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Saturday 20, Jan, 2018 | DHAKA Time: 12:49 AM
Economics jargons

Ad Valorem It means ‘According to value’.

Ad Valorem Tax It is a duty imposed on commodities in proportion to their value, i.e. a duty expressed as a percentage and not a flat amount. It is commonly used in respect of import tariffs.

Anti-inflation Description of a policy adopted by the government with the intention of preventing or reducing inflation

Appropriation-in-Aid It means an item in the estimates of a Government Department which records any revenue received from the sale of goods and services to the public; the effect of such an item is to reduce the amount of money required from the Exchequer during the coming financial year.

Bank Rate It is the interest rate that is charged by a country’s Central Bank on loans and advances to control money supply in the economy and Banking sector. This is typically done on a quarterly basis to control inflation and stabilize the country’s exchange rates.A fluctuation in bank rates triggers a ripple-effect as it impacts every sphere of a country’s economy.

Bills of Exchange It is a non-interestbearing written order used primarily in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date. Bills of exchange are similar to checks and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements. The difference between a promissory note and a bill of exchange is that it is transferable and can bind one party to pay a third party that was not involved in its creation.

Backwardation A downward sloping forward curve (as in an inverted yield curve). A backwardation starts when the difference between the forward price and the spot price is less than the cost of carry, or when there can be no delivery arbitrage because the asset is not currently available for purchase.

Balance of Indebtedness It is a balance sheet that shows, as of a particular date, all the claims for payment held by the residents of one country against foreigners, and all claims held by foreigners against residents.

Balance Of Payments An accounting record of all monetary transactions between a country and the rest of the world.These transactions include payments for the country's exports and imports of goods, services, and financial capital, as well as financial transfers.

Balance of Trade It means the relationship between the values of a country’s imports and its exports, i.e. the ‘visible’ balance. These items form only part of the balance payments which is also influenced by (a) ‘invisible’ items and (b) movements of capital.

Balance Ticket It is a deposit receipt given to the transferor for the number of shares not transferred and to be exchanged for new certificate in due course.

Barriers to Entry (or Exit) Obstacles in the path of a firm that make it difficult to enter a given market.Barriers to entry protect incumbent firms from competition from newcomers.

Balanced Budget A balanced budget is when there is neither a budget deficit or a budget surplus – when revenues equal expenditure ("the accounts balance") – particularly by a government. More generally, it refers to when there is no deficit, but possibly a surplus.

Barter Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.

CRR It is a Central Bank regulation that sets the minimum reserves each bank must hold to customer deposits and notes. It would normally be in the form of currency stored in a bank vault or with the Central Bank.CRR is used as a tool in the monetary policy, influencing the country's economy, borrowing, and interest rates.

Certificate of Deposit (CD) A certificate of deposit is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty. It is a savings certificate entitling the bearer to receive interest. It bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks. The term of a CD generally ranges from one month to five years.

Commercial Papers In the global money market, commercial paper is a unsecured promissory note with a fixed maturity of 1 to 270 days. Commercial Paper is a money-market security issued by large banks and corporations to meet short term debt obligations and is only backed by an issuing bank or corporation's promise to pay the face amount on the maturity date specified on the note. Only firms with excellent credit ratings from a recognized rating agency will be able to sell their commercial paper at a reasonable price. Commercial paper is usually sold at a discount from face value, and carries higher interest repayment dates than bonds.
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