchange rates, meaning how many units of one currency you’d get if you converted it into another currency.

Conversion Rate Optimization – also known as CRO, is the process of enhancing a website to increase the percentage of visitors who complete a desired action, like buying something or signing up for a newsletter.

Cookies – tiny tracking devices with bits of data that are sent from a website’s server to your browser and deposited in your hard drive. It tracks you browsing habits. Cookies do not gather sensitive information from your computer such as your bank details, contact list, email correspondences, etc.

Copyright – an intellectual property protection for creative works such as music, literature, and art, granting the copyright holder exclusive rights over the distribution, reproduction, performance, and display of their work, subject to certain exceptions like fair use.

Copywriter – somebody who writes the text for advertisements and other promotional material. The text they write is called copy. Today, good web copywriters are very much sought after.

Core Inflation – a measure of the long-term trend in the price level of goods and services, excluding volatile categories such as food and energy, to provide a clearer indication of underlying inflationary pressures and economic health.

Coronavirus – a family of viruses consisting of several strains. Some of these strains can be fatal for birds and mammals, including humans. In December 2019, Chinese authorities reported some cases of human infection of the Wuhan-nCoV (novel coronavirus), which has spread rapidly.

Corporate Strategy – strategies designed to help companies achieve their goals. There is a difference between a business-level strategy and corporate-level strategy.

Corporate Tax – tax that companies in the United States and Canada pay their governments on their profits. Known as corporation tax in the UK and Ireland and company tax in Australia. Also known in the US/Canada as corporate income tax. Many people complain that corporate tax rates in the US are too high.

Corporation Tax – tax that limited companies, cooperatives, clubs and some other entities in the United Kingdom and Republic of Ireland have to pay on their profits. In the USA/Canada it is called corporate tax. Corporation tax in the UK now stands at 21% – there is talk of reducing it further.

Corporation – a company or group of companies that is authorized to act as a single entity, just like you or me, and recognized as such in law. Corporations are owned by shareholders (stockholders) who share in profits and losses, and whose liability is limited to the money invested in the entity’s shares (stocks). The meaning of corporation is not the same in the US and UK. In the UK it generally means a large company or a state-owned company, such as the BBC (British Broadcasting Corporation).

Corruption – the abuse of entrusted power for private gain, undermining integrity in both public and private sectors, affecting society’s foundations and fairness. Examples include bribery, fraud, embezzlement, nepotism, and extortion.

Cost – the resources used to make a product, expressed in monetary terms. The word has several meanings. It also means the amount of money required or spent to acquire/buy something. Cost, unlike price, does not include the mark-up.

Cost Analysis – the process of identifying, assessing, and evaluating all costs associated with a project, product, or decision. It involves breaking down both direct and indirect expenses to determine the total cost and comparing it to potential benefits, helping organizations make informed financial decisions and optimize resource allocation.

Cost-Benefit Analysis (CBA) – a systematic approach used to evaluate the strengths and weaknesses of alternatives in order to make decisions. It involves calculating and comparing the benefits and costs of a project, decision, or policy.

Cost Control – the practice of managing expenses to maximize profit without compromising quality or performance.

Cost-Effectiveness – the evaluation of how efficiently resources are utilized to achieve desired outcomes, balancing the benefits gained against the costs incurred.

Cost of Living – how much money an individual needs to spend to maintain a specific standard of living. Economists and lawmakers use the measurement to compare different countries, towns, and regions.

CPC (Cost Per Click) – refers to the amount advertisers pay each time a user clicks on their online advertisement. It’s a method to gauge the cost-effectiveness of online campaigns.

Council of Economic Advisers (CEA) – a body consisting of economy experts that advises the US President on domestic and international economic policy. The Chairman is nominated by the President and approved by the Senate, and other members are appointed by the President.

Council of the European Union – the voice of the governments of the EU member states. People commonly refer to it as simple the ‘Council.’ The Council adopts the new policies and laws of the EU.

Coupon – can mean the annual interest on a bond, a voucher/ticket that you can redeem for a discount, rebate or free purchase, or a form in a newspaper, magazine or printed advert that you cut out, fill in, and send off for information, a purchase or a sample. In metallurgy, a coupon is a sample of metal or metalwork that is submitted to a customer or testing agency for approval or confirmation.

Coupon Rate – the sum of a bond’s annual coupon payments divided by the bond’s face value, i.e. the interest rate on the payments of a bond. In most cases, payment is done twice a year.

Court of Justice of the European Union – or the European Court of Justice, ensures that every EU nation interprets EU law in the same way. It is the supreme court of the European Union regarding EU law. It has no jurisdiction over the national laws of the EU Member States.

CPM (Cost Per Mille) – measures the cost of 1,000 advertisement impressions on a webpage, helping advertisers gauge campaign cost-effectiveness.

Creative Accounting – a slightly ironic term for imaginative ways to make a company’s accounts reflect it in a better light; make it look financially healthier than it really is. The practice, although frowned upon, is legal. The creative accountant works within the law, taking advantages of loopholes. Also known as Innovative Accounting, Aggressive Accounting, or Window Dressing.

Creative Industries – encompass sectors that blend art and commerce, including design, media, arts, and technology, generating cultural, economic, and social value through creativity and innovation.

Credit – money (loan) lent to a person or business, a positive balance in somebody’s bank account (‘his account is in credit’), or to add money into a bank account. The loan may also be in the form of goods or services.

Credit Bureau – firms that specialize in gathering people’s and companies’ payments and credit histories. They sell this information to lenders, who then decide whether to offer customers credit and how much interest to charge. Also known as a credit agency.

Credit Card – a plastic card that consumers use to purchase goods and services on credit. They can also use it to get cash, and pay back later. The arrangement is that the issuer pays for the purchase, and the cardholder pays back at a later date. This article helps you decide how to choose one.

Credit Card Loan – whenever you make a purchase using your credit card, the issuer is lending you money, which if you pay back by the ‘grace period’ deadline, will incur no interest charges (as long as you don’t carry a balance). Also called credit card debt.

Credit Control – a department in a company under a credit controller that chases overdue invoices and decides whether to offer customers trade credit. The term also refers to the department’s activities.

Credit Crunch – when banks and investors become more apprehensive about lending money because economic conditions or political problems have worsened. In other words, available credit shrinks considerably. Also called a credit squeeze or credit crisis.

Credit Default Swap – a type of insurance protection against a third-party borrower defaulting. A credit default swap contract states that the issuer will pay the buyer if a third party defaults. It is also known as a credit derivative contract.

Credit Easing – a strategy central banks use to improve credit conditions (increase liquidity) in the economy by purchasing private sector assets. The aim is to get banks to increase lending and boost economic activity.

Credit Freeze – refers to either when governments force their banks to stop lending money, or individuals stopping credit bureaus from selling their personal data. Also known as a credit report lock down, security freeze, or credit lock down.

Credit History – forms part of a credit report. It contains a record of how promptly an individual pays back loans, credits, etc., over time.

Credit Line – also known as a Line of Credit, is a flexible loan from a bank with a set maximum amount that you can borrow as needed and repay over time.

Creditor – the party that is owed money. When you take out a bank loan, the bank is the creditor and you are the debtor. The creditor might be a person, company, financial institution, or government.

Credit Score – a score that tells lenders whether you are a good or bad credit risk. Depending on your score, lenders decide whether to offer you credit, and what the interest rate will be on the loan.

Credit Union – a mutual financial organization that is owned by depositors, i.e. people who have an account. To be accepted, you usually need to have a common bond with the other members, such as belonging to a trade union, church, company or organization. Members save money and borrow at competitive interest rates. Credit unions are not-for-profit institutions.

Creditworthiness – an entity’s ability to borrow money and pay back on time. Also written as credit worthiness, it might refer to a person, company, organization, or country. Banks check applicants’ creditworthiness before deciding whether to lend them money.

Cross Holding – when one publicly-listed corporation owns shares in another company that is listed in the same stock exchange. Also called cross shareholding.

Cross-Selling – a sales strategy where customers are offered additional, complementary products or services at the point of purchase to enhance their initial buy. It aims to increase transaction value while improving the customer experience by suggesting relevant additions.

Crowdfunding – using online platforms to get contributions to help fund business ideas or other projects. With crowdfunding, many people contribute a small amount of money each.

Crowdlending – also known as Peer-to-Peer Lending (P2P Lending), is a financing method in which individuals lend money directly to people or businesses via specialized online platforms. This form of lending bypasses traditional financial institutions such as banks. Crowdlending is a subset of Crowdfunding.

Crowdsourcing – the practice of engaging a ‘crowd’ or group for a common goal—often innovation, problem solving, or efficiency—via an open call, typically through the internet.

Cryptocurrency – a type of digital money, i.e., it exists only electronically. It is an online currency that is encrypted. The encryption makes it secure, cryptocurrency creators claim. It operates without a central bank, unlike traditional currencies.

Cryptocurrency Exchange – an exchange where people can trade (buy and sell) cryptocurrencies. People trade them using fiat currencies, other cryptocurrencies, or other digital assets. Most cryptocurrency exchanges work 24/7. We also call them digital currency exchanges (DCEs).

Cryptocurrency Mining – the validation of cryptocurrency transactions, i.e., transactions using digital money. Some people refer to it as cryptomining. ‘Miners‘ carry out cryptomining. The process adds transactions to the blockchain and releases new currency. When miners have successfully completed the process, they receive a reward in the form of new currency units.

Crytpocurrency Wallet – a digital wallet or virtual wallet for cryptocurrencies. It is a software program that stores public and private keys. By using the keys, owners can use cryptocurrency to pay for things. They can also use the keys to receive payment. The cryptocurrency wallet allows owners to monitor their balance.

Currency – the money that is officially used in a country and backed by its government and central bank. The term also refers to digital currencies.

Current Assets – cash, cash equivalents and other things a company owns that could be turned into cash easily (within 1 year). Also known as current accounts in the UK.

Current Ratio – a calculation that tells us whether a company might find it difficult to meet its short-term debt obligations, i.e. debts that need to be paid back over the next 12 months. Current Ratio = Current Assets ÷ Current Liabilities.

Custom Made – made according to a customer’s specifications. If I produce a custom made item, I know who the customer is. If I make an off the rack or off the peg item, I don’t know who the customer is (or will be).

Customer – a person who buys goods or a service. It could also be a company or organization. It has virtually the same meaning as consumer, in that the customer is the end user (not always). The words customer and client have similar meanings, but the vendor tries to build a relationship with the client – this is less the case with a customer. When the seller receives the money from the customer and hands over the purchased item, he or she immediately focuses on the next one.

Customer Acquisition – the process a business uses to gain new customers, involving marketing strategies to attract, engage, and convert prospects into buyers, thereby driving sales and growth.

Customer Acquisition Cost – or CAC is a business metric that calculates the total expense incurred to acquire a new customer, including marketing and sales costs, divided by the number of new customers gained.

Customer Base – a group of individuals who repeatedly purchase goods or services from a business, generating its main revenue.

Customer Care – encompasses the support and service a company offers to its customers at all stages of the buying process—before, during, and after a purchase. It aims to ensure satisfaction, address inquiries and complaints, and foster a positive relationship between the business and its clientele.

Customer Engagement – the process of building and maintaining active, meaningful relationships with customers through various interactions and touchpoints, aimed at enhancing their experience and loyalty to a brand.

Customer Expectations – the standards or benchmarks that customers have regarding the quality, functionality, and performance of products or services, influenced by past experiences, marketing, and word-of-mouth. These expectations significantly impact their satisfaction and loyalty to a brand.

Customer Experience – also known as CX, the term refers to how customers perceive and feel about all their interactions with a seller. It includes their impressions regarding the product, service, brand, and company.

Customer Feedback – the information and opinions provided by customers regarding their satisfaction with a product, service, or experience, used for improvement and decision-making.

Customer Intelligence – the process of collecting, analyzing, and leveraging data about customers’ behaviors, preferences, and interactions. This information helps businesses make informed decisions, personalize experiences, and anticipate customer needs, ultimately leading to improved customer satisfaction, loyalty, and overall business performance. It integrates various data sources to provide actionable insights.

Customer Lifetime Value (CLV) – the total amount of money a customer is expected to spend on a company’s products or services during their relationship. It helps businesses assess the value of maintaining long-term relationships with customers and prioritize customer retention strategies.

Customer Loyalty – the likelihood that current customers keep coming back. In other words, how often existing and past customers come back for more again and again.. It is not the same as brand loyalty.

Customer Relationship Management (CRM) – a system for managing a company’s interactions with current and potential customers, utilizing data analysis about customers’ history with the company to improve business relationships, particularly focusing on customer retention and driving sales growth.

Customer Retention – a company’s ability to keep its customers over a period of time, creating repeat business and fostering a loyal relationship through various strategies and activities.

Customer Satisfaction – a way for companies to gauge how well they are meeting their customers’ needs and expectations.

Customer Segmentation – the process of dividing a customer base into distinct groups that share similar characteristics, such as demographics, behaviors, or needs, to create more targeted and effective marketing strategies.

Customer Service – the interactions between customers and sellers of goods or services. The conversations occur before, during, and after a purchase. It is crucial for customer loyalty and the company’s or product’s brand image.

Customer Support – a service provided to help customers resolve technical problems, understand products, and receive assistance for a better experience with a company’s offerings.

Customization – the action of adapting a product or service according to what the customer needs, wants, or prefers. It also refers to altering something for a specific function.

Custom Made – made according to a customer’s instructions or preferences. The term contrasts with mass produced, off the rack, or off the peg. We can also use the term bespoke or made to order with the same meaning as custom made.

Customs Union – or EU Customs Union is a union of countries that allows goods to move freely internally with no tariffs or quotas. Twenty-eight countries are members of the Customs Union.

Cyber – originally, the word was short for cybernetic. Today, we use it as an adjective (cyber crime) and prefix (cybercrime). There are hundreds of terms with the word ‘cyber.’ It means relating to or characteristic of the culture of virtual reality, technology, and computers.

Cyberbullying – or cyber bullying (one or two words) refers to bullying using electronic means, which in most cases is via the Internet. It has become a serious problem in many parts of the world.

Cyber Intelligence – or Cyber Threat Intelligence is the process of collecting, analyzing, and interpreting information related to potential cyber threats. It involves understanding how cybercriminals operate, anticipating their actions, and taking proactive measures to protect digital assets, networks, and systems. By staying informed about emerging threats, organizations can enhance their security posture and reduce the risk of cyberattacks.

Cyber Security – the practice of protecting a company’s or any organization’s computer systems, programs, and networks from digital or cyber attacks. Cyber is short for cybernetic or cybernetics.

Cyclical Share – a company share whose performance closely follows how well or badly a country’s economy is doing. When GDP is expanding strongly cyclical shares appreciate. Conversely, when there is a recession their prices decline. Also known as cyclical stock.

3D Printing – a type of additive manufacturing that creates objects by adding or depositing layers of material. Unlike subtractive manufacturing, it does not start with a block of something and gradually remove parts of it. The 3D printer gets its instructions from a computer (digital) file. We will eventually be able to 3D print virtually anything.

D2C – which stands for Direct-to-Consumer, is when the maker of a product sells directly to the end user rather than through an intermediary such as a warehouse, distributor, or retailer. Since the advent of the Internet, this business model has become increasingly more popular.

Dark Pools – trades that are secret and not available for the public to see. Some stocks are traded in dark pools, exchanges hidden from the public eye, as opposed to normal public stock exchanges, such as NYSE or NASDAQ.

Data – information such as facts, figures, measurements, amounts, trends, and dimensions that we collect for reference, analysis, and to help us plan for the future, i.e., make strategic decisions. Descriptive data includes information on something or somebody’s habits, features, hair color, etc.

Data Analysis – the systematic process of examining, cleaning, transforming, and interpreting data to discover useful information, draw conclusions, and support decision-making. It involves identifying patterns, trends, and relationships within data sets to gain insights that can inform strategies, improve performance, and solve problems across various fields.

Data Analytics – the process of examining raw data to identify patterns, draw conclusions, and support decision-making. It involves using tools and techniques to transform data into actionable insights, enhancing business processes, improving efficiency, predicting trends, and fostering data-driven strategies across industries.

Data Intelligence – the systematic analysis of data to derive actionable insights, guiding strategic decisions across various domains such as business, healthcare, and public policy.

Database Marketing – a method of obtaining and analyzing a large amount of information about a company’s customer base. The aim is to then for businesses to tailor their marketing plans and sales decisions.

Day Trader – somebody who buys and sells securities, i.e., financial instruments, in the same trading day. In other words, any operation that started on a trading day must close by the end of that day. They mostly work in stock markets and foreign exchange markets. However, a day trader can work in any marketplace.

Deadline – a specific date or time by which a task must be finished or a deliverable must be submitted, serving as a critical time constraint in project management and planning.

Debit Card – a plastic card that debits the holder’s bank account after each transaction. Unlike a credit card, it does not lend the money for a purchase.

Debt – refers either to money (or a physical thing) owed to the lender, or gratitude, as in being forever in debt to somebody who saved your life. The party receiving the debt is known as the borrower or debtor. Some economists say levels of debt globally are far too high, and predict another debt crisis will strike soon and spread rapidly across the world.

Debt Ceiling –  also known as the debt limit or statutory debt limit, a debt ceiling is the maximum amount of money the U.S. Treasury is allowed to borrow. This limit is set by the US Congress.

Debt Consolidation – the process of combining multiple debts into a single loan or payment. This simplifies managing debt by replacing multiple payments with one, often at a lower interest rate. It can involve personal loans, home equity loans, or credit card balance transfers, depending on the individual’s financial situation.

Debt Equity Ratio – a measure of the relationship between capital that came from creditors and capital that originated from shareholders. It is a calculation that reveals the relative proportion of stockholders’ equity and debt used to finance a business’ assets. Also called debt-to-equity ratio or D/E ratio.

Debtor – If I owe money to a bank, for example, I am the debtor and the bank is the creditor. We can used the term for a person, company, organization, government, or any entity that owes money.

Debt Ratio – a calculation that shows us what proportion of a company’s or individual’s assets consists of debt. It reveals the extent of a business’ (or person’s) leverage. At national level, the term may also refer to the ratio of government debt to GDP.

Debt Service Coverage Ratio – also known as DSCR or debt coverage ratio, is the ratio of available cash for debt servicing to interest, principal and lease payments. In government finance, it refers to the amount of export earnings required to meet a country’s external debt obligations. Banks look carefully at a loan applicant’s DSCR when deciding whether to lend money.

Deep Learning – an AI technique inspired by the human brain’s workings, utilizing layered neural networks to learn from large amounts of data. It excels in recognizing patterns, making predictions, and decision-making, significantly impacting fields like image and speech recognition, and natural language processing.

Default – to fail to pay back a debt. We can also use the term as a noun, as in: “ACME Inc. fell prey to default two years ago.” In computing language, the term refers to reverting automatically to its original state.

Defensive Shares – stocks that fluctuate much less severely when the economy does very well or badly. They belong to companies that provide products and services people need all the time, regardless of their financial situation, such as electricity, natural gas, water and essential foods. Also known as non-cyclical stocks or defensive stocks.

Deficit – the amount by which expenses or liabilities exceed income or assets over a certain period.

Deflation – when the price of goods and services decreases (it is the opposite of inflation).

Demand – an economics term that refers to a measure of desire to have or own a good or service, or all goods and services when talking nationally. It is the opposite of supply. When prices rise, demand declines, but when prices go down demand increases. Market economies rely on the forces of supply and demand, which regulate prices, rather than a central authority, like in a command economy.

Demand Loan – a loan with no maturity date or payment schedule. The lender can ask for full payment of the remaining debt at any time. Also known as a demand note, call loan or broker loan.

Demography – the study of human populations and the factors that make them change, such as births, deaths and migration. A demography specialist is called a demographer. He or she studies populations and the people within them.

Dental Tourism – traveling to a different country for dental care. It is a subset of the medical tourism sector.

Depreciation – when assets decline in value over time. It is also an income tax deduction that enables a taxpayer to recover the cost of certain assets.

Depression – when a recession continues for more than 3 years, it becomes a depression. During the depression, GDP contracts by at least ten percent. A depression is longer than a recession. However, recessions and depressions have the same starting dates. We also refer to it as an ‘economic depression.’

Derivative – a contract between two or more parties that is derived from or based on a specified asset. The parties involved in the derivative decide what that asset will be. Most common derivatives are based on the value of commodities, currencies, stocks, bonds, real estate or interest rates. There are several types of derivatives, including futures, forwards, options and swaps.

Devaluation – when the government forces its domestic currency to decline in value compared to other currencies there is a devaluation. This can only happen to currencies on a fixed exchange rate. Free-floating currencies such as the dollar and pound depreciate and appreciate, they do not devalue.

Developing Country – a nation that is less ‘developed’ than an advanced economy or developed country. A developing country fares poorly on the Human Development Index and has relatively low levels of industrialization. Many people disagree with the precise definition of the term.

Development Economics – the study of how low-income and emerging economies become more developed, i.e. countries that are changing from being agricultural economies to industrial ones. Also known as Economics for Development.

Device – a device is something that people created or adapted for a specific purpose.

Differentiation Strategy – a business approach focused on creating unique value for customers that sets a company apart from competitors.

Digital Assistant – a voice-activated computer program that carries out electronic tasks. It can also answer questions, arrange your schedule, talk to you, and much more.

Digital Currency – a type of currency that only exists electronically. It is not available in physical form, unlike banknotes and coins. In other words, digital currency is intangible. We can use digital money to buy products and services.

Digital Marketing – marketing of products, services, brands, and companies using the Internet and some other digital technologies. It is similar to Internet marketing and online marketing. Since the advent of the Internet, how companies approach marketing has changed significantly.

Digital Selling – the use of online tools and platforms to engage with customers, promote products or services, and complete sales transactions. It leverages digital technologies like websites, social media, email marketing, and AI-powered chatbots to reach a global audience and enhance customer experiences.

Digital Visibility – a.k.a. Online Visibility or Online Presence, refers to the extent to which a brand, product, or individual is visible and accessible online. It encompasses how easily and frequently these entities are found through digital channels, including search engines, social media, websites, and other online platforms, influencing audience reach and engagement.

Digital Wallet – a system that stores a person’s payment information securely. We also call it an E-wallet or electronic wallet. The wallet stores the user’s cards digitally for payments. Payments are made online through an electronic device such as a smartphone, tablet, or computer.

Digitization – the process of converting information into a digital format, where it is stored as binary data. “Digital format,” in this context, means the same as “electronic format.”

Diluted Share – a share in a company after it has issued additional shares. Ownership, voting rights, earnings per share and possibly its value are ‘diluted’, just like concentrated syrup is if you add water.

Direct Selling – a marketing approach where products are sold directly to consumers through independent sales representatives, bypassing traditional retail stores. This method often involves one-on-one demonstrations, home parties, and personal relationships to promote and sell products.

Discount – (Noun) 1. A deduction from the usual price of an item or service. 2. A deduction from the invoice total if the purchaser pays before a certain date. (Verb) 3. To deduct an amount from the price of something. 4. To eliminate something from a list of things that were of concern. 4. To bring down the price (stocks and shares) because of a change in market sentiment. There are more meanings in the main article.

Discount Loan – with this type of loan the lender discounts interest and other charges first from the face value, before lending to the borrower. Only used for short-term loans.

Discount Rate – has several meanings: 1. The interest rate a central bank charges commercial banks for very-short term loans. 2. The interest rate used in discounted cash flow analysis. 3. A reduction in the value of an invoice if the client pays before a certain date, or buys more than a minimum amount. 4. The discount on a bill of exchange or draft if it is cashed in before its maturity date.

Disinflation – the reduction in the rate of inflation, indicating a slowdown in the pace at which prices for goods and services increase.

Display Advertising – a form of advertising that employs visual elements such as graphics, videos, and images to promote a company’s product or service. Today, it is mostly done online.

Disruptive Innovation – refers to the introduction of new technologies or business models that fundamentally alter an industry, displacing established market leaders by offering more accessible, affordable, and often simpler alternatives, thereby reshaping market dynamics and consumer behavior.

Distributed Ledger – a digital system for recording the transaction of assets. All the data for each transaction is recorded in many different places simultaneously. There is no central authority or administrator. A blockchain is a distributed ledger database. The terms shared ledger and distributed ledger technology mean the same as distributed ledger.

Diversification – refers to spreading out into new fields, sectors or geographical areas so that risk not concentrated in one area. If one sector experiences a decline, the company has other activities which continues doing well. Diversification follows the idiom ‘Do not place all of your eggs in one basket.” Many large companies today, however, say that specialization is the future, not diversification.

Dividend – payment made to shareholders from a company’s profits. In most countries, it comes from a company’s net profits, i.e., profit after paying corporate tax.

Dividend Payout Ratio – the proportion of a business’ profit that is paid out as dividends to stockholders over a specified period. The ratio can be expressed as a decimal or percentage.

Dividend Price Ratio – a calculation that shows a stock’s dividend as a percentage of its price. It can alternatively be calculated by dividing a company’s total dividend payments in one year by its market capitalization. Also known as dividend yield.

DIY – an abbreviation of do-it-yourself – the activity of carrying out home repairs, maintenance, and improvements yourself instead of hiring a professional. It is considered distinct from arts and crafts.

Document – a recorded piece of information, either in physical (such as paper) or digital format.

Dogecoin – a cryptocurrency that began as a joke. Hence its nicknames the ‘joke currency’ or the ‘fun cryptocurrency.’ It features a Shiba Inu, a Japanese fighting dog, which is also its mascot. Today, Dogecoin has a market cap of $2 billion.

Domain Authority – a metric developed by Moz that predicts how well a website will rank on search engine result pages. It scores domains on a scale from 1 to 100, with higher scores indicating greater ranking potential.

Domestic Market – where goods and services are traded within the borders of where a company is based. For example, Ford’s domestic market is the US market, while Renault’s domestic market is the French market. Also known as the home market or internal market.

Domino Effect – describes a situation where an initial event causes a chain reaction, leading to a series of similar events. Each event acts as a catalyst for the next, illustrating how actions or occurrences are interconnected, resulting in significant, often unforeseen, outcomes.

Door-to-Door Selling – also known as Door-to-Door Sales, is a direct sales approach where salespeople visit potential customers at their homes or businesses to offer products or services. This method involves face-to-face interactions, allowing for personalized demonstrations, immediate feedback, and direct engagement, often leading to on-the-spot purchase decisions and strong customer relationships.

Dotard – an old man or woman, especially one who is weak and confused. Dotards are in their dotage; a period of senile decay, marked by weakening alertness and poise.

Dow Jones Industrial Average (DJIA) – commonly known as “the Dow,” this is an index that represents the weighted average of the 30 major stocks listed on the New York Stock Exchange or the NASDAQ Stock Market.

Down payment – a down payment is an upfront payment made at the time of purchasing something.

Downsizing – refers to the reduction in the size and of operating costs of a company. In most cases, this involves reducing the workforce.

Dual Economy – an economic system where two distinct sectors coexist within the same country: a modern, developed sector alongside a traditional, less developed one. This divide often results in disparities in income, infrastructure, and living standards between different regions or social groups.

Due Diligence – a comprehensive check of the operational and financial status of any company, individual or entity you plan to come to a business arrangement with. Put simply, it means carrying out research to make sure the other party is reliable, honest, and will stick to their side of the agreement.

Dumping – this refers to companies exporting products at a lower price than their domestic price or the cost of production.

Duplicate Content – Identical or very similar material appearing in multiple places on the internet. The material may be a text, audio, video, image, code, or metadata.

Earmark – 1. To put aside money for a specific project in the future. 2. A Congressional directive in the United States to spend money on a project. 3. To mark the ear of an animal to indicate ownership or identity. The word may be either a noun or a verb.

Earn – to receive payment for work that we have done. If you work 40 hours you will earn more than if you work just 20 hours. We also use the term when we gain other things from people. For example, we can earn somebody’s respect, affection, or esteem.

Earning Power – a business’ ability to generate profit. We can also use the term for a person, i.e., their ability to generate income. Investors calculate companies’ earning power before deciding where to place their money. We calculate earning power by dividing operating income by total assets.

Earnings – the profit that a company generates over a specific period (usually over a quarter (three calendar months) or a year).

Earnings Per Share (EPS) – the amount of profit a company allocates to every outstanding share of common stock. A business’ total profits, minus dividends, divided by the total number of common stock.

Easement – the right to do something with or on another person’s land. For example, if my land is completely landlocked, I need to drive over my neighbor’s land to get to the road. If I have permission to do this, I have an ‘easement.’ There are many types of easements.

Easy Monetary Policy – a central bank policy of low interest rates. When economic growth is sluggish, central banks may reduce interest rates to boost economic growth. When interest rates decline, people and companies borrow more. They subsequently spend more, which helps GDP growth.

EBITDA – an acronym for earnings before interest, taxes, depreciation, and amortization, i.e. Revenue minus Expenses (excl. interest, taxes, depreciation and amortization).

E-Book – an E-Book is an electronic copy of a printed book that can be read on the screen of a computer, mobile device, tablet, or dedicated e-reader.

Echo Bubble – a small bubble that follows a major bubble. When there is a stock market crash, we say that the bubble has burst. Sometimes, there is a premature recovery. Investors get excited and markets rise. However, it is short-lived. That second bubble also bursts, and markets fall again. We call that second bubble an echo bubble. We can use the term for the economy too.

E-Cigarette – also called an e-cig, vape pen, or e-hookah, is a non-smoking nicotine delivery device. The user inhales a vaporized solution or aerosol, which commonly has nicotine in it. Studies have shown that it is healthier not to vape or smoke, but vaping, i.e., using e-cigs, is less dangerous than tobacco smoking.

Eclectic Paradigm – a business approach that determines whether it is good for a company to engage in foreign direct investment. The paradigm looks at three potential advantages: ownership, location, and internalization.

E-Commerce – a business model that focuses on doing commercial transactions online, i.e., on the Internet. E-commerce stands for Electronic Commerce.

Ecommerce Marketing – the process of promoting awareness of a brand’s online store offerings through a variety of different marketing channels.

Eco-Efficiency – a management philosophy that many companies across the world have adopted. It involves getting more production from fewer resources and consuming less energy. In other words, being an efficient company but at the same time an environmentally-friendly one.

Ecological Impact – the effect that either a natural event or phenomenon or human activity has on organisms and their non-living environment. In other words, what effects things like volcanic eruptions or traffic pollution have on creatures that live and where they live.

Ecological Indicator – an organism that tells us about the state or condition of our ecosystem. An ecological indicator may tell us about air pollution or biodiversity. It is a collective term for stressor indicators, exposure, and habitat response.

Ecological Load – the demands and stresses that organisms place on ecosystems. Human demands, for example, are food and water. Pollution is an example of stress.

Ecology – the study of how organisms, i.e., living things, interact with one another and also their physical environment. It is a branch of biology. In politics, ecology is a movement that strives to protect our environment.

Econometrics – the application of statistical methods and mathematics to describe economic systems and test economic hypotheses. It turns theoretical economic models into tools that
politicians and other policymakers can use.

Economic Activity – includes producing, purchasing, distributing, or selling goods and services. Economic activities exist at all levels, from Primary to Quaternary levels. Any activity involving money or the exchange of goods or services is an economic activity.

Economic Analysis – an assessment or examination of issues or topics from the perspective of an economist. It is the study of economic systems or a specific industry. Some analyses aim to determine whether a company is functioning profitably or whether a project is feasible. There are many different types of economic analyses.

Economic Assumptions – a set of assumptions that a company makes about the future economic situation. Economists and statisticians also make economic assumptions when they build economic models.

Economic Base – entities that employ lots of people locally and sell products or services to outside consumers or companies. A factory that employs lots of workers and sells to businesses or consumers outside the local area form part of the economic base. We also refer to them as basic industries.

Economic Benefit – a benefit that we can quantify in monetary terms, i.e., money terms. For example, net income is an economic benefit, as are profits, net cash flow, and revenues. An economic benefit for a nation could be job creation or more tax income for the government.

Economic Bubble – also known as a price bubble or a market bubble, an economic bubble happens when securities are traded at much higher prices than what they are intrinsically worth.

Economic Capital – how much risk capital a financial institution should have so that it can survive market or credit shocks. The amount is determined by the company itself or its shareholders.

Economic Climate – the general state of the economy, i.e., economic conditions. The term may refer to the local, national, regional, or global economy. It may focus on the jobs market, stock market, the availability of credit, and levels of investment.

Economic Census – a program that some nations have in which they publish a directory of business statistics. The United States Economic Census, for example, comes out every five years. India’s on the other hand, comes out from every five to ten years, i.e., the intervals change.

Economic Cost – the accounting cost plus opportunity cost, i.e. how much doing something costs in money terms, as well as how it compares against doing something else.

Economic Crisis – a situation in which a national economy suddenly deteriorates significantly. We also refer to it as a real economic crisis. Most economic crises follow financial crises, which affect the banking and finance sector. An economic crisis affects the whole economy.

Economic Dependence – a situation in which one entity depends on the well-being of another or on something occurring. For example, farmers depend on rainfall for their economic well-being. A customer depends on the prompt delivery of a supplier so that it can do business effectively. Economic dependence between countries is a fact of life.

Economic Depression – a period of economic contraction that exceeds three years. During the whole, period, GDP contracts by at least ten percent. An economic depression is longer than a recession. However, they both have the same starting dates.

Economic Determinism – a belief or theory that all social and political activities and phenomena are the result of how society’s economy is organized. It is a socioeconomic concept that market forces determine all social and political change.

Economic Development – the process by which a country turns from a primitive economy to an advanced one. The population gradually shifts from agriculture to industry, and eventully to services. During economic development, people’s incomes, health, academic levels, and access to good quality housing improves.

Economic Downturn – when the economy contracts or growth slows down, stock market and property prices decline, unemployment rises, borrowing decreases, and companies invest and produce less. Sometimes an economic downturn may be a prelude to a recession.

Economic Equilibrium – an economic state in which the forces of supply and demand are in perfect balance. In other words, when demand equals supply. When there is economic equilibrium, there are no outside forces causing disruption.

Economic Environment – all the external economic factors that affect the purchasing habits of businesses and consumers, and therefore also influence company performance. They may be large-scale or small scale factors, i.e., macroeconomic or microeconomic factors.

Economic Forecast – an informed prediction of future economic conditions, derived from the analysis of current and historical data, including trends in GDP, employment, inflation, and other economic indicators, to aid decision-making for businesses and governments.

Economic Geography – a sub-field of Geography and Economics, studies the location, distribution and spatial organization of economic activities across the world.

Economic Globalization – the increasing mobility of capital, goods, services, technology and people internationally. It also refers to a nation’s integration into the global economy. Also known as simply globalization.

Economic Growth – an increase in GDP (gross domestic product) over a given period in a nation or region. When the value of all goods and services produced rises.

Economic Inequality – the extent to which income, wealth, and opportunity are distributed unevenly among individuals in a society, often leading to disparities in living standards, access to resources, and the ability to participate fully in economic, social, and political life.

Economic Indicator – a statistic that shows current economic growth rates and forecasts future economic trends. It helps assess the health of an economy, guiding policymakers, investors, and analysts in decision-making.

Economic Integration – the unification of economic policies and practices between different countries, aimed at reducing trade barriers and increasing economic cooperation. It encompasses various stages from free trade areas to full monetary unions, promoting efficiency and growth through shared markets and policy alignment.

Economic Intelligence – the analysis of market trends to facilitate strategic decision-making. The term also includes the gathering and analysis of information to protect national economic security.

Economic Landscape – a comprehensive snapshot of a country’s economic environment, encompassing key indicators such as GDP growth rates, employment levels, inflation rates, trade balances, and sectoral health. It reflects the interplay of supply and demand, monetary and fiscal policies, and global economic trends.

Economic Life – the length of time a machine, factory, vehicle or building (an asset) generates more income than it costs to operate and maintain, or before the repair costs become so high so that it should no longer be kept. Also known as depreciable life, useful life or service life.

Economic Model a simplified description of reality. Economic models are either simulations or predictions of what might happen in different scenarios. Specialists who have to present to lay people will use models to make their complicated data easier to understand. Simulations tend to be more accurate that forecasts.

Economic Performance – the evaluation of an economy’s output, stability, and growth, as measured by indicators like GDP, unemployment rates, and inflation.

Economic Policy – government measures and strategies to influence a nation’s economic health through fiscal and monetary actions, impacting taxation, spending, and the overall market environment.

Economic Recovery – the phase following a recession where economic activity rebounds, marked by increases in GDP, employment, consumer spending, and business investments, leading to overall growth and improvement in the economy’s health.

Economic Risk – the likelihood that an investment or company may be disadvantaged by regulatory changes, exchange rate fluctuations, higher taxes, nationalization, or economic sanctions. Economic risk applies to either the domestic or foreign economy, depending on where the investment is done or the company operates.

Economics – the study of the factors that determine the production, distribution and consumption of goods and services. Economics examines how people use scarce resources that have alternative uses.

Economic Sanctions – punitive measures taken against a country to get it to change policy. Actions may include travel bans, arms embargoes, capital restraints, foreign aid reductions, and trade restrictions. The aim may be to resolve a trade dispute, human rights violations, stop a nation getting nuclear weapons, to counter terrorism, cybersecurity, or combat drug barons.

Economic Sector – a segment of the economy categorized by a specific type of activity, such as agriculture, manufacturing, or services.

Economic Security – having a stable income and resources to provide for yourself and your family, both now and in the future.

Economic Sentiment – an indicator of the public’s optimism or pessimism about the economy’s prospects. It reflects perceptions on employment, financial health, and overall economic conditions. This sentiment can significantly influence economic activity, as it affects consumer spending, business investment, and government policy decisions, ultimately shaping economic growth and stability.

Economic Stability – a state in which an economy shows consistent growth, manageable inflation, and low unemployment, leading to predictability in economic performance and confidence among consumers, businesses, and investors.

Economic Stimulus – refers to government or central bank actions aimed at boosting economic activity, especially during downturns. This can include fiscal measures like increased public spending or tax cuts, and monetary actions such as lowering interest rates or quantitative easing to encourage consumer spending and investment.

Economic Strategy – a comprehensive approach designed to harness a country’s strengths and improve its weaknesses, aiming to foster long-term economic growth, enhance competitiveness, and ensure sustainable development through informed policy-making and resource management.

Economic Surplus – also called the Marshallian Surplus or Total Welfare, is the Producer Surplus and Consumer Surplus combined. The Consumer Surplus is the monetary gain obtained by consumers because they were able to buy a product for less than the highest price they would have accepted. The Producer Surplus is the difference between how much a supplier sold a good or service for minus his or her minimum selling price. British economist Alfred Marshall used the three terms in his 1890 book – The Principles of Economics.

Economic System – a system that defines how all the players in an economy interact. It is an organized way in which a nation allocates resources and distributes goods and services. An economic system includes the combination of all the entities, agencies, institutions and decision-making processes and patterns of consumption that constitute the economic structure of a specific community.

Economic Theory – the study of how societies use scarce resources to produce valuable commodities and distribute them among different people. It covers both individual (microeconomic) and national (macroeconomic) perspectives, focusing on market dynamics, decision-making, and policy impacts.

Economic Tigers – Singapore, South Korea, Taiwan and Hong Kong; four countries whose economies grew by more than 7% annually from the 1960s to the 1990s. In a few decades they changed from being low-income economies (third world countries) into advanced economies (industrialized nations). Also known as Asian Dragons or Asian Tigers.

Economic Trends – directional changes in economic activities, such as employment rates, market performance, and consumer behavior, that collectively indicate the health and future trajectory of economies on both a national and global scale.

Economic Union – a type of trade bloc which provides for the integration of member countries’ economic policies, including the free movement of goods, services, capital, and labor, alongside the harmonization of monetary and fiscal policies.

Economic Value – the value of an asset calculated according to its ability to generate income. The most a consumer is willing to pay for a good or service.

Economic Value Added – a measure of how well a company has performed in relation to the funds invested in it. If the measure is a positive number, it means the business or project generated more profit from invested capital than how much it had to pay out to get that capital. Also known as economic profit.

Economic Viability – the ability of a business or project to generate sufficient income to cover its costs and sustain operations profitably over time.

Economies of Scale – in microeconomics, it refers to the overall unit costs of production – they go down when production increases, and rise when production declines. With higher production, fixed costs – which remain relatively unchanged – can be spread over a larger number of unit costs. There are internal and external economies of scale. The opposite is diseconomies of scale.

Economist – somebody who specializes in economics, i.e., an economics expert. Economists may also study, develop, and apply economic notions, theories, and concepts and write about economic policy.

Ecotourism – a type of tourism which involves responsible travel to areas of ecological interest.

Education – the process of imparting or acquiring knowledge, i.e., the process of teaching and learning. The meaning may vary, depending on who says it, where, and in which context.

Efficacy – means the same as effectiveness in most cases. Efficacy is the ability to produce an intended or desired result. The term is more commonly used in the world of medicine and pharmacology than business & finance.

Effective Margin – the amount generated from an asset when taking into account the financing costs of a prepayment and interest. It represents potential profits if funds change but income remains the same.

Efficiency – is all about getting the most out of the available resources. Efficient businesses maximize outputs from the inputs they have. Efficiency looks at what is currently being produced and compares that with what could be achieved without changing current resources, such as time, machinery, labor numbers and skills, and money.

Efficient Diversification – refers to the organizing principle of portfolio theory, which attempts to help boost the expected return for a portfolio, given a specified level risk.

Efficient Portfolio – refers to a portfolio that gives the best return given a specific level of risk. The concept was introduced by American economist Harry Max Markowitz in 1952.

Elasticity – a measure of how sensitive the demand or supply of a product is to changes in price, income, or other factors, indicating the percentage change in quantity demanded or supplied in response to a one percent change in price or other variables.

E-Learning – stands for Electronic Learning, i.e., online learning or online education. In other words, doing a course via the Internet rather than physically being at the learning center’s campus.

Electric Vehicle – a vehicle that runs on electricity, either fully or partially. We also refer to it as an EV or e-vehicle. EVs have on-board batteries or fuel cells. Their owners recharge the batteries by plugging them into the electricity grid.

Electronics – a branch of physics which at its most basic level is concerned with the flow of electrons and their uses. If you design, create, or use electronic devices, you are involved in electronics.

E-Mail Bomb – the sending of a massive number of e-mails to an e-mail account holder. We also refer to it as a ‘mail bomb.’ The flood of emails overwhelms the system, causing it to crash. E-mail bombs are cyber attacks – they are nasty.

E-Mail Marketing – the act of sending emails to promote a company’s or organization’s goods or services, request donations, or invite readers to become members. It is part of digital marketing.

Embargo – an order to stop something temporarily, usually trading with a country. An embargo may involve banning ships from a certain country from using your nation’s ports. It can also mean to stop giving information, as in “The police asked for a new embargo while they tried to locate the kidnappers and free the hostages.”

Embezzlement – the fraudulent taking of personal property by someone to whom it was entrusted, typically in their role as an employee or public official.

E-Meeting – a meeting that takes place electronically. Hence the name, ‘e” (electronic) + ‘meeting’ = ‘electronic meeting.’ Most e-meetings are done using the Internet. We also call it an e-conference or online meeting.

Emerging Markets – the term refers to countries that are neither low-income nations (frontier markets) nor advanced economies. They have a growing industrial base and middle class, high literacy rate, and a young population that wants the same things that the citizens of developed countries want.

Emotional Intelligence – your ability to recognize, understand, and manage your own emotions, as well as recognize, understand, and influence the emotions of others. It involves self-awareness, self-regulation, motivation, empathy, and social skills, helping you navigate social complexities and make better personal and professional decisions.

Empathy – is the ability to listen in a non-judgemental way, sense the other person’s feelings, and imagine what they are thinking. When a person is empathic towards me, I feel accepted and understood.

Employee – somebody who is hired by an employer to perform specific duties in exchange for compensation. Somebody who works for a person, company, government department, or other entity for pay.

Employer – an individual or organization that hires people to perform specific tasks and duties in exchange for wages or salaries. Employers manage the work environment, ensure safety, provide training, and comply with labor laws to create a productive workplace.

Encryption – Encryption is like turning a message into a secret code. Only specific people have the key to change the code back into the original message.

Endowment Mortgage – a mortgage which also has a life insurance policy (endowment policy). At the end of the contract the life insurance policy is used to pay off what is owed. This type of loan was popular in the UK and Ireland in the 1980s.

End-to-End Testing – also known as E2E Testing, a comprehensive validation process that ensures an application performs as expected from start to finish.

Energy Conservation –  the practice of using less energy. It is achieved by adjusting behaviors and habits.

Energy Efficiency – the practice of using less energy to provide the same amount of useful output from a service (such as heating water, lighting, or cooling a fridge).

Engineer – an engineering professional who uses scientific principles to make machines, devices, equipment, and other structures such as tunnels, skyscrapers, airplanes, robots, chemicals, and pharmaceutical products. There are more than 40 different types of engineers.

Engineering – a huge field. Engineers use scientific principles to create things such as machines, structures, robots, chemicals, pharmaceuticals, and many more. There are dozens of different types of engineers.

Enterprise – can refer to a skill some humans have to be daring in business and pursue their new ideas, regardless of the risks. An enterprise is also a business. The term can also mean a difficult or important challenge. An enterprising person is called an entrepreneur.

Enterprise Selling – a complex sales process involving high-value transactions with large organizations, requiring tailored solutions and long-term relationships. Also known as Enterprise Sales and Complex Sales.

Entity – in business it is anything that is formed and administered, according to commercial law, in order to conduct business, engage in charitable work, or carry out other allowable activities. In lay English, an entity is a real thing, a being, something that exists, a separate being that exists in its own right. For tax purposes, a company is a separate business entity from its human owner(s).

Entrepreneur – somebody who sees a business opportunity and creates a company to exploit it. The term may also refer to a person who identifies a problem and then develops a business venture to solve it.

Entrepreneurship – the process of designing, launching, and running a new business, often starting as a small venture. The term also refers to the skills that an entrepreneur has.

Environment – all the conditions and surroundings in which organisms exist and function. The atmosphere, hydrosphere, and lithosphere are three parts of the non-living environment. We call the living part the biosphere.

Environmental Factors – all the elements that influence the well-being of a company, including internal and external factors. Internal ones include the quality and attitude of the workforce and the leadership characteristics of the management. External ones include levels and types of competition, technological changes, consumer attitudes, legislation, and the availability or scarcity of certain resources. The term also has scientific, biological and geographical meanings.

Equipment – the term has many possible meanings. It often refers to a set of tools or other items that are commonly used for specific purposes or to achieve particular objectives.

Equity Finance – also called equity financing, is a method of raising capital for business expansion by selling partial or complete ownership of the company’s equity. Sometimes the equity is sold in exchange for other assets.

Equity – the value of ownership of an asset after liabilities with that asset are cleared. Equity or shareholders’ equity is equal to the capital in a business. If you own a house worth $200,000 and your outstanding mortgage is $120,000, your equity is $80,000.

Ergonomics – also known as ‘Human Factors’, is concerned with the understanding of interactions among people and other elements of a system, and the profession that applies theory, data, principles, and methods to design in order to optimize human well-being and overall system performance.

ESG (Environmental Social and Governance) – a type of screening done by investors and many portfolio managers today which includes only companies that meet certain criteria related to the environment, society and governance (how the firm polices itself). ESG is a rapidly-growing segment in the world of capital markets, and is expected to continue expanding at an accelerated rate. ESG-screened investments are not, like many people believe, inferior investments that give you a lower-than-average return – in fact, the opposite is frequently the case.

eSports – short for Electronic Sports. In eSports, gamers, who play video/computer games, compete online or in huge arenas.

Estate planning – arranging and preparing the transfer of a person’s asset base after his or her death.

Ethereum – this term may refer to either the cryptocurrency ‘Ether‘ or the decentralized platform that runs smart contracts. Smart contracts are applications that run with no risk of interference from third parties or censorship. Also there is no risk of downtime. According to Ethereum’s creator, fraud is impossible with this platform.

Ethics – the moral principles that govern how we conduct ourselves at work and in our everyday lives. Business ethics, also called corporate ethics, is all about how we perceive and respond to ethical and moral issues. It affects how we deal with customers, other companies, regulations, employees, etc.

E-ticket – an electronic ticket. It is a digital ticket that is as valid as a paper one, i.e., it is the equivalent of a paper ticket. The e-ticket is an entry in a computer system that has the payer’s name, plus details of the flight, venue, event, etc. Most airline tickets today exist purely electronically.

Euro – the official currency of the Eurozone, used by 20 of the 27 European Union member states, managed by the European Central Bank for facilitating economic stability and integration within Europe.

European Central Bank (ECB) – the central bank for the euro. it manages the monetary policy of the Eurozone (which has 18 EU member states).

European Commission – the EU’s politically independent executive arm. It proposes new legislation. The European Parliament and the Council of Europe determine whether to turn them into law. The Commission also implements the decisions that the Parliament and Council have made.

European Investment Bank (EIB) – a European Union financial institution that lends money for infrastructure projects such as tunnels, roads, railways, as well as business development, mainly within the EU (but also outside). It is the largest public lending institution in the world.

European Parliament – the EU’s law-making body. It consists of 751 MEPs (Members of the European Parliament). European voters elect their MEP every five years.

European Union – an economic and political union of 28 European countries or member states. We also refer to it as the EU. It is the world’s largest consumer market.

Eurozone – a monetary union of 19 European Union countries that have adopted the euro (€) as their common currency, facilitating economic stability and integration within the region.

Event-Based Selling – a sales strategy where you align your sales efforts with specific events or triggers in the customer’s world, such as product launches, regulatory changes, or personal milestones, to offer timely and relevant solutions that address their evolving needs and increase the likelihood of closing deals.

Evergreen Loan – a type of loan that goes on and on. The credit facility is repeatedly renewed. The principal does not have to be paid off within a certain period. Also called a revolving loan or standing loan.

E-Wallet – a digital system that stores the user’s payment information such as credit cards, address, ID, etc. We also call it a digital wallet.

Exchange Rate – also known as Conversion Rate, is the value at which one currency can be exchanged for another.

Exchange-Traded Funds (ETFs) – an investment fund that tracks an index, such as a commodity, bonds, or a portfolio of assets. Similar to an index fund but different from a mutual fund in that you can buy and sell them at any time.

Excise – a duty or tax that governments levy on certain goods such as gasoline, alcoholic drinks, and tobacco products. As a verb, the term means to remove something, often by cutting it out.

Exhibition Booth – a specially designed space at trade shows or exhibitions where companies display products, interact with visitors, and promote their brand to potential customers and business partners.

Expenditure – the money we, companies, governments, and other organizations or entities spend is classed as expenditure. It is the action of spending money. There are many different types, such as government, capital, or revenue expenditure.

Expense – a cost incurred over a specific period which is part of a business’ operating activities. An outflow of money from one person or entity to pay for a good or service. It is a cost that is paid for usually in exchange for something of value.

Expense Ratio – represents a mutual fund’s total operating expenses as a percentage of the average net assets of the fund.

Experience Economy – an economy that is focused on creating and offering memorable experiences that foster emotional engagement and personal connections, it prioritizes the value of unique, immersive interactions over the simple transaction of traditional goods and services.

Exports – these are goods and services that are sold by people, businesses and other entities in one country to consumers in another country, i.e. products and services sold abroad. The opposite of exports are imports. Exports and imports form part of international trade. China is the world’s largest exporting nation.

Export Credit Agency (ECA) – a (usually) government-sponsored entity that helps domestic companies export, especially to higher-risk markets such as low income nations and emerging economies. Also known as ECAs, they provide loans, credit insurance and guarantees.

External Linking – the process of placing hyperlinks that take visitors away from a website to a different one. The term contrasts with internal linking. If you place a link in your website that points to Wikipedia, that is an example of external linking.

Extremophiles – creatures that can survive and reproduce in hostile environments. They thrive in environments that are too hot, cold, acidic, alkaline, or salty for most life forms.

Fabric – 1. Cloth or textile. 2. The roof, floor, and walls of a building. 3. The structure of a vehicle or airplane. 4. The basic structure or framework of society, as in ‘the fabric of society.’

Fabrication – the process of making or manufacturing something from raw or semi-finished materials instead of from ready-made components. The word also means a lie, forgery, or falsehood.

Face Value – represents the value of a tradable asset that is stated by the institution that issues it. Also known as the nominal value.

Facility – 1. A place where certain activities occur. Military activities, for example, occur at military facilities. 2 An arrangement with, for example, a bank (overdraft facility). 3. A talent for something (he has a facility for languages).

Fact-Finding – the term refers to the gathering or confirming of information, i.e. ascertaining or collecting facts. Often, a fact-finding mission gathers facts before organizing a full hearing or investigation.

Factor Income – the income that the factors of production provide. Land, for example, provides rent, while labor provides wages. The other two factors of production, capital and enterprise, provide interest and profit respectively.

Factoring – a type of financing in which a ‘factor’ buys a company’s invoices, i.e., its accounts receivables. The factor pays the seller between 70% and 85% of the invoice value immediately and collects the money due from the buyer. The factor charges a fee, which is a percentage of the invoice’s value, for the service. Factoring is useful for companies that need working capital. Factoring (UK: factorizing), in algebra, means finding a number’s factors.

Factor Portfolio – a diversified portfolio that has a variety of stocks, with different levels of risk exposure (including alterations in interest rates and inflation).

Factors of Production – the elements or building blocks we use to produce economic goods and services. The factors of production are divided into four categories: land, labor, capital and enterprise (entrepreneurship). Subdivisions of a factor may include management, machines, materials and money – known as the 4 Ms. The main article also explains what the primary and secondary factors of production are.

Facism – a way of organizing a country or society, usually with extremely harsh control and ultra-nationalist propaganda. The country is led by a dictator who controls the government and the lives of his or her citizens. Dissent is not tolerated and is dealt with violently. A person who believes in fascism is a fascist.

Failed Trade – when the seller or buyer of a security fail to meet their obligations by the settlement deadline. The seller may fail to deliver the security on time or the buyer may not pay by the settlement date. When the seller fails, we call it a short fail. When the buyer fails, we call it a long fail.

Failover – the term refers to the constant ability to function properly. If something goes wrong, the system switches over to a backup seamlessly. In other words, users are not aware of any malfunction or system breakdown. If a device or system has a failover mechanism, it can continue operating even when there is a fault.

Fail-Safe – a mechanism in a machine or system that allows it to ‘fail safely.’ If something goes wrong, it inherently responds in a way that causes no harm, or at least significantly minimizes potential dangers. The ‘dead man’s switch’ on a lawnmower, for example, is a fail-safe mechanism. As soon as the user lets go of the lever, the lawnmower stops working.

Fail Soft System – a system that only shuts down non-essential functions when there is a fault or something goes wrong. Therefore, the user can continue using it at basic level. The Windows operating system, for example, has a Safe Mode. Safe Mode is Windows’ fail soft mode.

Failure Analysis – an investigation into how something failed and why. The investigation also tries to determine what corrective actions are needed. In some cases, the investigators also determine liability.

Failure of Consideration – if one of the parties in a contract fails to fulfill their end of the deal, there is a failure of consideration. The failure may be partial or entire. We also call it a ‘failure of basis.’

Failure Mode – a description of the manner in which a failure can occur. We use the term either for a failure that has occurred or a potential one. When we are talking about several failures, we say multiple failure modes or competing risks. The term contrasts with failure cause, which looks at the past, and failure effect, which looks at the future.

Failure Rate – the frequency at which a system, component, or product fails. The term is common in medicine, reliability engineering, and many other disciplines and sectors. Failure rate also refers to the percentage of new companies that fail within a given time.

Fair Competition – refers to a marketplace in which all the players operate on a level playing field. There is no bullying, predatory pricing, or competitor bashing. Competitors focus on gaining market share and sales by offering the best prices, quality, and customer service.

Fair Rate of Return – how much regulated companies can charge their customers. For example, utility companies have a limit on how much they are allowed to charge their customers for water, electricity, or natural gas. In investments, a fair rate of return is an investment that is worth the risk.

Fair Trade – a cooperative movement whose aim is to buy and sell products that make sure that the people who produce them receive a fair price, operate in an internationally-accepted work environment, are paid a decent wage, receive training, and improve their standard of living and quality of life. Fair trade also means to make sure that international trade is conducted on a level playing field, without subsidies, taxes and quotas that favor one party or country unfairly.

Fair Value – the price that makes both the buyer and seller happy. In other words, both parties enter the transaction willingly and pleased with the price. We also use the term in accounting in disputes involving assets or liabilities.

Fallacy of Composition – arises when we assume that what is true from part of something is true for the whole. For example, if I am watching a sports match at a stadium, I know I’ll get a better view if I stand up. If I then assume that if everybody stood up we’d all get a better view, I’d be wrong. My assumption would be a fallacy of composition.

Fat Cat – a derogatory term for either a rich person with influence or a major contributor to a political party. In the UK, fat cats are overpaid executives, i.e., their bonuses do not reflect their performance.

Fat Man Strategy – a technique to ward off a predatory company that attempts a hostile takeover. The target company acquires assets or a company that the corporate raider does not like. It may also take on additional debt. Subsequently, it appears fat and bloated, i.e., unattractive.

FBI (Federal Bureau of Investigation) – America’s domestic intelligence and security service. It is a federal level organization that focuses on law enforcement and investigating criminal activity across the country.

F-Commerce – which stands for Facebook Commerce, refers to the selling of goods and services within a Facebook page. Social Commerce has a similar meaning, but includes selling within any social media website. F-commerce started off badly, with many retailers shutting down their Facebook shop operations within twelve months. It then took off again, and promises to become a major trading vehicle.

FDA (Food and Drug Administration) – the United States’ regulatory agency in charge of medications, medical devices, tobacco products, foods, and cosmetics. Before a pharmaceutical company can market a new drug, it must get FDA approval. This is a long process.

Feasibility Study – an evaluation of a proposed project to determine whether it is feasible and whether it should go ahead. The study looks at the project’s technical, financial, and operational feasibility. Whenever large sums of money are at stake, it is common to carry out a feasibility study before proceeding.

Feasible Portfolio – a pool of investments that can realistically be put together, given all available alternatives, that an investor can buy, according to his or her investment goals, capital resources limits, and tolerance for risk.

Feather One’s Nest – to take advantage of a situation, one’s position, or information to get rich. It is a derogatory term that means the same as ‘to line one’s pockets.’ The action does not necessary have to be illegal, but people see it as unethical.

Features – the characteristics of a product or service. When we talk about the features of a product, we give a description of what its like, including its size, color, weight, etc. Customers, however, are more interested in benefits that features. Many people do not know the difference between features and benefits. In business, that can be an expensive mistake.

Federal Home Loan Mortgage Corporation – a US government corporation that trades in mortgages on financial markets in order to raise money to lend to home buyers. Also known as Freddie Mac.

Federal National Mortgage Association – colloquially known as Fannie Mae, it is a a government-sponsored enterprise (GSE) that buys and guarantees mortgages that comply with its funding criteria. It guarantees mortgage payments, even if borrowers default.

Federal Open Market Committee – known commonly by its abbreviation FOMC, is a 12-member committee within the Federal Reserve System that sets US monetary policy, including the discount rate and Fed funds target.

Federal Reserve Policies – the term refers to the actions and strategies implemented by the U.S. central bank to manage economic stability. These policies aim to control inflation, support employment, and maintain financial stability. Key tools include adjusting interest rates, conducting open market operations, and setting reserve requirements to influence borrowing, spending, and overall economic growth.

Federal Reserve System – commonly known as the Federal Reserve (or simply the ‘Fed’). It is the central banking system of the United States of America.

Fertility Rate – the average number of children (babies) that each female has during her reproductive years. A woman’s reproductive years are from approximately 15 to 49 years of age. To maintain a country’s population, there should be a fertility rate of 2.1 (if there is minimal immigration/emigration).

FF&E – stands for Furniture, Fixtures, and Equipment. The term describes the movable items in a house or building that have no permanent connections to it. FF&E items have no connections to utilities either. For example, chairs, tables, computers, water coolers, and photocopiers are items of FF&E.

Fiat Money – money that the government declares as legal tender. Fiat money has no intrinsic value, the metal or paper it is printed on is worthless. Commodity money, on the other hand, has intrinsic value. Gold coins are examples of commodity money. Most countries today use fiat money.

FICO Score – a metric (number) that banks and other lenders use to measure a loan applicant’s creditworthiness. The FICO Score is used by more than ninety-percent of US lenders when deciding whether to lend a consumer money.

Fill or Kill Order (FKO) – an order to buy a considerable amount of stock – the broker is instructed buy straightaway or cancel the order (kill it).

Fill Rate – the percentage or proportion of customer orders that a company can deliver from stock at hand without back orders or loss of sales. Companies should aim for a fill rate of 100%.

Final Consumer – the term has two possible meanings. 1. The person or entity that consumes or uses a product or service, i.e., the ultimate consumer. 2. An advertising strategy that targets the final consumer.

Final Good – a product that the final consumer or ultimate consumer consumes. A final good is a consumer good. Unlike intermediate goods, we do not use final goods in the production of something else.

Finance – a set of activities related to the trading of capital assets between multiple entities. Finance is different from economics, which also includes also the production, consumption and distribution of services.

Finances – apart from being the plural of ‘finance,’ the term refers to the money that people, businesses, organizations, and governments earn and spend. Your ‘finances’ refers to your financial state, i.e., whether you are managing, struggling, etc.

Financial – the adjective of the noun/verb finance. ‘Financial’ means related to finance or money. In the world of investing, (noun) ‘financials’ means bank stocks (shares), and stocks of other financial institutions. Somebody might say “Don’t invest in computer stocks, invest in financials, they are doing well.”

Financial Activities – all activities involving the movement of money. Buying, selling, transferring money, for example, are financial activities. Financial activities include all the inflows and outflows of cash.

Financial Adviser – a person who provides clients with advice on how to manage their finances. They also suggest investment options, such as stocks and shares, bonds, and other financial instruments.

Financial Analysis – an assessment of a project, company, or any entity regarding its stability, viability, solvency, and profitability. Before making a major business decision or investing in a project, it is common to carry out a financial analysis.

Financial Analyst – a professional who examines financial data, market trends, and company performance to provide recommendations on investments, budgeting, and financial strategies, helping individuals or businesses make informed financial decisions.

Financial Assets – intangible assets including stocks (shares), bonds and bank deposits. The value of a financial asset is derived from a contractual claim of what it represents. Unlike tangible assets (e.g. real estate), they are not physical.

Financial Assistance – any type of monetary aid or help. Subsidies, tax allowances, and cost-sharing arrangements are examples of financial assistance. Welfare payments, bailouts, and loans are also forms of financial assistance.

Financial Attributes – factors of a company that show us how healthy it is financially. The parameters suggest how well or badly the business is faring and whether it is in good shape.

Financial Center – a financial hub, a district or city where there is a high concentration of financial institutions, and a highly-developed commercial and communications infrastructure. In financial centers, massive volumes of domestic and international trading transactions are performed. London, New York and Tokyo are the three largest financial centers in the world.

Financial Commitment – 1. A pledge to pay a certain amount of money on a specific future date. 2. To assume financial responsibility for something on a specific future date. 3. To regularly pay somebody or something over a specific period. We can use the term for short-, medium-, and long-term commitments.

Financial Goals – tailored plans individuals set to manage their money effectively, aiming for specific outcomes like saving for retirement, buying a house, or securing their children’s education, ensuring financial stability and achieving personal milestones over time.

Financial Crisis – a significant economic disturbance characterized by plummeting asset values, widespread panic, and the insolvency of financial institutions, often resulting in recession and high unemployment.

Financial Health – the state of one’s personal finances, encompassing the ability to manage expenses, maintain savings and investments, handle debt, and prepare for unexpected financial demands. It reflects financial stability and forward planning.

Financial Incentive – a monetary benefit to encourage people to do something or behave in a certain way. Financial incentives include rewards, commissions, bonuses, profit sharing schemes, stock options, and tax benefits. Specifically, financial incentives encourage actions or behaviors that would not have occurred otherwise.

Financial Institution – an organization that offers financial services, such as banking, investment, insurance, and credit. These institutions include banks, credit unions, investment firms, insurance companies, and brokerage firms. They play a crucial role in managing money, providing loans, and helping individuals and businesses achieve their financial goals.

Financial Instrument – a monetary contract between two entities. We can create, trade, modify, and settle financial instruments. They may be evidence of ownership or contractual rights to receive cash. Derivatives are financial instruments, as are securities.

Financial Intelligence – the ability to understand and use financial information effectively to make informed decisions, plan strategically, and achieve financial goals, encompassing budgeting, investing, and managing personal or organizational finances wisely.

Financial Literacy – understanding and applying financial skills like budgeting, investing, and saving to make informed money management decisions, ensuring financial well-being and security.

Financial Management – involves the planning, monitoring, organizing, directing, and controlling of a company’s, organization’s, or client’s monetary resources. The aim is to make sure that the business achieves its goals and objectives.

Financial Market – a market where traders buy and sell financial securities, foreign exchange, commodities, and other fungible items. Banks, insurance companies, pension funds, and other financial institutions form part of the financial markets.

Financial Planning – the strategic process of creating and managing a plan to achieve one’s financial goals, including income generation, investment, savings, tax strategies, and retirement preparation, tailored to individual needs and circumstances.

Financial Ratios – several ratios using data from a company’s financial statement that compare its performance and ability to pay off short- and long-term debts. Also known as accounting ratios.

Financial Sector – an ecosystem of financial institutions that manage money, including banks, investment firms, and insurance companies. It facilitates transactions, investment, risk management, and advises individuals and organizations on growing and protecting assets.

Financial Services – services involving insurance, savings, loans, investments, and money management. The industry encompasses a vast array of economic services that financial institutions, specialized firms, and other entities provide.

Financial Stability – the condition where financial institutions, markets, and systems operate smoothly without significant disruptions. It ensures that economic processes like lending, investing, and saving continue effectively, allowing the economy to grow steadily and withstand economic shocks, thus maintaining public confidence in the financial system.

Financial System – a network of institutions, markets, and instruments that facilitate the flow of funds between savers, investors, and borrowers, enabling efficient allocation of resources, risk management, and the provision of financial services like banking, investment, and insurance.

Financier – a person, group of people, company, or government that provides funding for projects and businesses.

Fintech – short form for Financial Technology. The term refers to modern software and other tech that have transformed the world of banking and finance. Such innovations as blockchain, online banking, digital wallets, and cryptocurrencies fall under this category.

Fintech Application – an application designed for the fintech industry designed to automate and digitize financial services.

Firm – a company or any entity that purchases and sells goods or services to consumers in the pursuit of profit. Examples of firms include, limited liability companies, partnerships, public limited companies, and sole proprietorships. Most law, accountancy or consultancy partnerships are known as firms (not companies).

First-mover advantage – also known as FMA, is a term used in marketing strategy where the advantage is gained by the initial significant occupant of a market segment, i.e. the first one to launch a new type of product or service. Also called Technological Leadership. The first-mover can gain rapid and significant market share, huge profits, customer loyalty, brand name recognition, and near-monopoly status. However, not all first-movers succeed, sometimes they fail and the second-movers or late-movers make all the money.

Fiscal – related to government revenue, i.e., taxes, public spending, and government borrowing. Therefore, a ‘fiscal issue’ is a ‘government finance issue.’

Fiscal Drag – an automatic brake applied to a rapidly-growing economy under a progressive tax system. As incomes increase, many people find themselves in higher income brackets. This means that tax obligations increase. Spending subsequently declines or slow down.

Fiscal Policy – refers to government spending and the collection of taxes. An expansionary fiscal policy is used to kick-start a sluggish economy, while a contractionary fiscal policy is adopted either to slow down the economy or pay off public debt. Governments deal with fiscal policy while central banks focus on monetary policy.

Fiscal Stimulus – government action to boost the economy that may involve either tax cuts or greater spending. Left-leaning parties favor boosting public spending while right-leaning parties favor tax cuts.

Fiscal Year – also known as a financial year, it is the 12-month-period that an entity uses for calculating and disclosing annual financial statements. The fiscal year may not be the same as the calendar year (Jan 1 to Dec 31).

Fiscalist – somebody who believes that government spending and methods of raising revenue, i.e., fiscal policy, are vital in economic regulation. Fiscalists contrast with monetarists, who warn that fiscal policies often lead to high inflation and economic decline.

Five Forces – the five external factors that tell us how viable an industry is for a company. In other words, how profitable it is likely to be. We also call them Porter’s Five Forces. The forces are customers, existing competitors, new competitors, suppliers, and substitute products.

Five W’s of Communication – five words beginning with the letter ‘W’ that we should focus on when communicating. They are WHO, says WHAT, in WHICH channel, to WHOM, and with WHAT effect? In public relations, ‘effect’ may refer to ‘feedback.’

Fixed Assets – assets that help a company produce things and earn income. Fixed assets cannot be converted into cash easily. Examples include PP&E (property, plant & equipment), vehicles, etc. We use fixed capital to purchase fixed assets.

Fixed Capital – the money that people invest in fixed assets, i.e., equipment, land, buildings, vehicles, etc. We also use the term ‘fixed investment.’

Fixed Costs – costs that do not change according to output or sales volume levels. They are the opposite of variable costs. Examples of fixed costs include rent, utilities and insurance premiums.

Fixed Exchange Rate – a system in which the central bank or government tries to peg its currency to another currency, a basket of currencies, or a precious metal such as gold. The system contrasts with a floating exchange rate, in which the currency’s value is left to market forces.

Fixed-Rate Mortgage – for a set period, which can be up to thirty years, the monthly payments on the mortgage do not change because the interest rate is ‘fixed’. This type of home loan is popular with households on a tight budget, and for people who like to plan ahead.

Flea Market – an outdoor market with stalls that sell old furniture, antiques, second hand items, etc. Most of them are outdoors. However, some may be in a warehouse or school gym. Britons call a flea market a ‘car boot sale.’

Flesch Formula – a formula that tells us how difficult or easy a text is for people to read and understand. The higher the score, the easier it is to read and understand. We also call it the Flesch Readability Score, Flesch Rate, or Flesch Reading Ease Formula. Rudolf Flesch, an Austrian-American readability expert, devised the Formula in the 1940s.

Flexible Budget – a budget (financial plan) that goes up and down according to the needs of a company or department. In other words, the budget’s size changes according to changes in the company’s or department’s variable costs. When they rise, the budget grows. Conversely, when they decline, the budget shrinks.

Flexible Factory – a production facility that can quickly change from producing one thing to producing something else. It can do this with the minimum of downtime. Many car factories are flexible factories.

Flexible Firm Model – a management or organizational technique that segments employees into different groups, i.e., core and peripheral groups. The Model uses different forms of flexibility to optimize the use of human resources.

Flexible Pricing – a strategy that allows buyers and sellers to negotiate the final price of a good or service. Some businesses benefit from flexible pricing, especially sellers of perishable goods. Most consumer like to be able to influence prices.

Flexible Schedule – an alternative to the traditional working day, which historically has been nine-to-five. It is also an alternative to the forty-hour week. With modern communications, the Internet, the cloud, emails, etc., people today can work from virtually anywhere. This means they can also work more flexible hours than their parents or grandparents could.

Flexible Specialization – a strategy that some businesses use to remain competitive. They employ multi-skilled workers and have multi-use equipment and machinery. They are then ready to adapt to any changes in the marketplace.

Flexible Staffing – an alternative to permanent staffing, i.e., an alternative to having permanent employees. The employer uses part-time workers, temporary employees, or independent contractors.

Flexible Workforce – the term has two meanings: 1. A workforce with many employees who have multiple skills. They can easily step in when somebody leaves or becomes ill. 2. A workforce whose size adapts to the needs of the company. When sales rise, the workforce grows. When sales decline, the workforce shrinks.

Flexible working – a general term for working patterns that vary from the traditional nine-to-five, Monday-to-Friday office job. The patterns typically vary by location of work, number of hours, and start and finish times.

Flexitime – a scheme whereby workers can vary the start and finish of their working day within certain limits. Most systems comprise a fixed core time with flexibility to vary the beginning and end of the day outside of the core.

Flight Capital – the money that leaves a country during a capital flight. Capital flight is the event, while flight capital is the money itself. There are many reasons why people decide to transfer their money out of a country. Perhaps they have lost confidence in the economy.

Flight to Quality – the large-scale movement of investments from high risk assets to low risk ones. The high risk assets offer a higher yield than the low risk ones. Flight to quality, or flight to safety, is a herd-like shift. It could be the result of very bad news, such as a corporate collapse or bank failure.

Flighting – an advertising strategy where the marketer places lots of adverts during one period and then no ads during another period. Flighting is more common among small companies with limited advertising budgets. It is also common among sellers of seasonal goods or services.

Flipping – buying something at a low price and selling it quickly at a high price. It is a form of speculation, but the speculator moves quickly. We can use the term for shares, commodities, real estate, cars, and many other items.

Floating Exchange Rate – an exchange rate where the Forex market, based on supply and demand, sets the price of a currency. The currency’s price is not fixed by the government, i.e., it is not pegged to another currency or precious metal.

Fluoridation – adding fluoride to drinking water to protect people’s teeth from decay. We also use the term ‘fluoridation of drinking water.’ If you add fluoride to drinking water, the incidence of tooth decay and cavities declines significantly.

Fluorocarbons (FCs) – compounds that contain carbon and fluorine. We also refer to them as perfluorocarbons or PFCs. We use them in the manufacture of aerosol propellants, refrigerants, oils and greases, and coolants. To protect the ozone layer, fluorocarbon use today is either illegal or restricted.

FMEA (Failure Mode and Effects Analysis) – a step-by-step approach to detecting the potential failures in a process, system, service, or product. We can use the term in the physical or abstract sense. The approach looks at each failure and their individual knock-on effects. We then view all of them together to get an idea of what the overall consequences are or might be.

Focused Factory – a factory that is not flexible, i.e., it cannot easily switch from making one thing to making something else. It contrasts with a flexible factory.

Focused Fund – a mutual fund that invests in a very limited number of companies and sectors. It contrasts with a diversified fund, which invests in a wide range of sectors and many different companies. Focused funds tend to be riskier than diversified funds.

Focus Group – a group of five to fifteen people who talk about specific themes as part of a market research project. A focus group could also be a brainstorming group, i.e., a group of people who get together to try to solve a problem.

Food Additives – functional substances that we add to food. Food additives may improve a food’s taste, color, texture, or consistency. Other additives may extend a food’s shelf life.

Food Biotechnology – the use of technology to alter or modify the genes of the plants and animals that we eat, i.e., our food sources. Thanks to food biotechnology, we can get better crop yields and produce disease-resistant plants. Many of our fruits and vegetables are more nutritious today thanks to food biotechnology.

Food Chain – a series of organisms that depend on each other to stay alive, i.e., as sources of food. Plants are at the bottom of the chain. Human, lions, eagles, and sharks, for example, are at the top.

Food Contaminant – a foreign object, organism, microorganism, or chemical that makes food unfit for human consumption. The term usually refers to the accidental contamination of food.

Foodborne Illness – an illness caused by something we ate or drank. We also call it a foodborne disease or food poisoning. Bacteria, viruses, fungi, parasites, and poisons, for example, can contaminate food. If we eat that food, we can get a foodborne illness.

Food Stamps – an American federal assistance program for low income individuals and their families. It is a nutrition program. Its official name is SNAP. SNAP stands for Supplemental Nutritional Assistance Program.

Footfall – 1. The number of people entering a shop or shopping mall per hour, day, week, month, etc. 2. The sound of footsteps. For retailers, footfall is an extremely important metric.

Foot Traffic – the number of people walking in a given area, i.e., pedestrian activity. Foot traffic matters more for shops than law practices. A shoe shop, for example, gets more business from pedestrians walking in off the street than a law practice does.

Forbearance – a special agreement in which a borrower who is falling behind on payments gets extra time to catch up. The lender postpones foreclosure, i.e. puts off seizing the borrower’s asset.

Force Majeure – unforeseeable events or circumstances that prevent a party in a contract from fulfilling its obligation. Examples include earthquakes, tsunamis, war, new legislation, riots, or strikes.

Forced Distribution – a method of appraising employee performance. We also call it the forced distribution method and stacked ranking. It is a very popular method among companies. Managers and supervisors grade employee performance according to three or four categories.

Forecasting – a planning tool that managers and directors of companies, economists, investors, and government departments use in their attempt to cope with the uncertainty of the future. Forecasting relies mainly on historical and current data, as well as the analysis of trends. There are several different forecasting methods.

Foreclosure – occurs when a borrower defaults and the lender demands he or she sells an asset (such as a house) in order to pay back a loan.

Foreign Policy – how a government deals with other nations, i.e., its plan of action. We also call it foreign relations or foreign affairs policy. It includes such matter as defense and trade. Its main goal is to protect the country’s citizens both while they are at home and abroad.

Foreign Reserves – foreign currency that a central bank holds. Its main aim is to defend the local currency and stabilize the economy. Most foreign reserves consists of hard currencies such as the US dollar, pound sterling, euro, and Swiss franc.

Forensic – 1. (Adjective) related to courts of law or used in courts. 2. (Adjective) suitable for discussion or public debate. 3. (Adjective) applying technical or scientific knowledge to legal problems. 4. (Noun) scientific tests or techniques people use to try to solve crimes. In this case, we often use the plural form, i.e., forensics.

Forensic Accounting – the application of accounting skills to determine whether there has been illegal activity. We also use the terms forensic accountancy, financial forensics, forensic auditing, and forensic audit. Forensic accountants are the detectives of the finance world.

Forensic Engineering – applying engineering knowledge to find out why something failed or went wrong. The forensic engineer often uses reverse engineering to determine why a structure, machine, component, or material failed.

Forensic Medicine – a branch of medicine that deals with the application of medical knowledge to determine what happened to somebody who died. We also call it forensic pathology.

Forensic Science – the application of scientific knowledge to find out why something bad happened. Forensic scientists try to determine why somebody died or a bridge collapsed. If fraud is suspected, the authorities send in forensic accountants. Forensic pathologists carry out autopsies to try to determine, for example, cause of death.

Forex – also known as the foreign exchange market, it is the international market for trading currencies. The abbreviation for ‘foreign exchange’ is ‘Forex’.

For-Profit Organization – an organization or company whose principal goal is to generate profit. It contrasts with a not-for-profit organization. For-profit organizations are a crucial part of a free-market economy. Successful ones have greater revenue than costs.

Fossil Fuels – crude oil (petroleum), natural gas, and coal. Fossil fuels consist of decayed animals and plants. It is a long process that takes millions of years.

Fractional Reserve Banking – occurs when a bank has reserves that are less than the amount deposited by its customers. It is what makes the money supply grow.

Franchise – an arrangement in which the franchisor (owner of the business) gives the franchisee the right to distribute and sell the franchisor’s goods or service and use their business name and business model. Sometimes the franchisee gets the rights for a geographical area.

Fraud – occurs when somebody uses deception, dishonesty, or tricks to gain money or property. Fraud is illegal. Somebody who engages in fraudulent activity is a fraudster. It is typically a white-collar crime, i.e., an office-based crime.

Free Market – an economy where the purchasing and selling of goods and services are not under the control of the government. Individuals and businesses can buy and sell freely. Also known as an open market.

Free Trade – an economic policy that allows goods and services to be traded across international borders without government-imposed restrictions, such as tariffs, quotas, or subsidies, aiming to encourage global economic integration and efficiency.

Free Trade Area – a group of countries that have agreed to eliminate tariffs, quotas, and preferences on most goods and services traded between them.

Freight– products and merchandise that are transported by land, sea, or air. The term may also refer to the cost of shipping/delivery. Cargo today means the same as freight. We can also use freight as a verb and adjective.

Frictional Unemployment – consists of people who are between jobs, they are still going to interviews, and searching for their ideal job. When there is near-full employment, frictional unemployment is higher, because individuals tend to spend longer going to interviews and deciding whether what is offered to them is what they really want. When unemployment is high, frictional unemployment dries up rapidly – people are less fussy and want to get a job as quickly as possible, even if it is not ideal.

Fringe Benefits – additional compensations provided to employees beyond their regular salary, such as health insurance, retirement plans, and paid time off.

Fungible – refers to something that can be exchanged for something else. For example, I can trade a $10 bill for ten $1 bills, two $5 bills, or another $10 bill. Fungible items are goods or commodities that are freely exchangeable for or replaceable by another of exactly the same or very similar nature. Pure gold is fungible – one bar of gold is interchangeable with another identical bar or 2 bars of half the weight. Fungible is an adjective – the noun is fungibility.

Futurology – a study of future possibility by carefully analyzing both present and historical trends. Futurists predict alternative futures. We also call it future studies.

Futures – standardized contracts for buying or selling financial assets or commodities at a future date and price, offering a way to hedge against price risks or speculate on market movements, with transactions facilitated through a futures exchange.

Futures Contract – a contract to exchange a specified security (of a specific quantity) for a price that is determined on the day the contract is created for delivery and payment on a future date. Futures contracts are appealing for those seeking price stability.

Futures Market – a market where people buy and sell futures contracts and commodities. There are many across the world. The largest is the Chicago Mercantile Exchange (CME). We also call it a Futures Exchange.

FYI – abbreviation of For Your Information. We pronounce the abbreviation /ɛfwaɪˈaɪ/. We use it in e-mails, memos, and informal messages. The information within the message is not urgent, i.e., the receiver does not need to take urgent action.

Gadfly – in business, it is somebody who comes to shareholders meetings and puts forward proposals the directors would rather avoid. We often refer to them as corporate gadflies. In lay English, a gadfly is a type of fly that irritates horses, cows, and other livestock. A gadfly is anybody who continuously annoys people so that they react.

Gadget – small devices or machines that have a specific purpose or function.

Gaia Hypothesis – a hypotheses that suggests that planet Earth is much more than just the third rock from the Sun. The theory, put forward by James Lovelock in the 1960s, suggests that Earth behaves like a giant, self-regulating cell. It is a living system that greatly affects the chemistry and conditions of our planet.

Gains Sharing – a system that companies use to boost productivity and reduce waste. Workers get bonuses when their productivity improves. We also call it gainsharing, gain share, or gainshare. It is not the same as profit sharing, which depends entirely on profits. Gains sharing depends on worker productivity.

Gallon – a unit of liquid volume. An American gallon equals 0.83 of a British (imperial) gallon. One American gallon equals 3.78 liters while a British gallon equals 4.55 liters. The term emerged in the English language as a measure for liquids in the thirteenth century.

Galvanized Steel – if you coat regular steel with zinc you get galvanized steel. Galvanizing makes the steel more resistant to corrosion, i.e., rust.

Gambling – the act or practice of betting money on a likely or unlikely outcome. Most people bet with money. However, your stake could be anything, even the shirt on your back! The verb is to gamble. An individual who gambles is a gambler.

Game Changer – a new factor, either a person or thing, that changes the variables in an activity or environment. For example, a game changer in a sports match turned the losing team into the winning team. The Internet was a game changer in the world of retailing and business in general. In fact, the Internet has changed how we live our everyday lives.

Games of Chance – games that depend more on chance (luck) than skill. People bet on most games of chance. A game of chance that involves money is a gamble.

Game Theory – the study of how we and others make decisions of strategy in situations. It is the formal study of cooperation and conflict. Game theory is a branch of mathematics that is concerned with the analysis of strategies humans use for dealing with competitive situations where one individual’s outcome depends critically on actions taken by other individuals. It is a game of strategy and not chance.

Gamification – adding game-design components to something that is not a game to make it more interesting or engaging. Marketing executives use it to boost willing participation and customer loyalty.

Gaming – the activity of playing video games and esports. The person who does this is a gamer. Gaming may also mean gambling – especially online.

Gantt Chart – a horizontal bar chart that most project managers use. Apart from telling us when each task starts and ends, it shows its duration. In fact, some charts are bursting with data. Project managers, supervisors, and other participants like Gantt charts because they can see the whole project’s activities ‘at a glance.’

Gap Analysis – a tool that compares a company’s current state with its future state. Specifically, a future state it desires. We also call it a need-gap analysis, needs assessment, or needs analysis. The ‘gap’ is the difference between a business’ current and target state.

Gap in the Market – demand for a product that does not exist yet. The term may also refer to a product that does exist, but it would sell better if it were upgraded. If a product exists but it is not for sale in a specific market, there is a gap in the market. However, in this last case, there is a gap only if there is demand for the product in that other market.

Gap Management – managing assets and liabilities so that income from interest-earning investments offset increases in loan repayments. Increases in loan repayments may occur if interest rates go up.

Gap Ratio – the ratio of a business’ rate-sensitive assets to rate-sensitive liabilities. A gap ratio of more than one means that sensitive assets are worth more than sensitive liabilities. ‘Sensitive’ refers to an asset’s or liability’s vulnerability to significant changes in value when interest rates change. There is also the poverty gap ratio, income gap ratio, and wealth gap ratio.

Garbage – refers to stuff we throw away. We also use the words rubbish, trash, refuse, and waste with the same meaning. If I think that a person’s statement is completely wrong or untrue, I might say “That is garbage.”

Gas Field – a deposit that is rich in natural gas that we can extract profitably. Since the turn of the century, when the price of natural gas rose, many gas fields have become commercially viable. A gas field may be onshore or offshore.

Gasohol – a gasoline-ethanol blend. Gasohol is approximately nine parts gasoline to one part ethanol (ethyl alcohol). The fuel became more popular when oil prices rose in the 1970s. However, it never caught on in a big way.

Gasoline – a transparent liquid that we use as fuel for our vehicles. Gasoline is highly flammable. It is a derivative of petroleum or crude oil. In the United Kingdom and the Republic of Ireland, people say ‘petrol.’ Gasoline floats in water.

Gateway – in information technology, the term refers to hardware or software that connect disparate devices or systems. The term also means the area where a gate is; as a doorway is the area where a door is. If I say “New York is the gateway to the United States,” I mean it is the point through which you may enter the US.

Gazelle Company – a company that is young and grew by at least 20% annually for four consecutive years. Specifically, its sales and number of workers grew rapidly. We can call them either gazelle companies or simply gazelles. Most of them started with sales of at least $1 million.

GDP Gap – or output gap is the difference between a country’s actual GDP and its potential GDP. If unemployment is high, output would be greater if everybody had a job. The GDP gap is the difference between current national output with high unemployment and output with full employment. The GDP gap may be a positive number, negative number, or zero. Governments and central banks aim for zero.

GDP Per Capita – is the GDP per head of a population. To get the per capita figure, you divide gross domestic product (GDP) by the country’s total population. GDP per capita tells us how wealthy a country’s citizens are in comparison to other nations. GDP on its own does not give us that information.

Gearing – the term refers to borrowing money to then make more money. Gearing also represents the proportion of a company’s equity capital that came from loans.

GECF – stands for Gas Exporting Countries Forum. It is a group of countries that represent more than 70% of worldwide natural gas production. There are twelve members and a number of observer members.

Gemology – the study of natural and artificial gemstones and gemstone materials. Gemology is a geoscience; a mineralogy branch. People who study gemology are gemologists; they value, buy/sell, and cut precious stones.

Generally Accepted Accounting Principles (GAAP) – these are the standard rules and guidelines for accounting. GAAP is also referred to as standard accounting practice or accounting standards. They are a series of rules on how financial statements should be prepared.

Generally Recognized Accounting Practice – or GRAP is a set of rules, regulations, and guidelines for public sector accountants. It is the public sector equivalent of GAAP (Generally Accepted Accounting Principles). The term ‘GRAP’ is common in South Africa.

General Equilibrium – an economic state in which demand and supply are in perfect harmony, i.e. one equals the other, they are in balance. Also known as Walrasian general equilibrium, it is a state that economists say we can never attain, but should set as our goal. It contrasts with partial equilibrium, where demand and supply are equal in only a part of the economy, in a certain market.

Gender gap – differences between females and males in areas such as achievement, attitude, decision-making, pay, and opportunity. Closing the gap is a major global concern and one of the UN’s sustainable development goals.

Generalization – refers to jumping to conclusions. The act of using very little evidence to make broad conclusions. People who generalize say that something is true all the time when it is only true some of the time.

General Ledger – a chronological account record that an entity uses to keep track of financial transactions, including income and expenses. Also known as ‘the book of final entry’. Transactions are categorized and posted into the general ledger account.

General Manager – somebody who is responsible for a whole business, if it is small, or a specific area of a large business. General managers are further down the management ladder than Chief Executive Officers (CEOs) or Managing Directors. For example, a general manager in McDonald’s is in charge of one restaurant, while its CEO is in charge of the whole company.

General Practitioners (GPs) – these are medical doctors who work in primary care, i.e., basic health care. They are typically the first healthcare professionals a patient sees. Also known as family doctors and primary care physicians.

General Strike – a strike that affects all or most sectors of the economy and a large geographical area. A general strike may affect a city, country, state, or even the whole country. Major general strikes bring the whole country to a standstill.

Generative Learning – a theory that involves incorporating new information with knowledge that we had already stored in our long-term memory. In other words, new data must attach itself to our existing knowledge.

Generational Accounting – a method that looks at government spending and how it may affect current and future generations. Specifically, generations of taxpayers. In other words, it determines whether future taxpayers will carry an unfair burden.

Generation Gap – the difference between generations in how they dress, talk, perceive things, behave, vote, etc. Sociologists say that misunderstandings between difference age groups is a cause of many arguments.

Generation Jones – people born between 1954 and 1965. Some people say the starting date was 1954. We also call it the Lost Generation. Sociologists initially lumped Genjonesers with Baby Boomers. Eventually, they recognized Generation Jones as a distinct generation. Genjonesers are more cynical than the idealistic Baby Boomers.

Generation X – people born from 1965 to the late 1970s. We also call the generation Gen X. Generation X members are Gen Xers. There is a stereotype perception that they are cynical, directionless, and disaffected. Some people dub them the MTV Generation.

Generation Y – refers to people born from the early to mid-1980s to the early part of this century. Some people refer to it as Gen Y, the Boomerang Generation, the Millennial Generation, or the Echo Boomers. They are more self-absorbed and cossetted than their predecessors.

Generative AI – Generative AI is a type of artificial intelligence that can create text, images, audio, video, and even code. It generates these items from large amounts of data that it has learned from.

Generic – either refers to goods that companies sell with no brand name or trademark, or characteristics related to a whole class of goods. Generic drugs, for example, compete with brand name drugs. Generic products are cheaper than brand name goods.

Generic appeal – an advertising strategy that promotes a product’s group or category rather than the product itself. For example, a company that sells broccoli that wants to increase sales to children may first encourage them to eat vegetables. When vegetable consumption has increased significantly, it then promotes its own brands.

Genesis Block – the first block in a blockchain. The first ever genesis block was mined in 2009 when the cryptocurrency Bitcoin was born. Blocks are records which are linked to each other to form a blockchain. They all have data from the block preceding them, except for the genesis block. The genesis block has no data from a preceding block because it is the first one in the chain, i.e., it has no block before it.

Genetically Modified Food – or GM refers to food whose source has been genetically modified or altered. For example, GM beef comes from cattle that has been genetically engineered, i.e., scientists have tweaked their genetic codes. GM food is a controversial topic. Some people say it is safer for consumers and better for farmers. Others, however, claim it is bad for our health and the environment.

Genetic Engineering – refers to the direct manipulation of DNA to change an organism’s phenotype (characteristics) in specific ways. Scientists can genetically engineer fish, mammals including humans, birds, and even plants. In future, geneticists say that we will be able to eradicate illnesses that people inherit from their parents.

Gentleman’s Agreement – or Gentlemen’s Agreement is an informal, oral, non-binding agreement between at least two parties. The agreement relies on the personal honor of each party for its fulfillment. If one of the parties breaks the agreement, you cannot (in most cases) sue them.

Gentrification – occurs when a deteriorating part of town has money spent on it or there is an influx of well-off people. The area becomes ‘nicer,’ more desirable, and more expensive. We often use the term with a derogatory meaning. Gentrification sometimes results in the displacement of low-income families.

Geotargeting – targeting consumers you want to attract according to where they are, live, or work. It is also called location-based marketing and geofencing.

Geothermal Energy – using the Earth’s internal heat to generate electricity and heat homes and buildings. We have been using geothermal energy for thousands of years. Most of Iceland’s electricity comes from geothermal energy.

Giffen Goods – products for which demand grows when they go up in price. In the vast majority of cases, a rise in prices is followed by a fall in demand – not Giffen goods. Giffen goods are ‘inferior products’ – usually staple foods for poor people, such as rice in Asia, tortillas in Mexico, and bread in Victorian Europe. The term was named after Sir Robert Giffen, a Scottish economist and statistician.

Gift – this is a present that one person gives to another. The word can also mean a special talent that somebody has. For example “John has a gift for music.” In business, there are some rules regarding the giving and receiving of gifts. The rules depend on the jurisdiction and industry.

Gig Economy – where employers hire freelancers, part-timers and short-term contract workers instead of permanent, full-time employees. In a gig economy, finding a job for life is extremely difficult. Since the 2009 global financial crisis, most countries in North America and Western Europe have drifted towards gig economies. Economists believe this trend will continue. A person whose work consists mainly of gig work is known as a gig worker.

GIGO – acronym for ‘garbage in, garbage out.’ It is a mathematics and computer science concept that the quality of the data going in determines the quality of what comes out. If you feed garbage into a computer, it will produce garbage, or faulty data.

Gilts – bonds that the British government issues. They are the equivalent of American Treasury securities. We also call them gilt-edged securities. When the British government needs to borrow money, the Bank of England issues gilts.

Gilt-Edged Securities – bonds that either governments or very solid, reliable, top-quality companies issue. They issue them to raise money, i.e., borrow money. In the UK and Commonwealth, the term usually refers to government bonds, unless otherwise stipulated.

Gini Index – a way of comparing income or wealth distribution between countries. We also call it the Gini Coefficient. Economists and statisticians also use it to measure consumption expenditure distribution.

Glamour Stocks – company shares that many investors believe will rise in value more rapidly than the rest of the market. The financial press tends to view glamour stocks favorably. However, sometimes there is too much hype, and when their glamour fades, they crash.

Global Analyst Research Settlement – a fund that investment firms in the US had to create following the 2003 mutual fund scandal. US investment banks had aided and abetted instances of investor fraud. The aim of the fund was to educate consumers and retail investors about finance and investing.

Global Economy – the term either refers to the total size of the economy of the world, or the way countries’ economies have become interdependent. In other words, we use the term when talking about global GDP or how what happens in one country affects many others. Hence the phrase “We live in a global economy.”

Global Financial Crisis – a financial crisis or economic meltdown that affects the whole world, rather than just one country. Typically, banks stop lending, businesses go bust, and consumer spending declines significantly. Many banks cannot cope and the taxpayer has to bail them out. Global financial crises often precede recessions.

Global Fund – a mutual fund (UK: unit trust) that invests all over the world, including the investor’s home country. An International Fund, on the other hand, invests globally but not in the investor’s home country. The Global Fund to Fight AIDS, TB and Malaria, which Microsoft billionaire Bill Gates founded, it also known as The Global Fund.

Global Investment Performance Standards (GIPS) – guidelines and regulations for investment firms. Investment firms in thirty-seven countries across the world adhere to the GIPS standards. Hence, investors have access to reliable performance data.

Globalization – the process by which companies and organizations start operating across borders and develop influence internationally. The term also refers to the transmission of values, ideas, and meanings across the world (cultural globalization).

Global Marketing – the effective planning, producing, placing and promoting of goods and services in the worldwide market. Ever since the arrival of the Internet and e-commerce, global marketing has become crucial for many companies. Today, even small businesses are selling globally.

Global Positioning System (GPS) – a network of satellites that send precise signals regarding their position as they orbit the Earth. GPS receivers obtain the signals. We use the receivers to calculate the precise position, speed, and time of things such as vehicles, ships, missiles, etc.

Global Recession – a period of general economic decline that affects many countries in different regions of the world. Either global GDP growth has slowed down significantly, is at zero, or is shrinking. The IMF says that the definition of a global recession must include a decline in capital flows, oil consumption, industrial production, and trade. It adds that there must also be rising unemployment. These macroeconomic indicators are in addition to a general slowdown in the worldwide economy.

Global Sourcing – the practice of sourcing (seeking and obtaining) from the global market for products and services across national borders. Companies opt for global sourcing when they wish to exploit global efficiencies in the delivery of products or services.

Global Strategy – a strategy that an organization creates when it wishes to compete and expand in other countries. It is a strategy that companies pursue when they want to operate beyond their borders.

Global Warming – the consistent rise in the average temperatures of our atmosphere and oceans. These temperatures are rising at progressively accelerating rates. If we do not reduce our greenhouse gas emissions, we will have a serious problem by the end of this century.

Global Warming Potential (GWP) – a measure of the amount of energy one ton of atmospheric gas absorbs compared to carbon dioxide over a specific period. In other words, GWP tells us how much heat a gas traps in the atmosphere.

Gloss – can be a verb or noun and has many meanings. (Verb) it can mean to apply a glossy substance to a surface, as well as disguising an unfavorable topic by talking about it very quickly. (Noun) it is a luster that we apply to a surface, as well as something that seems superficially attractive, but, in fact, is not. We also use the term when referring to a glossary.

Glossary – a list of words plus their meanings. Often, the words in a glossary are technical or specialized terms. For example, a banking glossary has words plus their meanings specific to the banking sector. Glossaries also appear at the end of articles and books. They contain lists of unfamiliar or difficult words that the author used.

Glut – the term means an oversupply; when the supply of a good or service far exceeds demand. When there is a glut, prices fall, stock levels (inventories) rise, and sometimes employers lay off workers. As a verb, the word means to satisfy an appetite, feed excessively, or overindulge.

Goal – in business it describes where or how a company hopes to be at a specific future date. The term, unlike an ‘objective,’ does not specify the steps the company will take to get there. Companies usually list their goals and objectives in their business plan.

Godfather offer – this is a tender offer a corporate raider makes during a hostile takeover attempt. The offer is too good to turn down. The bidder has offered to purchase shares from the target company’s shareholders with a very high premium, i.e. well above market prices. The term comes from The Godfather, a book and movie in which Corleone said “I’m gonna make him an offer he can’t refuse.’

Going concern – a company that is currently active and is profitable. In other words, it is thriving. ‘Going concern’ is a term that accountants use. They expect the company to be active and doing well at least for the next twelve months. A going concern has not gone bankrupt or sold off its assets (liquidated its assets).

Going Forward – a relatively new term that means ‘from this point on’ or ‘from now on.’ It suggests that from now on, there will be a different approach or behavior. Many people dislike the term; they say it has no meaning.

Gold – a precious metal that serves as a store of wealth and a form of investment. Humans have been investing in gold, and using it in jewelry, art and coin-making for thousands of years.

Golden Handshake – money, stocks, or other benefits that an employee gets when leaving the company. When executives must leave, the golden handshake may be considerable. In fact, some have cost the company hundreds of millions of dollars, end even billions. The golden handshake may be a reward for years of faithful service, while on other occasions it may be an attempt to prevent problems. For example, if the company wants somebody to leave without a fuss, they may offer a generous financial incentive.

Gold Rush – an onrush of prospectors seeking their fortune after word gets out that somebody found gold. When many people come to one area aiming to get rich by finding gold, we have a gold rush. There were many gold rushes in the 19th century.

Gold Standard – a system by which a currency’s value is defined in terms of gold. Most countries abandoned the system during the Great Depression (1930s). The United States, however, hung on until the 1970s. The system contrasts with a floating exchange rate. Both systems have their pros and cons.

Goodhart’s Law – a theory that states that when a measure becomes a target, it stops being a good measure. The theory was introduced by Prof. Charles Goodhart in the 1970s. Put simply, it means that when the central bank, for example, takes measures, businesses and people often find another way. In other words, they circumvent the measure.

Good Laboratory Practice – or GLP refers to accepted methods that researchers must adhere to when working in a laboratory. GLP aims to ensure safety, reliability, and high quality standards. We can also say the term in the plural, i.e., Good Laboratory Practices.

Good Manufacturing Practice (GMP) – a system for ensuring that foods, drugs, and medical devices are produced and controlled according to quality standards. It is a set of guidelines and rules that manufacturers and sellers must follow.

Good Offices – refers to the influence and power a person or his/her position has. We use the term when that influence is used to help another person, people, or organization(s). For example, the UN Secretary-General used his good offices to persuade a head of state to sign the agreement.

Goodness of Fit – a term that statisticians use. It refers to how accurate the expected values of a financial model are in comparison to their actual values. Psychologists and parenting experts also use the term when talking about a person’s temperament and their compatibility with their environment.

Goods – 1. Things we make for consumers to buy (consumer goods) or things we buy to make other things (capital goods). 2. Our possessions, as in “There are all my worldly goods.” 3. Carrying cargo rather than passengers, as in “A goods train.”

Goods and Services Tax – or GST is a value-added tax levied on the consumption of goods and services, replacing multiple indirect taxes previously imposed by individual countries.

Good Standing – refers to any entity that is current with the state’s, government’s, association’s, or agency’s obligations. A person in good standing is somebody who has the respect of other members of the community.

Good Til-Canceled (GTC) Order – an order to exchange a security at a specified price. The order is open until it is completed or cancelled. With a GTC order, the brokerage company does not usually hold the order for longer than 90 days.

Goodwill – in business the term refers to the established reputation of a commercial enterprise as a quantifiable asset and calculated as part of its total value. When the whole is worth more than the sum of its parts, the difference is the company’s goodwill. If the book value of a company is $10 billion, but a predator offers $12 billion to acquire it, the $2 billion premium is the goodwill value.

Go Public – when a private company turns into a publicly listed company, or a public company. Public company shares are traded on a recognized stock exchange. When a company goes public it carries out an IPO (initial public offering).

Government – 1. The process or manner of governing a nation or a system we use for controlling a country. 2. A group of people who run a country and make decisions at national level.

Government National Mortgage Association – commonly called Ginnie Mae or GNMA, is a US government-owned corporation set up in 1968 to expand home ownership across the nation. It guarantees investors the timely payment of principal and interest on mortgage-backed securities.

Government Shutdown – occurs when the US Congress cannot approve a new budget to finance the federal government and its agencies. Hundreds of thousands of federal workers are laid off without pay (furloughed). The USA is the only advanced economy that has government shutdowns.

Grace period – the amount of time someone has to meet an obligation after its deadline with little or no penalty.

Graduated Payment Mortgage Loan (GPM) – a mortgage that initially offers low monthly payments that gradually increase over time to a set level. This type of loan is appealing for younger borrowers who do not earn much at the moment, but expect their salaries to increase over time.

Grant – money given by an organization, local authority, national government, charity or individual for a specific purpose. It is different from a loan because the receiver does not have to pay it back. Grants are typically awarded for research, study, home improvements, to expand or improve a community project, or to set up a business. The verb ‘to grant’ has several meanings, including to give, accept, take as a given, because, or accept that something is true. It is also the first name and surname of some people.

Graphene – the strongest, thinnest and lightest material in the world that we know of. It is about two hundred times stronger than the strongest steel. It is also the best conductor of electricity and heat on Earth. It is a single layer of pure carbons arranged in a honeycomb, hexagonal lattice pattern. It is so incredibly thin it is considered to be a 2D object.

GRAS – stands for Generally Recognized As Safe. It is a US Food and Drug Administration (FDA) designation for substances that we add to food. Thousands of additional substances exist in many of our foods. The FDA determines whether or not to give each one a GRAS status.

Gray Market – (British: Grey Market) a market in which the distribution channels are unauthorized. In the securities market, the term may refer to trading before the official trading of a new stock begins. In marketing, a market dominated by consumers aged 60+ years.

Great Depression – the most severe economic downturn to hit the USA and the world in modern history. Over a three-year period, global GDP shrank by 15%. Unemployment in the US reached 20% of its population (15 million).

Great Recession – the longest period of economic decline since the Great Depression of the 1930s for many countries. From 2007/8 to the end of 2009, many countries experienced negative GDP growth.

Green Economy – an economic system aimed at reducing environmental risks and ecological scarcities, promoting sustainable development without degrading the environment.

Greenhouse Gas – an atmospheric gas that absorbs and emits radiation, i.e., it keeps the planet’s surface warm. Carbon dioxide and methane, for example, are greenhouse gases. There is a global effort to reduce greenhouse gas emissions.

Gresham’s Law – a monetary principle that says that when there are two forms of money, people hoard the more valuable one and use the cheaper one to buy things. Imagine there were $5 coins and they were all made of gold. Then the government started to issue $5 coins made of steel. People would hold onto the gold ones and use just the steel ones for transactions. It would not be long before there were no gold coins in circulation at all – that is Gresham’s law. The term is named after Sir Thomas Gresham, who was financial adviser to Queen Elizabeth I in the 16th century.

GRID – stands for Global Resource Information Database. It is part of the United Nations Environment Program (UNEP) that focuses on earth processes and the sound management of the environment. GRID works at global, regional, and national levels.

Growing Equity Mortgage – a type of mortgage loan which has a fixed rate interest rate and monthly payments that rise over time – there is never a negative amortization associated with this loan. The first payment is an amortizing payment.

Gross Domestic Product (GDP) – a measure of production that is equal to the all the goods and services that an economy produces within a set time period. GDP data are followed very closely by economists, investors and governments.

Gross National Product (GNP) – a measurement of the value of all final goods and services that a country produces, in addition to the income earned by its citizens (excluding income that foreigners make in the country’s economy). Often confused with GDP, which is quite different.

Gross Income – all income that an entity makes (no matter the source). It represents how much income is generated before taxes. The term can refer to corporations or individuals.

Growth Investing – an investment strategy that prioritizes capital appreciation, rather than annual income. It contrasts with value investing. The person is a growth investor.

GST – stands for General Systems Theory. it is a theory that proposes that complex systems all share several basic organizing principles. They share these principles regardless of their purposes. GST concentrates on the structure rather than the function of systems.

GSTP – stands for Global System of Trade Preferences. It is a preferential trade agreement between emerging economies and LDCs (less developed countries). The founding member nations signed the Agreement in 1988. In most cases, it involves either lifting or reducing tariffs on imports. LDCs do not have to reciprocate.

Guaranteed Investment Contract (GIC) – also known as a ‘funding agreement’. It is a contract that instructs the repayment of the principal and a floating or fixed interest rate for a set period of time.

Guaranteed Mortgage Certificate (GMC) – a bond that is backed up financially by a mortgage. GMCs have been issued by the Federal Home Loan Mortgage Corporation (Freddie Mac) since 1975. It has a guaranteed average life, and interest and principal are paid twice a year.

Guerrilla Marketing – a marketing approach that is eccentric, creative, unusual, and sometimes bizarre. It often involves street scenes that take consumers by surprise.

Guest Worker – somebody who works in another country for a limited period. Guest workers are neither immigrants nor illegal workers. They have permission to work in the other country temporarily. When their contract terminates, they return to their home country.

H-1B Visa – a temporary work visa that the US government issues. This type of temporary work permit is only for foreigners with at least a bachelor’s degree. The applicant must have a sponsor, i.e., an employer.

H2H – which stands for Human-to-Human, refers to the practice of engaging individuals on a personal, empathetic level, prioritizing genuine connections and understanding over mere business transactions. It emphasizes authentic communication, emotional intelligence, and building trust, aiming to foster meaningful relationships in professional settings.

Habitat – all the environmental factors that exist in a particular place. An organism’s (life form’s) habitat is where it feeds, sleeps, reproduces, and finds shelter. For example, a house is a human habitat, where we eat, sleep, and have shelter.

Habit Buying – the purchasing of a particular brand repeatedly. We also refer to it as habitual buying behavior. It is similar to brand loyalty. However, with habit buying, the consumer repeats the purchase due to a lack of dissatisfaction. With brand loyalty, buyers have compared their favorite product with others, and know why they are loyal. Habit buyers do not think much about other brands.

HACCP – stands for Hazard Analysis and Critical Control Point. It is a food management safety system which monitors food processing from beginning to end. Approximately 150 countries have adopted the HACCP system.

Hacker – 1. A person who gains access to computers by breaking password codes. They do this without authorization. 2. Somebody who cuts things roughly (who hacks things). For example, somebody who hacks through the jungle undergrowth with a machete. 3. A computer enthusiast, i.e. a computer geek.

Hague Protocol – an amendment, which occurred in 1955, to the 1929 Warsaw Convention. The treaty determined what the liability was for airlines in the case of an accident. The treaty focused specifically on air carriers that transported people, cargo, and luggage for profit.

Hague Rules – an international code that defines who is responsible for the damage or loss of cargo. The rules relate only to international shipping.

Haircut – in finance a haircut is the percentage of an asset that is used as collateral – deducted from its market value. It has the same meaning as ‘margin’ in the context of exchange traded products.

Half Life – how long it takes for the concentration of a substance to decline by fifty percent. We commonly calculate the half-life of a radioactive substance, a drug, a pesticide, etc. The half-life of an advert is how long it takes for the ad’s impact on consumers to decline by half. A mortgage’s half life is the time it take before half of the principal (initial loan amount) is paid back.

Happy Hour – a period during which drink prices are lower in bars in restaurants. Often establishments offer two drinks for the price of one. Happy Hour usually coincides with people’s commute home, i.e., early evening.

Harassment – unwelcome conduct or behavior from one person or group of people to another person. Sexual harassment is a common problem in the workplace. Harassment typically scares, humiliates, ridicules, disparages, puts down, or demeans the recipient.

Hard Brexit – a total separation from the European Union for the UK. Britain would regain complete control of its borders, i.e. how immigrants from EU member states are treated. With a hard Brexit, Britain would likely lose unfettered access to the EU market, and would also no longer have passporting rights.

Hardcore Unemployment – unemployment among long-term unemployed people. In other words, people who have not been able to or have not wanted to work for a long time. Some countries do not include this type of joblessness in their official unemployment figures.

Hard Currency – also known as a safe-haven currency or strong currency, is a currency that people trust, because they expect it to maintain its value. It can be exchanged easily and virtually everywhere for other currencies. This type of currency is used for most international transactions and is kept in the reserves of country’s central banks. Examples of hard currencies include the US dollar, euro, British pound sterling, Japanese yen and Swiss franc.

Hard Landing – the term has two meanings: 1. A clumsy or rough landing of an airplane. 2. An abrupt and severe economic slowdown following a period of GDP growth.

Hard Sell – a technique that salespeople and advertisers use to persuade consumers to buy immediately. We also call it high-pressure selling or hard selling. The salesperson applies psychological pressure to persuade the prospect to buy.

Hardware – the term has many different meanings: 1. The physical components of a computer system, such as the motherboard, mouse, monitor, etc. 2. Fasteners and fittings used by the construction industry. 3. Machinery, tools, and other durable equipment. 4. Tools and equipment for gardening and DIY. 4. Machinery that belongs to a certain sector. For example, military hardware includes, tanks, missiles, weapons, etc.

Harvard Business Review – a general management magazine that Harvard Business Publishing issues. The magazine has been in existence since 1922. As well as several themes of interest to senior management, the magazine also covers current macroeconomic topics.

Harvard Business School – one of the best business schools in the world. The graduate business school of Harvard University in Boston, MA., USA. The school offers several doctoral programs as well as a large full-time MBA program.

Harvest Strategy – a business plan for either scaling down or eliminating a product’s marketing and advertising expenditure. This usually occurs when the product, brand, or business line is reaching the end of its business cycle. We also refer to it as the harvesting strategy.

Hawala – an ancient and currently popular way to send money. Hawala, also called Hewala, leaves no paper trail, and relies completely on trust. No money is actually transferred, but the recipient gets paid. Today, Hawala is practiced mostly in North Africa, the Middle East, the Horn of Africa, and the Indian subcontinent. It is illegal in many countries and some US states, because their authorities do not like the fact that no records are kept.

Hawk – in a central bank, it is somebody who places controlling inflation above all else. A hawk is the opposite of a dove. In foreign affairs, hawks advise taking an aggressive approach while doves propose the opposite. A hawk is also a bird of prey.

Hawthorne Effect – an observation that showing concern for workers’ well-being is a stronger driver of productivity than working conditions. Researchers noticed this phenomenon during experiments at a light factory in Hawthorne, Illinois during the 1930s.

Hazard – a danger or undesirable or unpleasant event. The term is similar to ‘risk.’ However, risk is all about probability while hazard is the event or danger. There are many different types of hazards, for example, natural, anthropogenic, and technological hazards.

Headhunter – an agency or individual that seeks out high-flying executives to fill job vacancies in companies. Headhunters focus on top executives or highly-skilled professionals. We also call them executive search firms.

Health – the state of total physical, mental, and social well-being. Health is more than the absence of disease and infirmity. If I am healthy, it means I do not have a disease or illness. However, it can also mean that I am thriving.

Health Care – includes everything medical professionals and providers do to restore our physical, mental, and emotional well-being. There are three levels of health care: 1. Primary care. 2. Secondary care. 3. Tertiary care. We can also write the term as one word, i.e., healthcare.

Health Insurance – an insurance plan that pays for the medical expenses of a patient. Some health insurance plans are in the private sector, while others are in the public sector. More of the USA’s health insurance is in the private sector than in Canada or the UK.

Heavy Industry – the part of industry that is very capital intensive but not labor intensive. It uses large machines and has numerous and complex processes in the production of its goods.

Heavy Market – a market with too many sell orders and too few buy orders. There is investor uncertainty. Prices are either stagnant or declining.

Heavy Users – consumers who represent the majority of a product’s sales. However, they make up only about thirty-percent of total consumers. Marketing efforts should focus on heavy users. We also call them big spenders and high rollers.

Hedge Fund – an investment vehicle that can make a diverse range of investment strategies. They can be traced back to the 1940s, although most lay people would not have heard of them until the early 1990s.

Hedging – in financial markets, a strategy to reduce or manage the risk of price movements of assets. It is a way of protecting yourself against loss.

Heijunka – Japanese for ‘leveling.’ It is a technique that Toyota pioneered in the 1960s for achieving a perfect supply and demand balance. It is part of an approach called Lean Manufacturing. Inventories are kept to a minimum and workloads flow as evenly as possible.

Help Desk – a service that provides support to either customers or employees in the same company. The term is common in the computer, software, and telecoms sectors. Call centers are similar but only provide support for outsiders (customers).

Herd Instinct – a tendency that we and some animals have to behave and think like the majority. It is a common trait in the business world. Bank runs and stock market fluctuations are sometimes caused by our herd instinct. It influences what we do as well as our decision-making.

Herfindahl-Hirschman Index – also called the Herfindahl Index, is a measure of market concentration – how many or few competitors there are in a market. The aim is to detect markets where consumers may be at risk of monopolistic practices. A Herfindahl-Hirschman Index score of 10,000 means there is just one company – a monopoly – while a score of 100 means there are one hundred companies. In the US, mergers and acquisitions that change the score by over 100 points in a concentrated market may raise antitrust concerns.

Heterodox Economics – economic theories that are outside of mainstream economics. Mainstream economists often refer to them as ‘fringe’ theories. Heterodox economists refer to mainstream economics as ‘orthodox’ or ‘conventional.’ Many economists say the term ‘non-orthodox’ is problematic because defining ‘orthodox’ is challenging.

Hidden Unemployment – this term refers to people who have no job but are not registered in a country’s official statistics. It also includes underemployed people. For example, part-time workers who want to work full time are underemployed. Skilled people working in low-skilled jobs are also underemployed.

Hierarchy – a ‘pecking order’ system that exists in human society, companies, and organizations. Hierarchy also exists in the animal kingdom. Each member has a neighbor who is either higher up or further down the ladder, except for the top and bottom ones.

High-Ticket Sales – sales that involve transactions of high-value products or services that typically require a more complex sales process, including personalized solutions, trust-building, and strategic negotiations to meet the specific needs and preferences of discerning customers.

Hire – (Verb) To employ somebody for wages or borrow something in exchange for money. (Noun) An employee or the act of borrowing something for money. As a verb, it is similar to ‘rent,’ but not the same. Britons and North Americans sometimes use the word differently.

Hit – (Noun) 1. Occurs when a web server sends a file to a browser. 2. A song that is extremely popular. 3. An impact or collision. 4. A hard blow. (Verb) 1. To strike with force. 2. To reach a level. 3. To suddenly come to a realization or conclusion. 4. A dose of a recreational drug.

Hockey Stick Chart – a graph that looks like a hockey stick. There is a relative long period of stability, and then a sharp upward swing. Sometimes the chart may show a steep fall. The term first appeared when somebody described a graph showing how planet Earth was beginning to warm up.

Holding Company – a company that owns enough shares in other companies to control them. Many holding companies do not manufacture anything. However, they control and influence many companies and behave like vast commercial empires.

Holding Costs – also known as Carrying Costs, are expenses related to storing and maintaining unsold inventory (goods) or property.

Holiday – the word refers to time off from work or school, i.e., vacation or public holiday. In the plural – holidays – in the USA/Canada it means from the Thanksgiving to Christmas and New Year period. In the UK and other Commonwealth countries, the plural form means the same as vacations.

Home Business – a business that people operate from their home. Also called home-based businesses, home startups have a better chance of succeeding than other startups. However, working from home is not ideal for everybody.

Home Equity Loan – a loan that can be taken out using a house as collateral. Most lay people refer to it as a ‘second mortgage’.

Homo Economicus – also known as ‘Economic Man’, is an economic term used in most economists’ models. It describes humans as self-interested and rational beings who are capable of making judgments towards subjectively-defined ends, such as the accumulation of wealth and resources. Homo Economicus avoids unnecessary work. These assumptions regarding human consumers are challenged by many economists, sociologists and psychologists, who say we are also motivated by altruism, spite and charity.

Horizontal Integration – when a company expands within the stage of the supply chain where it operates by merging with another company, acquiring another firm, or investing in the project internally. For example, if a supermarket chain acquires another supermarket chain, this is an example of horizontal integration – they are both in the retail stage of the supply chain. It is also called lateral integration, and contrasts with vertical integration, when the business expands into another phase in the supply chain, for example, from retail into distribution, manufacturing or commodities (raw materials).

Hormones – signaling molecules that control vital functions such as movement and growth. The human body produces them in the glands of the endocrine system. The molecules travel from there through the bloodstream to tissues and organs.

Hospitality Industry – the sector of the economy that provides food, drink, and lodgings to visitors. The food and drink is consumed on the premises. It is part of the services industry.

Hostile Takeover – the acquisition of a company by another commercial enterprise; however, the target company does not want to be acquired. The target company’s board of directors are against the transaction. It is the opposite of a friendly takeover.

Hot-desking – a scheme in which the desks in an office belong to nobody in particular. Users can claim their desk for the day either on a first come first served basis, or through a reservation system.

Hot Money – funds that are held in one currency but are liable to be suddenly and unexpectedly moved to another currency. The term is also used for investments – money that might suddenly be moved to another investment. The aim is speculation – to move money to places where it will get the best possible yield. Some people say ‘speculative money’ with the same meaning. Hot money also means stolen cash that is easy to trace, money earned from illegal activity, and money that has not yet been laundered.

Household – a social unit consisting of a group of people who live under one roof. There are many types of households, including the traditional nuclear family, single people living alone, adults sharing the rent, etc. We commonly use the term in economics.

Household Goods – products that we purchase and use within our homes. Real estate, vehicles, and boats are not household goods, but clothing is. Household goods are products that are permanent in nature. Therefore, even though we buy food to consume inside the home, it is not in this category. Food is not permanent in nature. After we consume good, it has gone.

HTML – stands for HyperText Markup Language. It is the major markup language we use to display web pages on the Internet. Web pages display text, images, and other resources through a Web browser that understands HTML. The Web browser interprets the HTML and presents the web page to us with the texts, images, etc. nicely laid out.

HTTP – the letters stand for HyperText Transfer Protocol. It is the underlying protocol that the Web uses. It defines how we format and transmit messages. HTTP determines what actions Web browsers and servers should take when they receive requests.

Hub – 1. The central part of a wheel where the spokes meet. 2. A center of activity such as a major financial center. 3. An extremely busy airport or other type of busy transport facility. 4. An electronic device that connects computers, printers, smartphones and other devices to a network. 5. A steel punch from which we make a coin or medal.

Human Capital – investments we make in human beings in order to make people more productive. Examples include education & training, experience, skills, talent, judgment, etc.

Human Capital Management (HCM) – a set of practices for recruitment, development, and retention of employees to maximize their value to an organization.

Human Intelligence – the capacity to think, learn, reason, and adapt to new situations. It involves a range of cognitive processes such as problem-solving, memory, language, and understanding. Human intelligence also includes creativity, critical thinking, and the ability to manage emotions and social interactions effectively.

Human Resource Development (HRD) – a part of human resource management. HRD specifically deals with the training and development of workers.

Human Resources – the department of an organization that administers, hires, and trains its workforce. The term may also refer to human beings as a valuable asset. The singular form – human resource – refers to a single worker.

Hydrocarbon – any molecule or compound that contains just carbon and hydrogen. There are many different hydrocarbons. They occur naturally in, for example, crude oil, natural gas, and coal.

Hydroponics – the science of growing plants without any soil. The grower uses water that contains all the essential nutrient the plant needs to grow, flower, and fruit.

Hydropower – or hydro energy, involves capturing the energy in falling or flowing water and converting it into electricity. Humans used to use hydropower to grind grain and to operate textile mills, ore mills, and dock cranes. We also used hydropower for irrigation. When we generate electricity from hydropower, we call it hydroelectricity.

Hyperinflation – inflation of at least fifty per cent per month. When a country experiences hyperinflation, its currency declines dramatically in value and people’s purchasing power falls drastically. The main causes are economic recession while the government prints more money, or war.

Hyperlink – a link that takes the online visitor from an image, button, or hypertext to another part of the same web page or another web page. The visitor either clicks on the hyperlink or hovers over it. He or she then automatically jumps to the link’s destination.

Hypermarket – a vast retail space combining supermarket and department store, offering an extensive range of groceries and general merchandise.

Hypothecation – the granting of a hypothetic (collateral) to a lender by a borrower. In the terms of a secured loan, the lender – usually a bank – can take possession of a borrower’s asset, such as a house or car, if he or she is unable to keep up with the repayments. The borrower retains ownership of the asset and enjoys its benefits as long as he or she complies with the terms of the loan. In a mortgage, the hypothetic is the house that is being purchased, in auto financing the collateral (hypothetic) is the car. Hypothecated tax is earmarked tax – the Government pledges to spend a specific proportion of its expenditure or a specified amount on something, such as health or eduction.

Hypothesis – a proposed explanation for a phenomenon. In scientific reasoning, a hypothesis is one that is testable. Scientists base their hypotheses on previous observations.

Hysteresis – the lag in time between cause and effect. The term can be used in science and economics. For example, when there is a recession, unemployment rises. However, unemployment does not immediately fall when the recovery starts. There is usually a lag – this is known as the hysteresis effect.

I-Bonds – US Treasury savings bonds with two interest rates. 1. A fixed interest rate. 2. An inflation-busting interest rate. The fixed rate never changes, while the variable one adjusts every six months to the CPI (consumer price index).

ICAO Technical Instructions – a list of requirements regarding the transportation of dangerous goods by air. ICAO stands for the International Civil Aviation Organization.

Iceberg Principle – a theory that in most situations and phenomena, the bulk of what is going on is hidden from view. As with an iceberg, we cannot see most of the ice because it is below the water’s surface. We also call it the Iceberg Theory, the Theory of Omissions, and the Iceberg Model.

Icon – 1. A pictorial symbol we use in a graphical user interface. We seen them on our desktop. They may identify a program, file, document, or folder. 2. A person who represents a certain era, trend, movement, or way of thinking, i.e. a venerated person. 3. A depiction of Jesus Christ, a saint, or the Virgin Mary that is painted on a wooden panel.

Identity Theft or Identity Fraud – the former, i.e., identity theft, refers to stealing somebody’s identification data. The latter, i.e., identity fraud, refers to using that data to clone telephones, open bank accounts, create fake passports, etc. Identity theft and fraud are big business across the world today.

Idiosyncratic Risk – or unsystematic risk, is risk that is specific to a particular firm or sector of the economy. It is the opposite of systematic risk. If workers in a company are on strike, this is an example of an idiosyncratic risk, because it only affects the value of the shares of that company and not the whole market. However, an increase in interest rates affects all businesses – that is a systematic risk.

Idle Funds – money that is not earning interest and has not been invested in anything. In other words, money that is just lying around, i.e., it is not working for you. Eventually, due to inflation, that money will lose value. We also refer to it as idle money.

Idle Time – time during which workers or machines are not producing. If workers still get their pay during idle times, the company loses money. We also call it waiting time, downtime, or allowed time. There are many possible causes of idle time, including accidents, mismanagement, and faulty equipment.

Illegal drugs – either drugs that we are not allowed to produce, distribute, sell, buy, or consume, or prescription drugs that people abuse. For example, a patient gets a prescription from a doctor and gives or sells that drug to another person, who then sells it on or consumes it. We also call them illicit drugs.

Illiquid – the state of not having enough cash to pay bills and other debt obligations. An illiquid security is one that we cannot sell quickly, i.e., it is hard to convert into cash easily. We use the term for any assets that do not sell quickly. An illiquid market is one with slow volume, i.e., there are very few traders.

Impact Analysis – the process of evaluating the potential effects of a decision, event, or change on an organization, market, or environment. It involves assessing risks, disruptions, and outcomes, helping to inform strategies that mitigate negative impacts and enhance positive outcomes for stakeholders.

Imperfect Competition – a market where there are barriers to entry, which prevent a state of perfect competition. In an imperfect market, the participants are often in a position to abuse their power, raise prices, and manipulate the marketplace to their advantage. Perfect competition across a whole economy does not exist, there are always sectors with monopolies, oligopolies or monopolistic companies.

Implicit Cost – an opportunity cost that the accountant did not report as a distinct, separate expense. Any cost that results from an asset rather than renting or selling it. In other words, what the company has to forego by choosing not to sell or rent that asset. We also call it implied cost, notional cost, or imputed cost.

Implicit Interest Rate – a loan or lease agreement where there is interest added but the interest rate is not mentioned. The interest rate, although not mentioned, is ‘implied’ or ‘implicit.’ There is a mathematical calculation that determines what the interest rate is.

Import Credit – a loan facility that a bank in the importer’s home country offers the importer. Import credit is useful for importers if their suppliers do not offer credit terms. It contrasts with export credit.

Import Duty – tax on imported goods or services. Imports are goods and services that come from another country. Customs duty and import tariff mean the same as import duty.

Import Quota – a limit that a government places on the quantities of a specific product or service that can enter a country from abroad. In other words, an import limit targeting a particular product or service. This may be to protect domestic suppliers, in retaliation for something the other country did, or part of an international coordinated strategy.

Import Ratio – the ratio between one month’s worth of imports and the average total foreign exchange reserve held in the central bank. Most countries should have enough reserves to pay for three months’ worth of imports. Emerging countries, especially, should have a good ratio, because they pay for their imports and debt repayments in hard currencies. The term may also refer to the ratio between total imports and gross domestic product (GDP).

Import Relief – measures the government takes to help domestic companies compete with foreign imports. Measures include restricting imports, providing subsidies and low-interest loans. Sometimes, the domestic producer gets special tax concessions.

Imports – goods and services bought by people, companies or the government of one country that originate from another country. If a car is made in Japan and is bought by an American in New York, it is an imported product. The American consumer is an importer while the Japanese car company is an exporter. Imports and exports form part of international trade.

Import Substitution Industrialization (ISI) – an economic policy theory that advocates replacing imports with products made locally. The economic or trade theory was popular among some developing nations during the 20th century. Very few countries pursue ISI today.

Impound – The verb means: 1. To take legal custody of something, i.e., to seize it. 2. To shut up animals in an enclosure. To hold back water, as in ‘The dam impounds the water in the reservoir.’ As a noun, the term may refer to an account that a mortgage company has into which borrowers make certain payments.

Impression Management – the process in which we try to influence people’s perceptions of other people, places, things, or events. We do it in business and everyday life. Marketing and advertising executives, for example, try to shape consumers’ perceptions of their product so that they buy them. Shaping perceptions is part of impression management.

Impulse Buying – purchasing something when the decision was made there and then. It is a spur of the moment decision. We also call it impulse purchase. Emotions and feelings drive impulse purchases, rather than logic and strategic planning. Many companies depend on these type of purchases for a significant proportion of their revenue.

Impulse Goods – products that we buy without planning to do so, i.e., on the spur of the moment. Chocolate, candy, and chewing gum, for example, are impulse goods. We usually see them strategically placed at the checkout aisle of supermarkets.

Impunity – free from punishment or the consequences of bad or illegal actions. If a person committed an illegal act with impunity, it means that they got away with it. When we use the term, it means we think they should be punished.

Inbound Marketing – a marketing strategy whereby the company or organization uses content that appeals to potential customers or followers (if it’s a movement or political party), rather than placing banner ads and embedded videos. It is the opposite of outbound marketing. Inbound marketing uses blogs, video, podcasts, social media marketing, newsletters – content people are interested in – to lure them in.

Incentive – something that encourages people to do things. They are also used with animals. The word does not have the same meaning as motivation, which includes enthusiasm and will.

Income – also known as earnings, it is money that comes in for work done, goods sold or services rendered. In accounting, it refers to an excess of revenue over expenses for a month, quarter or year (accounting period).

Income Distribution – looks at how much different people, i.e., socioeconomic groups, in a country earn. Income distribution tells us how much or little income equality there is in an industry, company, or country.

Income Elasticity of Demand – measure how demand for a good or service changes when people’s incomes increase or decline. We also use the abbreviation YED with the same meaning. YED looks at the proportionate change in demand for something in response to changes in income levels.

Income Inequality – a measurement of the distribution of incomes across a country. It highlights the gap between those who get the highest incomes and individuals on the lowest incomes. Income inequality in the United States and many other advanced economies has been getting worse.

Income Share – a share in a mutual fund that gives the investor good dividends, but does not appreciate in value. The opposite of an accumulation share, which appreciates but gives little income.

Income Tax – a tax that the government levies on the incomes of people and some other entities. It taxes both earned and unearned incomes. It is a major source of revenue for the government. Most countries today have a progressive tax system, i.e., higher incomes pay proportionally more than lower incomes.

Increased Hazard – a situation that raises the risk of danger to something that is insured. Either, an existing danger has become more probable, or a new danger has emerged. Increased hazards usually result in more expensive insurance premiums. Sometimes the insurance company may even refuse to insure.

Increasing-Cost Industry – an industry where production costs rise when more companies enter the marketplace. The supply of materials required for production is limited. The term contrasts with constant-cost industry and decreasing-cost industry.

Increasing Costs – when factors of production are at maximum, any additional production will result in greater costs, even costs per unit will rise. Workers, for example, will have to do overtime. The company will have to pay them at overtime rates. The full term is the ‘law of increasing costs.’

Increasing Opportunity Cost – when a company continues raising its production with its limited resources, opportunity costs will increase. For each unit increase in production, the opportunity cost will rise. In fact, it will rise by a greater amount each time. That is what the ‘law of increasing opportunity cost‘ states.

Incremental Innovation – a succession of minor improvement or upgrades that a company makes to its existing products. It makes these small improvements at regular intervals. In some industries, such as consumer technology, incremental innovation is a must. Without it, a consumer tech company would not survive.

Incubator Firm – an organization, often a company, that helps early-stage businesses and startups. It assists them during their developmental stage until they can operate completely independently. We also refer to it as a business incubator.

Indemnity – compensation paid by one party to another to cover losses, damages, or injury. When you take out a home insurance policy, you will be indemnified if the house sustains damage from an earthquake, storm, fire or any other hazard listed in the agreement.

Indexation – adjusting an economic variable such as wages, pensions, taxes, or expenditure to a cost-of-living index, so that the variable goes up or down in accordance with the inflation rate. When economists talk of the indexation of wages, they mean making sure that people’s pay keeps up with inflation.

Index Fund – An index fund is a type of investment that tracks a specific market index, aiming to mirror its performance.

Index Number: an economic data figure reflecting the quantity or price compared with a standard value – a base value, which generally equals 100. For example, if something cost three times as much in 2010 as it did in 2000, an index would be 300 relative to 2000. Index numbers are commonly used to compared employment percentages, the cost of living, and business activity. They allow statisticians and economists to reduce unwieldy business information into easily-understood terms.

Index Option – a financial derivative that represents an index of a collection of stocks. The index option can be tied to indexes such as the S&P 500 Index or the Russell 3000 Index. Tied narrow-based indexes represent a specific industry, such as the energy or technology industries.

Indian Rupee – the national currency of India. One rupee equals 100 paise.

Indirect Competition – competition between two companies that make different products that target the same customers and satisfy the same needs. For example, a frozen yogurt shop and an ice cream shop sell to people who are hungry and want something sweet and cold. The term contrast with direct competition, in which two companies make virtually identical products, but with different brand names. For example, Coca-Cola and Pepsi-Cola are in direct competition.

Indirect Labor – the workers in a company who support the production process but do not make things that the company sells. They do not play an active part in converting materials into finished goods. Janitors, security guards, and accountants, for example, are indirect labor, while assembly line workers are direct labor.

Indirect Materials – materials that we cannot trace back to the production process. They do not form part of the finished product. Cleaning supplies in a company that makes furniture, for example, are indirect materials. They contrast with direct materials, which are traceable.

Indirect Relationship – a relationship between two parties in which they affect each other but only through a third party. The two parties or variables cannot affect each other directly. For example, Variable A affects Variable C through Variable B, i.e., indirectly. Imagine three dominoes. Domino A can make Domino C fall down, but only if it knocks down Domino B. It cannot knock down Domino C directly.

Indirect Taxation – also called indirect tax, is tax that doesn’t come from people’s incomes, company profits or assets. The opposite is direct taxation. Examples of indirect taxation are sales tax or VAT, excise duty, environmental tax such as carbon tax, and expenditure tax. Lawmakers tend to focus on indirect tax when they want to raise government revenue, because taxpayers are less aware of any changes.

Individual Branding – a marketing strategy some companies use in which each of their products has its own unique brand name. The strategy contrasts with umbrella branding. With umbrella branding,  companies use the same brand name for their whole product range.

Industry 4.0 – also known as the Fourth Industrial Revolution or 4IR. Machines are becoming ‘smart’ (communicating with one another), factories are becoming more and more automatic, the Internet of Things is expanding, artificial intelligence is advancing…and much more.

Inequality – sometimes referred to as economic inequality, is the difference between what the rich and poor, men and women, and other groups of people have in wealth, education, health, lifespans, etc. When a tiny percentage of the population owns fifty percent of its wealth, inequality is large. Studies have shown that the economies of countries with great inequality do not grow as rapidly as those with more equal societies.

Inflation – inflation occurs when general market prices rise (products become more expensive). It is the opposite of deflation. Inflation figures are closely monitored by economists, central banks, investors and companies.

Influencer – somebody who has the authority, reputation, or expertise to influence a large number of people in a specific niche. Influencers in social media, for example, have many followers and can help promote your product or service.

Influencer Marketing – Influencer marketing is a type of marketing where brands hire social media influencers to promote products and services to their fanbase or following.

Informal Sector – part of the economy that operates ‘below radar’. People who work within the informal sector, also known as the shadow economy, gray economy or underground economy, never declare their income to tax authorities, and consequently pay no tax on those earnings. What makes the activity ‘informal’ is not the work itself, but the evasion of taxes. Some parts of the informal sector are criminal, such as drug dealing, while others legal.

Information Technology (IT) – the term refers to the development, maintenance, and use of computer systems, networks, and software. It includes the use of computers for the processing and distribution of information. Virtually anything related to computing technology is part of IT.

Infrastructure – all the structures and systems in a country which we take for granted but without which our economy could not function, including road & rail networks, bridges, tunnels, subways, power generation and distribution, healthcare, education, emergency services, air control towers, cell towers, telephone lines, etc. The term may refer to a whole country, a company or any entity.

Inheritance – something that a person passes onto somebody else after they die.

Inheritance tax – that which an individual pays when they inherit money or property from someone who has died. Tax systems generally differentiate it from estate tax, which applies to the deceased person’s estate. The rules are different in different countries.

Initial Public Offering (IPO) – an IPO occurs when shares of stock of a company become available for the public to buy for the first time. In an IPO, a private company becomes a public one.

In Lieu Of – a term that refers to replacing something with something else; commonly used in business, finance and everyday English, especially in the United States. For example, a restaurant that has run out of onions, carrots and celery may serve asparagus soup in lieu of minestrone soup. The term originates from Latin (‘locus’ meaning ‘place’), via French.

Innovation – involves inventing, creating and producing new goods and services, new business models, or new process methods. It is more than invention. Commercial success depends on a good innovation system with the company. Some famous innovators, such as Alexander Graham Bell, dramatically changed people’s lifestyles across the world.

Insider Trading – buying and selling shares in the company you work for. This activity may be legal or illegal. If you use material non-public information – relevant information the public does not know about – to trade or help others trade, it is an illegal activity.

Insight Selling – a sales approach that focuses on providing valuable insights and knowledge to customers, helping them see problems or opportunities they were unaware of. It involves understanding the customer’s business deeply and offering solutions that drive significant business improvements or transformations.

Inspection – the act of examining something carefully, usually visually, to make sure it is up to standard and conforms to stipulated requirements or rules and regulations. The word may refer to an official visit to an organization or building to check that everything is legal and correct. In the US and Australia, it is an examination of the structure of a house or building by a specially-trained professional (UK/Ireland: a survey). An inspection is carried out by an inspector. The verb is ‘to inspect’.

Institutional Investor – an organization (firm) that buys and sells shares and other financial assets in huge quantities. Examples include pension funds, mutual funds, endowments, and insurance companies.

Insurance – a financial product that insurance companies sell to safeguard the policyholder against the risk of loss, damage or theft (such as an accident, burglary or flooding). Some types of insurance are compulsory – you cannot drive a car in most countries without the minimum 3rd-party insurance. Many lenders will not grant mortgages if the borrower does not agree to take out a mortgage insurance policy. Insurance has existed for many thousands of years.

Insurance Company – a financial institution that offers risk management by providing compensation for losses in exchange for regular payments, known as premiums.

Insurance deductible – the amount of money a policy holder has to pay in an insurance claim before the insurance provider covers any expenses.

Intangible Assets – valuable things a company has, but we cannot touch them because they have no physical form. Examples include brands, trademarks and patents.

Intellectual Property – patents, trademarks, slogans are examples of intellectual property. Intellectual property refers to the creation of the mind, such as literary and artistic works, inventions, designs, symbols, images, and names used in commerce.

Interactive Advertising – a media-based marketing technique which encourages consumer participation.

Interest – money a borrower pays on top of the principal (original amount), which compensates lenders for the risk they take as well as having to manage without that money for a specific period. Interest is a rental cost for the borrower and income for the lender. In some cultures and religions today and in the past, charging interest on loans is/was forbidden.

Interest Rate – typically expressed at an annual rate, it is the amount of interest that has to be paid during a year. Loans and savings accounts have interest rates – banks charge interest on loans and overdrafts and pay out interest on people’s savings accounts. Banks’ interest rates are closely linked to the rates imposed by the central bank – if the central bank’s rate (bank rate) increases, so do those of the rest of the banks in the country.

Intermediate Goods – items that we use to create another product. They are also the ingredients or components of a final product. For example, a baker buys salt and adds the salt to flour when making bread. The baker then sells the bread. The salt is an intermediate good.

Internal Linking – the practice of creating hyperlinks that connect one page of a website to a different page within the same website, enhancing navigation, improving user experience, and supporting SEO efforts by distributing page authority.

International Bank Account Number (IBAN) – a series of alphanumeric characters used as a means of identifying a specific bank account internationally. The use of IBANS helps speed up automatic processing of international payments and receipts.

International Banking Facility (IBF) – an account that an American bank creates to provide banking services to non-US residents and institutions. Essentially, the facility allows banks to operate loan and deposit business with foreigners.

International Business – business that takes place across borders, i.e., in more than one country. If make something in the UK and sell it to a customer in Japan, I am involved in international business.

International Depository Receipts (IDRs) – also known as Global depository receipts (GDRs), these are receipts that purchase shares of foreign companies that the bank holds in trust. In the US, they are called American Depository Receipts (ADRs).

International Monetary Fund (IMF) – an organization that focuses on fostering global monetary cooperation, securing financial stability, facilitating international trade, promoting sustainable economic growth and high employment, and putting an end to poverty. The IMF is different from the World Bank.

International Monetary Market (IMM) – one of the four divisions of the Chicago Mercantile Exchange, the largest futures exchange in America. The IMM trades foreign exchange, interest rate and equity index futures, and all IOM and GEM products.

International Trade – the buying and selling of goods and services across borders; from one country to another. International trade’s two main data items are imports and exports. If countries did not trade so extensively, our current industrial world would be quite different.

Internal Rate of Return (IRR) – also known as the economic rate of return (ERR), it is the rate of return used in capital budgeting to predict the rate of growth of an investment and how much it will generate in return. The IRR is calculated to determine whether a project is worth doing.

Internet – also called the Net, is a global network of networks that interlinks billions of computers – a bit like the physical postal system, but at ultra-fast speeds. In the Internet, small packets of digital data are sent from one computer to another using a language called Transmission Control Protocol/Internet Protocol (TCP/IP). The Net was not invented by one person or organization. It gradually evolved in the 1960s, when the military were worried that the telephone system could be knocked out of operation with just one missile attack.

Internet Marketing – marketing that only occurs online. It is the marketing efforts that companies do solely over the Internet. Online advertising and search engine optimization are examples of Internet marketing.

Internet of Things – or IOT is a system of interrelated devices, machines, objects, people, and animals that communicate with each other. Your car will communicate directly with your house, which will communicate with hundreds of different devices at home and outside.

Internet Proxy – A network entity that serves as an intermediary between your device and the internet, hiding your IP address, enhancing privacy, and allowing access to geo-restricted content by appearing to access the web from a different location.

In The Red – a bank account that is in the red has negative numbers, i.e., the account holder owes the bank. It is the opposite of ‘in the black.’ If we say that a company is operating in the red, we mean that it is making a loss.

Intrapersonal Intelligence – self-awareness and the ability to understand one’s own emotions, motivations, and thoughts.

Intrinsic Value – what a company, stock, option, currency or property is really worth, rather than its book value or market price. It takes into account several variables including the firm’s business historical performance, regional and global market conditions, the quality of its directors, its financial condition, business trends, trademarks, copyrights and brand name.

Inventory – all goods a company holds for eventual sale, including raw materials, work-in-progress, and finished products. It represents a key asset in business operations.

Investigation – a systematic examination to uncover facts, determine the truth, and resolve uncertainties or disputes.

Investigator – a professional skilled in gathering and analyzing information to uncover facts, solve mysteries, and resolve various investigative challenges. Some work for companies, science laboratories, the police, and other organizations.

Investing – refers to committing money, energy or time for a future benefit. We invest money in order to make our money grow, boost production, or make our businesses more successful.

Investment – the application of resources, e.g. money, to make more money or provide a future benefit. It may also mean purchasing goods that are not consumed today, but are utilized for future production and income generation. In finance, it may mean an asset that will appreciate (rise in value) and either be sold at a higher price or provides an income.

Investment Analyst – somebody who specializes in studying investments and providing advice and recommendations to portfolio managers, stockbrokers, and market traders. Also called an equity analyst or financial analyst.

Investment Bank – a financial institution that specializes in services for companies and major investors such as pension funds. Investment banks, unlike commercial banks, do not take deposits. Also known as a merchant bank in the UK/Ireland.

Investment Club – a group of up to 100 people who pool their money to make investments. The investment club meets regularly and decides (usually by voting) which investments to buy and sell.

Investment Deficit – occurs when investments in critical areas like infrastructure and technology fall short of what is necessary for long-term economic health and growth. We can use the term for the public and private sectors.

Investment Firm – a company that specializes in managing financial assets, offering a range of services including investment advice, portfolio management, and trading securities to help individuals and institutions achieve their financial goals and grow their wealth.

Investment Horizon – how long a person expects to have his or her money tied up before they liquidate it. A young woman investing in a pension, for example, has an investment horizon several decades away. Also called investment time horizon.

Investment Philosophy – a person’s particular style and approach to investing. How they view the market, how long they plan to invest, the type of companies they wish to focus on, plus other factors all contribute to building an investment philosophy. Also called investment style.

Investor – a person, company, organization or other entity that invests capital (money) into a business or project with the expectation of making a profit or gaining an advantage.

Investor Relations – a department in larger companies that deals with the investor community, i.e. shareholders, investors and other people and entities who may be interested in a company’s stock or financial stability. Also called financial public relations and financial communications, investor relations is a sub-function of public relations.

Invisible Hand – a metaphor used by Scottish political economist and philosopher Adam Smith (1723-1790) that people’s self-interest is what makes economies great. The term refers to the ability of the free market to allocate factors of production, goods and services to their most valuable use. If each individual in an economy acts from self-interest, driven by profit, then the system will work more efficiently and productively, compared to an economy with some type of central planner.

Invoice – a document that a seller issues to a buyer containing pertinent information related to a sale transaction. It is used in business as a record of sale.

Inward Investment – investment in capital goods that comes into a country from abroad, specifically from foreign companies, individuals or other entities. It is the opposite of outward investment. The US is the largest recipient globally of inward investment. The US by far is the largest investor in the UK and vice-versa. Inward investment creates well-paying jobs.

IP Geolocation – sourcing the physical address of a user who visits your web site by doing IP lookups.

IQ – which stands for Intelligence Quotient, is a score that indicates how intelligent a person is compared to their peers. When talking about children, peers refers to age group. A genius has an IQ of at least 140.

ISP – Internet Service Provider; an industry term for a business that provides users with Internet access. ISPs also provide other services such as emailing, data communication access, web hosting, and domain registrations.

IT Consultant – a person that helps organizations make best use of information technology (IT).

Jargon – terminology that people in certain professions or sectors of the economy use. Nobody else uses them with those specialized meanings. It is the opposite of saying something in layman’s terms.

J-Curve – refers to the trend of a nation’s trade balance immediately after a devaluation under a specific set of assumptions. The trade balance initially worsens after the devaluation. After a while, the desired effect – greater exports and reduced imports – starts to kick in. J-curves also exist when calculating returns and losses on private equity. The Davies J-Curve shows that social unrest occurs when an unexpected recession is preceded by many years of economic growth and high expectations.

Jet Lag – a temporary disorder travelers experience after a flight across time zones. We also call it flight fatigue, desynchronosis, jet lag disorder, and circadian dysrhythmia. Symptoms include sleepiness, insomnia, mood swings, generally feeling unwell, and stomach problems.

Job – this word has many meanings: 1. A part-time or full-time position of paid employment. 2. The execution or performance of a task, as in ‘He did a terrible job!’ 3. A duty or responsibility. 4. A specific task carried out as part of the routine of a person’s occupation. 5. A piece of work, generally at an agreed price. 6. A robbery, as in ‘John Smith is suspected of being responsible for the string of bank jobs in South London’.

Job Action – or industrial action is an organized protest by workers. It may come in the form of a slowdown, overtime ban, work-to-rule, or even a strike. Some dictionaries say the term includes going on strike while others say it does not. Americans and Canadians say ‘job action’ while the rest of the English-speaking world uses the term ‘industrial action.’

Job Aids – devices or tools that we use to help us complete a job. For example, an instruction manual that tell you how to assemble an item of IKEA furniture is a job aid. A recipe that tells you how to prepare a meal is also a job aid. A corkscrew, however, is not a job aid because does not tell you how to do something.

Job Analysis – a process that carefully examines a job and determines what its duties are and who is best suited to do it. Duties are also placed in order of importance, including what the consequences of errors might be.

Job Characteristics Theory – also called the Core Characteristics Model, is a work design theory developed forty years ago. It is widely used today as a framework to study how matched an employee is to his or her job, and if job redesign is required, how to go about it. The aim is to reduce job dissatisfaction, minimize absenteeism and turnover, increase motivation, and ultimately optimize the productivity of the worker.

Job Description – a written account of the duties and responsibilities involved in a particular job. The description also includes the job title, details on the salary, who the person reports to, and required qualifications or skills. Job descriptions accompany job ads when an employer is seeking candidates.

Job rotation – a scheme in which employees move around different jobs in the organization in a planned way. Reasons for using the method include to broaden experience, raise motivation, alleviate boredom, and expand career options.

Jobless Recovery – when an economic recovery following a recession does not also come with a decline in unemployment. In other words, GDP is growing but unemployment is either stubbornly high or rising. Economists say this could be due to lingering caution, automation, or workers moving into new jobs or industries. We also call this phenomenon jobless growth.

Job Satisfaction – the pleasure employees get from doing their job. We also call it employee satisfaction. There are many different ways of determining levels of job satisfaction.

Job-sharing – an arrangement in which two part-time employees share the duties and responsibilities of a full-time role. Typically, they receive pay and holidays on a pro rata basis and work at different times.

Job Shop – a small business, typically a manufacturing unit, that makes bespoke products. In other words, it tailor-makes things for one customer at a time. Job shops deal in customization.

Joint Probability – a statistic that analysts and statistician use to determine the likelihood of simultaneous events. Joint probability specifically refers to the likelihood of two or more events happening at the same time. For example, if I roll two dice, what are the chances of getting two sixes?

Joint-Stock Company – a company that belongs to its shareholders. Shareholders are free to buy and sell the shares. However, the term has a different meaning in the United States and the United Kingdom. In the UK, shareholders have limited liability. In the US, shareholders of a joint-stock company have unlimited liability.

Joint Supply – a term used in economics that refers to a product that turns into two or more other products (by-products). For example, a farmer breeds cattle, which eventually are sold to consumers as a number of different product, such as beef, milk, cheese, butter, yogurt and leather products.

Joint Venture – a partnership between two or more parties that each contribute capital and assets. The parties involved may be groups of people, corporations, companies and even governments.

Journal – may mean a diary, a place where accountants record a company’s transactions, or the minutes of parliamentary meetings. In mechanical engineering it sometimes means a shaft. Academic journals are magazines or newspapers that specialize in particular disciplines.

Jumbo Mortgage – a mortgage loan that offers more than a conventional loan. It does not have the same rules and limits imposed by Fannie Mae and Freddie Mac compared to a conventional loan. Most jumbo mortgages charge higher interest rates than conventional loans.

Junk Bonds – high-yield bonds that have a higher risk of default than investment-grade bonds. Companies with no track record and small businesses, if they need money, issue junk bonds. Blue chip companies issue investment grade bonds.

Junk Mail – mail that we receive but did not request. In other words, unsolicited mail. The term may apply to physical mail or electronic mail. Spam has the same meaning as junk mail, but just in the digital world.

Jurisdiction – the power that a court or official has to enforce laws. It is also the power a court has to carry out legal judgments. There are many different types of jurisdictions. Some grant authority over a person, for example, while others over a subject matter.

Jurisprudence – the philosophy of law. The science of law. We also call it legal theory. It is the study of the principles and theories on which all our legal systems are founded.

Jus Sanguinis – a legal system where people’s nationality is determined by their parents’ citizenship rather than where they were born. The term is Latin for ‘law of blood.’ It contrasts with jus soli, a legal system in which where people are born determines their nationality.

Jus Soli – a law that states that you assume the nationality of the country where you were born. Jus Solis is Latin for law of soil. It contrasts with Jus Sanguini, i.e., law of blood, which says that our parents’ nationalities determine our nationality.

Justice – the term refers to moral rightness, fairness, and the system of law. It includes the enforcement of a country’s law, i.e., punishing people who break the law. A justice is also a judge in a high court.

Justice of the Peace – a lay judicial officer who hears and determines minor offense charges and conserves peace. In this context, ‘lay’ means they are not professional lawyers. We also call them magistrates. They also perform wedding ceremonies, administer oaths, sign search and arrest warrants, and take statutory declarations.

Just in Case – also known as JIC or Just in Case Manufacturing, is the traditional inventory and/or production management model used by companies. Levels of stock of finished goods and raw materials are maintained at the highest levels possible. The aim of this strategy is to be prepared for unexpected events, such as a very large order or a halt in supplies. It is the opposite of Just in Time.

Just in Time – an inventory or manufacturing strategy in which companies keep stock levels at an absolute minimum. As orders come in, suppliers are contacted to make immediate deliveries of the raw materials and components required for manufacturing finished products. It is the opposite of Just in Case. Japanese car-maker Toyota started ‘just in time’ in the 1960s – it was known as the Toyota Production System. North America and Western Europe began adopting the strategy in the late 1970s.

Just-in-Time Learning – or JITL is a training method that provides learners with the knowledge or skills they need at the exact moment they’re required. Typically delivered in short, targeted modules, JITL emphasizes quick access to relevant information, improving efficiency and retention in workplace settings.

Just-World Phenomenon – a human tendency to believe that we get what we deserve. If something bad happens to somebody, we believe that a past deed is catching up with them. We look for ways to rationalize away injustice by believing it was the victim’s fault. We also call it the just-world hypothesis.

Kaikaku – a Japanese word that means ‘radical change.’ It is concerned with making drastic changes to a production system. It contrasts with Kayzen, another Japanese word, meaning ‘improvement,’ which involves taking small steps to achieve gradual change. The Toyota Production System introduced the terms to the West.

Kaizen – a Japanese word, meaning ‘change for the better,’ which refers to taking many small steps to improve a system. However, for Kaizen to work, it must involve everybody in the company, i.e., all the employees. It contrasts with Kaikaku, an approach in which we take drastic measures that affect the whole company.

Kamikaze Defense – a strategy a target company takes when a hostile bidder tries to acquire it. The target company either sells its good assets, raises its debt levels, or buys undesirable assets. Put simply, it makes itself less attractive.

Kano Model – a theory of customer satisfaction and product development. Prof. Noriaki Kano developed it in the 1980s. It classifies customer preferences into five categories.

Kano Model Analysis – an analysis technique that makers of goods and providers of services use to assist in differentiating product and service features. It is an analysis of consumer preferences based on the Kano Model.

Kansei Engineering – engineering that is based on human feelings. Kansei Engineering is a method for translating human feelings and impressions into product parameters. In other words, making goods that are not only technically good, but also make us feel good.

K-Commerce – the trading of knowledge mainly online. In other words, sharing knowledge online and making money in the process. K-commerce stands for knowledge commerce. It is a huge global industry that is growing rapidly.

Keepwell Agreement – a contract in which the parent company agrees to keep its subsidiary solvent for a given period. Usually, this means making sure it can pay back debts on time, has certain financial ratios, and levels of equity. A keepwell agreement boosts the subsidiary’s creditworthiness.

Keller Plan – a personalized learning method in which each learner works at his or her own pace. Students receive learning material in small units. In order to move onto another unit, they must pass an exam. Instructors are more like facilitators.

Keyboard – a panel of keys which we use for writing letters and numbers. Keyboards exist on laptops, communication devices, and typewriters. They also exist separately and are connected to desktop computers. A piano keyboard consists of black and white keys.

Key Employee – somebody who is vital for the well-being of a company or organization. We also use the terms ‘keyman‘ and ‘key personnel.’ If a key employee leaves, the company may suffer significantly. Key employee insurance aims to protect the company if a key person leaves, dies, or becomes disabled.

Key Person Insurance – an insurance policy an employer takes out to protect itself if it loses a key employee. The policy pays out a lump sum if the key person gets ill, becomes unable to work, or gets chronically or terminally ill. We also call it keyman (key man) insurance or key person protection.

Keynes, John Maynard – a British economist, journalist, and financier. He believed that governments should intervene in the economy during recessions and depressions. He insisted that aggregate demand was the driver of economic expansion and employment growth. The terms Keynesian Economics and Keynesian Theory were named after him. He was probably the most influential economist in the world in the 20th century.

Keynesian Economics – the economic theories of John Maynard Keynes, who led the idea that economic performance is calculated by aggregate demand (an economy’s net spending). Keynes’ approach was used by several governments following the 2008 global financial crisis.

Keynesian Theory – a school of thought initiated by John Maynard Keynes that aggregate demand drives the economy. He also believed that governments should intervene to stabilize the economy and achieve full employment. Keynesian Theory, which emerged during the Great Depression of the 1930s, turned economic theory on its head.

Keystone Markup – a gross margin of 100% when you sell something. If you sell a product for $100 and it cost you $50, it has a keystone markup or keystone pricing.

Keyword – a word we include in web pages so that search engines can present them in response to a search query. A word that search engines such as Google sell to advertisers. The main word, one that we use a lot, or a word that defines a subject matter. A concept of great significance. In cryptography, we use a keyword as a key.

Kickback – the term may refer to a bribe, the recoil of a gun when it fires, or a physical exercise movement. When it means a bribe or backhander, the payer wants the receiver to do something illegal or unethical.

Kinesic Communication – non-verbal language using our bodies. When we speak, our words convey only part of the message. Our gestures, eye movements, facial expressions, and posture also influence the message. Kinesic communications or kinesics is all about what our body is doing when we communicate.

Kiosk – a free-standing retail unit in a shopping mall aisle or a cubicle or hut that sells newspapers outdoors. Kiosks are also cubicles or stands that provide information or promote something in a conference or exposition. Kiosks provide tourists with information in many towns, cities, and resorts. In the UK, people say a ‘telephone kiosk’ or a ‘telephone booth’.

KISS Principle – the notion that simple things do better than complicated things. KISS stands for Keep It Simple, Stupid. The term originated in America in the 1960s. The KISS principle is important in business, science, and many other aspects of life.

Kitting – the process of providing a person or thing with the appropriate equipment, articles, or clothing. In other words, getting the ‘kit’ together for shipping.

Kleptocracy – a country whose leader, politicians and public officials use their powers of state to steal money and resources for their own personal gain – to line their pockets. These dishonest people are called kleptocrats. They feather their nests at the expense of the taxpayer and other citizens.

Kluge – or Kludge is a program, system, or machine that has been badly put together. It is typically a clumsy but temporarily effective solution to a particular fault or problem. We use the term in computer technology, neurology, and aeronautics.

Knock-In Option – an option contract that only activates when it reaches a specific price level. It must hit that price before the contract expires. If it does not reach that price, it becomes extinguished. It is the opposite of a knock-out option.

Knock Off – as a noun, it means a product that is a cheap imitation of the original. As a verb, to knock off means to finish work, hurt somebody, kill somebody, or stop doing something (‘please knock it off’). Knock off prices means low prices.

Knock-Out Option – an option contract that deactivates as soon as it reaches or exceeds a certain price. It is the opposite of a knock-in option.

Knot – a tangled mass of hair, wool, or similar material or a fastening made with string or rope. We measure the speed of ships in knots. One knot equals 1.115 miles or 1.85 kilometers. To knot means to fasten a piece of rope or string or to tangle something. Many idiomatic expressions exist with the word knot.

Know-How – the skills, knowledge, and abilities that people have that help them do things. It also refers to our ability to accomplish things successfully. It is the ability of the human brain to perform a task. Know-how is not easy to pass on because it is hard to explain verbally.

Knowledge Capital – refers to the methods, valuable ideas, and other intuitive talents that belong to a company or organization. We also call it knowledge assets and intellectual capital. It comprises, human capital, structural capital, and relational capital.

Knowledge Creation – the transfer combination or conversion of different kinds of knowledge as users interact, learn, and practice. It is a product of the interplay between knowing and knowledge. Companies that know how to promote knowledge creation and manage that information have a strong competitive advantage.

Knowledge Economy – an economy where the creation, production, and use of knowledge are paramount. It is an economy that buys and sells knowledge. Economies of scale and scarcity of resources matter much less than knowledge. The advanced economies are becoming knowledge economies. They were agricultural and industrial economies.

Knowledge Management – the processes and strategies that businesses use to detect, capture, structure, leverage, and share their intellectual assets.

Knowledge Map – a visual aid that tells us where a company’s or organization’s knowledge is. It also tells us where in the company people with the most expertise are located. We also call it an inventory of knowledge.

Knowledge-Based Pay – a system in which workers are paid based on their academic level and individual skill set. It contrasts with a job-based pay system.

Kondratiev Cycle – a very long business cycle that lasts about half a century and includes booms and busts. We also call it the Kondratiev wave, Kondratiev cycle, or the long-wave cycle. Nikolai Dmitriyevich Kondratiev, a Russian economist, first proposed the long-term cycle in the 1920s. He was eventually sent to a concentration camp in Siberia for is capitalist views and was executed.

L-Shaped Recovery – a chart showing a sharp decline in economic growth followed by a long flat period. During the flat period there is little or no GDP growth. The graph looks like the letter ‘L,’ i.e., a steep (vertical) line followed by a flat (horizontal) line at the bottom.

Label – a small piece of paper, plastic, or cloth that we attach to a product. The label has information about the product, such as its manufacturer and origin. The term also has meanings in biology and everyday English.

Labor – 1. The workforce (workers). 2. Physical or mental exertion. 3. The cost of paying workers (e.g., in the breakdown of a bill or invoice). 4. All manual workers whose work involves physical exertion. 5. The process of childbirth. 6. Labor unions collectively.

Laddering – an investment technique that requires the purchaser to buy several financial products with different maturity dates. We also call it a ladder strategy, bond ladder, or a laddered portfolio.

Laffer Curve – a graph that suggests that as you increase tax rates, government revenue rises, but begins to fall beyond a certain point. In other words, if you raise taxes too high, people and companies become less interested in working and investing, or move their activities abroad, which leads to less tax income for the government and a weaker economy. The Laffer Curve was drawn by economist Arthur Laffer in a restaurant in 1974 while he explained his point of view to his dinner companions.

Laggards – when a new product or system enters the marketplace, they are the last people to adopt them. Approximately sixteen percent of the population are laggards. They typically have an aversion to change and anything that brings about change.

Lagging Indicators – economic and financial indicators that do not change at the same time as the general economy. Lagging indicators change a few months later. Hence their name, i.e., there is a ‘lag.’ The unemployment rate, for example, is a lagging indicator.

Laissez-Faire – an economic system in which the business activities of and between private citizens, companies and other entities are free from government interference such as subsidies, tariffs, privileges and regulations. It means the same as a free-market system or pure capitalism. The emphasis is on the government having a hands-off approach.

Landlord – the owner of a property that is being rented. The person who pays the rent is the tenant. If the owner is female we say ‘landlady.’ However, in legal documents, the term ‘landlord’ may refer to either a man or a woman.

Land Pollution – where there is at least one contaminant on or under an area of land, there is land pollution. Land pollution includes the deposition of solid or liquid waste materials on or under the ground.

Lapping – the fraudulent practice of stealing or concealing cash received from one customer and using money from the next customer to offset the shortfall. It is a white collar crime. Teeming and lading, short banking, and delayed accounting mean the same as lapping.

Larceny – a crime which involves stealing something from its rightful owner. The individual who steals the property intends to become its owner. The term no longer exists in British or Irish law, but continues being used in the American legal system.

Large Capitalization Stocks – the shares of publicly listed companies with a market capitalization of $5 billion or more. In other words, the shares of the largest companies in the country. We also use the terms large cap stocks or large cap companies.

Last In, First Out (LIFO) – an accounting and valuation technique that the newest assets to be added to inventory are the first ones to be sold or used, while the older ones are the last ones to be sold.

Latent Demand – potential or dormant demand for a product or service. The demand has not yet become active because the consumer cannot afford it, it is not available, or the consumer does not know it is available. It is the opposite of effective demand.

Latent Market – a potential market that is still dormant, but in the right circumstances, would come alive. In a latent market there is demand for something. However, that item is not available, i.e., people cannot buy it.

Lawsuit – a dispute or claim that one party or parties, the plaintiff(s), bring to a court of law for adjudication. The plaintiff sues the defendant. One party sues another party for something; in most cases money.

Lawyer – somebody who studies law and is licenced to practice law. There are many names for this profession, including attorney, solicitor, and barrister.

Layoff – the suspension or permanent termination of a position (job) in a company. The verb is ‘to lay off’. When a worker is laid off, he or she has done nothing wrong – it is not their fault. Layoff, when it is permanent, means the same as redundancy. It can happen if sales decline, during a recession, the business goes bankrupt, or it cannot produce goods because it cannot get a vital component or raw material.

Leader – a person who is in charge of a company, organization, country, town, etc. We can use the term for people, products, companies, and countries. It can also be a jargon word.

Leadership – 1. The leaders of an organization, company, or country, regarded collectively. 2. The action of leading or being a leader.

Lead Generation – the process of attracting and converting potential customers into leads interested in a company’s products or services through various marketing strategies.

Leading indicators – indicators that usually change before the whole economy changes. They are used as short-term predictors of the economy. Stock market returns – a leading indicator – usually start to decline before the general economy weakens, and pick up just before the economy starts recovering from a slump. Other examples of leading indicators include building permits, the money supply, and consumer confidence.

Lead Magnet – a free product or service that is given away by a company in order to gather contact details. By giving away a freebie, the business can gather new sales leads.

Lease – a contractual arrangement where one party grants another the right to use an asset for a specified period in exchange for periodic payment, typically subject to agreed terms and conditions.

Legacy System – a computer term that refers to an obsolete IT system in a company. It is also called a legacy platform. The term is pejorative that refers to an out-of-date computer system or application program. When ‘legacy system’ is mentioned, the speaker is suggesting that the company or organization’s computer system needs to be replaced.

Lender of Last Resort – when a bank needs money and no other bank or entity can or is willing to lend to it, the lender of last resort – usually a central bank – intervenes and supplies the required funds. This happens when a commercial bank is in trouble. The central bank often lends with strings attached; it may take control of the financial institution, find it a new owner, or close it down. The function of the lender of last resort is to: 1. Prevent the bank from failing. 2. To protect the country’s financial system.

Letter of Credit – a document from a bank saying that it guarantees payment to the exporter, as long as it meets a list of conditions. If the importer fails to pay, the bank pays. Also known as documentary credit.

Leverage – the ratio between equity capital and credit in a financial exchange. Typically, it means using borrowed money to fund the purchase of an asset.

Liability – in accounting a liability is a legal debt or obligation that a company or other entity is required to pay back. Liabilities are reported on the right side of a balance sheet.

Libor – also known as the London Interbank Offered Rate or ICE Libor, is the rate at which banks offer to lend wholesale money to other financial institutions in the international interbank market.

Life Expectancy – the number of years we expect an organism, person, or group of people to live. We also refer to it as ‘expected lifespan‘ or ‘expectancy of life.’ Life expectancy globally has been increasing rapidly for the past one-hundred years.

Life Insurance – a contract made between an individual and an insurance company. The person being insured pays a premium in return for a lump-sum payment  (“a death benefit”)  to a designated beneficiary following the their death. Cover may either be temporary or permanent.

Light-emitting diode (LED) – an electronic device that lights up when electricity passes through it. By manipulating the physical properties of LEDs, manufacturers can set the types of light that they emit. The devices have many applications and benefits. As room lights, for instance, they consume less energy and have a longer lifetime than filament bulbs.

Limited Company – a business entity we can set up to run our business. It is responsible in its own right for all its activities. Its finances are separate from the personal finances of those who own shares in it. Profit made (after paying tax) is owned by the company. A limited company can pay dividends to shareholders from its net profit. There are two main types: 1. Private Limited Company. 2. Public Limited Company.

Line of Credit – or credit line, is the amount you can borrow on a flexible loan. In other words, your credit limit. We also call it a revolving credit agreement or bank line. You only borrow what you need, as long as you remain within your limit. You only pay interest on what you borrowed.

Lipper Index – a set of benchmarking tools used to track the performance of a portfolio or of various mutual funds.

Liquid Assets – current assets that can be quickly turned into cash (usually within a period of a month). Cash and checking accounts are the ‘most liquid’ of assets.

Liquidity – refers to how rapidly an asset can be converted into cash and spent, if so desired. Cash is the most liquid of all assets. In accounting, liquidity is a measure of an entity’s ability to pay its bills as they come due, as well as its ability to access money when it needs it. The term also refers to how much activity there is in a market. A liquid market has many buyers and sellers.

Liquidity Trap – a situation in which cash injections from the central bank into the private banking system to decrease interest rates and thus kick-start the economy have no effect. The aim of the cash injections is to get people and companies to borrow and thus spend more. However, for some reason everybody wants to hoard cash and are risk averse. The USA and UK experienced a liquidity trap during the Great Depression of the 1930s, and so did Japan in the 1990s.

Litecoin – a peer-to-peer cryptocurrency and also an open software project. Litecoin uses an open-source cryptographic protocol to transfer and create coins. Like all cryptocurrencies, Litecoin has no central bank. It is nearly identical to Bitcoin, but is much faster.

Litigation – the process of using the courts of law to resolve disputes. An example of litigation is a lawsuit.

Living Wage – the minimum income necessary for a worker to meet their basic needs, including housing, food, healthcare, and other essentials, while maintaining a decent standard of living.

LLC – which stands for Limited Liability Company, is a flexible business structure (in the USA) offering personal liability protection for its members and tax efficiencies, often ideal for small to medium-sized enterprises.

Loan – something that is borrowed (usually in the form of money or property) that is eventually paid back to the lender with interest. There are many types of loans, such as a mortgage, which is money borrowed to buy a property.

Loan Capital – money that a company borrows from banks, other organizations and people for an agreed period on which it pays interest. The most common ways to raise loan capital are with a bank loan, a bank overdraft or debentures.

Loan Guarantee – this is a loan where a person, government or other entity pledges to become liable for a debtor’s debt obligation in the event of a default.

Loan Modification – changes that are made to an existing mortgage loan, due to the borrower’s long-term inability to pay. It is not the same as a refinance.

Loan Shark – a moneylender who charges exorbitant rates of interest. Many of them work outside the law, threaten borrowers with violence, and sometimes force defaulters into criminal activities.

Loan to Value Ratio (LTV Ratio) – calculates the risk of people who want to borrow money. The LTV ratio is commonly used by banks and financial institutions. The greater the LTR ratio, the higher the risk.

Logistics – a subset of supply chain management that focuses on the challenge of planning and coordinating the flow of information and materials, all the way from purchasing raw materials, making the product, storing it, right through to delivering to customers.

Logo – a drawing, sketch, or image that a company, school, organization, or even a person uses to mark who they are and what they do. It is part of their brand image. Logos may also have letters, whole words, or even a short phrase in them.

London Stock Exchange (LSE) – the principal stock exchange of the United Kingdom. It is Europe’s biggest stock exchange and one of the world’s Big 3, together with the New York Stock Exchange and Tokyo Stock Exchange.

Long-Tail Keywords – highly specific, multi-word phrases that attract targeted traffic with lower competition and higher conversion potential.

Lupus – or Systemic Lupus Erythematosus is a chronic disease that causes inflammation of the joints, skin, and other organs. It is an autoimmune disease, i.e., the body’s immune system attacks good tissue. Lupus is not curable, but treatment can control symptoms and protect organs.

Lupus Causes – researchers are not sure what causes lupus. They believe that it is due to a combination of genetic, environmental, and hormonal factors.

Lupus Signs and Symptoms – this article is part of the ‘What is Lupus‘ hub. It lists all the signs and symptoms, and describes them in detail.

Lupus Treatment Options – this in-depth article goes through all the treatment options and self-help measures for lupus patients.

Luxuries – goods or services that are not necessary for living, but are highly-desired by consumers. They are more expensive than ‘normal’ or cheap items. People’s ability to buy or finance luxuries is directly proportionate to their assets or income. Rich people purchase luxuries more often than individuals further down the socioeconomic ladder. ‘Little luxuries’ are simple things that can make somebody happy, such as a quiet evening watching TV with a glass of wine and some chocolates while the children spend the night away at their grandparents’.

Machiavellianism – a political theory or belief which supports the use of any means necessary to stay in power. It is also a term in modern psychology that describes manipulative people who lack empathy and will lie and deceive to achieve their goals.

Machinability – a characteristic of a material, e.g., a metal, that makes it easy to cut, grind, drill, or shape. In other words, how easily we can ‘machine’ it into the shape we want.

Machine – 1. A device made of moving parts for applying mechanical power. 2. An extremely well-organized and efficient system or organization. 3. To machine means to make. 4. To machine can also mean to cut, slice, grind, and shape something until we have the finished product. There are other meanings.

Machine Bureaucracy – a formalized and highly-specialized management structure in which decisions are made at the top. Employees and middle/lower managers carry them out. This structure is common in very large, established corporations and government organizations.

Machine Code – or machine language is a computer programming language consisting of strings of ones and zeros. Computers can respond to it directly, i.e., without any conversion of direction.

Machine Instructions – instructions that a computer’s processor understands because they are in machine code or machine language. One machine instruction consists of many bytes of memory. It tells the processor to perform one machine operation. A computer performs a huge number of operations every second.

Machine Learning – an artificial intelligence application that gives computers and smart machines the ability to learn from experience. In other words, to learn without human intervention. Machines that can ‘learn as they go along’ have machine learning.

Machine-to-Machine (M2M) – the direct communication between devices using wired or wireless networks, enabling automation and real-time data transfer without human involvement.

Macroeconomics – a branch of economics that is concerned with general or large-scale economic factors, such as national output, interest rates, unemployment and prices (inflation). It contrasts with microeconomics, which focuses on the behavior of individual consumers, households, workers, companies and markets. The macroeconomy equals the total sum of all microeconomic activities.

Macros – 1. Keystroke instructions that can perform specific tasks. We are familiar with the macros in word processors such as Word. 2. A short term for a macro lense. 3. Overall or large scale, as in macroeconomics. 3. Macronutrients, which include fats, proteins, and carbohydrates.

Mad Cow Disease – the non-scientific term for BSE or bovine spongiform encephalopathy. The cow’s nervous system is affected; holes are formed in the brain. It loses coordination, becomes nervous and sometimes extremely aggressive (hence the name ‘mad’). It is a fatal non-curable and non-preventable disease.

Made-to-Order – has the same meaning as the entry below. Fast-food restaurants, such as McDonald’s or Pizza Hut, don’t assemble their meals until customers’ have specified what they want. These restaurants have a made-to-order system.

Magazine – a general interest publication that comes out weekly, fortnightly, or monthly. In printed form, they have a paper cover, contain stories, pictures, articles, and adverts. Today, most of them are available online. AARP The Magazine, has the most readers of all magazines in America.

Magistrate – in the UK and many Commonwealth countries, a magistrate is a civilian who works as a judge in a court (Magistrate’s Court). The term does not have the same meaning in the US as it does in most other English-speaking countries. Magistrates have been around for thousands of years. They existed in ancient Rome.

Maintenance – the process of maintaining something in good or workable condition. We can use the term for things or people. It can also mean to provide somebody with living expenses. There are four main types of maintenance.

Mainstream Economics – the theories of economics, body of knowledge, and models as taught across universities and colleges, that economists generally accept as a basis for discussion. Mainstream economics, which contrasts with heterodox economics, is orthodox economics.

Main Street – a term that refers to the most important street in a village or town. Its main shops, banks, post office, and other services are there. In England and Wales, people use the term High Street. The term also refers to the average American, as opposed to big business or wealthy individuals.

Major Currencies – the most commonly-quoted currencies in the world. The currencies against which we most commonly compare a local currency. We also call them the Majors.

Majority Interest – when an entity has a majority interest in a company, it means that they own more than half the shares. It means the same as a controling interest. The term may apply to a company, person, group of people, and also the government.

Majority Ownership – possessing over fifty percent of a company’s common stock or ordinary shares. The person, company, group of people, or entiry that has a majority ownership controls the company. We also use the terms controling interest and majority interest.

Majority Shareholder – a person or entity that owns more than 50% of the common stock (ordinary shares) of a company. They can choose the members of the board of directors and make policy decisions. Also known as a majority interest or controlling shareholder.

Major Market Index – officially called the NYSE Arca Major Market Index. It consists of 20 blue-chip stocks, seventeen of which also appear in the Dow Jones Industrial Average. Trading in futures and options is based on this index.

Make-to-Order – a manufacturing process in which the company waits till a customer’s order comes in before making the finished product. The customer places the order first, then the company manufactures the good. We also call it Build-to-Order or BTO.

Make to Stock – or MTS is a business strategy in which the company produces goods beforehand to make sure stocks can meet anticipated demand. The company forecasts future demand and prepares for it by building up inventory (stocks). It is similar to Just in Case, but contrasts with Make to Order.

Male Chauvinism – the belief that males are superior and more important than women. This belief is not supported by realiable or compelling evidence. A person who believes and practices male chauvinism is a male chauvinist.

Malware – software that a programmer has deliberately designed to disrupt or damage a computer system. Examples include scareware, visurses, worms, Trojan horses, spyware, and adware. Malware starts damaging after it has gained acces to a computer system.

Managed Account – an investment account that an investment manager manages for his or her client. The client could be a person, company, or any entity with funds.

Management– this involves the leadership, staffing, organization, and planning of a company to reach a goal or target. The term refers to either the people who manage, or the function of managing.

Management Accountant – a professional who analyzes financial data to help businesses make informed decisions. They focus on budgeting, forecasting, cost control, and performance evaluation, providing insights that guide internal strategy and operations, ensuring the company meets its financial and organizational goals.

Management Consultant – a consultant that helps companies and other organizations improve their performance.

Manager – a person in a company or organization who exercises managerial functions primarily. These functions include hiring, firing, disciplining, doing performance appraisals, monitoring attendance, approving overtime, and authorizing vacations. The manager is in charge of a part of a company, which usually has a team of employees.

Manufacturing – the process of converting raw materials and components into finished products. Manufacturing takes place in a factory. It usually involves making things on a large scale.

Margin – the difference between one price and another, usually related to the profit a trader or speculator can make. For a trader, it is the difference between the cost of production or purchase of a product, and how much it is sold for. In futures trading it is the difference between the current and future price.

Marginal – in business, economics and finance, the term usually has a similar meaning to ‘additional’ or ‘by adding one more’. For example, marginal price is the price of buying one more – imagine you bought 10 cars for your fleet, and then asked for one more in the order; it is the price of that extra one. There are many terms with the word ‘marginal’, such as marginal cost, marginal propensity to spend/save, marginal revenue, marginal utility, marginal output of labor, and marginal tax rate.

Market – a place where people and businesses gather to buy and sell products and services. The term may refer to a physical place, such as a flea market, store, or farmers market, or an abstract description that includes all the possible buyers, as in “The semi-conductor market is forecast to grow by 7% this year.”

Marketability – the term may refer to things or people. If I am selling my house, I can improve its marketability if I convert the loft into another bedroom. In other words, the conversion makes it easier to sell the house. If I study for a degree, I improve my marketability, i.e., I become more attractive to employers.

Marketable – refers to a product that is easy to sell or a person who is in demand in the job market. We can use this term for goods, people, or skills. For example, nursing is a marketable skill, i.e., employers are always looking for nurses.

Market Analysis – studies that people carry out on any market. They aim to anticipate or predict which way prices or growth rates will go. Often, the term on its own refers to an analysis of a stock, commodity, or bond market.

Market Attrition – the gradual erosion of customer loyalty due to the absence of effective advertising and promotions. We also call it customer turnover, customer churn, customer defection, or customer attrition.

Market Capitalization – the net value of shares issued by a public company. Market capitalization is determined by multiplying the price per share by the number of shares outstanding. It is one of the main factors in determining stock valuation.

Market Development – a marketing strategy whereby a company tries to get more sales from an existing product. This may involve trying to get existing customers to spend more, or new customers to buy the product. The strategy may focus on just one product or the company’s overall sales. Market development applies to the promotion of existing products and services.

Market Economy – an economy where prices are set by levels of supply and demand, rather than central or local government. All decisions regarding production, distribution, investment and salaries in a market economy are driven by market forces.

Market Equilibrium – a situation in which demand for a good or service is equal to its level of supply. When market equilibrium is reached, the price remains stable. Also known as the market clearing price.

Market Failure – when the market does not function as efficiently as it is capable of. Market failure typically has four causes: 1. Deficiency in the provision of public goods. 2. Externalities, such as a factory polluting the drinking water of nearby villagers. 3. The abuse of market power, such as monopolistic behaviors. 4. Asymmetric information – when one person knows more about something than the other person in a business transaction.

Market Follower – a company that follows the market leader in a sector. It does not want to challenge the leader. It copies all the leader’s successful strategies and implements them. The market follower just wants to maintain its market share. It is happy with the current status quo, i.e., that the leader remains on top.

Market Forces – the forces of supply and demand, which in a free market economy determine the price of goods. When demand rises faster than supply, prices rise, when it is exceeded by supply, prices fall.

Market Garden – a small farm that grows vegetables, fruits and flowers and sells them to the public. The crops are grown for profit. Also known as a microfarm.

Market Index – comprises numbers that represent weighted values of different components that make up the index. The components may be company stocks, commodities, bonds, parts of the economy, or the prices of goods. The term, when we use it on its own, usually means stock market index.

Marketing: refers to analyzing the market, determining what consumers want, finding out whether your company can produce it at the right price, producing it, and then selling it to them. It is an aggregate of functions related to the movement of goods from producer to consumer. Marketing is much more than simply promoting a product – it involves all the activities from before the product has been developed, through to after it has been sold.

Marketing Campaign – a plan that details a comprehensive course of action to sell and/or promote a product, service, or brand. Marketing campaigns are part of the umbrella term ‘marketing.’

Marketing Mix – a planned combination (mix) of elements that make up a marketing plan for a good or service. The four elements all start with the letter P: Product, Price, Place, and Promotion. Hence, we refer to them as the 4Ps.

Marketing Manager – a person in the company who tries to understand the market and match its products for that market. The marketing manager controls all the promotional and market research/study activity of the company. The role of a marketing manager is different from a sales manager’s.

Marketing Plan – a document that details a business’ marketing efforts for a future period, such as six-months or twelve-months. It states in detail what the company’s marketing goals and objectives are.

Marketing Principles – agreed-upon marketing ideas that businesses use for a successful marketing strategy. We also refer to it as the Principles of Marketing. Marketing Principles can be used for products or services.

Marketing Research – the systematic collection of data about components in the market such as rivals, consumers, similar products, etc. Marketing executives and senior managers analyze the data before making important company and product decisions.

Marketing Strategy – a business’ marketing goals and objectives combined into one comprehensive plan. You can draw on market research and other relevant marketing data to create an effective marketing strategy. It is not the same as a marketing plan. The ‘strategy’ describes where you want to get to, while the ‘plan’ describes ‘how’ you plan to get there.

Marketing Tactics – all the actions in detail to achieve a marketing strategy. A set of strategic methods aimed at promoting a company’s goods or services. It is not the same as marketing strategy, which is a general goal.

Marketing Tools – tools that businesses use to promote and develop their products and services. In most cases, companies use a range of marketing tools simultaneously.

Market Intelligence – the gathering and analyzing of data about products, customers, competitors and their products, etc., in a specific market, that a company uses to help it determine where to allocate more resources, what products to sell, and how much to charge for them.

Market Jitters – a feeling of fear, uncertainty, and apprehension among investors and stock market traders. Market jitters often causes investors to sell stocks and bonds, which subsequently pushes down their prices. Economic indicators, reports of bad profits, and political instability, for example, can make investors nervous.

Market Leader – a corporation or country that has the greatest sales in a specific product in the market. The market may be a country or the world. It is calculated either by volume or value of sales.

Market Maker – a company or individual that regularly buys and sells securities at a publicly quoted price to provide liquidity to the markets.

Market Orientation: – a business philosophy or culture where the number one priority is identifying what the customer wants and needs, and meeting that need with suitable products and/or services. It contrasts with product orientation, which focuses on the product and tries to persuade customers to buy it. The most successful commercial enterprises today are definitely market oriented.

Marketplace – 1. an open space or square in a town or city where people trade, i.e., buy and sell things. 2. The ‘market’ in the abstract sense. 3. The online marketplace is where people can buy and sell things online. Amazon.com, for example, is a massive online marketplace. 4. A service that helps people shop for health insurance and also enroll.

Market Power – the extent to which a company can influence the price or supply of a good or service. Market power may refer to a producer or buyer. It is a firm’s ability to profitably increase the market price of a product over marginal cost. In a marketplace where perfect competition exists, market power is zero for all the competitors. If a company is the only supplier – a monopoly – its market power is absolute.

Market Rate – the usual price paid for a product, service or somebody’s labor in the open market. Also known as the going rate.

Market Research – the gathering and analyzing of data regarding customers, competitors, a product, and market trends. It is the study of how a product or service is sold, who buys it, why they buy it, and how competitors behave.

Market Risk – the risk that an investment might face due to market volatility and changes in the overall economy. Market risk can reduce the value of an investment. Also known as systematic risk.

Market Sector – part of the economy. Market sector covers a broader area than an industry. Some sectors may include two or more industries. Stock markets classify shares according to market sector. In bond markets the term refers to the type of issuer (government or company).

Market Segmentation – businesses should ensure that their products are being properly targeted for the right consumer base. Market segmentation is a strategy that focuses on targeting different consumer bases – which attracts more consumers, and consequently boosts sales.

Market Sentiment – in financial world refers to the overall attitude of investors toward a particular security, sector, or financial market, influencing trading behavior and price movements. It’s driven by emotions, news, and economic indicators, impacting investment decisions and market trends.

Market Share – refers to how big your slice of the total market pie is, in percentage terms. In other words, what your total sales represent relative to the size of the industry. Market share may be measured by units sold, or the value of total sales.

Market Trends – overall patterns in which markets move, encompassing rises or falls in stock prices, consumer behaviors, and economic conditions over a given timeframe.

Market Value – the price that buyers and sellers both agree on when a security or asset is traded on the open market, based on the forces of supply and demand. A company’s market value is what investors believe it is worth. Also known as market price, fair value, fair market value and open market value.

Market Volume – the total amount of transactions in a specific marketplace over a given period. When looking at stock exchanges, we use the term ‘stock market volume.’

Markup – 1. The amount a seller adds to the cost price, i.e., the difference between the wholesale and retail price. It does not mean the same as margin. 2. The process of correcting text before it goes to print. 3. A line-by-line review of a budget by a committee.

Marshall Plan – a US program of international aid, named after General George Marshall, destined for Western Europe after WWII, to help the war-torn countries get back on their feet. It formed part of the ‘Truman Doctrine’, President Harry Truman’s attempts at stopping the spread of Soviet communism in Europe. During the Marshall Plan – 1948-1952 – the United States and Canada donated 1% of their gross national product.

Material Nonpublic Information – confidential information that can affect the share price of a company, or how investors make decisions. Only a small number of corporate insiders currently know about this information. Acting on this information to sell or buy shares, before the public has access to it, is known as insider trading and is illegal. Passing on material nonpublic information to others is also illegal.

Matrix organization – a management structure in which some employees are responsible to managers in two or more different departments within a company. An engineer may have to report to the head of the engineering department as well as the project manager or product manager. Matrix organization structures emerged in the 1960s in the aerospace industry in the United States.

MBA – Master of Business Administration or Masters in Business Administration. It is an advanced degree that concentrates on developing the skills that people need to manage or run a business.

M-Commerce – a part of e-commerce in which people buy and sell using mobile phones (smartphones) and other wireless handheld devices. M-commerce stands for mobile commerce.

Media the plural of medium, describes the various ways through which people communicate in society. It refers to the communication channels through which news, movies, music, promotional messages, education and other data are disseminated. It includes newspapers, magazines, books, TV, radio, billboards, and the Internet.

Medical Consultant – a senior doctor with several years of specialist training.

Medical Device – a machine, apparatus, device, or piece of equipment that has been made for a medical application or purpose. The term includes hundreds of different products, from gauze and bandages, to an MRI machine or CAT scanner.

Medical Tourism – refers to traveling to another country for medical treatment.

Medicare – the federal healthcare scheme for those aged 65 and older in the United States. It also covers younger people with disabilities and certain diseases. Medicare is also the official name of Australia’s publicly funded healthcare and the unofficial name of Canada’s system. This article describes the U.S. scheme.

MEDDIC Sales Framework – a sales qualification methodology that focuses on understanding and addressing key factors like Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, and Champion within the customer’s organization to improve the likelihood of closing complex B2B deals effectively.

Mercantilism – an economic theory and practice that was common in Western Europe from the 16th to 19th century. Mercantilists believed that global GDP was fixed, so that a country could only become wealthier at the expense of others. Governments tried to get domestic producers to export as much as possible, and kept imports down to a minimum by placing hefty taxes on them. Countries like Great Britain, France, Spain and Portugal gained colonies in order to expand their markets, and accumulated as much wealth, gold and silver as possible.

Merchandise – any type of product, including commercial or personal goods, as well as commodities that are sold or given away to the public (retail) or other commercial enterprises (wholesale). When a political party gives away T-shirts with a photograph of its candidate during an election campaign, it is an example of free merchandise. The aim in merchandising is to get consumers to spend their money, or encourage customer loyalty.

Merchandising – all activities related to the promotion of goods in a retail setting, such as a supermarket. A merchandiser decides how to display a product, where, what special offers to include, and how much to sell it for.

Merger – the combination of at least two companies into a new legal entity. A merger is a marriage of equals, unlike an acquisition or takeover, where there is a predator and a prey – one company literally consumes the other.

Mergers and Acquisitions (M&A) – a practice of corporate finance that deals with combining, dividing, selling, and buying different companies to create a new enterprise, merge them together, or help a company complete a takeover. A merger is a marriage, while an acquisition is a takeover.

Mental Health – our psychological, emotional, and social well-being. People who enjoy good mental health, do not live with a mental illness. Mental health is a vital component of overal health.

Menu Costs – in economics the term refers to the costs to a company resulting from a price change. It will have to redesign its catalogue, get new ones printed, tell customers about the change, and perhaps hire a team of price experts. Companies are reluctant to change prices for this reason. In times of high inflation, menu costs can significantly undermine a firm’s ability to make a profit. Studies have shown that menu costs amplify the business cycle.

Meta Tags – short pieces of HTML text that describe a web page’s content. If well-written, they can help optimize a web page’s ranking.

Metaverse – the next step in technology following virtual reality and augmented reality. In this case, however, it will span the whole of the Internet. People will experience ‘life’ inside the Internet’s digital environment, probably with an avatar.

Metrics – a set of numbers and statistics that provide information about a business’ performance or a specific activity or function. Metrics tell us how well or badly we are doing and whether we are going in the right direction.

Methane – a compound with the chemical formula CH₄, is a common fuel source. It is the main component of natural gas. It is an attractive fuel for us because it is so abundant. It is also a very potent greenhouse gas.

Microchip – a small electronic device made from a semiconductor material, typically silicon, that contains an integrated circuit. It houses thousands or millions of tiny components like transistors and capacitors, which process data and control functions in electronic devices like smartphones, computers, and other digital systems.

Microeconomics – the study of the economic behavior of individual units of a country’s economy, such as a firm, household or person. It contrasts with macroeconomics, which is the study of the aggregate economy. Microeconomics is mainly concerned with the factors that influence individual economic choices.

Microlearning – an educational strategy that delivers information in small, focused units or modules, typically lasting between 5 to 20 minutes. It emphasizes short bursts of content to boost retention, engagement, and adaptability, making it ideal for skill-based or knowledge-focused learning in education and workplace training.

Milestone – a significant event or achievement that marks a critical point or stage in the development or progress of something, such as a project, company, or individual’s life.

Millennial Generation – refers to people born in the early 1980s up to about 1995, and in some cases the end of the last century. Also known as Generation Y, the Echo Boomers, the Me Me Generation and the Boomerang Generation. Unlike previous generations, most Millennials were brought up in homes with Internet connection and electronic devices & games in their homes.

Mindfulness – a state of being utterly aware of what is going on inside and outside ourselves, on a moment-to-moment basis. It is a way of fusing the mind and body, releasing tension and pain, and regaining pleasure and happiness.

Minimum Wage – the lowest amount an employer is legally allowed to pay a worker. It is always calculated at an hourly rate. Employers can pay more but never less than the minimum wage. More than ninety countries across the world have a minimum wage.

Minimum-variance portfolio – this is a portfolio with the lowest risk possible. Each individual investment has a higher risk than all of them combined.

Misery Index – the sum of a nation’s unemployment and inflation rates. It is an informal measure of how healthy or unhealthy a country’s economy is. The lower the score the better off a country is, the higher the score the worse off it is. There are some variations – the Barro Misery Index or BMI adds to the Misery Index total the interest rate, plus (minus) the surplus (shortfall) between the actual and trend rate of GDP growth.

Mobile-First Indexing – a method used by search engines to crawl web pages with mobile versions as a priority. For example, with Google craw bots, the mobile version serves as both a starting point and a major determinant for a page’s ranking.

Modern Portfolio Theory – a financial theory that attempts to achieve the best expected return for a specific level of risk, or the smallest possible risk for a set level of expected return. This is possible if the investor carefully chooses the proportions of different assets. It is a mathematical formulation.

Monetarism – a school of thought that says that high inflation is caused by increasing the money supply faster than GDP growth. If you manage to control the money supply, monetarists say, the rest of the economy will take care of itself. Monetarism contrasts with the Keynesian economic policies of demand management. President Ronald Reagan and Prime Minister Margaret Thatcher were great believers in monetarism. Their monetary policies were influenced by one of the pioneers of monetarism theory, Milton Friedman.

Monetary Policy – the decisions a Central Bank of a country makes to manage the money supply and make sure inflation is on target and that the economy is moving in the right direction. During a recession, monetary policy will be expansionist, but when the economy is overheating monetary policy will be contractionary. The setting of interest rates forms part of monetary policy.

Monetary Union – a group of countries that use a common currency and have aligned monetary policies, aiming to facilitate trade, enhance economic stability, and reduce transaction costs among the member states.

Money – any intangible or tangible thing that represents a unit of value and can be used as a medium to exchange goods. Money has been around for thousands of years.

Money Illusion – the erroneous notion that many people have that a unit of money does not decrease in value over time, which it does because of inflation.

Money Laundering – the process of turning ‘dirty’ money into ‘clean money’. The funds were obtained from illegal activities. The criminals need to launder their proceeds in order to be able to use them openly and place them properly in the financial system.

Moneylender – an individual or organization that lends money, usually at very high interest rates and outside the official banking system.

Money Markets – places where money and various types of extremely liquid assets – money market instruments – are lent and borrowed between a few hours and just over a year. In the money markets, money managers, retail investors and banks can make short-term investments, effectively lending money to governments, broker-dealers, banks, and non-financial corporations. Together with capital markets, money markets make up the financial market and provide liquidity for the global financial system.

Money Order – a financial instrument that allows the payee to receive a certain amount of cash on demand – considered as safer than a check.

Money Supply – also known as money stock, refers to the amount of monetary assets that an economy has access to at a certain period of time. It is measured by monitoring currency in circulation and demand deposits.

Monopoly – a market where there is just one producer/supplier of a product or service; there is no competition. The monopolist controls the price and it is either extremely difficult or impossible for any other entity to enter the market.

Monopsony – a situation where a market has just one buyer, or one buyer dominates that sector. In a monopsony there are usually many suppliers, and they all exist at the mercy of the buyer, who can dictate terms, prices, delivery dates, product specifications, etc. A monopsonist may be a buyer of products or services, or an employer. For example, in an isolated town, a large company, organization or entity may employ most of the workers in the area.

Morale – the collective emotional and mental condition of a group as it relates to discipline, confidence, and motivation to perform tasks.

Mortgage – a loan to a purchaser of real estate that is secured on the property that is being bought. A mortgage could also be provided for any other purpose, when the borrower already owns a property and uses it as security.

Mortgage-Backed Securities – these are bonds that are backed by either a mortgage or a collection of mortgages (mortgage pool). The borrower is essentially paying the bondholder through his or her monthly installments.

Mortgage Bond – this is a bond in which the issuer has granted the bondholders a lien against the pledged assets (property). If the borrower defaults, the bondholder can resell the property.

Mortgage Protection Insurance – also known as mortgage payment protection insurance, covers the policyholder if he or she is unable to meet payments due to accident, sickness or unemployment. Policy prices vary considerably, so consumers are advised to shop around.

Mortgage Rate – the interest rate on a mortgage. A borrower’s monthly payments on a mortgage depends on the size of the loan and the mortgage rate.

Motivation – in business, it is about finding ways to encourage staff so that they can give their best. A workforce that is motivated cares about the success of the business and works more effectively. Motivation is all about why a person acts or behaves in a particular way – it is about enthusiasm.

MRO Items – or Maintenance, Repair, Operations Items are materials and products that companies buy that do not end up as part of their finished prodcuts. They are products and materials a company needs for its operations, such as goggles for factory workers.

Multinational Company – a company that has business, staff and premises in more than one country. They typically have a centralized head office from which global activities are managed. Also called a multinational corporation or transnational corporation.

Multiplier – also known as the ‘multiplier effect’, is a calculation that tells us how big an initial expenditure can eventually become when it has worked its way through the economy. For example, the government spends an additional $5 billion on education, schools consequently hire more teachers, the new teachers buy goods in shops and eat out in restaurants, shops and restaurants consequently hire more workers, their workers spend on … ,etc. Multiplier effect theory was created by John Maynard Keynes during the Great Depression of the 1930s.

Mutual Fund – a company that gathers the money from several investors – pools it – and invests it in securities such as stocks, bonds and short-term debt. Some mutual funds are huge, with several hundreds of thousands of investors. People buy shares in the mutual fund, i.e. they become owners of a proportion of the fund. Mutual funds in the United Kingdom are known as unit trusts.

Mutual Savings Bank – a financial institution that belongs to its depositors. It has no shareholders, i.e. no equity capital. They were first founded two hundred years ago to encourage low-income workers to save.

Naked Short Selling – a type of short selling where the trader chooses not to borrow (or arrange to borrow) securities before exchanging them. In many areas this practice is illegal. It has been against the law in the US since 2008.

Narrow Money – the most liquid forms of assets, i.e. they can immediately be used for transactions and commerce. Includes coins, notes, travelers checks, and checking accounts in banks. Also known as M1 (M0 in the UK).

Nash Equilibrium – a concept in game theory where the game’s best outcome is one where none of the players has an incentive to veer from his or her chosen strategy after considering all the choices available to other members of the group. The player cannot receive any incremental benefit by changing plans, assuming that all the other players keep to their strategies. A game may have just one Nash equilibrium, several, or none.

National Debt – the total amount borrowed (total outstanding borrowings) by a central government and all local authorities within a country. The national debt includes what the government owes foreign creditors – external debt – and its national creditors – internal debt. Also know as the Sovereign Debt, Public Interest, and Government Debt.

National Health Service – or NHS is the publicly funded healthcare system of the UK, providing free medical services to residents, funded primarily through taxation and national insurance contributions.

Nationalization – when a government or state becomes the owner of a private industry or controls private assets. This can occur for several reasons, such as a socialist government taking over certain sectors of the economy, or the taxpayer bailing out collapsing banks.

Nation-Building – refers to either 1. Getting a failed state to function properly again. 2. Help a country or region get back on its feet after a war. 3. Government policies aimed at encouraging a strong sense of national identity. In South Africa, it refers to the advocacy of national solidarity that emerged in the country after the apartheid era. The most successful nation-building program in history was the Marshall Plan, which helped speed up Europe’s recovery after WWII.

Natural language processing (NLP) – a branch of artificial intelligence that focuses on the interaction between computers and humans through natural language. It enables machines to read, understand, and interpret human languages, facilitating tasks such as translation, sentiment analysis, and voice recognition.

Natural Monopoly – a monopoly that exists because a particular market’s economies of scale make it the most cost-effective solution and the best deal for consumers. If several companies operated in that market, prices would be higher and quality might be affected. The provision of water, for example, requires a massive infrastructure investment – having two companies laying down two separate pipelines for the same end users would not make economic sense.

Natural Rate of Unemployment – that rate of unemployment at which inflation does not fluctuate – it neither accelerates nor decelerates. When an economy is at the natural rate of unemployment, inflation is constant over each 12-month period. Employers and employees come to expect this annual inflation rate and base their decisions on it. That is why it is often called the constant inflation rate of unemployment or the non-accelerating inflation rate of unemployment.

Near Money – assets that are not as liquid as money, but can be converted into cash rapidly, such as short-term money market instruments and bank deposits. Also called quasi-money.

Needs-Based Selling – a sales approach that focuses on identifying and addressing the specific needs of the customer. By understanding their pain points and requirements, salespeople provide tailored solutions, fostering trust and building long-term relationships with clients.

Negative Income Tax – a system in which people on low incomes or no income receive supplemental pay from the government instead of paying taxes. In the US it is known as Earned Income Tax Credit, and Working Tax Credit in the UK. It is said to have less stigma attached to it than other forms of welfare financial help.

Negotiable – refers to something that can be transferred to another individual or entity as a form of payment, or sold on. Negotiable instruments, such as banknotes, bills of exchange and promissory notes are documents that guarantee the payment of a specific amount of money, either immediately (on demand) or at a future date, with the payer named on the document. Negotiable also means that the sale price might be reduced, or the terms of a contract or agreement could be adjusted.

Negotiable Instrument – a written document where the payer guarantees the payment of a specified amount of money, to be paid either on demand or at a future time. The payer promises payment without condition. Examples include banknotes, checks, bills of exchange, demand drafts, promissory notes and certificates of deposit.

Negotiation – a discussion in which all participating parties try to reach an agreement, settlement, or deal. In most cases, a successful discussion is one where everybody comes out on top, i.e., with a mutually beneficial outcome.

Neo-classical Economics – can also be written without the hyphen (neoclassical economics). It is a school of economics, a theory, that believes that the consumer is ultimately the driver of price and demand, because the consumer’s goal is utility maximization (customer satisfaction), while that of the company is profit maximization.

Net Asset Value (NAV) – the value of a company’s total assets minus the value of its liabilities. This might also be the same as the book value or equity value of a business.

Net Income – also known as net profit or net earnings, net income is income after paying for the cost of goods sold, expenses, taxes, as well as depreciation. The term may refer to businesses as well as individuals.

Net Profit – a business’, person’s or entity’s total sales (revenue) minus all its expenses. In the UK it might not take into account taxes paid, while in the US it nearly always does. Net Profit is part of an income statement, which covers an accounting period of either one month, one quarter, six months, or one year. Also known as net income, net earnings or the bottom line.

Network Effect – the effect that an individual user of a good or service has on its value to other subscribers or users. When a network effect exists, the product or service’s value depends on how many people are using it. Also called demand-side economies of scale and network externality.

Network Marketing – a business model in which direct selling agents promote products or services. They also try to recruit and train new agents, who sell and also recruit new agents. The more agents you have under you, the more you earn.

Network Selling – a business model where individuals sell products directly to consumers and earn commissions not only from their own sales but also from the sales made by individuals they recruit into their network. This model emphasizes personal relationships and the growth of a sales network.

Networking – communicating with other people, companies, or organizations regularly with the aim of improving your company’s sales or your personal career prospects. The bigger your network of contacts, the better your chances of doing well.

Net Worth – the value of an entity (be it a person, company, or other organization). Net worth equals assets minus liabilities.

Neural Networks – sets of algorithms that have been modeled after the human brain. The algorithms have been designed to recognize patterns. An neural network is an example of machine learning, which is part of AI (artificial intelligence).

Neutrality of Money – also called neutral money or monetary neutrality, is an economic theory that says that changes in the money supply make no difference to GDP and the basic structure of the economy. If you double the money supply, everything will rise, including wages, prices, etc. If they all increase by the same proportion, then nothing really has changed. The real economy (real variables), including total employment and total output remain the same.

New Economy – a term some economists and journalists began using during the last two decades of the last century. They believe that the Internet, state-of-the-art information technology, other hi-tech, and globalization have created a completely new kind of economy – one that does not follow the rules that existed in the old economy. In the new economy, productivity is considerably greater, as are growth rates, and inflation is virtually non-existent, they say.

New Money – wealth that was not inherited; it was created during the lifetime of the individual. The opposite of old money. A derogatory term for new money is nouveau riche.

Newsletter – A periodic publication, typically sent to subscrivers via email, that provides readers with updates or news on a certain topic or interest.

Niche market – a very focused market with demand for a specialized product or commodity. It is typically a small subset of a larger market.

Nobel Prize for Economics – seen as the most prestigious award globally in the field of economics. Officially called the Nobel Memorial Prize in Economic Sciences, and often referred to as the Swedish National Bank’s Prize in Economic Sciences in Memory of Alfred Nobel. The Swedish National Bank, the country’s central bank, pays the $1 million annual prize money.

Node – in a blockchain, a node is a computer that connects to the network. It supports the network through validation and relaying transactions. Each node, during a transaction, gets a copy of the full blockchain. There are different types of nodes, such as full and lightweight nodes.

Nominal Price – an asset’s ‘estimated’ price that does not always accurately reflect the market price of an asset (as it does not change based on inflation).

Nominal Value – the value of something expressed simply in the money of the day. Nominal figures are misleading because they do not take into account inflation. ‘Real value’ factors in the inflation effect. If a bag of sugar cost $5 in 2010 and $5 in 2016, its nominal value was the same. However, if average annual inflation over those six years was 1.2%, the real value of a bag of sugar declined.

Non-Disclosure Agreement – a confidentiality contract that parties in a meeting or presentation sign so that sensitive information remains a secret. It is also known as an NDA or ‘confidentiality agreement’. There are two types of NDAs, one-way or mutual.

Non-Participating Preferred Share – shares that only pay a fixed rate of interest and have a limit on how much can be paid out in dividends each year. The dividends are not proportional to the company’s profits. Holders of these shares get their money before common stockholders do.

Non-Performing Loan – when payments on interest and principal are overdue for more than 90 days it is a non-performing loan. It is likely (but not certain) the borrower will not be able to pay back the debt.

Non-Price Competition – marketing campaigns carried out by companies that do not involve altering the price of their products or services. Rivals may focus on providing extra services, inviting consumers to join a raffle or competition with a nice prize, improving the quality of their product, pointing out their excellent workmanship, etc. Non-price competition is more common in markets where there are very few competitors – oligopolies. The companies like to give the impression that they are competing aggressively, but they have probably colluded to keep their prices artificially high.

Non-Store Retailing – retailing that takes place outside a traditional brick-and-mortar (physical) location.

Nonprofit Organization – an organization whose purpose is other than making a profit. Nonprofit organizations typically focus on education, scientific research, scholarships, health, human rights, religious bodies, trades, professions, worker’s rights, etc. If you donate money to a nonprofit organization, in most cases your contribution is tax-deductible.

Nootropics – drugs, supplements, compounds, or synthetic substances that boost cognitive performance, i.e., brain power. There are three categories.

Normal Goods – includes all goods for which demand rises when incomes increase. Demand for normal goods always rises when incomes rise, but by a smaller amount – goods for which demand increases are matched or are greater than income growth rates are called luxury goods. Normal goods contrast with inferior goods, for which demand declines when income grows.

Normative Economics – a branch of economics that makes value judgments and looks at how things should be or should have been, rather than observing current or past facts. Normative economics contrasts with positive economics, which focuses purely on tested or proven facts. Normative economics expresses value regarding economic fairness, or what the economic goals or outcomes of policymakers ought to be.

ObamaCare – an informal term for the Affordable Care Act. We know it officially as The Patient Protection and Affordable Care Act. US President Barack Obama signed the Act in 2010. It is an American national health care plan that focuses on creating better health care coverage.

Objective – in business it refers to the specific aims a company has including details of how it will get there plus a time frame. It is not the same as a goal, which is less specific and is longer-term. A company’s aims are the same as its objectives, hence the term ‘aims and objectives’.

Objective Evidence – evidence that we base on facts that we can prove. It is the same as ‘compelling evidence’ and the opposite of ‘subjective evidence.’ Subjective evidence requires a leap of faith. We use the term ‘objective evidence’ in business, science, philosophy, and layman’s English.

Obsolescence Risk – the risk of a company’s product, system, or technology becoming obsolete. When, for example, a company’s technology becomes obsolete it loses competitiveness in the market. Obsolescence affects a firm’s bottom line, i.e. its profits.

Obstruction of Justice – an offense that covers any attempt by a person to corruptly ‘influence, obstruct, or impede the due administration of justice.’

Occupation Tax – a tax that certain professions, establishments, and other businesses must pay. They pay this type of tax to the local government. Some US states call it ‘business and occupation tax.’

Occupational Accident – an accident that workers suffer in the course of their work. This type of accident is common all over the world. Examples include animal attacks, human attacks, falls, slips, being struck by objects, and poisoning. The worker may become physically or mentally injured or ill. In some cases they may even die.

Occupational Hazards – risks of accidents, illnesses, or injuries in the workplace. Something unpleasant that somebody experience as a result of doing their job. There are many types.

Occupational Injury – a personal injury, disease, or death that a worker suffers in the workplace. In most cases, it is the result of an occupational accident.

Occupational Medicine – a subspecialty of preventive medicine that focuses on the health, safety, and performance of employees.

Occupational Psychology – an applied discipline within the field of psychology that studies human behavior in the workplace. Also called Work and Organizational Psychology, Organizational Psychology, and Industrial and Organizational Psychology.

Occupational Safety And Health – refers to the health, safety, and welfare of workers in their place of work. The term may also include the safety and wellbeing of employers, customers, and anybody else who might be affected by workplace dangers.

Occupational Stress – stress that employees can experience and which can build up in the workplace. It might be triggered by unexpected responsibilities. We also call it work stress or work-related stress. It can make people ill.

Occupational Therapy – helping people who find it hard to perform everyday tasks. This may involve showing them how to use tools and aids, or doing specific physical exercises. We also refer to it as OT.

Ockham’s Razor – a proposition that we should always choose the simplest explanation when there are two or more. The simpler explanation is more likely to be the right one. The concept was put forward by William of Ockham, a medieval Franciscan friar.

OECD – which stands for Organisation for Economic Co-operation and Development, is a unique forum where the governments of thirty-five nations – all democracies with market economies – work with each other. The aim is to promote sustainable development, prosperity and economic growth. The OECD was founded in 1960.

Offer – a clearly defined proposal to contract, presented by one party to another, outlining specific terms and awaiting acceptance or rejection.

Office – a place where people do non-manual work. An office may be one room, a set of rooms, or even a whole building. Clerks, secretaries, accountants, IT personnel, and other professionals work in an office.

Office Audit – an audit that the US IRS (Internal Revenue Service) carries out at one of its offices. The IRS auditor tries to determine whether the taxpayer is paying the correct amount of tax. There are three types of audits: 1. Office audit. 2. Correspondence audit. 3. Field audit.

Office Automation – using computers and software to do office work automatically. With office automation, machines and IT systems do the work that humans used to do. Files, for example, are stored digitally rather than in large filing cabinets.

Office Manager – somebody who is in charge of a company’s or organization’s administrative activities. We also call them administrative service managers or business office managers. They are responsible for running the office.

Office rotation – a way of working in which office workers take it in turns to occupy company premises. In this way, only part of the workforce is in the office at any one time.

Officer of the Court – the term refers to people who are responsible for promoting justice. Examples include judges, magistrates, court clerks, court stenographers, lawyers, and bailiffs.

Official Development Assistance (ODA) – an indicator of aid flow around the world. The Development Assistance Committee of the OECD coined the term in 1969. The world’s largest donor is the United States, followed by the United Kingdom.

Official Interest Rate – this is the rate at which banks lend to each other. Specifically, they are one-day maturity loans or overnight loans. Americans use the term ‘federal funds rate.’ In the UK, people call it the ‘official bank rate,’ while New Zealanders and Australians say the ‘official cash rate.’

Official Reserve – the amount of gold, tradable foreign currency, and special drawing rights (SDR) that a country has. The central bank holds the official reserve in most countries. We can also refer to it in the plural form, as in ‘official reserves.’

Officials – these are people with jobs in which they have power and authority. Officials may work in government departments, companies, organizations, or sports. Politicians in power are elected officials. However, people working in regulatory agencies are non-elected officials.

Offshore – in finance and business, the term means any other country other than one’s own – foreign, overseas. An offshore account is one that is held abroad. An offshore financial center offers financial services to people from abroad, they are usually tax havens or places with considerably lower tax rates than the home country of the bank account holders. The majority of offshore financial centers have small populations – many of them are or used to be British colonies or protectorates.

Offshore Company – the term has two broad meanings. 1. A company that operates in one country but is registered in another. That ‘other country’ is usually a tax haven. 2. A company that produces its goods abroad, in a country with cheaper labor or raw material costs. It then imports those good into the country where it operates.

Offshore Fund – a fund that operates abroad. Most of us interpret the term as a fund in a tax haven. However, technically speaking, an offshore fund simply means one that is abroad.

Offshore Manufacturing – relocating a company’s production plant abroad. Company’s do this because the other country has low labor costs. Sometimes, it moves production abroad because raw materials are cheap in the other country. The firm produces the goods abroad and imports them for sale in the home market.

Offshore Production – the manufacturing or assembly of products abroad, and then selling them in the home country. Companies do this because either labor costs or raw materials are cheaper in the foreign country.

Offshore Trust – this is a trust that a trustor created outside the jurisdiction of their country of residence. Offshore trusts offer confidentiality, tax benefits, and protection from local laws.

Offshore Outsourcing – the term means farming out business activities to organizations and companies abroad. The main reason is cost. The company finds organizations in countries with low labor costs.

Offshoring – relocating part of a company’s business operations abroad. Offshoring may include the relocation of production, manufacturing, accounting, or other service to another country. For example, several large companies have moved their call centers abroad.

Off-the-Shelf – an item that has not been custom-made. Off-the-shelf products are one-size-fits-all goods that anybody can buy. They are the opposite of bespoke, tailor-made, customized, or made-to-measure products.

Offtake Agreement – an agreement between a producer who plans a project and a buyer. They both agree to sell and buy a specific amount of future production. Offtake agreements are common in project finance with significant capital outlays. The lender needs to know that the project will hit the ground running before granting a loan.

Oil Economy – the term may refer to: 1. A country where oil revenues represent a major part of the economy. 2. A country that relies on oil for transportation, heating, etc. 3. A portion of the overall economy that is associated with the exploration, extraction, refining, and sale of oil.

Oilfield – a geographical area below the surface of the Earth with oil wells. There are onshore and offshore oilfields. We can write the term with one or two words, i.e., oilfield or oil field. There are over 40,000 oilfields in the world. Many of the largest ones are in the Middle East.

Oil Patch – the term originally referred to the major oil-producing states in the USA. However, today some people use it in Canada and other countries for regions with oil deposits. It also means an oil slick as well as the oil industry in general.

Oil Port – a deepwater port where large oil tankers can load and unload. The water in most ports is about twenty feet deep. Oil ports must have considerable deeper water.

Oil Spill – an unintentional escape or leak of oil into a body of water; usually the sea. However, some oil spills can also occur on land. We only use the term when talking about major leaks. Oil spills harm wildlife and the environment. They also have an economic cost, often take human lives, and can make people ill.

OKRs (Objectives and Key Results) – a strategic framework used by individuals and teams to set challenging, ambitious goals with measurable results. They foster alignment, improve transparency, and enhance accountability by linking objectives across an organization to measurable outcomes

Okun Gap – or the output gap is the difference between what total GDP actually is and what it could be. For example, if unemployment is high, output is lower than it could be if unemployment were low. That gap in output is the Okun gap.

Okun’s Law – an empirical relationship in economics whereby a certain decline or increase in gross domestic product results in a different but correlated rise or fall in the rate of unemployment. The GDP and unemployment fluctuations do not change by the same amounts due to a number of factors, including increased/declining productivity, changes in the average number of hours worked each week, and people who stop seeking work (they drop out of the job market).

Old Economy – the economy that existed from the Industrial Revolution until the mid-1990s. The ‘new economy’ emerged with the arrival of the Internet, online activities, and more powerful computers. The companies that drove GDP growth in the old economy are different from the ones in the new economy. Today, hi-tech companies dominate.

Old Money – refers to rich families that inherited their wealth. The wealth was passed down multiple generations. It contrasts with nouveau riche. In the UK the term generally only applies to members of the aristocracy.

Olf – this is a unit that we use to measure how strong air pollution is from a source. It measures the scent emission from an object, animal, plant, and even human. One olf is what an average sedentary, healthy, non-smoking human emits.

Oligarch – a very rich businessperson who also has considerable political influence. Oligarchs are members of an oligarchy, an elite group of powerful people who run a country. In most cases, oligarchs are friends or faithful to the head of state.

Oligopoly – a market in which very few companies dominate supply. These ‘oligopolists’ are able to control prices as well as output. This type of market may have dozens of competitors, but only very few dominant ones. If a market with 100 suppliers has three giant ones that control 90% of all sales, it is an oligopoly.

Oligopsony – a market with few buyers and many sellers. The buyers in this type of market are usually big and powerful. For example, there are not many supermarket chains. The few that exist are huge. They can dictate terms when negotiating prices with farmers.

Ombudsman – an official who represents the interests of the public. They investigate and address complaints between individuals and companies or government departments.

Omnibus Account – an account opened in the name of an account provider with the securities that belong to two or more clients of the account provider.

On Account – the partial payment of a debt. The term may also mean deferred payment. For example, if I buy something ‘on account,’ it means that I pay for it later. In other words, ‘on credit.’ There are also some other meanings that you can read about in the full article.

One Price Policy – a pricing strategy in which the seller offers everybody the same price. There is no discrimination. There is no haggling. The price you see is the final price; take it or leave it. This pricing strategy contrasts with a variably price policy or differential pricing approach. Both approaches have pros and cons.

One-Stop Shop – this might be a place or a company. It has everything a person with a particular need might want. Therefore, it is the only ‘stop’ you need to make to get everything you want. For example, a wedding one-stop shop will make the ceremony arrangements as well as organize the reception afterwards. It will make the invitation cards and the bride’s wedding dress. Put simply, for your wedding needs, you do not need to go anywhere else.

One-to-One Marketing – a kind of customer relationship management approach in which the sales and marketing people communicate directly with somebody. This person is an individual that the seller targets directly. We also call it 1:1 marketing, individual marketing, and personalized marketing.

Online – the term refers to a state of connectivity, specifically in a technology and telecommunications context. If something is online, it means it is connected to a network, on the Internet, or available to read or download. It is the opposite of offline.

Online Advertising – the term refers to placing adverts on websites and other Internet venues. Promotional material appears on the screens of mobile phones, laptops, desktops, smart TVs, and tablets. Online advertising has grown exponentially since the 1990s.

Online Banking – a service where customers can manage several aspects of their account over the Internet, rather than physically visiting a branch, using the telephone, or sending letters and forms via surface mail. Online banking can be done through your smartphone, tablet or personal computer. Also known as e-banking, Internet banking, and virtual banking.

Online Broker – a securities broker that interfaces with investors over the Internet rather than face-to-face. People visit the online broker online and not in a physical office. Online brokers have been around since the birth of the Internet.

Online Business – all commercial activities that are carried out across the Internet are examples of online business. Similar to e-commerce and e-business. The term may refer to the activity or specific companies.

Online Community – this is where like-minded people get together on the Internet and chat. Like in offline communities, members of an online community have something in common. They join the community to talk about that thing they have in common.

Online Marketing – marketing through the Internet. We also call it digital marketing, search engine marketing (SEM), and web marketing. It is outselling traditional marketing today.

Online Marketplace – a digital platform where buyers and sellers connect to trade goods or services. The platform acts as an intermediary, facilitating transactions, listing products, and offering features like payment processing and reviews. Online marketplaces often don’t own the inventory, but instead, present various sellers’ products to consumers, enabling efficient and secure commerce.

Online Retailers – stores that sell things online, that is, via the Internet. They are the key players in the online retail sector. Amazon.com is an example of an online retailer.

Online Shopping – the action or activity of purchasing things on the Internet. Online shopping refers to buying goods or services. People have been shopping online since the 1990s. You purchase something online and the seller delivers it to your home, office, or a nearby pickup point.

Online Trading – the act of buying and selling (trading) financial products on the Internet. The online trader buys and sells using an online trading platform. Online traders can buy and sell futures, international currencies, stocks (shares), bonds, and other financial instruments. All of the trades occur online, without the need to see a broker face-to-face or call them on the telephone.

Ontology – the study of things in the Universe. More specifically, the study of what exists and what entities there are in the Universe. It is a branch of metaphysics, which is part of philosophy (not physics).

OODA Loop – the four stages we go through from receiving a stimulus to responding to it. OODA stands for Observe, Orient, Decide, and Act – they are the four stages we go through. Entities that can go through the OODA Loop the fastest are more likely to win in a competitive environment. You are also more likely to survive a military conflict if your OODA Loop is faster than your enemy’s.

OPEC – Organization of the Petroleum Exporting Countries. An economic cartel whose members collaborate to fix the price of oil.

Open Interest – the number of derivative contracts (such as futures and options) that are not closed or delivered on a particular day. Also called open commitments or open contracts.

Open Market – one where all the participants, i.e. buyers and sellers, compete on a level playing field. There are no tariffs, taxes, subsidies and regulations that favour some players and hinder others. There are no regulatory barriers to entry in an open market.

Open Market Operations – activities carried out by central banks to give or take liquidity to/from the economy. When the central bank wants to kick-start the economy it purchases bonds – and sells them when its goal is to control inflation.

Opening Price – the price of a security when it is first available to be exchanged in a business day (which occurs as soon as the market it’s listed on opens).

Operating Activities – everything people do in a company related to the sale of goods or services. In other words, all the functions that generate revenue. Examples include purchasing materials, paying workers, talking to potential buyers, delivering to buyers, etc.

Operating Expenses – the recurring costs necessary for the day-to-day maintenance and administration of a business, excluding direct production costs.

Operating Ratio – generally refers to a business’ operating expenses divided by its net sales (operating revenues). It may also refer to any type of financial or business ratio that measure’s a company’s efficiency, including net profit to gross income ratio, net profit to net worth ratio, or sales to cost of goods sold ratio. The higher a company’s operating ratio is the less efficient it is.

Operational Intelligence – involves the continuous, real-time analysis of data to optimize business processes, enhance decision-making, improve efficiency, and mitigate risks. It provides actionable insights that allow organizations to respond swiftly to changing conditions, ensuring that operations run smoothly and effectively. This intelligence is crucial for maintaining a competitive edge.

OPEX – means operational expenditure or operating expense. It is the money that a business spends on a daily basis to keep going. It contrasts with CAPEX, which stands for capital expense.

Opinion Poll – a survey in which market researchers ask people what they think about different issues. The respondents belong to a representative sample of the whole population. Opinion polls are popular during election campaigns.

Opportunism – the practice of exploiting opportunities regardless of who they may affect. The opportunist takes advantage of opportunities as and when they arise. Opportunists are selfish, exploitative, unprincipled, and inconsiderate.

Opportunity Cost – the value of the best alternative choice when deciding to go along with a certain action. Looking and evaluating the option you gave up when you made a choice.

Oprah Effect – the huge sales boost that a product or book would experience after receiving a mention by Oprah Winfrey. If a company, product, or book appeared in the Oprah Winfrey Show, its commercial future was virtually guaranteed. The same applied if there was a mention in The Oprah Magazine.

Optimal Price – the price of a product or service that gives you the greatest profit. Finding it is often a question of trial and error. We also use the term profit maximizing price.

Optimal Solution – the best possible solution. When there is no other feasible solution anywhere, we say it is the globally optimal solution. When there is no better solution ‘in the vicinity,’ we call it the locally optimal solution.

Optimization – making something the best it can possibly be. For example, if you want to optimize production, you want to produce as much as possible at the lowest possible cost. We use the term for the production of goods as well as the delivery of services. Optimizing a design means making sure it has the best characteristics.

Optimum Capacity – when production is as high as possible and costs as low as possible. In other words, when the cost to produce each unit cannot go any lower, the factory is at optimum capacity.

Order – this may be a spoken or written announcement of an intention to buy something. When I place an order I am telling the seller that I am buying it. In finance, a bank check or bank draft with the name of the receiver written on it is an order. Courts issue orders. To order somebody to do something means to give them a command.

Order Management – the process of managing orders, from when customers first place them until they receive their product or service. Order management may also include dealing with refunds, returns, and replacements. Most order management systems (OMS) today are automated.

Ordinary Share – a form of corporate equity ownership. An ordinary share is written proof that the holder owns a part of a company. It is a British (and Commonwealth countries) term. Americans say common stock. Ordinary shareholders get dividends if there are profits, and also have voting rights.

Ore – naturally-occurring rock with metal or metal compounds in it. Ore refers to the rock, and not the metal. For example, gold ore is a rock with bits of gold in it. There must be enough metal in the rock so that we can mine it and make a profit. Otherwise, it is not an ore. We extract the metals from the ore and either sell it, if it is a precious metal, or use it to make things. For example, from iron we make steel. And with steel we make knifes and forks and thousands of other things.

Organic Farming – farming the natural way. Organic farmers never use artificial fertilizers or pesticides. Neither do they use growth hormones or genetically-modified organisms. They practice natural pest control, such as using ladybugs (UK: ladybirds) to reduce aphid populations. Organic farming is more expensive than conventional farming. Therefore, organic food costs more than non-organic food.

Organic Food – refers to food which has been created, prepared, or raised without artificial fertilizers or pesticides. Organic meat, poultry, and fish come from animals that did not consume livestock feed additives or growth regulators. Organic food comes from organic farms. Organic farms do not irradiate their products or use genetically modified organisms (GMOs).

Organic Growth – means the same as internal growth. It involves expansion from within a business, rather than the result of acquisitions or borrowing from outside. Organic growth builds on the company’s own resources and capabilities.

Organization – an organized group of people who work together and have a common goal. There are many types of organizations. For example, governments, companies, schools, charities, and the armed forces are organizations. Partnerships, non-governmental organizations, and organized crime groups are also organizations.

Organizational Change – occurs when a company or organization makes a transition from its current state to a desired future state. In today’s marketplace, commercial enterprises must undergo changes nearly constantly if they are serious about remaining competitive. Globalization of the markets and evolving technology have forced companies to respond rapidly and frequently in order to stay alive.

Organizational Culture – a group of internal behaviors and values that each organization has. We also call it Corporate Culture. It includes ways of thinking, future expectations, and beliefs. It is the result of a perception that all the employees of a company share.

Organizational Development – commonly known as OD, refers to a planned and systematic approach to enhancing the effectiveness of a company or any organization. OD includes the practice of planned, systematic change in the attitudes, values and beliefs of a company’s workers through the creation or reinforcement of long-term training.

Organizational Economics – the study of how we create and develop organizations and how they affect economic growth. It uses applied economics to understand how organizations, such as companies, behave and perform.

Organizational Memory – all the accumulated data and knowledge that a company has. The human memory exists in our brain. Organizational memory, however, exists in many places. We also call it corporate memory or institutional memory. They are the things that a company remembers which help it make good decisions and not repeat mistakes.

Organizational Performance – an analysis of a company’s current performance against its goals and objectives. In other words, is it doing as well as it had planned to do? Were senior management’s forecasts accurate regarding the company’s performance? Organizational performance concentrates on three principal outcomes; shareholder value performance, financial performance, and market performance.

Organizational Strategy – a strategy to transform an organization from its current state to a desired future state. First of all, it must create a strategic plan. Making a good plan is much easier than properly executing it.

Organizational Structure – defines how activities within a company or any type of organization are directed towards the achievements of its goals and objectives. A company can be structured in many different ways, depending on what it does and where it seeks to go. Its structure will determine the modes in which it operates and performs.

Organization Theory – there are many theories, and they all look at the relationships between organizations and their environment. We also call it organizational theory. It examines the effects of those relationships on how entities function. Basically, organization theory is everything to do with organizations. It aims to understand them and improve them.

Organizational Unit – we use this term in business and computing. In business it means one of many organizational groups in a company that accomplishes a specific function. In computing, it is a subdivision inside an archive directory. Within that archive directory, we can place computers, users, groups, as well as other organizational units.

Organized Crime – crime that powerful criminal groups carry out. They carry out these crimes on a large scale. Organized crime groups, often in several different countries, work together in specific sectors. They may be involved in money laundering, people trafficking, prostitution, gambling, arms dealing, etc.

Orientation – in Human Resource Management, it refers to a program to introduce new employees to their position and company. Some people call it ‘onboarding.’ A good orientation program helps optimize productivity and employee retention. Unfortunately, orientation is not something many employers take seriously enough.

Or Near Offer (ONO) – this term means that the seller would consider a lower offer. However, that offer would need to be close to the asking price. We generally write the short form – ‘ONO’ – when placing adverts. However, when speaking, we tend to use the long form – ‘or near offer’.

Outage – the term may refer to an interruption in the electricity supply, i.e. a blackout. An outage also occurs when a system stops working. A Sun outage is when geostationary satellite signals fail to reach earth stations. Sun outages are due to solar radiation.

Outbound Selling – also known as Outbound Sales, is a proactive sales approach where salespeople initiate contact with potential customers through methods like cold calling, direct mail, emails, or door-to-door visits. Unlike inbound selling, which relies on attracting customers, outbound selling involves actively reaching out to prospects to introduce products or services and drive sales.

Outlay – how much people spend on an activity or project. It is the total cost for reaching an objective or acquiring something. If you purchase new equipment, your outlay includes the money you spent buying it, delivery charges, plus installation and setting up costs.

Out Of The Box Thinking – means thinking in original, non-conventional, and creative ways. Imagine the box is the traditional framework for doing things. If you come up with a situation and follow protocol, you are ‘thinking in the box.’ Sometimes, to find an effective solution, we need ‘out of the box thinking.’ In other words, a novel approach.

Outplacement – the process of helping employees who have been laid off or made redundant to find jobs elsewhere. Instead of just handing out redundancy notices, a progressive employer arranges of its workers to receive career advice and assistance in seeking employment.

Output – in business, it is the quantity or amount produced by a person, firm, town, region or country over a specified time, usually one year. In electronics and computers, it refers to data that has been processed and sent out. In electronic devices, it may be where power leaves a system.

Outsourcing – involves farming out work to a third party supplier, not doing the task in-house. It also refers to the practice of contracting out control of public services to profit-making companies. When outsourcing is done with a foreign provider it is called offshoring.

Overdraft – occurs when your checking account balance goes below zero – into negative numbers. This may occur by accident, when you draw more money than was available in the account, or because you have an ‘arranged overdraft’, a previous agreement with your bank with interest charged at an agree rate. Overdrafts should be used as a last resort contingency, rather than an everyday spending limit, banks and financial advisors say.

Overdraft Protection – an arrangement a customer has with his or her bank in which debit card payments and checks are honored, even if there are insufficient funds in the checking account. Savings and checking accounts, for example, may be linked up, with the savings account providing the backup funds if they are needed.

Overhead – refers to all ongoing business expenses. It is also called the “operating expense”.

Over-The-Counter (OTC) – refers to trading that is carried out directly between two parties, rather than on an official exchange such as the New York Stock Exchange or the London Stock Exchange. OTC derivatives come from deals negotiated bilaterally and privately between a buyer and a seller, rather than traded on a formal securities exchange. In healthcare, over-the-counter refers to medications that you can buy without a doctor’s prescription.

Over-The-Counter Shares – shares in the smaller and/or newer companies that are not traded through stock exchanges, such as the New York Stock Exchange or London Stock Exchange. Also known as over-the-counter securities or over-the-counter stocks. ‘Over-the-counter’ is often written as ‘OTC’.

Overtime – time a worker spends working extra hours, i.e., more than his or her scheduled working week. If my employment contract says my working week consists of 40 hours, and I work 42 hours this week, I did 2 hours overtime. We also use the term when talking about payment for each of those extra hours.

Owner – somebody or something to whom something belongs. If I own something, it means that it belongs to me; it is mine. When you are the owner of something, you have a ‘bundle of rights.’ You can keep it, use it, give it away, sell it, exchange it for something else, etc.

Ownership – if you are the owner of something, it means you have ownership of it; it is yours. Ownership may also refer to an organization or group of owners. Ownership is the exclusive and ultimate legal right to a lawful title or claim.

Oxidation – occurs when substances gain oxygen. Oxidation is the opposite of reduction, which means the loss of oxygen. Rust is an example of metal oxidation.

Ozone – a gas comprising three oxygen atoms. Ozone’s chemical formula is O₃. Most of our atmosphere’s ozone exists in the stratosphere, eight to thirty miles above the ground. Ozone protects us from the Sun’s harmful UV radiation. At ground level, however, too much ozone causes lung and throat irritation, and worsens asthma and emphysema symptoms.

Ozone Hole – excessive thinning of the ozone layer at high altitude. When a significant proportion of the ozone layer in the stratosphere thins, more sun rays get through. Some of these rays are harmful. However, there is good news; the holes are shrinking.

PageRank – an algorithm used by Google Search to rank web pages in their search engine results, based on the quality and quantity of links.

Pain Points – specific problems, challenges, or frustrations that customers experience with products, services, or within their general work or lives.

Pandemic – an infectious disease that spreads across a vast region, typically the whole world. Pandemics kill many people and cause serious problems for countries’ public health services.

Paperless Office – an office or workplace where everything is done digitally (electronically) so that there is no need for paper. We also use the term when the workplace has significantly reduced paper usage, but still uses it for some things.

Pareto Principle – also known as the 80/20 rule or principle, is a theory that maintains that a minority of causes are responsible for the majority of effects. The Pareto Principle is frequently used in business to determine how to get the best return on investment; channel your resources into priority areas.

Paris Club a group of officials from major creditor nations who try to find coordinated and sustainable solutions for debtor nations that are having difficulties in paying back the money they borrowed. Sometimes the Paris Club members may offer to reschedule the terms of the loan. Since the Paris Club was formed in 1956, it has lent $583 billion, and signed more than 433 agreements to ninety debtor countries.

Part-time – a term that describes workers who work fewer hours in the day or week than full-time workers. It can also apply to work and jobs, as in “I work part-time” or “I have a part-time job.”

Partner – a member of a partnership, such as a law or accounting form, business, international arrangement between two nations, or a joint venture. A business partner is an individual or commercial entity which has some type of alliance with another individual or commercial entity.

Partnership – a relationship, generally a business one, formed by the agreement of two or more individuals or entities (corporations may be partners) to run a firm as co-owners. It is a business with two or more owners, each one having invested in the partnership and being liable to its debts and obligations. The owners of a partnership are called partners. Limited partners are usually liable just for the money they have initially invested, and do not risk losing their private savings and assets if the partnership is unable to pay its debts.

Partnership Marketing – When at least two businesses, organizations, or other entities work together on a marketing campaign. The partners are working to achieve mutual benefits. Also known as partner marketing.

Partnership Selling – also known as Partnership Sales, is a sales strategy that emphasizes building long-term, collaborative relationships with customers and partners. The focus is on working together to create customized solutions that meet specific needs, fostering trust, and ensuring mutual success. This approach prioritizes ongoing collaboration over one-time transactions, leading to stronger customer loyalty.

Par Value – the nominal or face value assigned to a share of stock or bond by the issuing company at the time of issuance. It represents the minimum price per share established by the corporate charter.

Passive Portfolio Strategy – tries to maximize diversification with little expectational input. A passive strategy often mirrors a market index.

Passporting – often referred to as passporting rights, refers to the rights that financial institutions have to do business freely throughout the European Economic Area (EEA). The EEA consists of the 28 EU nations plus Norway, Iceland and Liechtenstein. London risks losing passporting rights if no agreement can be reached when Brexit occurs. This may encourage companies to move from London to mainland Europe.

Past Continuous Tense – describes an action in the past that was still in progress. We commonly use this tense to describe an unfinished or incomplete action in the past or an action that was interrputed by something.

Past Simple Tense – we use this tense to describe an action that happened in the past. It could be the distant or recent past. We can use this tense together with the Past Continuous.

Patent – a certificate that protects an inventor from the illegal copying, sales and other uses of his or her invention without permission. It is like being given a sword and shield that you can use to protect your inventions. Patentable inventions include products, processes that give new technical solutions to problems, methods of doing things, technical improvements for existing products, or the composition of new goods.Copyright, trademarks and patents are examples of intellectual property.

Path Dependence – an idea that tries to explain that many of the things we do and the decisions we make today are the result of choices and decisions we made in the past – history really matters! Where we have been in the past and what we did then determines where we currently are and where we can go in future. Even seemingly insignificant differences in the path we have taken may have major consequences for where we are now and where we can go.

Patron – 1. A regular customer of a bar, restaurant, hotel, or other business. 2. Somebody or an organization who provides support for another person or organization. This support may be financial. Sometimes, if the person is influential or powerful, they lend that organization their name to give it greater prestige and credibility.

Payouts – funds disbursed to individuals or entities as earnings, returns on investments, or for services rendered.

Payroll – the term may mean: 1. The amount required to pay employees during a week, month, etc. 2. The process of working out employees’ salaries, tax, deductions, and then paying them. 3. A department in a company. 4. A list of employees plus information on them.

Peer-to-Peer – a system or network of computers without a central administrative server. In a peer-to-peer system, each computer is both server and client. Cryptocurrency blockchains use a peer-to-peer system. Each block holds all the transaction data of the whole blockchain.

Penny Stocks – shares that trade at extremely low prices. The US Securities and Exchange Commission (SEC) defines a penny stock as being a share valued below $5. They are cheap and can be very volatile.

Pension – 1. Income people get when they retire. 2. A boarding house or guest house in continental Europe, Latin America, the Middle East, and some other parts of the world.

Per Capita – means per head, per person, or for every man, woman and child in the population. The term is commonly used in human geography, economics and statistics, but may be used in virtually any description of a situation that includes populations. ‘Per capita’ is also used in legal English when talking about inheritance. The term has been part of the English language since the seventeenth century. In Latin, ‘capita’ means ‘head’, while ‘per’ means ‘by’ or ‘by means of’.

Percentage Point – also called a percent point or pp, is a one-hundredth (¹/₁₀₀). If something is one percentage point greater it does not mean it is one percent greater. Five percent (5%) is one percentage point more than four percent (4%), but 25% (twenty-five percent) more than four percent.

Perceived Value – the worth or significance a consumer assigns to a product or service, often influenced by its price, quality, brand image, and personal experiences.

Percentile – also called centile or pp, is the value below which a percentage of data falls. If you are at the 75th percentile in your test score, it means that you did better than seventy-five percent of the test takers. The poorest one percent of a population is at the bottom percentile, while the wealthiest 1% is at the top percentile.

Perfect Competition – a theoretical free-market Utopia in which there are many buyers and sellers so that none of them has any significant impact on the prices of goods and services, all buyers and suppliers seek to maximize their income (profit), buyers and sellers can freely enter or leave the market, transactions do not incur costs, and all the players – both buyers and sellers – have access to information regarding the goods’ quality, availability and prices. Also known as a perfect market or pure competition. It is the opposite of an imperfect market.

Perk – a desirable extra or advantage that comes with a position or status, as in “perks of the job.” The term is an altered, shortened version of perquisite. Some organizations distinguish between benefits and perks.

Performance Bond – a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. Essentially, it’s a financial guarantee that the contractor will fulfill their contractual obligations.

Personal Assistant – a dedicated professional who manages administrative tasks, schedules, and personal duties, ensuring smooth operations for executives or individuals, facilitating efficiency and organization.

Personal Finance – managing our financial activities such as personal banking, savings, income, budgeting, risk allocation, investments, and planning for the future.

Personal Injury – injury to part of a person’s body. The term also includes mental or emotional injury resulting from an accident or attack.

Personalization – a marketing strategy of tailoring products, services, and content to individual preferences and behaviors, aiming to enhance customer experience, engagement, and loyalty by delivering more relevant and meaningful interactions.

Personality Testing – techniques employers use to measure people’s personality. They carry out personality tests to determine whether job candidates are suitable for certain jobs.

Personal Loan – a loan taken for personal use, rather than business use. The individual may need to borrow money to buy a car, renovate the home, cover the costs of a wedding, a vacation, etc. Personal loans are for smaller amounts than mortgages and for shorter periods.

Personal Property Coverage – insurance that protects you from the loss of or damage to your household possessions. Furniture and computers, for example, are items that a policy would cover. We also call it personal property insurance, contents insurance, and personal items insurance.

Personnel – two main meanings: 1. The employees of a company – its workforce. 2. A department in a company that deals with employees, pay, recruitment, conditions, etc.

PEST Analysis – a study that helps companies identify threats and opportunities. Specifically, threats and opportunities related to uncontrollable external factors. PEST stands for Political, Economic, Social, and Technological. These are factors that have an impact on a company’s current and future profits and overall performance.

Pet insurance – a policy a pet owner buys to either lessen or eliminate the cost of veterinary care, surgery, and medications that a pet incurs. There is also pet insurance for accidents and damage/injury to third parties.

Peter Principle – a management concept that employees in a hierarchy are promoted until they reach their ‘level of incompetence’, and are then promoted no more. The term was coined by Dr. Laurence Peter, who suggested that all over the world there are millions of managers who are in way over their heads.

Petty Cash – a cash fund that companies and other organizations keep for small or miscellaneous expenses such as stationary, cab fares, postage, coffee, employee snacks, etc. The person in charge of it is called the Petty Cash Custodian.

Pharmacy – a facility where pharmacists dispense medications, provide healthcare advice, and offer services like health screenings, vaccinations, and medication management to patients and the community.

Phillips Curve – a graphical representation of Professor A.W.H. Phillips’ theory that the inflation and unemployment rates have a direct inverse relationship – when one goes up the other falls. The theory was disproved, to a certain extent, by the stagflation in the 1970s experienced by the United States and most other advanced economies.

Phishing – an attempt to obtain confidential data from somebody by pretending to be a legitimate company. The phisher communicates with his or her target by email, phone, or text. The victim clicks on a malicious link or attachment. The verb is to phish.

Pigou Effect – an economics concept that suggests that when there is negative inflation – a decline in prices – the economy is stimulated because consumers’ purchasing power increases. If consumer spending rises, company sales will increase, which will result in them taking on more workers. Consequently, employment rises. The Japanese deflationary recession that started in the 1990s revealed some major flaws in the arguments behind the Pigou Effect.

Pip – also known as ‘percentage in point’ or ‘price interest point’, it is simply a measure of change in the exchange rate of a currency pair.

Plaintiff – the person, group of people, or legal entity who initiates a lawsuit against another party in a court of law. The other party is known as the ‘defendant.’

Plaza Accord – an agreement between the United States, West Germany, Japan, the United Kingdom and France in 1987 to work together to bring down the value of the US dollar, which during the Reagan administration had appreciated considerably. The Accord was successful, and the dollar fell over the next two years. In fact, it was so successful that they needed another meeting – the Louvre Accord – to stop the dollar’s slide.

Plugin – also written plug-in, is a piece of software that we add to an existing computer program.

Podcast – a podcast is an episodic audio show that listeners can find online available to download or stream.

Point-of-sale (POS) – the time and place of a sales transaction. When you pay for goods and services, you are completing POS transactions. POS systems are technologies that automate and analyze such transactions.

Political Capital – this is the goodwill, trust and influence that a politician builds up with the public and other lawmakers. The more political capital a politician has, the more effectively and rapidly he or she can get things done. This goodwill is like a type of political currency that lawmakers are able to use to mobilize voters or spend on policy reform.

Porter’s Five Forces Analysis – a strategy tool that helps businesses analyze and understand which factors affect the business environment. It is a simple but very power tool that can help business people determine which strategy their company should take.

Portfolio – a group of investment products held and managed by an entity such as a financial institution, an individual, a hedge fund, or a corporation. Your portfolio is your spread of investments.

Portfolio Insurance – a strategy of hedging a portfolio against market risk by short selling stock index futures. Institutional investors often use this strategy when the market is volatile.

Portfolio Manager – a person or firm who manages clients’ portfolios, or somebody who works in a financial institution and is in charge of asset and liability portfolios.

Pollution – the presence of chemicals, particulates, and other substances that are toxic or harmful. They may be harmful to the health of humans, other animals, and plants. Pollution occurs when something harmful enters the environment faster than it can be gotten rid of.

Positional Goods – goods that people buy in order to enhance their socioeconomic status. These products are purchased because the buyer wants others to think that he or she belongs to an exclusive group of people – that he or she has class, style, money, and good taste. Demand for most positional goods goes up when their prices rise. Examples include designer clothes and shoes, expensive vacations, diamond necklaces and other jewelry, Swiss watches, and luxury cars.

Positive Economics – the economic study of what is, what was, and what will happen. It focuses on facts and things that can be proven. It contrasts with normative economics, which tells us what should or ought to be – it is a value judgment.

Pound (Sterling) – commonly known as the pound, is the official currency of the United Kingdom and its territories. It is one of the world’s oldest currencies still in use, symbolized by £, and subdivided into 100 pence.

Poverty – the condition or state of being poor; having very little or no money, goods, food, shelter, clothing or access to health care. In the advanced economies, poverty refers to people or families whose incomes fall below a specified threshold. Measuring levels of poverty is not easy. There is more to being poor than simply not having enough money. All or nearly all a poor person’s income is spent on food, they have no or very limited access to schools, they may spend much of their lives feeling hungry, they fear for tomorrow, and live one day at a time.

Precariat – refers to a social class (socioeconomic class). Members of the precariat do not have secure jobs and incomes. Many economists and sociologists believe they are the result of globalization.

Predatory Pricing – a strategy taken by a product’s market leader in which prices are drastically cut in order to kill off the competition. Predatory pricing may be in response to a newcomer that has just entered the market, or a decision to destroy existing rivals. When successful, predatory pricing helps the dominant seller either re-establish or establish a monopoly. If there is a strong likelihood that the strategy will result in a monopoly or less competition, the authorities will intervene.

Preferred Stock – (also known as preferred shares) is a type of stock that has a higher claim on earnings and assets compared to common stock. Holders of preferred stocks are paid a specific dividend before common stock holders get their dividends.

Price – the amount of money we have to pay for anything that is on sale. It is how much the vendor will accept for the sale of a good or service. Prices today are expressed in currency, but used to be quoted in quantities of other products (barter). Price minus cost equals the profit the seller makes.

Price Discrimination – setting different prices for the same product for different purchasers. Bus companies and movie theaters, for example, offer discounts for children, students and seniors (aged 65+). Supermarkets may offer you a discount if you buy in bulk, or telephone companies may charge less per minute for calls after you have used up 10 minutes. Airlines charge frequent flyers less by allowing them to clock up air miles. Companies take the price discrimination approach to maximize profits.

Price-Earnings Ratio (P/E ratio) – calculates a corporation’s current share price compared to its earnings per-share. It can be an indicator of high earnings and the growth that is to come.

Price Elasticity – a measure of how the demand (or supply) for a product or service is affected by a price rise or price cut. If a good or service is very price elastic, it means that demand changes by a greater percentage than the price change. If the demand change is smaller or not at all, it is said to be price inelastic. Except for Griffen goods and Veblen goods, the relationship between price changes and demand is inverse – when prices go up demand goes down, when prices fall demand rises.

Price Gouging – the practice of raising prices on essential goods or services to an unreasonable or excessive level, especially during a crisis or emergency situation.

Price-to-Book Ratio – a financial multiple used to compare a share’s current market price to its book value. Investors use this metric to determine whether a stock is worth buying. Also known as market-to-book ratio and P/B ratio.

Price-to-Sales Ratio – the ratio of the market value of equity to sales. It is calculated by dividing a company’s stock price by its sales revenue per share over a 12-month period. Also known as the P/S ratio, PSR or price-sales ratio.

Primary Market – where securities (stocks and bonds) are sold for the first time. The money from the sale goes straight to the issuer. The primary market is part of the capital market. Also known as the New Issue Market.

Prime Rate – the interest rate that American banks charge their ultra-creditworthy customers, their lowest-risk customers, for loans. The Prime Rate is typically determined by the Federal Reserve System’s key rates. It is a benchmark for all commercial lending rates across the country. The Fed says the Prime Rate is also known as the Base Rate, and is a reference rate for many types of loans, including lending to small businesses, credit card loans, some private student loans, adjustable-rate mortgages (ARM), and home equity lines of credit with variable interest rates.

Principal – or the Principal Amount is the original amount of a loan, before interest, fees, and other charges are added. It is also known as the Face Value or the Face.

Prisoner’s Dilemma – a situation described in Game Theory that illustrates a problem when two accomplices are accused of the same crime and are locked in different cells. The Prisoner’s Dilemma shows why cooperation is sometimes hard to achieve in a business environment, especially in an oligopoly (too few competitors), where one rival does not know what the other one is going to do. If every player chose one particular option, they would all be better off. However, none of them will risk being the first to make that choice, because they do not know how their rivals will respond.

Privacy – the right or state of keeping personal information private and to be shielded from prying eyes. If I say that I cherish my privacy, it means I value my private space (both physical and abstract).

Private Banking – a service offered to wealthy individuals by banks. Private banking is much more personalized than general retail banking – it is focused on the needs and preferences of each customer.

Private Company – an enterprise (firm) whose shares are not offered to the general public for sale, i.e. they are not traded at a stock exchange. The term might also mean companies that do not belong to the state.

Private Equity – money invested in certain types of private companies, i.e. businesses that are not publicly listed – they are not listed on a stock exchange. Investors may want to acquire a struggling business and turn it round, or inject funds into a startup. Private equity may include mezzanine capital, distressed investments, growth capital, venture capital or leveraged buyouts.

Proactivity – anticipating future needs and acting in advance to address them effectively. The adjective is “proactive,” as in “John is a proactive person, he prepares in advance rather than waiting for problems to arise and then deal with them.”

Proactive Chat – an automatic pop-up message system that encourages your website visitor to engage in conversation. The main aim is to keep them on the site longer.

Probate – 1. Getting permission to carry out a deceased individual’s wishes contained within their will. 2. The process of settling the deceased person’s estate (money and things they owned).

Procurement – the strategic process of identifying needs, sourcing potential suppliers, negotiating terms, and purchasing goods or services essential for business operations.

Producer Surplus – the difference between how much a producer sold something for and how low he or she was willing to go. If something is sold for $10, and the producer would have gone as low as $6, the producer surplus is $4. In economics, it is part of the Economic Surplus, which also includes the Consumer Surplus – the difference between how much a consumer paid and how high he or she would have gone.

Product Differentiation – the process of distinguishing a good or service from others. The seller or provider aims to make its product or service more appealing to a particular target market. For example, if an automaker creates a very fast car, it is appealing to consumers who like speed.

Product Intelligence – the process of collecting, analyzing, and utilizing data on how products perform and how customers interact with them. It aims to improve product design, enhance user satisfaction, and inform business decisions. By leveraging insights gained from this data, companies can stay competitive and continuously adapt to market demands.

Productization – transforming services or ideas into standardized, marketable products suitable for mass production and consumption.

Product Life Cycle – four stages that every product goes through during its commercial life. They are: 1. Introduction. 2. Growth. 3. Maturity. 4. Decline. There are strategies to extend the decline so that the product’s profitable life can continue for longer.

Product Placement – a marketing strategy that seamlessly integrates brands or products into various forms of media, such as movies, TV shows, or online content, to promote them within the context of the content.

Product Recall – the action of asking or telling buyers to return a product. They have to return it because it either has a defect or may be dangerous. For example, defective car brakes pose a danger, while a ballpoint pen without enough ink has a defect.

Production Function – in economics, it relates physical output of a production process to factors of production (physical inputs) using mathematical equations. In other words, what production figures would you get with one combination of land, labor and capital, compared to a different combination (with different proportions of each one)? Companies want to produce goods using the cheapest combination of inputs.

Productivity – refers to how much is produced per unit of input. For example, how many shirts a worker produces per hour in a factory. There are several kinds of productivity depending on the input, and different was to calculate it. For instance, labor productivity can be calculated per hour, per worker, etc. When calculating the return from an investment, capital productivity would be examined.

Product Line – a series of different products which form a group. All the items in a product line must belong to the same company. A product line may focus, for example, on a market sector such as personal care.

Profit – the financial reward that business people aim to receive in compensation for the risks that they take. It refers to how much money a business is making.

Profitability – a measure of how effectively a company generates profit relative to its revenue, expenses, or assets, often expressed as a percentage or ratio.

Profitable – in the world of business, the term means able to make a profit. If a company has more money coming in than going out, it is profitable. In a non-business context, the term means ‘beneficial’ or ‘useful.’

Profit Margin – also known as net margin, is a measure of profitability. It is the net profit as a percentage of net revenue. In other words, it is the amount by which revenue from sales exceeds a business’ costs.

Profit Sharing – giving employees a percentage of a company’s profits. It is different from employee bonuses, which are targeted at specific workers for achievements or good work. Profit sharing may be given to all or part of the workforce.

Profit-Taking – the act of selling assets, such as stocks or cryptocurrencies, after they have increased in value, in order to realize the gains. This strategy can lock in profits and reduce exposure to future market volatility.

Program – a planned series of activities or events designed to achieve specific goals, often organized and implemented by an individual, group, or organization.

Progressive Tax – a tax system that charges a higher percentage of higher earners’ incomes than that of lower earners. It is called progressive because the tax rate ‘progresses’ upward as incomes increase. The progressive tax applies to both income tax and sales tax, as well as the income of individuals and businesses.

Project Management – involves planning, organizing and managing many things, including a team of people to make sure a project is completed properly, on time and within budget. Put simply, it is about getting things done – knowing about what you want to accomplish, how it is going to be done, how long it will take, and what the cost will be. Project management professionals are called project managers.

Project Manager – a professional who plans, organizes, and oversees projects from start to finish. They are responsible for managing timelines, budgets, and resources while coordinating with teams and stakeholders. Their primary goal is to ensure the successful completion of projects, meeting objectives within set constraints.

Promotion – 1. Going up the corporate ladder, e.g., from supervisor to a manager or from manager to director. 2. Things a company or its marketing people do to get consumers to notice its products and want to buy them.

Proofreading – the last stage of checking a piece of writing. It involves looking for and correcting errors of grammar, spelling, punctuation, formatting

Propensity – in economics, generally refers to what percentage of a person’s income is channeled in a specific direction. For example, our propensity to consume is the percentage of our income that we spend. There are two types – marginal and average propensities. The former measures what we do with any additional income, while the latter focuses on total income.

Property Rights – the legal rights that you and I, companies, organizations, charities, governments and other entities have on a thing that is owned. They are among the most basic rights in free societies, and are generally taken for granted in today’s Western democracies. Property rights include the right of the owner to use the good, earn income from it, transfer ownership to others, and enforce property rights.

Proportional Tax – also known as Flat Tax, a system where individuals pay the same percentage rate of their income in taxes, regardless of their income level, ensuring a uniform tax burden across all earners.

Proposal – a suggestion, often in written form, to gain support for an idea or plan. A well-written proposal can help to win a deal. Proposal writing is an important skill for those working in research, government, non-government, and business settings.

Pro Rata – a method of distributing amounts or resources proportionally based on individual shares or contributions. It ensures equitable distribution among participants, according to their respective stakes or involvement, in financial, legal, and business contexts.

Prospect – 1. Somebody who I think could become a customer. 2. The likelihood of something happening in the future. 3. A job applicant. 4. The possibilities of success in future (career prospects).

Prospect Theory – a theory that suggests that people make decisions based on the potential value of gains and losses, rather than the final outcome, and that we place more weight on a loss than its equivalent gain. For example, losing $50 earns more negative points in our perception of things than the number of positive points earned by receiving $50. The theory was put forward by Daniel Kahneman and Amos Tversky in the 1970s.

Prospectus – a legal document that describes a financial security for potential investors. It contains material for potential buyers of stocks, bonds, mutual funds or other investments. It describes the company’s business, officers’ and directors’ biographies, how much they earn, financial statement, and other data potential purchasers might be interested in.

Protectionism – a government policy that tries to reduce imports and possibly also promote exports. The government may impose tariffs or quotas on imported goods and services, subsidize exports or offer domestic suppliers financial assistance.

Provocative Selling – or Provocation-Based Selling is a sales approach that challenges customers’ current thinking by introducing new ideas, provoking thought, and encouraging change. The provocative seller introduces their product or service as the solution to their problem.

Psychological Pricing – a marketing strategy in which prices are expressed in a way that appears to be more attractive to customers. For example, $7.99 instead of $8.00.

Public Company – a company whose shares are bought and sold freely by members of the public on a stock exchange or over-the-counter. Contrasts with a private company. Also known as a public corporation, publicly held company, or a publicly-traded company.

Public Goods – goods and services that we all consume and are provided by the state (in most cases). Public goods are available for the well-being or benefit of all citizens. When an individual consumes a public good, it does not stop another individual from consuming it – it is non-rival. We cannot avoid consuming it; it is non-rejectable. If one person can consume it, it is impossible to stop another person consuming it; it is non-excludable. Examples of public goods include clean air, national defense, emergency services, the judiciary, and public parks.

Public Limited Company (PLC) – a public company under British and Irish law, in addition to some Commonwealth nations. Members of the general public can buy and sell a PLC’s shares on the open stock exchange.

Public-Private Partnership – also known as 3P, PPP or P3, is a cooperative agreement between a local or national government and a private company; usually a long-term arrangement. The two partners provide a public asset or service. PPPs have become considerably more common since the 1980s. In a public-private partnership, the private company bears significant risk and management responsibility. Remuneration (how much the private company gets paid) is linked to performance.

Public Relations – also called PR, is the discipline that focuses on a company’s or organization’s reputation – how customers and other people perceive it. Public relations is all about reputation. PR specialists attempt to create and maintain a favorable public image of a company, organization or famous person.

Public Sector – government-controlled entities and activities, responsible for delivering essential services like healthcare, education, and infrastructure, and for implementing laws and regulations, all primarily funded through taxation.

Public Speaking – the art of communicating ideas effectively to an audience. It requires confidence, clarity, and connection, transforming mere words into impactful messages that inspire, inform, or persuade listeners.

Public Utility – a company that supplies consumers with a utility such as water, electricity, natural gas, sewage treatment, and telephone service. The term may refer to the company or the utility itself. Public utilities are usually monitored by a national or local government regulator. They are often natural monopolies, because it would not be economically viable to have more than one supplier. Public utilities may either be state-owned or private companies.

Purchase – as a verb means to buy something, and as a noun something that is bought. Can also refer to a firm hold – ballerinas add powder to their shoes in order to get a better purchase on the floor (prevent slipping).

Purchaser – also known as a Buyer or Procurement Specialist, is somebody who buys goods and services on behalf of their company. They are involved in procurement.

Purchasing Managers’ Index (PMI) – an economic indicator that measures the business activity level in the manufacturing and service sectors. Investors, analysts, business people, and policymakers monitor PMI data.

Purchasing Power Parity (PPP) – an economic term that calculates the relative value of different currencies. PPP allows economists and investors to determine the exchange rate between currencies for the trade to be on par with the purchasing power of the countries’ currencies.

Python – a high-level, interpreted programming language prized for its simplicity, readability, and broad applicability in areas like web development, data analysis, and artificial intelligence.

Q Theory – gives you a ratio of the market value of a company to the net replacement cost of its assets. If q is greater than 1, this suggests that you should invest in that company. If q is less than 1, you should sell – it means the shares are worth more than the stockholders currently expect the company to earn in profit by retaining them. Also known as the q Ratio, Tobin’s q, Tobin’s q Theory, or Kaldor’s V.

Qualification – refers to a pass of an exam or an official completion of a course. There are many jobs that people cannot work in without the necessary qualifications. For example, to work as a medical doctor, you must have a university degree plus a medical licence.

Qualitative Research – a mainly exploratory type of scientific research which generates non-numerical data. It is used to understand people’s beliefs, experiences, behavior, attitudes and interactions.

Quality – the term refers to how good something is. While quantity means ‘how much,’ quality means ‘how good.’ In business, many terms use the word ‘quality.’ For example, quality management, quality control, quality assurance, and quality improvement.

Quality Assurance – a program for the systematic monitoring of various aspects of production, a service, or a project. The aim is to ensure that standards are being met.

Quality Circle – a group of employees who get together regularly to solve problems related to their own jobs. It is a management technique that started in Japan and spread to much of East Asia.

Quality Control – or QC is a system in manufacturing of maintaining standards. An inspector examines the final product visually to make sure it meets specifications and standards. If it is a service, the inspector checks the end results.

Quality Creep – when quality improvements over time, accompanied by price rises, eventually lead to a decline in sales. Consumers become unwilling to pay a premium for all the quality improvements.

Quality Engineering – the engineering discipline that focuses on the principles and practice of product and service quality assurance and control.

Quality Improvement – the systematic approach to the elimination or reduction of waste and losses in the production process. It involves weeding out what does not work properly, and then either eliminating it or improving it.

Quality Management – everything a company does to make sure that it produces and delivers its goods and services to specifications, and also at the appropriate cost. Quality management consists of four components: quality planning, quality assurance, quality control, and quality improvement.

Quality Management System (QMS) – a set of business processes that focus on meeting customer requirements and regulatory requirements. The system also focuses on improving customer satisfaction.

Quality of Life – the term refers to how well a person or community lives. It includes their state of mental, physical, emotional, and social well-being.

Quantity Theory of Money – a theory that states that the money supply and prices in an economy go up and down in direct proportion to each other. When the money supply goes up, so do price levels by approximately the same percentage – the same happens when the money supply declines. It is the foundation stone of monetarism.

Quantum Computing – computing technology that uses the fascinating properties of atomic and subatomic physics, i.e., quantum mechanics. Quantum computers can operate at significantly faster speeds than conventional ones.

Quash – to officially declare that a court decision or judgment is now invalid or null. If I quash a rumor, it means that I completely suppress it. To quash an uprising or riot means to suppress it completely using force.

Quick Ratio – measures a company’s ability to use its most liquid assets to clear all current liabilities. It is an indicator of a business’ financial strength.

Quick Response (QR) code – a two-dimensional barcode comprising many small black and white squares that resemble a randomly-tiled mosaic. QR codes can hold a lot more data than ordinary barcodes and are easy to scan and process. Modern smartphones, for instance, have the technology to scan and decode them.

Quitclaim Deed – a legal instrument in which the owner of a property (grantor) transfers interest to another person (grantee). The grantor gives up all rights to the grantee.

Quorum – the smallest number of members required to be present at a meeting before it can officially start, or before official and binding decisions are taken. Parliaments, company shareholder meetings, associations, boards, etc., typically have quorums.

Quota – in international trade the term refers to the imposition of limits in either the quantity or monetary value of targeted imported goods or services. Quotas may be directed at imported goods or specific countries. In business, a quota could mean the sales target that sales reps or their departments have to meet by a speficied date. Basically, the term means a set amount.

Racketeering – the act of engaging in criminal activities, such as extortion or fraud, as part of an organized effort to profit from illegal business schemes.

Random Walk Theory – also called the random walk hypothesis, states that it is not possible to forecast accurately and consistently which way stock prices will go, regardless of how carefully you think you have observed and detected past trends. Shares and markets move randomly and unpredictably, and our ability to determine whether prices might go up or down or by how much is no better than trying to guess where a drunkard might go next as he zig-zags up and down the road. Some economists – those who support the non-random walk theory, disagree.

Ransom – a payment demanded for the release of someone or something from captivity, often involving money or other valuables.

Ransomware – a type of malware that infects a computer. The computer owner cannot access files or data unless they pay a ransom to the cybercriminal who placed the malware. It is a type of cyber blackmail.

Rate of Return – the profit or loss that you can make on an investment. This is usually a ‘per year’ calculation. It is the ratio of the income from an investment over the cost of that investment. We use ‘rate of return’ to measure economic or financial success. When deciding which investment to buy, we usually compare their different historical rates of return.

Ratings – in the business world there are several meanings: 1. An assessment by a credit agency on a company’s or government’s ability to pay back a debt (bond). 2. An analyst’s or expert’s recommendation on whether to sell, purchase or hold onto a specific company stock. 3. The percentage of viewers who chose a particular channel or program on television or radio at a specific time on a specific date.

Rational Expectations Theory – a behavioral economics theory that states that, on average, most people can predict future conditions fairly accurately, because we analyze ALL available data and then take measures accordingly. It contrasts with adaptive expectations theory. It is also known as the rational expectations hypothesis or the theory of rational expectations (TRE).

Rationing – a system of limiting how much of something each citizen is allowed to buy or consume. It may include food, fuel, certain clothing or materials for making clothing, other household items, and utilities (water, electricity, natural gas). Rationing is common in times of war, after natural disasters, or following a terrorist attack. It was also common in the old communist Soviet Union and its satellite nations, as well as in Cuba and North Korea today.

Raw Materials – also known as Primary Materials or Primary Commodities, are basic, unprocessed substances obtained from the earth, used in the production of goods and services. These include metals, oil, grains, and wood, essential for manufacturing and construction.

Real Estate Investment Trust (REIT) – a company that owns and typically operates a portfolio of real estate properties and mortgages. REITs investors earn a share of the income that is generated through the ownership of commercial real estate.

Real Interest Rate (RIR) –  the amount by which the nominal interest rate is more than than the inflation rate, i.e. it is the nominal interest rate minus the inflation rate.

Real Options Theory – a relatively new theory on how to make decisions on capital investment projects when the future is uncertain. Real options relate to tangible projects, such as renewing a factory, building a new plant, purchasing or leasing land for oil exploration, or deciding when to pump oil. Real options do not include financial instruments such as bonds or shares, i.e. intangible things.

Real Terms – after adjusting for the effects of inflation. It contrasts with ‘nominal value’. If my salary goes up by 10% today, and the inflation rate for the past 12 months was 8%, my pay increase has been: 1. Two percent in real terms. 2. Ten percent in nominal value.

Rebranding – the process of changing the image of a product or whole company. Rebranding means changing the company’s or product’s whole ‘look and feel.’ It is a marketing strategy that may involve changing its name, logo, slogans, symbols, or a combination of those things.

Receipt – a document or slip stating that the buyer has paid. The receipt typically has the date, the amount the buyer paid, and a description of the good(s) or service the seller provided.

Recession – a contraction in the business cycle. It is characterized as a decline in economic activity, which can be measured by various macroeconomic indicators (such as GDP and the unemployment rate). There was a global recession (Great Recession) following the 2008 financial crisis.

Reciprocity – the practice of doing as we are done by. Reciprocity is common among individuals, companies and governments. One country or organization might grant privileges to another, usually in return for a gesture in kind. Reciprocity may also refer to harmful acts – tit-for-tat behaviors – if one country kicks out three of our embassy staff, we will expel three of theirs from our country. Reciprocity is an important skill to learn and use for negotiators and sales people.

Record – a documented form of evidence that captures and preserves data, events, or activities, serving as an official account for future reference, analysis, or proof in various contexts.

Recruitment – what organizations do to find and take on new members. Employers do it when they hire new staff and armies when they enlist soldiers. Clubs also do it when they wish to increase their membership. The process typically begins with a vacancy and ends when the new starter is settled in the post.

Recurring Revenue Selling – or Recurring Revenue Sales is a sales strategy focused on generating consistent, repeat income from customers through long-term relationships, often via subscriptions, contracts, or ongoing services. The goal is to secure predictable revenue over time by ensuring customers continue purchasing regularly rather than relying on one-time sales.

Recycling – the recovery and conversion of waste into materials for making new products. The combination of mechanical and advanced recycling could do much to reduce the worldwide problem of plastic waste.

Red Chip Shares – shares in Chinese companies that are listed in the Hong Kong Stock Market but belong to entities (such as local and regional governments) in mainland China. Also known as red chip stocks. The companies are called red chip companies.

Redlining – the practice of refusing financial services, such as loans or insurance, to people who live in certain parts of a city, because they are considered ‘a poor financial risk’. Historically, those ‘poor risk’ areas have had a majority black or Hispanic population. When a loan or insurance applicant is ‘redlined’, he or she is not assessed according to his income or credit history, but rather where he or she lives. Redlining is illegal if the bias is for racial or ethnicity reasons. It is allowed if there is a fault line going through the area (earthquake risk), or it is especially prone to flooding.

Redundancy – a form of dismissal. Employees are laid off permanently because their jobs no longer exist. If a person is dismissed and his or her post is filled by another individual, it is not redundancy. With redundancy that post disappears. Voluntary redundancy is usually offered before the employer has to choose who to dismiss.

Reflation – refers to measures taken by the government and/or the central bank to boost demand so that the economy grows and inflation goes up to its long-term annual target rate. Measures taken by the central bank include altering interest rates and changing the money supply, while those taken by the government include increasing spending and reducing taxes.

Refund – the amount of money a customer got back from the seller. The customer was not happy with the product and asked for his or her money back. The ‘money back’ is the ‘refund.’ If you pay too much tax, the tax authorities will give you a tax refund.

Regional Policy – refers to government policy that targets specific regions of a country or trading bloc, such as the European Union. In the majority of cases, regional policy targets economically poorer regions or those experiencing greater problems than their neighbors. The term may also refer to targeting wealthier regions to prevent them from becoming over-congested.

Registered Independent Advisor – a person or company that gives clients advice or recommendations on investments. Sometimes, they also manage people’s investment. They have a fiduciary duty, i.e., they must put their clients’ interest ahead of their own.

Regression Analysis – in statistical modeling it is a way to mathematically determine which variables affect something you are focusing on. For example, if you want to know what affects your sales figures (dependent variable), you might look at special offers, price discounts, the weather, competitors’ prices, etc. (independent variables). Regression analysis is commonly performed by investment and financial managers, sales and marketing managers, and professionals in several different fields.

Regressive Tax – a tax system that takes a greater proportion of income from people on low wages compared to their better-off counterparts. It is the opposite of progressive tax. Sales tax is usually a regressive tax – the sales tax on $100’s worth of supermarket shopping represents a greater percentage of an office cleaner’s salary who earns $1,500 per month than that of a brain surgeon in a top hospital on $10,000 per month.

Regulatory Capture – when a regulatory agency fails to accomplish what it was set out for – to protect consumers. A ‘captured’ agency fights more for the interests of the very industry it is supposed to be policing than those of the people it should be protecting. Some economists believe that the only solution is not to set up these regulatory agencies in the first place.

Regulatory risk – refers to all the bad things that can happen to businesses, sectors, markets, or the economy in general due to changes in laws and regulations. Since the global financial crisis of 2007/8, regulatory bodies across the world have become much stricter. Regulatory risk management is today an important focus for companies.

Relationship Selling – a sales technique focused on building long-term relationships with customers through trust, understanding, and meeting their needs, rather than prioritizing quick transactions. This approach emphasizes personalized interactions and consistent communication to foster customer loyalty and satisfaction.

Relative Income Hypothesis – states that a person’s attitude to saving and consumption is determined more by his or her income in relation to other people rather than by abstract standard living. In other words, I perceive my own well being according to how I see those around me. I’d rather get a $50 wage rise if nobody else got one than receiving a $100 wage rise along with everybody else. Poorer individuals spend more of their income than their wealthier counterparts because they want to close the consumption gap.

Relocate – to move from one place to another. Individuals do it when they move house. Businesses also relocate when they move to a new site or relocate employees. Relocation can be local or distant, domestic or international. Employee relocation is a multi-billion dollar industry.

Remittances – funds sent by migrants to family or friends in their home countries, often used for living expenses, education, healthcare, and investment in local communities.

Remote Selling – the selling of goods or services at a distance. If you are the salesperson or sales representative, you do not see your clients or prospects face-to-face. They are far away; possible thousands of miles away.

Remote Working – working away from where your employer’s central workplace is. In most cases, this means working from home. A growing number of people are working remotely. We also use the terms teleworking and telecommuting with the same meaning.

Renewable Energy – energy that comes from a source that lasts for ever. The source never runs out. For example, wind energy comes from energy from the wind. We never run out of wind. Other examples of renewable energy are solar energy, hydropower, geothermal energy, and biomass energy.

Rent – this word has several meanings. 1. Income from hiring out something like land, property, a vehicle or any other durable good. 2. The difference between what one is paying for a factor of production and the minimum amount of money required to keep it going – often referred to as ‘economic rent’. Technically, ‘to rent’ means to borrow and pay for it, while ‘to hire’ means to lend and be paid. However, in North America, ‘to hire’ is commonly used with both meanings (a trend that is spreading into the other English-speaking nations).

Rent-Seeking – refers to trying to increase one’s share of the total current wealth in one sector without creating any additional wealth in return. It is the equivalent of attempting to obtain a larger slice of the wealth pie, without trying to make that pie any larger. The rent-seeker’s gain is another entity’s loss – it is a zero-sum game.

Replacement Cost – also known as replacement value or replacement cost value, refers to the total cost of replacing a current asset at today’s market prices with an asset that performs the same function. The term is also used to determine the cost of replacing an item that a company has sold, or inventory that became unsalable.

Replacement Rate – in the world of economics, demographics and geography, the term has two meanings: 1. How much of an employee’s pre-retirement income his or her current pension represents. 2. The rate at which the people who die in a country and emigrate is replaced by the rate of babies being born and individuals who come in from abroad to live in that country. In the rich countries, a replacement rate of 2.1 babies per mother is required to prevent the population from shrinking.

Reputation – the opinion that other people have about you, others, a company, a government or even a country. In business, a good reputation can boost sales and profits.

Rescheduling – in finance, the term means to renegotiate the terms of a loan. Rescheduling usually occurs when the borrower is having problems keeping up with his or her repayment obligations. Rescheduling may also apply to rearranging a booking, as in “I will have to reschedule my flight to Moscow.”

Reservation Wage – the lowest pay that a person would accept for doing a particular job. The reservation wage of a brain surgeon will be significantly higher than that of a window cleaner. People usually have a lower minimum for jobs they find pleasant, compared to unpleasant or dangerous occupations. Our reservation wage can change during our lives.

Reserve Currency – a hard, foreign currency that is traditionally held by governments and central banks as part of the nation’s official reserves. The most important reserve currency today is the US dollar. Other currencies, including the French franc, Dutch guilder, Portuguese and Spanish real, Greek drachma, and the British pound sterling have all been dominant currency reserves.

Reserve Ratio – is the proportion of customers’ deposits that a bank or any other financial institution has in the form of available cash. Reserve ratio requirement is the statutorily enforced proportion. Most countries’ central bank sets a reserve ratio requirement (some don’t). The reserve ratio may be referred to as the ‘bank reserve ratio’, ‘cash reserve ratio’, or ‘bank reserve requirement’.

Reserves – liquid assets held by an individual, business, bank, central bank, or government in order to meet expected payments in the future, unexpected emergency needs, and take advantage of opportunities that may arise. Energy reserves are the oil, gas and coal reserves we know of around the world or specific to countries or regions, which we could extract with our current technology.

Reshoring – the opposite of offshoring. It is a term used to describe bringing back offshored manufacturing to a country. For example, a US automobile company closing manufacturing facilities in other countries and opening new ones in the US. This typically occurs when production costs, such as labor or raw materials, become cheaper at home or more expensive abroad.

Residual Risk – a risk that is still there after all attempts have been made to either eliminate or minimize the risks that an investment or business project might face. Sometimes the residual risk-taker knows it exists, but often he or she doesn’t.

Responsible Investment – an investment which the investor hopes will provide not just an economic return, but also some kind of benefit, which could be environmental, related to justice and human rights, the reduction of poverty, etc. Also known as sustainable investing, ethical investing, green investing, and triple-bottom-line investing.

Responsive Design – also known as Responsive Web Design, an approach to web development that ensures a website adapts to fit the screen size of any device.

Restrictive Practice – or ‘restrictive practices‘ (plural) refers to an arrangement by a group of people, often workers, to restrict the entry of other workers or limit output. Companies that abuse their dominant power in the market are guilty of restrictive practice. Another example is when a trade union only allows its members to work in certain jobs – a closed shop.

Résumé – a page containing all relevant information about an applicant. It is used for the job positions. It is your opportunity to tell employers about your work experience, education, and skills. In the UK and other Commonwealth countries, the term CV (curriculum vitae) is more common. In the US, a résumé is shorter than a CV.

Retail – the sector of the economy in which the ultimate consumer purchases products. The ultimate consumer does no resell what he or she buys. Shops and stores are in the retail sector – they are retailers.

Retail Banking – the banking service provided to individuals (members of the public) and small companies, as opposed to the service banks provide to other banks, financial institutions, and large corporations.

Retail Investor – a person who invests using his or her own money, rather than other organizations’ or people’s funds. Retail investors tend to trade in much smaller amounts than institutional investors.

Retained Earnings (RE) – the earnings of a company that have accumulated since it started doing business, after dividends are paid. On a company’s balance sheet its accumulated retained earnings appears as owner’s equity.

Retargeting – a digital marketing strategy that shows personalized ads to users who have previously visited a website, encouraging them to return and complete a purchase or desired action.

Return on Capital – how much people get back from an investment in one year in relation to the total they invested in that year.

Return on Equity (ROE) – an important metric of profitability. It compares a company’s net profit directly to the value of the company’s equities  (what the shareholders outright own).

Return on Investment (ROI) – also known as return on net worth or return on owners’ investment, it is a measure of how profitable an investment is. A high ROI means that an investment generates favorable profit when compared to its investment cost. In other words, it measures how much you got back from your initial investment.

Revealed Preference Theory – a theory that suggests that we can determine what consumers’ preferences are by observing their purchases under a range of different circumstances, particularly different levels of incomes and prices. According to the theory, our preferences are fairly constant – given a set of choices, we tend to make the same choices again and again over time – if our circumstances have not changed.

Revenue – the money a company receives from the sale of goods and services to clients and customers, as well as income from royalties and interest. It is a business’ income over a specified period.

Reverse Mortgage – a special kind of home loan that lets the homeowner convert a portion of the equity of his or her house into cash. It is a mortgage where the bank pays the borrower, rather than the other way round. The borrower must be aged at least 62 years.

Reverse Stock Split – when a company reduces its total number of shares outstanding by merging them. The total could be halved, brought down to one quarter, or any fraction. Each share will go up in value proportionally. Also known as a stock merge, reverse split or reverse share split.

Revolving Credit – a type of credit line that renews every time the borrower pays it off, as opposed to installment credit. Also known as an evergreen loan.

Ricardian Equivalence – a proposition that suggests that when the government boosts spending with borrowed money, it does not result in increased consumer demand. The theory was developed by David Ricardo, and later elaborated by other economists.

Ricardo, David – David Ricardo was an early 19th century English political economist whose writings and concepts continue to influence modern economic thinking. He was a believer in free trade and a free market economy. He became interested in economics after reading Adam Smith’s The Wealth of Nations. He is one of the few people in history who apart from having a significant impact on how economists think today, also became immensely rich.

Rightsizing – adjusting the size of a company, usually its workforce, so that it is better able to make a profit in the current conditions of the marketplace. Rightsizing nearly always means reducing the workforce – making employees redundant, but it could in theory mean taking on more staff. Hence, its meaning is similar to downsizing.

Rip-Off – something or a situation in which the consumer paid too much. We use the term when we are not happy with our purchase because we realize it is worth much less than what we paid. The term can be a verb or a noun, as in (noun) “That is a rip-off,” or (verb) “The shop ripped me off.”

Ripple – a real-time gross settlement system, remittance network, and currency exchange created by the Ripple company. Ripple or XRP is also the name of the company’s cryptocurrency. The company claims that with its system, people can send money across the world securely and much more cheaply than with traditional systems.

Risk – refers to the likelihood or threat of damage, injury, loss, liability or any other undesirable occurrence resulting from internal or external vulnerabilities. There are many types of business risks, including  interest rate risk, capital risk, settlement risk, liquidity risk, operations risk, political risk,  country risk, sovereign risk, default risk, delivery risk, economic risk, exchange rate risk, reinvestment risk, refinancing risk, and underwriting risk.

Risk Analysis – the process of determining, analyzing and defining the risk of danger to individuals, companies, governments and even the whole economy, posed by potential human-caused and natural adverse events. It is the systematic study of the uncertainties and risks we encounter in business, and many other areas.

Risk Assets – assets that carry an element of risk, such as stocks, currencies, property, commodities, high-yield bonds, and other financial products that fluctuate in price.

Risk Averse – not wanting to take risks. A risk averse investor prefers secure investment, such as bonds or savings accounts, even if the returns are relatively low. The opposite is a risk loving investor.

Risk-Free Rate – the theoretical rate of return that an investment that carries no risk yields over a given period. An example of a risk-free investment is government stock, such as US Treasury bonds. An investment with a risk-free rate has a guaranteed rate of return – the expected return and actual return are always the same. Risky investments are compared with risk-free ones to determine several aspects of a business, including the cost of capital.

Risk Intelligence – the ability to gather, analyze, and apply information to identify, assess, and manage uncertainties, enabling better decision-making. It involves understanding potential risks, weighing them against potential benefits, and making informed choices to protect assets and ensure long-term success. This intelligence is crucial for navigating complex environments and achieving strategic goals in business.

Risk Management – the process of identifying, quantifying and managing the risks that a company, organization or any entity might face. As a business activities’ outcomes are unpredictable, they have some element of risk. These risks include operational failures, strategic failures, market disruptions, financial failures, regulatory violations, environmental disasters, etc.

Risk Neutral – describes people who are totally insensitive to risk. A risk neutral investor is only interested in the possible return, and ignores the potential risks or losses completely. Risk neutral contrasts with risk averse, which describes a person who prefers certainty.

Risk Premium – the difference between the expected return on a high-risk investment and a risk-free one. For example, if a US Treasury bond (risk-free) yields 3% per year, while a company-issued corporate bond (higher risk) yields 6%, the risk premium is 3%. Investors say that a greater expected return – risk premium – is required for higher-risk investments, otherwise they are unwilling to bear the risk.

Risk-Seeking – or risk-loving, describes a person who loves risky investments. The term might also refer to an individual who is willing to give up his or her secure job to set up a company. Risk-seeking is the opposite of risk-averse. People who have nothing to lose tend to be more risk-seeking than those in secure, well-paying jobs.

Risk Tolerance – the degree of variability in investment returns that an individual is willing to withstand in their financial planning.

Rival – someone who competes against another, challenging them in a pursuit of common objectives, such as status, success, or a specific prize, often fueling motivation and a desire to achieve excellence. We can use the term for people, companies, nations, and other entitites.

Robot – a machine or device that we can usually program. We program it to do things. Some robots have artificial intelligence or AI. The AI makes the robot think and behave in a similar way to humans. Some robots look like humans, but most don’t.

Robotic Process Automation (RPA) –  the use of software ‘bots’ to automate repetitive, routine tasks traditionally performed by humans across digital systems.

Rotation in office – a practice that limits the number of terms that a person can serve in a particular role. The term can also mean a system in which two or more individuals of equal rank take it in turns to occupy a more senior role.

S&P 500 – also known as the Standard & Poor’s 500, is a stock market index that includes the 500 largest companies (in terms of total market capitalization) listed on the New York Stock Exchange or NASDAQ.

Safe Haven – an investment expected to retain or even increase its value during times of economic turbulence, offering protection against market downturns, examples include gold, US dollars, Swiss francs, and government bonds.

Safe Harbor – a provision in a regulation, law, contract or agreement that affords protection from penalty, oversight or liability under certain circumstances, or if a number of specified conditions are met. The term may also refer to a strategy that a business that is being targeted for a takeover might use to fend off the predatory company – it acquires a heavily-regulated firm, thus discouraging the acquiring company from going ahead with the hostile takeover.

Salary – money that is given as payment from an employer that an employee has worked for. Salaries are expressed monthly or annually and are paid every month. Unlike wages, salaries are fixed and do not vary if the employee worked overtime.

Sales – the exchange of goods or services for money, encompassing activities from promotion and negotiation to the final transaction that meets the buyer’s needs.

Sales Cycle – the step-by-step process that sales teams follow to convert prospects into customers. It includes stages such as prospecting, initial contact, qualification, presentation, handling objections, closing the sale, and follow-up, ensuring a structured approach to achieving sales goals.

Sales Funnel – a marketing model that visualizes the journey potential customers go through, from initial awareness to the final purchase, segmented into stages such as awareness, interest, decision, and action.

Sales Intelligence – the use of data analysis and technology to understand market trends, customer behavior, and sales opportunities, thereby enabling businesses to make informed decisions, personalize customer interactions, and ultimately drive sales growth and enhance competitiveness.

Sales Leads – also known simply as Leads, potential customers identified as having interest and authority to purchase a product or service, initiating the sales process. There are three main types – cold, warm, and hot.

Sandler Selling System – also known as the Sandler Sales Method and the Sandler Sales System, is a sales methodology that emphasizes a consultative approach, focusing on building trust and fostering open communication with clients. It involves understanding the client’s needs, setting clear expectations, and creating mutually beneficial solutions, rather than using high-pressure tactics to close deals.

Satisficing – accepting what is good enough rather than trying to get the best option possible. The satisficer tends to be happier with his or her decision, compared to the maximizer (the one who strives for the best possible option). When having to make several decisions at the same time, satisficing is usually a more effective strategy – sometimes it is the only realistic one. The term is a portmanteau of Satisfying and Sufficing.

Savings – the amount of money left over after our consumer spending is subtracted from our disposable income. The portion of our disposable income that we do not spend on consumer goods. Money we put aside for a rainy day, a future project, or an expected future expense, such as college fees or retirement. The term can also mean to economize, as in: “Tremendous savings can be made if you shop around before purchasing a new car.”

Savings Account – also known as a deposit account, is a bank account that provides principal security and a moderate interest rate. There are several types of ‘savings accounts’ today which are really ‘checking accounts’.

Say’s Law – states that aggregate production (supply) automatically creates an equal quantity of aggregate demand. In other words, to boost an economy and get demand to increase, you first need to boost supply. Say’s law, also called the law of markets or Say’s law of markets, was introduced in 1803 by French economist Jean-Baptiste Say (1767-1832). John Keynes rejected Say’s law after observing what happened during the Great Depression of the 1930s. Keynes insisted that you need to boost demand first if you want economic growth during an economic downturn.

Scalability – a measure of how rapidly or slowly a system, company, or any entity can adapt to greater demand. If demand for a product or system grows, and a company can respond rapidly by increasing production, it has good scalability, especially if costs increase at a much slower rate. Software products have fantastic scalability – the first unit is extremely expensive to create, but subsequent copies are incredibly cheap to produce.

Scam – a scheme that tricks victims. The victim of a scam loses something of value; usually money. To scam is to carry out a scheme that tricks people into losing money. The person who does this is a scammer.

Scarcity – regarded as the fundamental economic problem that arises from the fact that resources are finite but human wants are not; they are infinite. It is a relative concept rather than an absolute one. For example, water is less scarce in the tropical rainforests of Latin America than in Chile’s Atacama desert. Determining how to make best use of scarce resources is what most economists focus on.

Scenario Analysis – a method of predicting what a company, portfolio, economy or any entity might be like in the future if certain potential events occur. We use scenario analysis to analyze and predict possible future events by considering alternative potential outcomes, known as alternative worlds.

Schema Markup – a powerful tool that can improve SEO, including giving your website/webpage better results in search engines, improved click-through rates, greater visibility, and superior crawlability.

Scholarship – financial support so that somebody can study. To get a scholarship, the applicant typically must reach a certain academic level. In many cases, there must also be a financial need. It is not the same as a bursary or sponsorship.

Search Costs – the cost of seeking and finding what you want. When you buy something, the economic cost involved is more than just its price. You spend time and money gathering data, going to different market places to compare features, offers and prices. Search costs form an important part of consumers’ decision-making.

Search Engine Marketing (SEM) – Internet marketing that tries to increase a website’s visibility in search engines, and thus its traffic. The aim is similar to SEO (search engine optimization). Unlike SEO, however, most of SEM includes paid advertising in search engines.

Search Engine Optimization (SEO) – the practice of trying to get one’s webpage or website higher up in the results of a search engine search. When somebody searches in a search engine such as Google, the top two or three webpages in the search results are well optimized. The aim in SEO is to get your webpage(s) up there.

Seasonally Adjusted – refers to a statistical technique to take out the effects of seasonal influences operating on a series. Sales of many products, unemployment trends and construction activity, for example, rise or fall every summer and increase or decline each winter. In order to determine whether real growth or contraction has occurred, you need to seasonally adjust the figures.

Secondary Market – a market where existing financial instruments, such as stocks and bonds are traded. Investors sell to other investors in secondary markets, as opposed to primary markets, where companies and governments sell to investors. Also known as the aftermarket.

Secondary Mortgage Market – is the buying and selling of ongoing home loans (mortgages), which are usually bundled together and traded as MBS (mortgage-backed securities).

Second-Best Theory – an economics concept that if a requirement for achieving a desirable situation cannot be met, focusing on the requirements that can be satisfied may not necessarily be the second-best option – it could do more harm than good. You should not assume that the other components have not changed when one of them is not ‘good’, the theory states. It is also known as the Theory of the Second Best.

Secondhand – the acquiring of possessions that have had at least one previous owner, such as used cars and secondhand apparel. The term can also refer to the hand on an analogue timepiece that marks the passing of seconds.

Secured Loan – this is a type of loan where the borrower puts up an asset, such as a car or real estate property, as security (collateral). If he or she defaults the lender can seize the asset and recover all or some of the money lent by selling it.

Securities – securities are financial instruments, contracts that are given a value and then traded (such as bonds), i.e. any evidence of ownership or debt that has been assigned a value and may be traded.

Securitization – involves bundling up several different loans into a bond-like investment and selling those bonds to capital market investors. Banks and other lending institutions can move debts and risk off their balance sheets and get cash. Securitization involves a process of taking illiquid assets and converting them into a security through financial engineering.

Seed Capital – money invested in a business or project during its very early stage – the idea or conceptual stage. This type of funding typically involves a family member or close friend. Also known as seed funding or seed money.

Seigniorage – the profit the government makes by printing bank notes and producing new coins. You can calculated seigniorage by subtracting the cost of making and distributing money from its market value. If it costs the government $0.05 to produce a one-dollar bill, the seigniorage is 95 cents. Paper and electronic money have a significantly higher seigniorage than metal coins, which are more expensive to create.

Self-employed – describes those who work for themselves in their own businesses as opposed to working as employees for employers. The definition varies slightly depending on its use, such as for economic analysis or taxation policy. It is possible to be both employed and self-employed.

Seller’s Market – when demand exceeds supply and sellers have the upper hand. Prices are higher (than in a buyer’s market), and goods & services are sold more rapidly.

Selling – the act of giving something in exchange for money. It is the opposite of buying. Selling also means to persuade or try to persuade somebody to purchase something.

Selling Price – the price the customer pays for something. It is the price for which something sells. Selling price contrasts with cost price, which is how much the company paid its supplier. It is important for a company to get its selling price right.

Senior debt – debt with the highest priority of repayment. Businesses secure senior debt from large financial institutions for a set interest rate and period – payments are made on a pre-determined schedule.

Seniority – in the workplace it is about whether an employee is ranked higher or lower than another worker. If you have seniority over another person, it means you outrank them. Seniority may be determined by the number of years the person has been working for his or her employer, or how effective they are at their job – their work performance. When a company goes bankrupt, debts are paid off according to seniority – ‘senior’ debts are paid off first.

Sequencing – when a country’s economy is in trouble, in order to get financial help and expertise from organizations such as the IMF (International Monetary Fund), it will have to implement a series of economic reforms. Sequencing refers to the order in which they need to be introduced for the malfunctioning economy to recover and thrive. Just introducing the correct set of reforms in any order does not work, many economists say – sequencing really matters.

Server – a computer or software that ‘serves’ other computers or software. The server provides data or functionality for the other devices. The other devices are the ‘clients.’

Services – the non-physical part of the economy. The economy consists of goods and services. Goods are tangible things – you can handle or touch them – such as a car. Services are intangible things – you cannot handle them – such as car repairs. The vast majority of the rich countries’ economies consist of services today; this was not the case one hundred years ago.

Shadow Banking System – refers to the activities of non-deposit taking financial institutions such as hedge funds, monoline insurance firms, investment banks, and other unregulated entities. Shadow banks look like banks, behave like banks, and do the things that banks do, but below the regulator’s radar.

Shadow Economy – also known as the informal sector, is part of the economy where all work and business is done ‘below the radar’, i.e. none of it is registered, taxes on income and profits are not paid, and state rules and regulations are ignored. The shadow economy exists in every single country in the world, and ranges as a proportion of GDP from 7% in the United States to 94% in Uganda. People operate within the shadow economy either deliberately, because they want to evade taxes and regulations, or because they have no choice – they would not survive otherwise.

Shadow Price – the real price of a project, good or service for which there is no market price, the price is hard to estimate, or whose price does not properly reflect the real sacrifice made. Also known as shadow pricing, it involves estimating how much it would cost to continue using a resource, comparing that cost to the expected benefit it would bring, and then deciding whether to go ahead or not. If the expected benefit exceeds the cost, the project, plan or strategy should be approved.

Share – a unit of account for financial instruments, such as the stock market, limited partnerships, and investment trusts.

Share Capital – a company’s capital that came from investors who have bought shares. The calculation uses the nominal share price. The term can also refer to a company’s share structure.

Shareholder – a person, government, institution or any entity that owns one or more shares in a company. Shareholders are the owners of the company.  Also known as a stockholder.

Shareholder Rebellion – when a company’s shareholders to not agree with decisions made by its Board of Directors and challenge them. Sometimes the aim might be to get rid of current Board members.

Shares Outstanding – all the shares that a company has issued or authorized, and are owned by investors and company officials. Also known as issued shares, outstanding stock or outstanding shares.

Shareholder Value – many say that this is senior management’s top priority. Shareholder value, also referred to as the shareholder value model or shareholder value maximization, is a business term that implies that how well a company and its senior management have performed depends on how much richer the shareholders have become. If the value of the business’ shares increased significantly, there has been effective shareholder value maximization.

Sharpe Ratio – a way of measuring the real return on an investment, fund or portfolio after adjusting for risk. The Sharpe ratio is extremely useful when investors want to compare two or more investment options, because market volatility is factored out – thus flattening out the returns as if the risk were the same for all investment opportunities. Investors and potential investors use the Sharpe ratio – which is also called the Sharpe Index, reward-to-variability ratio, and Sharpe measure – as a rough guide to whether an investment’s, fund’s or portfolio’s expected rewards justify the risk.

Shelf Company – a company that has been legally established, but has no activity. The owner set it up with the aim of doing business at a later date or selling it. Also known as ready-made company, aged company, blank check company, or shelf corporation. (in this context the words ‘corporation’ and ‘company’ are interchangeable).

Shell Company – a company without any current business activity or significant assets. While many are set up for legitimate purposes, they are popular among money launderers, funders of terrorist activities, and tax avoiders. Also known as a shell corporation, front company, or personal investment company.

Shipping – 1. Refers to sea vessels collectively. 2. A charge that shops add to a product to cover delivery (delivery charges). 3. The transportation of goods (freight, cargo).

Short Position – the sale of a borrowed security, currency, or commodity.

Short Squeeze – the price of a stock unexpectedly rises, forcing those who were betting on its further decline (short sellers) to start buying it. Their move pushes the price higher still.

Short-Termism – in business and finance, the term refers to an approach that focuses on short-term results instead of long-term objectives. Business leaders and policymakers who are doing things that make their company or country better off now and in the short run, but worse of in the end, suffer from short-termism.

Side effect – an adverse reaction or physical response to a drug or medicine. The term can also refer to an unintended outcome of a decision or action.

Signaling – when you do not have all the information regarding a product, you have to interpret the market signals, such as buying-selling behaviors of insiders, or announcements made by company CEOs regarding dividend payouts, etc. If a company announces that this year’s dividend payout will be 28% higher than last year, the signals picked up by the market players is that the business is doing well and probably has a promising future. When looking at the resume (CV) of a job applicant, the employer will be interested in that person’s education credentials more as a productivity signal rather than the specific details of each course.

Signature Loan – a signature loan and a personal loan are the same. The term is sometimes used in lieu of personal loan when the process only requires something as simple as a signature on a dotted line to be approved.

Silver – silver is a precious metal often bought as an investment or store of value. Find out what drives the price of silver and its risks (such as extreme price volatility).

Single Market – a group of nations that trade with each other without imposing import taxes, thus creating one large market. Examples include the European Union and the North American Free Trade Agreement. Some single markets aim for total economic union.

Sino-Foreign Cooperative Joint Venture – a joint venture agreement between a Chinese and foreign company. This type of joint venture gives the foreign company more flexibility than a SJV.

Sino-Foreign Equity Joint Venture (SJV) – a limited liability company which has the status of a Chinese legal person.

Sister Company – two companies with the same parent company are sister companies, they are both subsidiaries of the same company.

Skill – an ability or aptitude. Having craft skills, for example, means being able to create garments, tools, ornaments, and other objects. Jobs may require particular skills and labor surveys talk of gaps between what employers need and what workers possess.

Smart – the word has many different meanings. A smart person in the US is a clever individual, but in the UK it’s more likely to mean a well-dressed person. Smart can be a verb, a common tech term (smart machines), and even an adjective.

Smart Contract – lines of code that make a contract function automatically instead of relying on lawyers or other intermediaries. It is a self-executing contract.

Smart Money – can mean: 1. Investments by experts who can spot or foretell market trends. 2. The collective force of big money that can shift markets. 3. Venture capital where the investors also put in their own time and provide know how and advice. 4. Where the good bets are going (gambling). It is the opposite of dumb money or stupid money.

Smartphone – a term that refers to a device that’s a combination of a cell phone and a computer. Smartphones may also work as a camera, media player, and satellite navigation device.

SME – Small and Medium-sized Enterprise or Small to Medium-sized Enterprise. They are not subsidiaries of other companies, i.e., they operate independently, and have a maximum of 250 and 500 employees in the EU and USA respectively.

SMS – Short Messaging Service; mobile phone users can send and receive messages using this service. Before Facebook Messenger, WhatsApp and other encrypted messaging systems existed, SMS was all there was.

SNAP Selling – a customer-centric sales methodology developed by Jill Konrath. It focuses on simplifying the sales process, being invaluable to buyers, aligning with their objectives, and prioritizing their most pressing needs. This approach helps salespeople effectively engage with overwhelmed and time-constrained buyers.

Social Capital – the value of human networks. The term refers to the collective value of all human networks and the tendency that arises from these networks for people to trust each other and do things together.

Social Commerce – a type of e-commerce that utilizes online social networks to drive the purchase and sale of products and services. Social commerce uses online communities, ratings, F-commerce, social advertising, shares, and stores inside the social networking website to buy and sell goods and services.

Social Currency – the economic value of each individual’s or entity’s relationships, both in real life and online. Companies have become aware of social currency and are actively weaving their brands into social networking sites, blogs, forums and other environments in order to create social currency for them, i.e. get people to include their brands when they interact with each other.

Social Intelligence – the capacity to understand and manage social interactions effectively. It involves recognizing social cues, understanding others’ emotions, and responding appropriately to build strong relationships. This skill helps you navigate social environments, communicate effectively, and resolve conflicts, making it essential for personal and professional success.

Social Media – the collective of online communications channels in which people, companies and organizations create and share content in blogs and social networking sites. The apps (applications) and websites are dedicated to forums, social bookmarking, social networking, product and service reviews, social curation, virtual worlds, wikis and other kinds of social media.

Social Media Marketing – or SMM. The use of social media platforms to promote companies’ goods or services, individuals, political parties, and other organizations. It is today a multibillion-dollar industry. Social media marketing is part of digital marketing.

Social Selling – the process of using social media platforms to connect with potential customers, build relationships, and achieve sales goals by sharing valuable content, engaging in conversations, and establishing trust without relying on traditional advertising methods.

Social TV – watching a TV program while at the same time communicating through social media with other people on a smarphone or tablet. We also call it Social Television.

Social Work – a profession dedicated to improving individual and community well-being, advocating for social justice, and supporting people in overcoming personal and systemic challenges.

Socialism: a term with many meanings, ranging from pure communism to a free-market system with a minimum safety net for vulnerable people. In socialism, unlike communism, private property is allowed. However, socialists support more government intervention than capitalists do.

Social Responsibility – the practice of businesses and individuals making decisions that benefit society at large, beyond their own interests or profits.

Socially Responsible Investing – investing money into businesses that conform to a set of ethical, moral and/or environmental standards. The socially responsible investor may refuse to invest in companies that sell tobacco products, weapons, or those that are high polluters. Also known as sustainable investing, socially conscious investing, green investing, ethical investing or SRI.

Social Worker – a professional dedicated to providing support, advocacy, and resources to individuals and communities, addressing challenges and enhancing well-being.

Soft Loan – a loan in which the interest rate is either very low or zero. Sometimes the borrower is given longer-than-normal repayment periods as well as interest holidays. Also known as concessional funding or soft financing. The World Bank provides soft loans to developing nations for worthwhile projects.

Soft Brexit – leaving the European Union but keeping some of its features, including free access to the EU market, the customs union, and passporting rights. However, in order to have these benefits the country would have to sign up to the free movement of people. The opposite of a Soft Brexit is a Hard Brexit, in which total border control is regained, but unfettered access to the EU market is lost, as are passporting rights.

Soft Currency – also called a weak currency, is one that people trust less than a hard currency. A soft currency loses its purchasing power over time in relation to hard currencies. Business people prefer to carry out international transactions with hard rather than soft currencies. A soft currency is the least popular for central banks as far as holding foreign exchange reserves are concerned. Developing nations tend to have soft currencies, while the advanced economies have hard currencies.

Software – all the programs – instructions and codes – within a computer that make it possible to use it. The physical parts of a technical device are called the hardware. Software refers to the programs that perform specific tasks. Without software, none of our technical equipment would work.

Solar Energy – capturing the Sun’s energy and converting it into electricity. We also refer to it as solar power. China is the world’s largest producer of solar energy.

Sole Trader – or Sole Proprietor is an individual who owns and operates a business, making them solely responsible for its debts and entitled to all profits.

Solution-Based Selling – or Solution-Based Sales, is a sales approach that focuses on identifying and addressing the specific needs or challenges of the customer. Instead of merely promoting a product, this method emphasizes understanding the customer’s problems and offering tailored solutions that directly solve those issues, creating more value and stronger relationships.

Solution Selling – a sales methodology where the seller focuses on understanding the customer’s problems and tailoring solutions to address their specific needs.

Solvency – a business’, person’s or entity’s ability to meet long-term financial obligations. Solvency equals total assets divided by total liabilities. If the result is greater than 1, the company is solvent, if it is less than 1 it is insolvent. Liquidity and solvency have different meanings – the article explains the meaning of each term.

Spam – mass mailing online by sending promotional messages and materials to thousands and even millions of people simultaneously. All the messages are identical. They are unsolicited online messages, i.e., the receivers did not ask for them. Spam only refers to online messages. Junk mail has the same meaning, but includes both digital and real world messages.

Specialization – the opposite of diversification, refers to companies selling off divisions not closely related to their core activities, so that they can focus resources in specialized areas and thus become more streamlined and profitable. Workforce specialization, also called the ‘division of labor’, means individual people specializing in what they are good at, and working in just those areas. Specialization may refer to individuals, studies, careers, companies, organizations, communities, regions and even whole nations.

Speculation – an investment in which the investor wants to make a quick profit. Speculation involves placing money in short-term investments that carry high risk. However, they also provide the opportunity to make great gains rapidly. The person involved in speculation is called an investor.

Speculative Investment – an investment where all that matters, as far as the purchaser is concerned, is the short-term profit that can be made when it is sold. Traders in speculative investments are known as speculators. They are not interested in the annual income or dividends an investment may provide, but just its price fluctuation and making a profit.

SPIN Selling – a sales technique developed by Neil Rackham that uses four types of questions—Situation, Problem, Implication, and Need-Payoff—to understand customer needs, identify their problems, and offer tailored solutions, ultimately improving sales effectiveness and building better client relationships.

Sponsor – as a verb it means to pay for part or all of the costs involved in staging an artistic or sporting event in return for advertising. The person, company or entity that does this is called a sponsor. To sponsor may also mean to pledge to donate money to somebody in a charitable endeavor, such as offering to contribute a certain amount for each mile run in a marathon. A company that pays for the broadcasting of a TV program such as a soap opera is its official sponsor.

Spot Market – a public financial market where commodities and financial instruments are traded for immediate delivery, or two to three days at the most. Also called the physical market or cash market.

Spot Price – the market price at which something is bought and sold for payment and delivery now. The spot price contrasts with the futures price or forward price, which is the price at which an asset – a commodity, security or currency – can be purchased or sold for delivery at a future date.

Spread – the difference between the prices of one item or interest rate on different days, or two items or interest rates on the same date. The term can be used for insurance underwriting, share trading, bond values, or virtually any type of security or commodity.

Stability – something that most central banks and governments across the world strive for. An economically stable economy is one that experiences small changes in GDP growth rates, and long-term low inflation. For economic stability to exist in a country, it needs a stable political system, usually a free market economy, good levels of infrastructure, technological development, and human capital.

Staff – collective word for the people who work in an enterprise or organization. It can refer to all workers, or a particular group. As a verb, it means to supply a workforce, such as to staff a department. The term also has other meanings that are not people-related. These include a type of measuring rod, a stout stick that aids walking, a symbol of office, and a musical stave.

Stagflation – an economy is in a stagflation rut when GDP growth is either very slow or absent, unemployment is too high, prices are rising too fast, and demand is weak. Policymakers have a serious problem when stagflation strikes, because anything they do to bring down inflation is likely to slow down economic growth even further, kill demand, and exacerbate the unemployment problem – and any measures taken to address slow GDP growth, unemployment, or demand will push up inflation.

Stakeholder – anyone (or group of people) who have an interest in a company or organization are considered to be stakeholders.

Standard of Living – a measurement that tells us how well the citizens of a country, region, or town live. It refers to people’s levels of wealth, how much they possess (material goods), their levels of health and access to healthcare, education, etc.

Standby Credit – funds made available to lower income nations that find themselves with temporary balance of payments problems, or experience unforeseen catastrophes, such as floods or earthquakes. An example is the IMF Standby Credit Facility.

Staph Infection – an infection caused by Staphylococcus bacteria, leading to skin infections, pneumonia, blood poisoning, or even endocarditis; treatment involves antibiotics or drainage, with resistance a growing concern.

Startup – a new company that an entrepreneur has set up (sometimes a group of them). Startups differ form other new businesses in that venture capitalists like to invest in them. The founder wants the company to grow fast and one day become a giant multinational.

Statistical Learning – in computer science, the term refers to a set of tools for understanding and modeling complex datasets. It is a fairly new area of artificial intelligence, together with machine learning.

Statistical Significance – refers to how reliable a statistic is. If something is statistically significant, it means that the finding is reliable and is highly unlikely to be the result of chance or happenstance. In the world of statistics, ‘significant’ does not mean ‘important’, it means ‘reliable’ or ‘unlikely to be due to chance’.

Statistics – has two meanings. In singular form it is the subject – e.g. statistics, economics, mathematics, biology, etc. In the plural form it refers to the numbers – e.g. statistics are pointing to an accelerating incidence of obesity across the country.

Statistician – a person who gathers, analyzes, interprets and presents numerical, quantitative data – statistics. They might work in a wide range of fields and sectors, including transportation, finance, government, education, forensics, astronomy, market research and many more. They need to be good at mathematics, dealing with people, and making presentations.

Steel – a versatile material that comprises mostly iron with up to 2% of carbon.

Sterilized Intervention – the buying of foreign currency by a country’s central bank to influence the value of the domestic currency, without changing the money supply. When the central bank purchases or sells some of its foreign currency reserves, the country’s money supply may be affected. This effect can be ‘sterilized’ if the government buys or sells the equivalent amount of securities, such as Treasury bonds.

Sticky Prices – prices that do not respond rapidly to changes in demand, supply, production or delivery costs. Sticky prices are the opposite of flexible prices. The price of a dollar in currency exchange markets is flexible – it changes by the minute. The prices of hotel rooms, on the other hand, take several months to respond to changes in the market’s environment – hotel rooms have sticky prices.

Stimulus – refers to something that provokes a reaction or response. In economics, it refers to actions taken by governments or central banks to promote economic activity.

Stockbroker – an individual who buys and sells securities, such as stocks and shares on behalf of private and commercial clients. They do this in return for a fee or commission. They may also trade on their own account and help companies issue securities.

Stock Index – a computed average of a sample of share prices, representing either a particular sector, market, the whole economy, a country, or a geographical area. Examples include the S&P 500 and FTSE 100. Also called a stock market index or a share index.

Stock Market – refers to the whole market where shares (stocks, equity) are bought and sold. The stock market includes what occurs in stock exchanges, as well as over-the-counter transactions.

Stocks – in finance, the term refers to company shares, hence the term ‘stocks and shares’ and the ‘stock market’. Stocks in a warehouse means goods stored for future orders or deliveries – a reserve of products for future use. Government stocks, in British English, refers to one of the bonds sold by the government to finance its budget deficit – government bonds. The expression on the stocks, which comes from shipbuilders, means ‘under construction’.

Stock Scanner – also called a stock screener, is used to filter stocks from major databases. Stock scanners give traders more manageable lists of stocks to work with.

Stock Split – an increase in the total number of a company’s shares outstanding, accompanied by a proportionate decline in the value of each share. Dilution does not occur in a stock split. Also known as a share split or stock divide.

Stock Swap – when a corporation offers a certain number of its shares for each share of another company. Often occurs during an acquisition. In most cases, some cash is also included in the transaction. Also known as a stock-for-stock, share-for-share exchange, or share exchange.

Storytelling Selling – or Storytelling in Sales, is a sales technique where you use compelling narratives to engage customers emotionally, making your product, service, or idea more relatable and memorable. By aligning stories with the customer’s needs and experiences, you build trust and create a stronger connection, ultimately driving more effective sales outcomes.

Strategic Selling – a sales approach focused on building long-term relationships and creating tailored solutions by understanding the broader business context and needs of key decision-makers.

Stress Testing – a series of simulated scenarios that banks, other financial institutions, investment portfolios, and even whole economies are exposed to, to determine how well they might fare against economic shocks. Ever since the 2007/8 global financial crisis and Great Recession that followed, financial institutions across the world have had to undergo stress testing, to determine their ability to deal with a simulated economic crisis.

Structural Unemployment – unemployment that is not caused by the cyclical changes in the economic cycle – such as declining demand – but rather from changes in the structure of the economy itself. Technological advancements, such as artificial intelligence and robotics, i.e. automation, can reduce the size of a company’s workforce. The workers who are laid off do not have the skills that employers are looking for, such as robot operators – so there is a mismatch between the available unemployed workforce and what companies are looking for.

Student Loan – a loan aimed at students that may be offered by the state or the private sector. Most of the advanced economies have state-funded student loan programs and grants and so do a growing number of emerging economies.

Subcontracting – the practice of hiring external firms or individuals to complete specific parts of a larger project, allowing for specialized expertise, resource efficiency, and often cost savings in project management.

Subprime Mortgage – a type of mortgage that is made out to borrowers who have a very low credit rating.

Subscription Business Model – a revenue model where customers pay a recurring fee (monthly, yearly, etc.) to access a product or service. This model allows businesses to generate predictable, consistent income while fostering long-term relationships and customer retention. Common examples include media streaming, software, and subscription boxes.

Subscription Selling – or Subscription Sales, is a business model where customers pay a recurring fee, typically monthly or annually, to access products or services. This model ensures continuous service for customers and predictable revenue for businesses, often used in digital media, software, and consumer goods industries.

Subsidiary – a company that is at least 50% owned by a parent company or holding company. The holding company has a controlling interest. The subsidiary can be any type of commercial enterprise, such as a limited liability company, a corporation, or a state-owned business.

Subsidy – money the government gives directly to companies, farmers, organizations, individuals and other entities to encourage production, increase exports, promote research, prevent companies from going bankrupt, reduce joblessness, or make the price of a food, product, service or utility more affordable. There are many types of subsidies.

Substitute Goods – often referred to as simply Substitutes, are two or more products that can replace each other; they can be used by consumers for the same purpose. Examples include Coke and Pepsi, Crest and Colgate (toothpaste), or MacDonald’s or Burger King hamburgers. When the price of one rises, demand for the other goes up – the two products have a positive cross-elasticity of demand.

Subtractive Manufacturing – or subtractive fabrication involves taking parts away from something to make an object. For example, when a lathe cuts away bits from a metal block. It is the opposite of 3D printing or additive manufacturing.

Sunk Costs – money that has already been spent which you will never get back; it is not recoverable. If a company spends money on research and development, advertising, or building a new plant, that expenditure has gone – it is not possible to claw back the money. Rather than continue funding a project which probably won’t help the company make money, senior management should cut their losses – accept the expenditure as a sunk cost – and focus on other things.

Supplier – a person, organization, or even a country that provides/supplies something to another person, organization, or country. Saudi Arabia, for example, sells oil to Japan. Saudi Arabia is the supplier while Japan is the buyer.

Supply – to provide something that is needed or wanted. To take over. A stock of something that is available for use. A substitute, as in ‘substitute teacher.’ Provisions, as in ‘we are running low on supplies.’

Supply and Demand – the most fundamental concept in economics is supply and demand, it plays a huge role in determining the prices of goods and services in a market economy.

Supply Chain – the whole process of making and selling commercial products. It includes every stage, from the supply of raw materials to delivering the product to the ultimate consumer. In other words, from the point of origin to the point of consumption.

Supply Chain Intelligence – the process of collecting, analyzing, and leveraging data from all stages of the supply chain to optimize operations, reduce costs, and enhance decision-making. It provides real-time insights, helping businesses to anticipate market changes, manage risks, and improve efficiency, ultimately leading to better customer satisfaction and a competitive edge.

Supply Chain Management (SCM) – supply chain management is a cross-functional approach, integrating activities into supply-chain processes. It is the management of the entire production flow of a good or service.

Supply-Side Policies – the term describes economic policies aimed at influencing output and employment through their impact on the supply-side of the economy. This contrasts with Keynesian economics, which focuses on demand-side policies – boosting demand. In the 1980s, US President Ronald Reagan and UK Prime Minister Margaret Thatcher pursued supply-side policies.

Surety Bond – an agreement between three parties – Principal, Surety and Obligee. The Surety is an insurance company that provides a financial guarantee to the Obligee (usually the government) that the Principal (business owner) will fulfill all their obligations. Essentially, a surety bond is a risk transfer mechanism. Evidence of a contract of suretyship dates back to 2750 BC.

Surplus – the condition where the quantity of a product or resource exceeds the demand or requirements, often leading to lower prices and stock accumulation.

Survey – a systematic method used to collect information, opinions, or data from a specific group of people, typically by asking questions. It can be conducted in various formats, such as online, by phone, in person, or on paper, to gather insights on specific topics or behaviors.

Sustainability – the responsible management of resources to meet present needs while ensuring future generations can also fulfill theirs, maintaining ecological balance and social equity.

Sustainable Growth – the term may be used for a company or a whole economy, and refers to its ability to grow consistently without hitting problems or creating problems for the future. Sustainable growth is also used when talking about the environment – specifically, economic growth over the long term without using up all the non-renewable resources, polluting the planet, or contributing to global warming.

SWIFT Code (BIC Code) – a SWIFT code contains 11 characters. It is a form of bank identification which helps facilitate international wire transfers.

Swift – a modern, open-source programming language developed by Apple Inc. for iOS, macOS, watchOS, tvOS, and beyond. It is designed to be powerful yet easy to read and write, emphasizing safety, performance, and software design patterns.

SWOT Analysis – a technique that helps people or organisations identify key strengths, weaknesses, opportunities, and threats. This type of analysis helps the individual or organization plan a strategy. We also call it a SWOT Matrix. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Syndicated Loan – also known as a syndicated bank facility, is a loan where a number of banks and/or financial institutions form a group (syndicate) and lend money to one borrower, usually a corporation, government or large project.

Systemic Risk – risk that could affect the whole economy, usually because a company that is ‘too big to fail’ collapses. Companies that are ‘too big to fail’ are typically major banks – if a major bank collapses, other banks that it owes money to will have problems, people get to hear about it and clusters of bank runs ensue…,etc. Governments will generally bail out a troubled large financial institution because of the systemic risk. Opponents say they shouldn’t, because knowing that they will be rescued encourages behaviors that increase systemic risk.

Systems Management – an IT term that refers to the centralized management of a company’s or any entity’s information technology. This ‘umbrella term’ comprises several tasks required to monitor and manage IT systems. Virtually every type of organization, such as charities, schools, universities, religious organizations, healthcare services and trade unions have personnel specialized in systems management.

Tailor Made – if my clothes are tailor made, somebody made them specifically for me – according to my instructions or preferences. Tailor made, custom made, or bespoke products contrast with off the shelf or off the rack goods.

Takeover – also called an acquisition, is when one company acquires the majority or controlling interest in another company, in most cases through the purchase of its shares. Put simply, when one firm buys another firm. There are many types: friendly, hostile, reverse and backflip takeovers. The purchasing company is known as the acquirer or bidder, while the company being bought is called the target. As a noun it is one word – takeover – but as a verb it consists of two words – to take over.

Talent Intelligence – the process of collecting and analyzing data on employees’ skills, experience, and potential from both internal and external sources. This information is used to make informed decisions about hiring, workforce planning, and talent development, helping organizations align their team’s abilities with business goals and ensuring long-term success and growth.

Tangible Assets – these are assets we can touch because they have a physical form, unlike intangible assets. Examples of tangible assets include land, buildings, equipment, cash, and inventory.

Target Account Selling – or Target Account Sales, is a strategic sales approach where companies focus their efforts on a select group of high-value accounts. By tailoring their sales strategies to meet the unique needs of these key prospects, businesses aim to maximize revenue, conversion rates, and long-term customer relationships.

Target Audience – the people who you believe are most likely to buy your product or service. They are the ones who will respond most positively to your message. Advertising campaigns are directed at them.

Tariffs – duties or taxes that are levied on imported products. The purpose is either to protect domestic suppliers and jobs at home, or raise revenue for the government. Tariffs and quotas are two weapons that countries can use to improve their balance of trade and protect domestic producers.

Tax – an amount of money that has to be paid to the government based on a person’s income, a company’s profit, how much a dead person bequeathed, or the cost of goods or services bought. Tax is compulsory. If you deliberately cheat the tax authorities and don’t pay, you could be facing a fine or even jail time.

Tax Avoidance – everything we do to reduce our tax bill, that is, everything we lawfully do. Tax avoidance, unlike tax evasion, is legal. If I want to avoid tax, I need to find an accountant who specializes in taxes, and ask him or her to advise me on how to reduce my tax bill.

Tax Evasion – illegal methods used to not pay tax. Examples of tax evasion include circumventing or frustrating tax laws, deliberately understating taxable income, willful non-payment of taxes that are due, and hiding your money.

Tax Haven – also known as a secrecy jurisdiction, is a country, territory, or part of a country that offers very favorable tax rates and other conditions, especially to foreigners who deposit their money there. Tax havens are commonly used by tax avoiders and tax evaders, who place their money there legally or illegally (respectively).

Tax Return – an official form that taxpayers fill in with details of their income and personal situation. It helps people and businesses calculate how much tax they owe or are owed.

Team Selling – a collaborative sales strategy where multiple professionals work together to close deals, leveraging their combined expertise and skills to address complex customer needs, improve efficiency, and enhance overall sales performance.

Technology – the application of scientific knowhow for practical purposes. If you solve practical problems using your scientific knowledge, you are using technology. It has been with us since we first set food on this Earth.

Telecommunications – communicating at a distance. Also known as telecom, today the term usually means communicating over long distances using hi-tech equipment, such as satellites, fiber optics, mobile phones, laptops, the Internet, TV or radio broadcasting, and telegraphs. It all started off many thousands of years ago with smoke signals and beating drums.

Telecommuting – also called teleworking, means working away from the office, remotely, which in the majority of cases means working from home. The person engaged in telecommuting is called a telecommuter or teleworker. Telecommuting has become much more common since the Internet emerged at the end of the last century.

Telemarketing: refers to contacting potential customers, usually by phone, in order to get them to buy something, pay for a service, contribute to a charity, reveal their preferred party in the next elections, provide feedback, make an appointment, receive a free sample, or to take part in a survey. Telemarketing can be business-to-business (B2B) or business-to-consumer (B2C). The term may also refer to using fax or the Internet for marketing purposes.

Teleworking – also called ‘telecommuting’, means working remotely. This could be working at home, in a cafe, in a designated work center, on a train, etc. A person who teleworks is a teleworker or telecommuter. Teleworking is becoming progressively more popular in most parts of the world. It offers several advantages to both the employer and employee.

Tenant – an individual or entity that leases property from a landlord for residential or commercial use.

Testimonial – in the world of business and marketing, refers to a written or spoken statement from a satisfied customer endorsing a product or service, often used to build trust and credibility with potential customers.

Text – a short message that one cell phone can send to another. Texting is the act of sending and receiving such messages.  The term can also refer to an extract, passage, or body of writing, either handwritten or printed.

Third Way – an ideology that is at the center of the political-economic spectrum. The Third Way is neither socialism nor capitalism, it is eclectic – it takes from both left-wing and right-wing approaches, combining the two into a middle way. The Third Way was initially promoted by US President Bill Clinton and British Prime Minister Tony Blair in the 1990s, and then the German, Italian, Dutch and other European leaders. Today, the Third Way is rarely mentioned – some say its outlook is bleak.

Threshold – the point at which something changes or begins to belong to a particular class. Tax-free threshold is the amount of income for which no income tax is payable. Your pain threshold is the level at which pain starts to be felt. People with a low fear threshold get scared easily.

Tidal Power – or tidal energy is a type of hydropower. With tidal power, we capture the energy in moving water and convert it into electricity. It is a type of renewable energy, i.e., its source never runs out.

Tier 1 Capital – this is a bank’s core capital. As opposed to Tier 2 capital, it is considered to be more reliable.

Tier 2 Capital – an element used to measure a bank’s total capital base. This form of capital is considered to be riskier than Tier 1 capital.

Time Value of Money – the concept that money has a higher value today than at any future date, because it can grow with time. Also called present discounted value.

Tip – the word may mean a gratuity (money) that you give to a waiter or hairdresser, or the pointed end of something. It may also refer to a useful piece of advice or information. If a room is a tip, it means that it is a mess.

Title Loan – a type of secured loan in which the borrower puts up a possession, such as a vehicle, as collateral. If the borrower defaults, the lender can seize that item.

Top-Down Investing – a strategy that starts with analyzing the global economy, then sectors, and finally individual stocks, prioritizing macroeconomic over company-specific factors in the investment decision-making process.

Tort – a civil wrong that causes somebody loss or harm. Tort law aims to prevent future occurrences and to compensate the harmed party or parties.

Total Return – the actual rate of return of an investment, calculated by including interest, dividends, capital gains, and distributions realized over a specific period. It is the total return on an investment or portfolio of investments that takes into account both the capital appreciation on the portfolio as well as the income received on it.

Toxic Assets – financial assets whose value has declined significantly, will probably continue falling, and for which there is no longer a functioning market.

Toxic Debts – debts that are not likely to be paid back to borrowers. Essentially toxic debts are a class of assets that were once of value (or were believed to hold value) but are now worthless or have almost completely declined in value.

Track record – a reference to past performance that people often use to imply that future performance will be similar. A management consultant, for example, may assure clients that they are right for the job because of their track record of success in their industry.

Trade – the activity of purchasing, selling (exchanging) goods or services within a country or between nations. Trade may also refer to the volume of activity within a business enterprise, industry, etc. A trade may be a particular skilled job, especially a manual one. It also means to buy-sell shares, bonds and other financial instruments on a stock exchange.

Trade Agreement – a legally binding pact between two or more countries that sets terms for mutual trade, typically aiming to reduce or eliminate tariffs and regulate market access.

Trade Area – also known as a market area, is the area in which a company does business; its commercial territory. The trade area of a shopping center, wholesaler, or department store is the geographical area where sales are made. Trade areas tend to be smaller for cheap, everyday goods, such as groceries and gasoline, and larger for more expensive items, such as furniture. In other words, we are willing to travel further to buy expensive dining room furniture than to fill our cars with fuel.

Trade Barrier – a government-imposed restriction on the international exchange of goods and services, aimed at protecting domestic industries and controlling economic activity across borders.

Trade Credit – an arrangement whereby customers can pay for goods or services received at a later date, generally 30, 60 or 90 days later. For many businesses, it is a useful way of improving cash flow.

Trade Deficit – also known as a trade gap, it is defined as being a negative commercial balance. It occurs when a nation imports more products than it exports.

Trade Show – also known as a Trade Fair or Exposition, is an exhibition in which many businesses promote their goods or services. Most of them focus on a particular market sector or industry.

Trade Surplus – a positive measurement of a country’s balance of trade. Specifically it refers to a positive balance of trades – when a country exports more than it imports.

Trade Union – a group of workers that collectively tries to improve or maintain their wages and workplace conditions.

Trademark – spelled as such in the USA, ‘trade-mark’ in Canada, and ‘trade mark’ in the rest of the English-speaking world, is a symbol or sign used to distinguish a company’s goods or services from those of other businesses. The trademark is legally registered or established by long-term use as representing a product or company.

Trader – somebody who buys and sells goods or services. A person who buys and sells cattle is a cattle trader. In finance, a trader is somebody who purchases and sells financial instruments. There are other types, such as market traders and sole traders.

Trainee – an individual in the process of acquiring skills and knowledge through practical experience for a specific job or career path.

Training – the action of teaching a person a specific skill. The term also refers to teaching a specific type of behavior. People or animals can be trained. In companies, training programs aim to improve a worker’s capacity, performance, productivity, or capability.

Transactional Selling – a sales approach that focuses on making quick, individual sales rather than building long-term relationships. It emphasizes efficiency, volume, and closing deals swiftly, with minimal customer engagement and follow-up. This method is common in retail and other high-volume sales environments.

Transaction Costs – costs incurred by purchasers and sellers during trading, apart from the price of the good that is changing hands. Transaction costs may refer to an underwriter’s fee, lawyer’s fee, broker’s fee, or other financial intermediary charges. When deciding whether your company should make something or buy it, transaction costs are a critical factor.

Transition Economy – a country that is changing from being a communist state to having a free-market economy. The nation’s economy is moving from one where the state planned everything to a capitalist or mixed-economy system – where market forces determine what happens. Examples include Russia, China, Vietnam, Ukraine, Poland, Laos, Cambodia, Hungary, Romania, and the Czech Republic.

Transparency – in business, the term refers to the extent to which investors, shareholders and other stakeholders have ready access to a firm’s or market’s data, such as price levels, market depth, financial reports, and other planned actions. In government, transparency refers to how much data a nation’s government shares with its people.

Treasury Bills – these are short-term maturity promissory notes that national governments issue to raise funds or regulate the money supply through open-market operations. Time to maturity may range from a few days to fifty-two weeks. They contrast with treasury notes and treasury bonds, whose time to maturity range from 1 to 10 years and more than ten years respectively.

Trend – a general direction into which something is veering toward, developing, or changing. It may also mean a fad or craze. In financial markets, a bullish trend exists when prices are rising, while a bearish trend is when they are falling.

Trials – tests of quality, suitability, or performance of people or things. A trial in a court of law is where the formal examination of evidence occurs before a judge, and often a jury. Horse trials are equestrian events in which horses and their riders take part in several different contests. When we test new drugs and treatments on human volunteers, we call them clinical trials.

Trough – in economics and statistics, it is the point in the business cycle between the final part of a recession and the beginning of accelerating GDP growth. In a graph, the trough is the bottom of the ‘V’ shape, where the falling and rising lines meet. In non-business English ‘trough’ has many meanings, including the narrow, open container that animals eat/drink from; a long, narrow container used for growing plants; the lowest part of two waves in a sea or lake; a long hollow in the Earth’s surface; a channel that water flows through; and in medicine, the lowest concentration of a drug in a human’s bloodstream.

Trust – the firm belief in the truth, reliability, or ability of something or somebody, is one of the most important ingredients for a successful business. Without trust, our world today would be a very different place – significantly poorer and more backward. A trust may refer to an arrangement in which one person – the trustor – gives control of his or her estate/property to a trustee for the benefit of a third party – the beneficiary.

Trust Fund – or ‘Trust‘ is a fund where assets are transferred to be managed by a trustee. The trust aims to benefit either a person, organization, or charity. There are three people in a trust fund: 1. The grantor. 2. The beneficiary. 3. The trustee.

Turnover – the total revenue generated by a business through sales, or the rate at which employees leave and are replaced within an organization. It is used in finance to measure sales efficiency and in HR to indicate staff retention and recruitment dynamics.

Uberrimae Fidei – Latin for ‘utmost good faith.’ The term refers to insurance contracts. The insured must disclose everything that is pertinent to his or her insurance policy. If anything is held back, the policy is voidable, i.e., may become invalid. We also use the term uberrima fides.

Ubiquitous – refers to something that seems to be everywhere or seems to have the ability to be everywhere at the same time, i.e., omnipresent. In computer technology, the term refers to the interconnection of all electronic and electrical devices. That does not just mean computers, tablets, and smartphones, but also refrigerators, microwave ovens, and other devices we have at home, in the office, and outside.

Ullage – the air space between the fill level in a bottle of wine, for example, and the cork. Ullage or headspace is the air space at the top of a container that holds a liquid. In shipping, the container may also hold grains.

Ultimate Consumer – the person or entity that consumes or uses a product or service. They do not buy it and then sell it on or give it to somebody. The person who buys something, the customer, is not always the same person as the ultimate consumer. A mother buys baby food, but the ultimate consumer of it is her baby.

Ultra-Short Bond Fund – a type of bond fund that solely invests in fixed-income instruments that have very short-term maturities of no longer than a year.

Ultraviolet Radiation – comes from the Sun in the form of sunlight. Ten percent of the Sun’s light consists of ultraviolet radiation or UV radiation. UV radiation can darken our skin and burn it. It can also cause skin cancer, aging of the skin, as well as eye cataracts.

Umbrella Policy – an extra liability policy. With an umbrella policy, the insured continues receiving payment for liability after the primary policy has reached its limit. This type of policy protects people who believe they are at high risk of claims and lawsuits.

Uneconomic Growth – economic growth that leads to more harm than good. Perhaps the harm is environmental, economic, or social. If a country’s economy grows too rapidly, for example, the consequence could be a severe downturn that results in a long-lasting recession or depression. Excessive pollution is often the result of rapid GDP growth in many emerging economies.

Unemployment – occurs when people don’t have jobs and are seeking work. The unemployment rate is calculated by dividing the total number of unemployed by the number of people in the labor force. Unemployment can also mean unemployment benefit.

Unemployment Insurance – money and benefits eligible people receive when they become unemployed. We also call it benefits, UI, or unemployment compensation. To be eligible, you must have become unemployed through no fault of your own.

Unemployment Trap – when people are disuaded from taking a new job because their loss of unemployment benefits would leave them worse off. In other words, a situation in which your current standard of living, as an unemployed person on welfare, is better than it would be if you took a low-paying job. Unskilled workers and young adults are more likely to find themselves stuck in the unemployment trap.

Underlying Asset – a security (such as a stock) on which a derivative is based – determining its price.

Underground Economy – the part of the economy that the authorities know nothing about. People who work in the underground economy, also called the black economy, the informal sector, and the shadow economy, do not declare their income – they pay no tax on what they earn; this is illegal.

Underwriter – a professional who assesses and evaluates the risk of insuring a person, asset, or financial instrument. They determine the terms and conditions of insurance policies, loans, or securities, including the price and coverage. Underwriters play a crucial role in ensuring that agreements are fair and sustainable for both the company and the customer.

Underwriting – the process of determining whether a customer is eligible to receive capital from corporations and governments that issue securities.

Unicorn – a startup that is worth more than $1 billion. The number of unicorns appearing each year is growing rapidly. We also use the terms unicorn company or unicorn startup.

Union – 1. A workers’ trade union is an organization that represents workers and tries to get their employers to pay and treat them well. 2. A marriage is a union of two people. 3. A union can be a society or association of like-minded people. 4. In 1707, the Sottish and English parliaments united. We call this ‘The Union.’

Unique User – also called a Unique Visitor, is a website visitor who is only counted once during a period of one day, week, or month. It tells us how many different individuals visited a website during a specific period. It contrasts with the term ‘visit,’ which simply tells us how many times a website is visited.

Universal Bank – a bank that offers retail, wholesale, and investment banking under one roof. The world’s largest banks are universal banks.

Universe – everything that exists, including space, time, all matter, and energy everywhere. All the planets that exist, plus all the stars, galaxies, and other celestial bodies make up the universe. If I say ‘My universe,’ I might mean ‘my world,’ as in “My family is my universe.” In statistics, universe represents all possible elements in a set.

University – an educational institution where people study for bachelors and masters degrees. People also study for doctorates (Ph.D.) at university. Apart from teaching, universities also carry out research.

Unknown unknowns – things we neither understand nor are aware of. The term also refers to future situations or events that we cannot predict or plan for. In fact, we don’t even know where or when to look.

Unlimited Wants – the term refers to humans’ insatiable appetite for things. We are never satisfied – we always want more. However, the resources available to satisfy those wants are limited. The two halves of scarcity are limited resources and unlimited wants.

Unprofitable – (of a business/activity) not making a profit or yielding financial gain. It also means, when referring to just an activity, not useful or beneficial. It is the opposite of profitable. No commercial enterprise aims to be unprofitable; they all want to be profitable.

Unsecured Loan – a loan with no security (collateral) or guarantor tied to it. The lender risks losing all its money if the borrower defaults. Also known as unsecured debt.

Unskilled Labor – members of the workforce who have no special training or skills. The term also refers to jobs that require no special training or skills. Unskilled labor contrasts with skilled labor or highly-skilled professionals.

Unsustainable – refers to anything that we cannot keep going in its current state or at its current rate. In other words, it is not ‘sustainable.’ For example, oil, butane gas, and coal are unsustainable energy sources. They are unsustainable because they will run out, i.e., they will not last forever. We cannot continue using them at current rates forever. They contrast with sustainable energy sources, such as sun, wind and hydro (water) power.

Unwholesome Demand – demand for things that are bad for us or society. The demand is there despite warnings. Groups warn people, for example, that smoking is bad. However, there is still demand for cigarettes, i.e., there is unwholesome demand for cigarettes.

Upcycling – a type of recycling that produces higher-value products from items that would otherwise go to waste. To upcycle is to give new life to discarded objects. An example would be the creation of plant pots out of used tin cans.

Upper Class – the richest people in the country. There are three classes: 1. Upper class. 2. Middle class. 3. Working class. Members of the upper class represent a tiny proportion of a country’s population. However, they own a disproportionate percentage of its wealth.

Upselling – a sales technique where a seller encourages a customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale.

Urbanization – refers either to the migration of people from rural to urban areas or the growth of city populations. The current urbanization, which is occurring in most countries across the world, started during the industrial revolution.

Usability – the ease of use and learnability of something, such as a device or tool. In software engineering, usability refers to the degree to which specific consumers can use a program successfully and easily.

User Experience – an individual’s responses and perceptions resulting from the use or anticipated use of something, i.e., a product, service, or system. Our user experience is our overall experience of using something, such as a website, smartphone application, or computer software.

User Friendly – a term that describes a device, program, or system that is easy to learn how to use. It is easy and perhaps also enjoyable to use. Some people say that the term has been overused and is a cliché today.

U-Shaped Recovery – an economic period that begins with economic decline, i.e., a recession. Then there is a trough that lasts a long time. Finally, there is a gradual recovery. We also call it a U-shaped recession. U-shaped recoveries last longer than others, such as V-shaped ones.

Usufruct – a right to use, enjoy, and make money from a property that does not belong to you. The person with a usufruct can derive an income from the property, but cannot damage it.

Usury – the act of loaning money at exorbitant interest rates. The term may be used as a moral condemnation of the act, or to inform about an illegally high interest rate. Originally, hundreds of years ago in the English language, ‘usury’ just meant lending money and charging interest, regardless of whether it was exorbitant or reasonable. Some countries have legislation to protect borrowers from abusive lenders.

Utilitarianism – a doctrine that suggests that the right action is the one that results in the most happiness for the greatest number of people. Conversely, a wrong action brings more unhappiness than happiness.

Utility – in economics the word refers to how much pleasure or satisfaction we derive when we consume a product or service, or experience an event. In business, a utility company generates, transmits and/or distributes utilities – electricity, gas or water. Utility may mean a computer program that improves the efficiency of an IT system. In patent law, the utility of a product refers to how useful it is – if an invention is not useful, it is virtually impossible to get it patented.

Utilization – the action of making use of something, i.e., using it effectively and in a practical way. It represents the percentage of total hours available that a machine, device, or person was productive, i.e., working. It also represents the percentage of all machines or people available that are currently working.

UX/UI – refers to User Experience (UX) and User Interface (UI) design, focusing on enhancing user satisfaction and interaction with a product, emphasizing usability, aesthetics, and efficiency.

Value Added – there are many meanings. 1. In economics, it is one industry’s contribution to a nation’s gross domestic product. 2. In accounting, it can mean the same as gross income. 3. In marketing, it is the extras that are added on to a basic product to make it more attractive for consumers, so that they buy it. 4. Value added agriculture is the value that can be added to a basic agricultural product by changing or transforming it from its original into a more valuable state, such as from wheat-to-flour-to-bread.

Value Added Tax (VAT) – VAT is an indirect consumption tax charged on goods and services. It is levied at each stage of a product or service’s production or distribution.

Value at Risk (VaR) – a widely used risk measure of the risk of loss on a specific portfolio of financial assets over a specific period. It did not emerge as a distinct concept until after the 1987 stock market crash.

Value for Money – the optimal combination of cost, utility, and durability, offering the consumer the highest level of satisfaction and efficiency for the price paid.

Valuation – an estimate of how much something, such as a business, antique, property, financial asset, or work of art is worth. Examples of financial assets include commercial enterprises, patents, trademark, stocks and options. Banks will not approve a mortgage unless a valuation of the property is carried out.

Value Chain – all the activities a company is involved in from buying raw materials to delivering the finished product or service to customers. Value chain also includes after sales service and/or after sales repairs. All the activities are interlinked, and if analyzed carefully and tweaked properly, can give the company and its products an advantage over its competitors in the marketplace.

Value Investing – a system of making money by purchasing securities for less than they are worth. Value investing emerged after the publication in 1934 of ‘Security Analysis’, written by Benjamin Graham and David Dodd.

Value Selling – also known as Value-Added Selling, is a sales technique in which the seller focuses on the benefits of the product or service when talking to the customer or prospect, rather than just its features.

Value Proposition – a promise of value to be delivered, communicating the main reasons a product or service is attractive to customers.

Vaping – inhaling and exhaling an aerosol solution, which often contains nicotine, using an e-cigarette or vape pen. Many people turn to vaping as a less unhealthy alternative to tobacco smoking.

Variable Costs – relate to the costs that go up and down according to levels of production. When production is increased variable costs rise, when production declines variable costs go down – unlike fixed costs, which rarely change from month-to-month. Examples of variable costs include labor and materials used for production, while rent, insurance premiums and utilities are examples of fixed costs.

Variable-Rate Mortgage – a home loan whose interest rate can change, usually as a result of fluctuations in the base rate. In the United States, the term adjustable-rate mortgage (ARM) is more common.

Variance Analysis – the process of comparing actual financial performance to planned or budgeted figures to identify differences, known as variances. This analysis helps businesses understand why performance deviated from expectations, enabling them to make informed decisions, control costs, and improve future planning by identifying areas of efficiency or inefficiency in operations.

Veblen Goods: – luxury items whose prices do not follow the normal microeconomic laws of supply and demand. When the price of a Veblen good rises, demand for it increases. Examples of Veblen goods are luxury yachts, designer handbags, diamonds, expensive Swiss watches, certain vintage wines, and ultra-expensive cars. People buy Veblen goods either because they think their quality is superior, or they want to show off – they are status symbols.

Vehicle – any device (machine) that transports humans, animals, and goods. Examples include bicycles, motorbikes, cars, buses, trucks, airplanes, watercraft, and spacecraft. Some dictionaries limit the definition to devices that travel only on land.

Velocity of Circulation – also known as the velocity of money, refers to how much money is in circulation within an economy over a given period, i.e. how fast it is moving. Velocity of circulation is the driver of prices, rather than the amount of money in an economy. Economists use this measure to determine how healthy an economy is, and whether inflation is expected to rise.

Venture Capital (VC) – financial capital provided by investors to small businesses that are believed to have long-term potential. It is a type of private equity. Venture capitalists typically see thousands of proposals and just back a couple of dozen.

Venture Capitalist – a person who invests in a new business venture, i.e., a startup or a young company. The term may also refer to a company with venture capital ready to invest.

Vertical Equity – the principle that better-off people should contribute more in taxes to the government than others, and that middle class individuals should pay more than working class people, etc. Proponents say this system is fairer and reduces inequality in societies. Those against it say it discriminates against hard workers and rewards people who work less. In most countries there is a vertical equity income tax system.

Vertical Integration – refers to a company that merges with another one in the same business but in a different stage of the supply chain. For example, if Company A, a fashion retail chain, mergers with Company B, a manufacturer of clothes, that is vertical integration. It can be achieved by either merging, acquiring other companies, or setting the whole thing up internally. There are three types of vertical integration – backward, forward or balanced integration.

Vertical Market – this is a niche market, with buyers and sellers that make similar products and have virtually identical needs. Often, the term refers to a subcategory of an industry or sector. For example, a maker of artificial limbs operates in a subcategory of medical devices.

Viability Study – an in-depth study of an idea, proposal or project to determine how ‘viable’ or profitable it could be. The study also tries to determine whether it is possible to convert the proposal or idea into a going concern (successful business).

Viable – capable of working or existing successfully. In biology, a seed that can germinate is a viable seed. A viable fetus or newborn is one that can survive outside the uterus. A viable business is one that is expected to be profitable for a long time.

Virtualization – the process of using physical resources to make a virtual environment consisting of operating systems, networks, and storage media.

Virtual Reality – or VR is computer technology that makes people feel like they are in another place, i.e., another environment. VR uses software to produce images, sounds, and other sensations to create a new, simulated environment. Users feel as if they are inside this simulation.

Virus – an infectious agent that replicates inside living cells of organisms and can make them ill or even kills them. A software program that gains unauthorized access into a computer system causing damage or disruption.

Visa – 1. An endorsement by a foreign country allowing you to enter or leave. Visas also exist as work permits, study permits, and other purposes. 2. A credit, prepaid, or debit card with the Visa symbol.

Visible Trade – the importing and exporting of goods, tangible products, merchandise, things you can see and touch such as smartphones, automobiles, ships, coal, coffee, oil, etc. Visible trade contrasts with invisible trade, which refers to services, such as tourism, royalties and licence fees, software, consultancy, advertising, etc.

Visual Aids – tools that present information graphically, enhancing comprehension, engagement, and retention, including charts, infographics, videos, and models, used to clarify and support verbal or written communication.

VOIP – which stands for Voice over Internet Protocol, is a new technology that allows us to talk to each other and send files via the Internet. Skype, for example, uses VoIP. It is much cheaper than using a traditional landline.

Volatility – a measurement of the fluctuations of the price of a security. It is essentially an analysis of the changes in the value of a security. It is one of the most key measures in quantifying risk. In business/finance the term can also refer to fluctuations in currencies, markets, property prices, etc.

Volcker Rule – a federal regulation that prohibits banks from engaging in certain types of speculative investment activities. It was proposed by former United States Federal Reserve Chairman Paul Volcker following the 2007-2008 financial crisis. He wanted to stop commercial banks gambling with depositors’ money in the markets.

Voluntary Unemployment – the part of the unemployed population that consists of people who opted not to work, although there are jobs available. Voluntary unemployment includes frictional unemployment – people who are between jobs, they are searching for a job, going to interviews, etc. Those in the unemployment trap – the ones who choose to remain unemployed because they think they are financially better off on unemployment benefits than taking a low-paying job, also form part of the voluntary unemployment total.

Voucher – the term has several meanings: 1. A small printed piece of paper or plastic that entitles the holder to either a discount or free product or service. 2. In the US, a scholarship to a private school. 3. In accounting, an internal document used in the accounts payable department. 4. A credential – a piece of evidence, proof, or authorization in writing. Although there is technically a difference in meaning between voucher and coupon, today the two terms are commonly used interchangeably.

Voyage Policy – an insurance policy that covers loss or damage to cargo that is being transported by ship (by sea). We also refer to it as marine cargo insurance. The policy covers the cargo during the sea voyage, but not the vessel (ship).

VPN (Virtual Private Network) – a service that provides users with safe and private access to the World Wide Web, i.e., they can go online anonymously and safely. Nobody can find out who they are because the VPN system does not allow it.

V-Shaped Recovery – a period of sharp but brief economic decline and then a short trough. This is followed by a rapid recovery. The V-shaped recovery is the most common pattern that the advanced economies follow. We also call it a V-shaped recession.

Vulture Funds – mutual funds which invest in high risk financial instruments issued by distressed countries or businesses. Distressed, in this context, means in or near bankruptcy. Vulture funds is a derogatory term.

Vulture Investor – a person or organization that specializes in purchasing assets and financial instruments belonging to companies or people in trouble.

Wage – in business, a wage is the money that an employer pays an employee for work done. Wages are calculated on an hourly, daily, weekly or monthly basis, as opposed to salaries, which are calculated monthly or annually. Sometimes wages are linked to production, i.e. piece rate. The article also briefly explains some other non-business meanings of the term.

Wage Drift – the difference between the basic wage bill and the final earnings bill. Not every month is the same – one month employees in a company or industry may work a lot of overtime, while in another month there may be very little or no overtime at all. Apart from overtime, bonuses, profit share, and other financial benefits that are added to workers’ basic pay determine how big or small the wage drift is.

Wage ratio – the ratio between the top salaries in a company and its bottom salaries. If a CEO earns $2,000,000 per year, and the average worker pay in the company is $50,000, the wage ratio is 20:1. The term pay ratio has the same meaning.

Wage Theft – the illegal practice of withholding wages from an employee. It also includes not paying them overtime when they work extra hours, and other violations of workers’ rights.

Wager – can be a verb or a noun, and means ‘a bet’ or ‘to bet’. For example, if I say “In yesterday’s horse race I put a cash wager of $100 for GoldFinger to win,” it means “I bet $100 on Goldfinger in yesterday’s horse race.”

Waiver – a voluntary surrender or relinquishment of a known right or privilege. It may refer to the action itself or a document that states it. In insurance, a waiver is a supplementary clause or agreement, attached to a policy, that excludes it from specific losses, limits the amount that may be claimed, or extends cover to include extra items (that are not included in the list of a standard policy).

Wallet – a small, flat case used for keeping paper money in, as well as bank cards, loyalty cards, small documents, business cards, driving licence, and maybe some form of photo ID. Wallets are generally made of fabric or leather, most of them are pocket sized and foldable (not always). An e-wallet is a software program that helps us shop and make payments online.

Wall Street Crash – America’s most severe stock market crash in its history. In October 1929, share prices crashed, and continued declining for several years. It caused the Great Depression, which lasted right up to the beginning of WWII (1939).

Warehouse – a large, usually plain-looking building used for storing goods before they are sent to shops, exported, imported, sold or used. A warehouse may refer to a retail outlet, as in: “I purchased this dining room furniture from a huge furniture warehouse 2 miles out of town.”

Warehousing – this word has two meanings. 1.Everything to do with keeping goods and materials in a warehouse; unloading and loading them from trucks, trains, airplanes, etc. 2. Gradually and surreptitiously purchasing shares in a company over time with the aim of eventually acquiring it completely. This is often an illegal activity, especially if you do not declare a more than 5% stake in your target company.

Warrant – can mean: 1. A security that entitles the holder to buy shares in a named company at a certain price up to a specified date. 2. A legal writ (authorization) – issued by a court – that gives the holder the right to search a premises/person (search warrant) or arrest an individual or people (arrest warrant). 3. A certificate of appointment which is issued to a non-commissioned officer in the military. 4. In philosophy, it refers to the justification for holding a belief.

Warranty – a written guarantee, pledge or promise, issued by the manufacturer, supplier, retailer, or distributor of a good or service that any defect or flaw will be repaired, the item will be replaced, or the consumer will be refunded. The promise has a time limit. In contracting, a warranty is either an implied or expressed understanding that certain facts related to a subject matter in the contract are true or will happen.

Wash Sale – a sale of poorly-performing stocks, bonds or options (securities) at a loss and repurchase of the same securities or very similar ones within thirty days. Investors used to use the wash sale strategy to try and recognize a tax loss, while in fact their position had not changed. Tax authorities in several countries introduced new rules which mean that the loss can no longer be claimed.

Wash Trade – a kind of market manipulation in which traders buy and sell the same financial instrument at the same time. This is often done to give others the impression that the security is in greater demand than it actually is. During the Libor Scandal, some participants were doing this. The term may also be referred to as round trip trading.

Wastewater Management – the process of treating and disposing of water that has been contaminated by human use.

Water Pollution – the contamination of bodies of water such as aquifers, oceans, rivers, lakes, and groundwater. Pollutants are either directly or indirectly discharged into water bodies without water treatment being able to remove the harmful compounds fast enough. Some studies have shown that we are now using our oceans as dumping grounds.

Waterfall Payment – a system of paying back debts in which the higher-tier lenders (senior creditors) receive principal and interest payments from the borrower – in full – first, while the lower-tiered lenders (subordinate creditors) get paid after. The subordinate lenders will get nothing if there is not enough money to fully meet the obligations with the senior lenders.

Watering Hole Attack – hackers target people who regularly visit a particular website, in the same way crocodiles target prey that comes to a watering hole. They load malicious software onto the website, which surreptitiously makes its way into visitors’ computer systems.

Wave Damage Insurance – insurance coverage against damage to an insured property from high waves or tides.

Wave Energy – also known was Wave Power, is the process of generating electricity by harnessing the natural movement of ocean waves. It involves capturing the kinetic energy from waves and converting it into electrical power using devices like floaters or buoys, which are typically attached to marine structures such as breakwaters or piers.

Wealth – the term has several meanings. In general, it refers to tangible and intangible items that make countries, towns, companies, households, and individuals better off – richer. In accounting, it refers to all assets minus liabilities, i.e. net worth. In economics, the assets of a country, for example, are those economic units that generate income or have the potential to one day generate income.

Wealth Effect – a theory which states that people spend more when the value of their property or investment portfolios increase in value. When the value of our bonds, stocks, property or other assets appreciate, we feel richer, and go out or online and spend more. It is the opposite of the negative wealth effect – when we spend less because our assets have declined in value – we feel poorer.

Wealth of Nations – a magnus opus (great work) of Scottish economist Adam Smith; published in 1776. In his work, known formally as ‘An Inquiry into the Nature and Causes of the Wealth of Nations’, Smith laid the foundations of what is known today as classical free market economic theory. Economists call Smith the ‘Father of modern economics’.

Wealth Tax – a tax on the possessions of individuals who have a high net worth. It contrasts with income tax, which is levied on how much we earn. Wealth tax is a tax on our assets, including our cash, bank accounts, stocks and shares, bonds, properties, airplanes, cars, jewelry, antiques, works of art, etc. In most cases, wealth tax has brought in a disappointingly small amount of revenue for the government.

Wear and Tear – the damage to an item when it is used properly and ordinarily over a period of time. Wear and tear is the expected and normal deterioration in the quality of something that happens over time. In a warranty issued by a manufacturer, the term is used to mean that the product will be repaired, replaced, or the consumer will get his or her money back if it deteriorates more than expected over a given period.

Wearable Computer – a small computing device designed to be worn as an accessory on a user’s body, for example, on the wrist.

Web – also called the World Wide Web or WWW, is an information system that uses the Internet as a medium. It allows documents to be connected to other documents through hypertext links. Through the web, online users can search for data by moving from one document to another. The Internet is a network of networks, where hundreds of millions of computers are connected to each other, while the web is a system on the Internet for the sharing of documents (websites and web pages) and linking them to each other.

Web Design – the process of creating the visual layout and user experience of websites. It encompasses the planning and building of elements like structure, layout, images, colors, fonts, and graphics to ensure usability and aesthetic appeal for optimal user interaction.

Web Development – the process of creating and maintaining websites, encompassing front-end, back-end, and full-stack development to ensure functionality, user experience, and performance.

Website – also called a site, is a virtual location on the Web which contains at least one webpage and data files that online users can access through a browser such as Chrome, Explorer, Firefox or Safari. Each website has its own unique web address (URL). Website data is stored (hosted) in a server. A server is a computer that communicates with other computers. The terms webpage and website may be written as two words: ‘web page’ and ‘web site’.

Weighting – a statistical technique used in surveys in which an average is emphasized more than other data items that make up a summary or a group. If, for example, the sample population in a survey is not representative of the general populations – maybe there are too many young people – the respondents will be ‘weighted’ so that the results are not biased or inaccurate.

Weightless Economy – part of our economy with abstract products; things that have commercial value but we cannot touch because they have no mass. Information, ideas, knowledge and services make up the weightless economy. During the industrial revolution, nearly all innovation involved heavy physical products, such as locomotives, textile machinery, etc. Today, most economic growth occurs within the weightless economy.

Weight of Evidence – or WoE (WofE), refers to the persuasiveness and credibility of information presented as fact – how compelling it is – in many cases in comparison to other evidence. The term may be used when there are just two sides to an issue, or when there are more than two issues.

Welfare – this word has several meanings. 1. Government assistance in the form of money for vulnerable, poor or disadvantaged people. 2. The availability of resources and conditions needed to keep a human mentally and physically healthy, secure and comfortable. 3. Economic surplus. 4. Welfare Economics is a branch of economics that uses microeconomic techniques.

Welfare Economics – a subfield of economics that looks at how things affect human welfare and social conditions. Also known as economics with a heart, it includes the redistribution of wealth, making sure everybody has access to good education and healthcare, as well as other essential services.

Welfare State – a system in which the state undertakes to protect and maintain the well-being and health of all is citizens. People at the bottom of the socioeconomic ladder are entitled to financial help and other benefits. Health care and education are provided free of charge for all citizens. The welfare state emerged after World War II.

Wellness Tourism – refers to traveling for health and well-being reasons.

West Texas Intermediate (WTI) – a trading classification of crude oil and one of the most commonly used benchmarks in oil prices, alongside Brent Crude.

Wet Loan – a mortgage in which the money is released before all the documentation regarding the loan is completed. In the US, some states forbid wet loans. This type of loan is useful in a ‘seller’s market’, when the buyer needs to act rapidly. It is the opposite of a ‘dry loan’.

Wetting Ability – the ability of a liquid to spread evenly over another surface, rather than beading up. If you pour mercury onto a surface, you will see lots of mercury beads – mercury has extremely low wetting ability. Engine oil, on the other hand, will spread evenly – it has very high wetting ability. Water is somewhere in between mercury and engine oil; it has medium wetting ability.

Wharf – a level quayside area where ships may moor for loading, unloading, boarding, and disembarking. It is a man-made structure built in a harbor to provide berthing space for sea vessels. There are two possible plural forms: wharves or wharfs.

Wheel of Retailing – a major hypothesis regarding how retailers develop. According to the hypothesis, a newcomer will enter the market selling cheap items, has low status, and accepts tight margins. Gradually, that retailer raises prices and moves upmarket, until eventually it is an upscale seller. Then a newcomer arrives, sells at low prices, the upmarket retailer is vulnerable, and has to reduces prices.

Whipsaw – in financial English, the term refers to losses made by traders when they purchase a security or currency, expecting it to move one way, for example ‘up’, but it suddenly and unexpectedly moves the opposite way. When this happens and the trader incurs a big loss, we say he or she was been whipsawed. This occurs more often when the market is volatile.

Whisper Number – the unofficial and unpublished earnings per share forecast for a company whose shares are listed in a stock market. An investment house, website, or other financial firm gets the ‘gut feelings’ plus expert opinions of people in the investment community, and pass on this data – the whisper number – to its preferred clients, or in the case of a website, its paying subscribers. The whisper number contrasts with the consensus estimate, which is published.

Whistleblower – also written whistle-blower or whistle blower, is a person who reveals to the public unethical, improper, or criminal activity within a company, organization, government department or agency. In the majority of cases, the whistleblower works where the improper activity was witnessed. In the advanced economies today, and about fifty other countries, whistleblowers are protected by law – this was not the case a few decades ago.

White Collar – refers to a job type in which the worker does mental, non-manual, clerical/administrative work – in an office. A white collar employee typically works behind a desk and/or with computers. Blue collar workers use their hands, they do not work in an office, while pink collar workers (North America only) are women who work in the service sector.

White Elephant – something that was extremely expensive to create and requires a great deal of money to maintain. A white elephant is an expensive loss maker, nobody wants it.

White Goods – also known a major appliances, are large home appliances such as refrigerators, freezers, washing machines, air conditioners and dishwashers. Traditionally, they have been manufactured with a white-enamel surface, hence the term. Today, white goods can be purchased in virtually any color. They contrast with brown goods, which include TVs, radios, computers, and video game consoles.

White Hat – a cybersecurity expert specializing in ethical hacking, who uses their skills to identify and fix security vulnerabilities in systems and networks, ensuring protection against malicious attacks while adhering to legal and ethical standards.

White Knight – a company that comes in during a hostile takeover attempt and places a bid for the target company. The target company prefers the white knight to the black knight (the hostile bidder). A white knight may also be a company that steps in and saves another company from total collapse.

White Shoe Firm – a leading firm, typically based in Boston or New York, that has been around for at least a century, represents a Fortune 500 company, and used to be populated mainly by WASPs (White Anglo Saxon Protestants). The term originates from a type of white shoe worn by WASPy Ivy League students.

Whole Life Insurance a type of insurance which provides coverage throughout the policyholder’s lifetime – there is not set period. Premiums are generally fixed. In contrast with term life insurance, this type of insurance has a cash value which acts as a savings component and allows an individual to build up tax-deferred savings.

Wholesale Banking – the practice of borrowing and lending money on a very large scale. Unlike retail banking where small amounts of money are lent to individual customers, wholesale banking transactions are massive. Customers include governments, giant corporations, pension funds, and other financial institutions.

Wholesale Energy – the buying and selling (trading) of energy products in the wholesale market by energy producers as well as retailers. Banks and other trading houses use the wholesale markets to optimize assets, speculate on price movements, provide liquidity, and manage risk.

Wholesale Inventories – stock levels in warehouses. If stock levels are high, it means that retail demand (demand in shops) has been weak, conversely, if stock levels are low, demand in shops has been high. The US Census Bureau published the country’s wholesale inventories figures every month.

Wholesale Price – also known as the trade price, is the price that wholesalers charge for the goods that they sell to retailers. There are three price levels in an economy: 1. Produce Price – what manufacturers/farmers charge wholesalers. 2. Wholesale Price – what wholesalers charge retailers (shops). 3. Retail Price – what consumers pay in the shops.

Wholesaler – a person or company that buys goods in bulk from producers and sells them in smaller batches to retailers or other businesses, but never to consumers (people going shopping). The wholesaler is the middleman. The wholesaler buys each unit at a very low price from the producer, and sells them at a higher price to the retailer, who then sells them on at an even higher price to the consumer.

Wide-Body Aircraft – a jetliner (passenger jet airplane) whose fuselage is wide enough to accommodate two passenger airlines, i.e. it is a twin-aisle aircraft. This type of aircraft has from 7 to 10 seats across (abreast), compared to a narrow-body aircraft, which has a maximum of six. Wide-body aircraft are made by Airbus, Boeing, McDonnell Douglas, Ilyushin, and Lockheed.

Wide Economic Moat – a significant edge – a strong competitive advantage – that a company has over its rivals. A wide economic moat may consist of patents for high-selling products that have many years to go before they expire, state-of-the-art technology, or an excellent brand image. A wide moat tells investors that the company will thrive for many years to come. The term comes from moats that surrounded medieval castles to protect them against attacks by rivals and enemies.

Wide Market – a market with significant profit margins or a wide spread. The term is most commonly used in investment markets. When the spread – the difference between the bid and ask prices – is wide, there is a wide market. Wide markets tend to have less trading activity than ‘thin markets’.

Wi-Fi – a technology which allows smartphones, laptops, computers, tablets, video game consoles, printers, digital audio players, and other devices to communicate with the Internet without the need for cables or extra telephone lines. Wi-Fi devices use the same type of waves that microwave ovens do.

Wiki – a website whose content is created, edited and updated by the people who visit it. The users continuously change the website’s landscape. Ward Cunningham developed the first wiki in the 1990. The word means ‘quick’ in Hawaiian.

Wildcard – this term has several possible meanings. 1. The wildcard in a pack of playing cards may match any number, character, suit or value in a game – it is at the discretion of the player who holds it. 2. In sports, it may refer to an opportunity or invitation to compete in a tournament without having to go through the qualifying rounds or have achieved a specific ranking level. 3. In computing, a wildcard character is one that represents other characters, phrases, or numbers. In a Google search, you can use an asterisk (*) to represent several different possibilities. 4. A wildcard may be a person, thing, or event that is unpredictable or surprising.

Wildcat Business – a business venture where the possible outcomes are massive profits or the loss of the entire investment. If you are considering investing in a wildcat business, apart from wondering how much money you could make, remember that you are putting your whole investment at risk.

Wildcat Drilling – involves drilling for oil or gas in areas that geologists do not know much about – they are unproven or unexplored. Wildcat drilling is a very high risk venture, where investors can either make a great deal of money or lose their entire investment.

Wildcat Strike – a strike which has not been supported or authorized by the striking workers’ union. It is an unexpected, sudden strike which is technically illegal. In most of the advanced economies, employers have the legal right to fire workers involved in a wildcat strike.

Will and Testament – a document in which a people state where all their money and possessions should go after they die. It lists the names of individuals, organizations, charities, and other entities – known as the ‘beneficiaries‘. If you die without a will, you are said to be ‘intestate’. The terms ‘testament’, ‘last will and testament’, or simply ‘will’ have the same meaning.

Willful Default – or willful misconduct occurs when somebody deliberately fails to adhere to the terms of an agreement or contract. If I have plenty of money but fail to pay my monthly loan repayments, I do this on purpose and know it is wrong, I am guilty of willful default – I am a willful defaulter.

Willie Sutton Rule – also known as Sutton’s Law, states: 1. In Business – that you should seek out the most profitable activities. Go where the money is. 2. In Management Accounting – we should try to find savings in the most costly activities. 3. In Medicine – it refers to the principle of going straight to the most likely diagnosis, rather than looking at every single possibility. The term was named after something that Willie Sutton – a famous American bank robber – supposedly said.

Willingness to Pay – or WTP, is the most a consumer will buy something for. It contrasts with willingness to accept (WTA), which is the least a seller will sell something for. In marketing, knowing what consumers’ willingness to pay is, is crucial.

Wilshire 5000 – is an index that tracks the returns of virtually every US-based company that is quoted in a major stock exchange, such as the American, New York, or NASDAQ stock exchanges. Although it is not as well-known as the major US stock exchanges, it is the largest index by market value in the world. It is also known (more formally) as the Wilshire 5000 Equity Index, and is often referred to as the Total Stock Market Index.

WiMAX – is a type of wireless technology that provides Internet connectivity over significantly longer distances than standard WiFi does. WiMax, which stands for Worldwide Interoperability for Microwave Access, never became as popular as some experts at the beginning of this century had expected.

Wind Energy – capturing energy from moving air – wind – and converting it into electricity. Wind energy is renewable energy. We have been using it for thousands of years.

Windfall Gains – unexpected large amounts of money that we receive or win. If I won $10 million on the lottery it would be a windfall gain, as would a sizable inheritance. A windfall profit is a type of windfall gain if somebody bought something and then sold it for much more than he or she had expected. For example, if I sell a property during an incredible boom month, and make a huge profit, that is a windfall profit.

Windfall Profits – huge profits that businesses or individuals make unexpectedly. The giant profits are always the result of unusually-favorable circumstances for the seller. To be a windfall profit, the amount of money made needs to be considerably greater than the historical norm. Generally, when there are windfall profits, they are experienced by the whole industry (not always).

Winding up – is a way of shutting down a company by selling off its assets, paying off creditors, and distributing the net assets (whatever is left over). The net assets may be distributed in cash or kind. Liquidation has the same meaning. Dissolution is the final stage when winding up a company.

Window Dressing – is what accountants and portfolio or mutual fund managers do to make things look better than they really are. In accounting, it means the same as creative accounting. Accountants will deliberately position and date things in the books so that the company appears much more profitable that it really is. Mutual fund and portfolio managers typically sell off their badly-performing stocks and purchase high-flying ones just before the end of a quarter or financial year. In most cases, the practice is not illegal, but is frowned upon.

Window of Opportunity – a very short period which should be exploited if you want a desirable outcome. If the window of opportunity, also called a margin of opportunity or critical window is not seized, it will be gone as will that desirable outcome. The term is used in business, science, medicine, and everyday life.

Windstorm – a storm market by high wind and little or no rain. Most types of windstorms, such as cyclones and hurricanes, are not usually covered in standard homeowners’ insurance properties if they live in susceptible areas.

Winner’s Curse – being the winner is not always best; sometimes it is better to lose. The term refers to the hazards you face as a winner if, for example, you won a contract by offering prices that were far too low, or succeeded in bidding for something in an auction, but paid too much for it.

Winner-Takes-All Market – a market where the top player, or top few players, receive a disproportionate share of the total reward available. The rest of the competitors are left with extremely little. The term – winner-takes-all market – may refer to people, products or services.

Win-Win – a term used in game theory in which everybody wins. In a win-win negotiation involving two people, both parties come out on top – there are no losers. This contrasts with a zero-sum (win-lose) situation – with one winner and one loser – or a lose-lose situation – where everybody loses.

Wireless Application Protocol – or WAP, is a suite of emerging standards to enable end users view mobile devices such as tablets and mobile phones – mobile Internet applications. The wireless application was created in 1997, when the WAP Forum was formed by Unwired Planet, Ericsson, Nokia and Motorola. The convergence of wireless communications and the Internet has had a dramatic effect on the number of people going online with their mobile communication devices and the explosion of e-business and e-commerce.

Wireless LAN –  also called WLAN, is an IT term that refers to a LAN (local area network) that does not need cables to connect different devices such as laptops, smartphones, tablets, printers, etc., hence the term ‘wireless’. Instead of using physical wires, communication is achieved through radio waves and IEEE. 802.11.

Wireless Technology – technology that allows people or devices to communicate without using cables or wires. Wi-Fi and cellular networks, for example, are types of wireless technologies. The term also refers to being able to recharge smartphones and other devices without having to plug them in, i.e., without wires or cables.

Witness – the term has several meanings. 1. Somebody who testifies under oath in court during a trial. 2. A person who saw an event first hand. 3. An individual who observes somebody else signing a document or contract and signs it, attesting that the signatory was there. As a verb, ‘to witness’ means to see something happen first hand, or to be present when somebody is signing something and confirming it is their signature and they are who they say they are.

Wolfe Wave – a price action pattern made up of up to five waves that show supply and demand as price heads toward an equilibrium price. Forex traders, stock market speculators, and other investors are forever trying to identify and use Wolfe Waves to predict future prices. The Wolfe Wave was discovered (not invented) by Bill Wolfe, an S&P trader more than twenty years ago.

Word by Word – a system of alphabetizing lists in which the first word in a multiple-word entry determines where the term comes in the list. For example, when entering multiple-word terms whose first word is San or Santa, all the multiples with San are entered first, as in: San Cristobal, San Diego, San Victor and Santa Barbara. In a letter by letter system, on the other hand, the space between the two words is ignored, and the terms would be entered in this order: San Cristobal, San Diego, Santa Barbara and San Victor (santabarbara comes before sanvictor).

Word Processor – a term that refers to either software that people use for writing letters, documents, articles etc. on a computing device, or the hardware, such as computers and typewriters. Mechanical word processors – typewriters – have been around for hundreds of years. The most common word processing software is Microsoft Word, which was first launched in 1983.

Word of Mouth Marketing – also known as WOMM, is a marketing technique which encourages satisfied customers to talk about the product or service they purchased. It is considered the best form of promotion of a good, service, or brand. Even though the term ‘word of mouth advertising’ is commonly used with the same meaning, advertising involves payment. In cases of word of mouth marketing, the satisfied customer who comments on the product is not paid.

Words of Art – terms or expressions that are specific to a certain profession, activity, sport, or subject. A word of art (jargon) may have a different meaning when used within a profession from its use by lay people. For example, a cabbage is a vegetable in lay English, but in the medical profession it is a heart bypass.

Work – this word can have many different meanings. As a noun, it can mean an activity that requires mental and physical exertion in order to obtain a result, a job, one’s hours of employment, a task that has to be undertaken, a painting (work of art), or materials used in the workplace (he took his work home). As a verb or phrasal verb there are dozens of possible meanings.

Workaround – a way of successfully carrying out a task or achieving something when the planned or traditional way of doing it does not work. It is generally a temporary strategy – the cause or root of the problem is not dealt with; it is circumvented.

Work Cell – also written as one word ‘Workcell’, is a group of workers, machines, and other materials needed to perform a specific task. Work cells are used in many different types of organizations, especially manufacturing plants, in order to boost productivity, reduce costs, and minimize errors.

Workforce – encompasses all individuals engaged in or available for work, including both the employees of organizations and the broader pool of people in an economy seeking employment or actively working.

Working Capital – a measurement of how much operating liquidity an entity has. It is a measure of a firm’s liquidity, efficiency and overall health.

Work-life balance – the equilibrium between job and non-job roles. There is no consensus definition. Apportionment of time and conflict between the roles are key factors. The relative contributions that the roles make to satisfaction and happiness are also important.

Work Stress – stress that workers experience in the workplace. It is frequently triggered by unexpected responsibilities. Work stress, also known as occupational stress or work-related stress, can lead to serious physical and mental illnesses.

Work-Related Stress – stress that employees experience in the workplace. It is the negative reaction that we have when work pressures become too much. The terms occupational stress and work stress mean the same as work-related stress.

World Bank – a financial institution managed by the United Nations that offers loans to poor and emerging economies for capital projects. Formed after WWII, its initial aim was to finance the reconstruction of Europe and Japan.

World Health Organization – or WHO, is a UN specialized agency that is dedicated to international public health. It works with 194 Member States across six different regions.

World Trade Organization – or WTO, is a global organization that deals with the rules and regulations of international trade. It helps countries resolve international trade disputes. The organization says it aims to help the suppliers of products and services, importers, and exporters optimize how they do business.

Worm – this term may refer to a nasty bit of software designed to harm computer systems, a bad person, a small long, thing, snake-like animal found in soil, or a parasite. It is also a verb.

W-Shaped Recovery – a chart that shows two declines and recoveries in the economy; back-to-back dips and rises in economic activity. A W-shaped recovery, also known as a W-shaped recession, occurs during periods of extremely volatile economic activity – usually when interest rates and inflation fluctuate wildly.

WYSIWYG – the acronym stands for What You See Is What You Get. It is a computing term. Print Preview, for example, shows you what a document will look like when you print it. Print Preview is a WYSIWYG application. Web design applictions also have this feature.

X-efficiency – describes a company’s, management’s and workers’ inability to get the maximum output for inputs. Harvey Leibenstein, a Harvard professor, first used the term, and explained the x-efficiency notion, in 1966. His theory was that when firms are not very competitive, their workers will not behave as efficiently.

Xerox as a Verb – means to photocopy. The term ‘Xerox’ as a verb is more common in North America and India than in the British Isles, where people tend to use ‘to photocopy’ more often. The verb came from the brand name of Xerox Corporation, an American multinational company. Many brand names end up being used as verbs, such as Google, Skype, Uber, FedEx, and Super Glue.

Yankee Bond – a bond that is issued by a foreign government, foreign bank, or foreign company in US territory, denominated in US dollars. The Yankee bond issuer must first apply to the US Securities and Exchange Commission (SEC), which checks out its credit worthiness. It may be a few months before the applying issuer gets approval.Yankee Market – where the trading of non-US securities occurs within the United States. Yankee bonds, for example, form part of the Yankee market. Non-Americans sometimes refer to the US stock market as the Yankee makret.

Yellow-Dog Contract – a contract that employers would make their workers sign, in which they would pledge never to join a union while working for that employer. If they joined a union, the employer could fire them. In 1932, the yellow-dog contract practice became illegal.

Yellow Knight – when the predatory company in a hostile bid attempt backs off or gets cold feet, and decides to propose a merger of equals to the business it had tried to acquire, the predatory company has become a yellow knight. A hostile bidder that sees the whole thing through – does not change its aggressive approach – is known as a black knight. Using the word ‘yellow’ is derogatory, it implies that the hostile bidder lost its nerve; got scared.

Yellow Pages – a telephone directory of businesses. The Yellow Pages directory, which is printed using yellow paper, has existed since 1886. The directory exists in most countries across the globe, and lists businesses according to category. It contrasts with the White Pages, which is an A-to-Z list of residences’ telephone numbers.

Yen – Japan’s official currency, used globally for trade, known for its stability and role as a reserve currency.

Yield – the amount of money that an investment generates in cash in percentage terms. For example, with a company’s shares it is the annual dividend as a percentage of the share price.

Yield Curve – often called the “term structure of interest rates”, the yield curve is a curve that plots the yields or interest rates for debt contracts, according to their maturity dates.

Yield Gap – 1. In investment markets: the difference between the yields on long-term bonds and equities. It is used to determine whether shares are priced too high, just right, or too low. 2. In Agriculture: the difference between what a farm currently yields and what it could yield if it had good management and the latest equipment. Also used to compare productivity in the farms of the advanced economies with those in the rest of the world.

Yield Spread Strategy – a method of taking advantage of the yield spread of a specific bond.

Zaibatsu – a powerful group of giant conglomerates that controlled a significant portion of the Japanese economy until the end of the Second World War. At the end of the war, many of them were dissolved or broken up.Z bond –  a bond that accrues interest added to its principal balance. It is also known as an accrual bond.

Zero Air – ultra-filtered air that contains less than 0.1 parts per million of total hydrocarbons. Some laboratory applications can only work properly in a zero air environment.

Zero Balance Account – a bank account that maintains a zero balance all the time. The only time money goes into the account is when a check is issued – the amount is the same as the amount on the check. As soon as the check is cleared, the account goes back to a zero balance.

Zero-Based Budgeting – a budgeting method in which all expenses start the accounting period at zero – the slate is wiped clean. Every function within a company or organization is analyzed for its needs and costs – from scratch. Zero-based budgeting contrasts with traditional budgeting approaches, in which the previous period’s spending is carried forward.

Zero-Cost Option – a trading strategy in which one option is bought while another one is sold at the same time – they both have equal value. By buying and selling two things with the same value at the same time, they cancel each other out, leaving the trader with a zero balance – hence the name. It is also called zero-cost hedge and risk reversal strategy.

Zero-Coupon Bond – also known as a discount bond, is a bond bought at a price lower than its par value, with the par value repaid when it reaches maturity. This type of bond does not disperse an annual interest payment.

Zero Dollar Contract – a kind of contract where either no money changes hands, or a donation of just one dollar is made. This type of contract is commonly made between government departments and companies.

Zero-Sum Game – a game or business situation where there is one winner and one loser; the winner’s total minus the loser’s total loss equals zero – hence the term ‘zero-sum’. An example could be an arm-wresting contest or game of poker. The opposite is a non-zero sum game. Most business transactions are not zero-sum games, for the simple reason that nobody would enter a zero-sum deal.

ZEW Indicator of Economic Sentiment – a monthly survey of economists and analysts regarding mainly the Germany economy, but also other major economies and regions. ZEW stands for Zentrum für Europäische Wirtschaftsforschung (Centre for European Economic Research).

Zip Code – a coding system the US Postal Service uses to locate and route the mail to specific locations. Other English-speaking countries use the terms post code, postal code, or (in India) pin code.

Zombie (computer jargon) – a zombie is either a compromised computer that has been infected with a virus or trojan horse, or the virus itself (or trojan horse itself). In most cases, the owner does not know.

Zombie Bank – a financial institution that is worth less than nothing, but continues operating, mainly because of government support.

Zombie Company – a business that is heavily in debt and is only able to pay the interest on its loans, i.e. it cannot reduce the principle. The term includes companies that were bailed out and would not have survived without help. Also called a zombie firm or living dead.

Zombie Virus – in the world of IT (information technology), a zombie could be a malicious virus, worm, Trojan horse, or any program that infects and takes control of computers and smartphones and gets them to do illegal things. Zombies can cause websites to shut down because they get flooded with visits from zombie computers – infected computers.

Zone Pricing – charging customers different amounts for the same product or service, depending on where they are. In most cases, the seller is taking into account the cost of getting the product to the customer. In other words, the further away the customer is, the more he or she will pay. The USA, for example, may be split into four zones. Customers in the cheapest zone, i.e., the ones nearest the manufacturing facility, pay the least.

Zoning – local government by-laws that define how certain parts of the city may be used, specifically land use. Some areas are residential, while others are destined for agriculture, industry or commerce. The aim of zoning is to make communities as safe as possible, and ensure that growth occurs in an orderly way.

ZZZZ Best – a carpet cleaning company, set up by Barry Minkow in 1982 when he was just sixteen, that was involved in massive amounts of fraud. Minkow was jailed in 1988 and then again in 2011.