Economic Terms (C - D)

economic terms
 

(C)


CANNIBALISE

Market cannibalization, market cannibalism, or corporate cannibalism is the practice of slashing the price of a product or introducing a new product into a market of established product categories.

CAPACITY

It represents the maximum production capacity of a company or an economy utilizing its existing resources, including equipment, labor, capital, and other assets, to their fullest extent.

CANNIBALISE

Market cannibalization, market cannibalism, or corporate cannibalism is the practice of slashing the price of a product or introducing a new product into a market of established product categories.

CAPACITY

It represents the maximum production capacity of a company or an economy utilizing its existing resources, including equipment, labor, capital, and other assets, to their fullest extent.

CAPITAL

In economics, capital refers to financial assets or the machinery, tools, and buildings used in production.

CAPITAL ADEQUACY RATIO (CAR)

CAR is a measure of a bank's capital in relation to its risk-weighted assets, indicating its financial stability and ability to absorb potential losses.

CAPITAL ASSET PRICING MODEL (CAPM)

CAPM is a financial model used to determine an asset's expected return based on its risk in relation to the overall market.

CAPITAL CONTROL

Capital controls are measures imposed by a government to regulate the flow of money in and out of a country's economy.

CAPITAL FLIGHT

Capital flight refers to the rapid movement of assets out of a country, often due to economic or political instability.

CAPITAL GAINS

Capital gains are profits earned from the sale of a capital asset, such as stocks, real estate, or bonds.

CAPITAL INTENSIVE

Capital-intensive industries require significant investments in machinery, equipment, and infrastructure.

CAPITAL MARKETS

Capital markets are financial markets where long-term debt and equity securities are bought and sold.

CAPITAL STRUCTURE

Capital structure refers to the mix of debt and equity financing used by a company to fund its operations.

CAPITALISM

Capitalism is an economic system based on private ownership of the means of production and free market competition.

CARTEL

A cartel is a group of companies that collude to control prices, production, and distribution to limit competition.

CATCH-UP EFFECT

The catch-up effect refers to the tendency of less developed economies to grow at faster rates and converge with more developed economies over time.

CENTRAL BANK

A central bank is a financial institution responsible for managing a country's money supply, conducting monetary policy, and regulating banks.

CETERIS PARIBUS

Ceteris paribus is a Latin phrase meaning "all other things being equal," often used in economic analysis to isolate the effect of one variable while holding others constant.

CHARITY

Charity refers to voluntary donations of money, goods, or services to individuals or organizations in need.

CHICAGO SCHOOL

The Chicago School is a neoclassical economic school of thought emphasizing free markets and limited government intervention.

CHARITY

Charity refers to the voluntary giving of resources, such as money, time, or goods, to help those in need or support various causes.

CLOSED ECONOMY

A closed economy is an economy that does not engage in international trade or transactions.

COLLATERAL

Collateral is an asset pledged as security for a loan, which can be seized by the lender in case of default.

COMMAND ECONOMY

A command economy is an economic system where the government or central authority makes most economic decisions.

COMMODITISATION

Commoditization refers to the process by which goods or services become standardized and undifferentiated in the market.

COMMUNISM

Communism is a socio-economic ideology advocating for the common ownership of means of production and the absence of social classes.

COMPARATIVE ADVANTAGE

Comparative advantage is the ability of a country, region, or individual to produce a good or service at a lower opportunity cost than others.

COMPETITION

Competition is the rivalry among firms in a market to attract customers, improve products, and achieve market share.

COMPETITIVE ADVANTAGE

Competitive advantage is the unique edge a company has over its competitors, allowing it to outperform and achieve superior results.

COMPETITIVENESS

Competitiveness refers to a country's ability to produce and sell goods and services in international markets.

COMPLEMENTARY GOODS

Complementary goods are products that are used together, so the increase in demand for one leads to an increase in demand for the other.

COMPOUND INTEREST

Compound interest is the interest calculated on the initial principal and the accumulated interest of previous periods.

CONCENTRATION

Concentration refers to the distribution of market share among firms within an industry.

CONDITIONALITY

Conditionality refers to requirements imposed by international organizations on borrower countries in exchange for financial assistance.

CONSUMER CONFIDENCE

Consumer confidence is the degree of optimism or pessimism consumers have about the economy's future prospects.

CONSUMER PRICES

Consumer prices, or consumer price index (CPI), measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

CONSUMER SURPLUS

Consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay.

CONSUMPTION

Consumption refers to the spending by households on goods and services.

CONTAGION

Contagion is the rapid spread of financial crises and economic disturbances from one country to another.

CONTESTABLE MARKET

A contestable market is a market with low barriers to entry, allowing new firms to enter and compete with existing ones.

CORRUPTION

Corruption refers to the abuse of power for personal gain, often involving bribery, embezzlement, or other unethical practices.

COST OF CAPITAL

Cost of capital is the required return necessary to make a capital investment financially viable.

COST-BENEFIT ANALYSIS

Cost-benefit analysis is a technique used to evaluate the potential benefits and costs of a project or decision.

CREDIT

Credit is the ability to borrow money or receive goods and services now with the promise to repay in the future.

CREDIT CREATION

Credit creation is the process by which banks create money through the issuance of loans.

CREDIT CRUNCH

Credit crunch refers to a sudden reduction in the availability of credit or loans in the financial market.

CREDITOR

A creditor is an individual or institution that lends money or extends credit to a borrower.

CRONY CAPITALISM

Crony capitalism refers to an economic system where close relationships between business and government lead to preferential treatment and unfair advantages.

CROWDING OUT

Crowding out occurs when increased government borrowing leads to higher interest rates, reducing private sector borrowing and investment.

CURRENCY BOARD

A currency board is a monetary authority that issues notes and coins convertible into a foreign currency at a fixed exchange rate.

CURRENCY PEG

Currency peg is a fixed exchange rate system where a country's currency is tied or pegged to another currency, often the US dollar or the euro.


(D)

DEFAULT

Default is the failure to fulfill the terms of a loan agreement.

DEFICIT

A deficit is the amount by which a sum falls short of some reference amount.

DEFLATION

Deflation is a decrease in the general price level of goods and services.

DEMAND

Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price.

DEMAND CURVE

The demand curve is a graphical representation of the relationship between the price of a product and the quantity demanded by consumers.

DEMOGRAPHICS

Demographics refer to statistical data about the characteristics of a population, such as age, gender, income, and education.

DEPOSIT INSURANCE

Deposit insurance is a guarantee provided by the government to protect depositors' funds in banks and financial institutions.

DEPRECIATION

Depreciation is a decrease in the value of an asset over time due to wear and tear or obsolescence.

DEPRESSION

Depression is a severe and prolonged economic downturn characterized by high unemployment, low production, and reduced consumer spending.

DEREGULATION

Deregulation is the reduction or elimination of government regulations in a specific industry or sector.

DERIVATIVES

Derivatives are financial contracts whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies.

DEVALUATION

Devaluation is a deliberate reduction in the value of a country's currency relative to other currencies.

DEVELOPING COUNTRIES

Developing countries are nations with lower income levels, less industrialization, and lower Human Development Index (HDI) rankings.

DEVELOPMENT ECONOMICS

Development economics focuses on the economic, social, and political factors that contribute to the development and growth of countries.

DIMINISHING RETURNS

Diminishing returns is a concept in economics where the marginal benefit of an additional unit of input decreases as more units are added.

DIRECT TAXATION

Direct taxation is a tax levied directly on individuals or entities, such as income tax or property tax.

DISCOUNT RATE

Discount rate is the interest rate used to calculate the present value of future cash flows or to determine the cost of capital.

DISCOUNTED CASHFLOW

Discounted cash flow (DCF) is a valuation method that calculates the present value of projected future cash flows.

DISEQUILIBRIUM

Disequilibrium refers to a situation where demand and supply are not in balance, leading to changes in prices and quantities.

DISINFLATION

Disinflation is a gradual reduction in the rate of inflation, resulting in lower but still positive price increases.

DISINTERMEDIATION

Disintermediation is the process of removing intermediaries or middlemen from a supply chain or distribution network.

DIVERSIFICATION

Diversification is a risk management strategy that involves investing in a variety of assets to reduce the impact of a single loss.

DIVIDEND

Dividend is a payment made by a corporation to its shareholders as a distribution of profits.

DIVISION OF LABOUR

Division of labor is the specialization of tasks within a production process or organization to improve efficiency.

DOLLARISATION

Dollarization is the use of a foreign currency, such as the US dollar, as the official currency or a parallel currency in a country.

DOMINANT FIRM

Dominant firm is a company that holds a significant market share and exerts considerable influence on market conditions.

DUMPING

Dumping is the practice of selling goods in a foreign market at a price lower than their cost of production.