Economics: Topic 10, Year 2 Definitions

A medium of exchange that is acceptable in payment for goods and services or to settle a debt.

Exists when two parties to a transaction have products of approximately equal value and both want what the other possesses.

A rate of increase at which the authorities have lost control of prices. Usually attributed to a figure in excess of 1000% per annum.

The direct exchange of goods or services between parties to a transaction without the use of money.

Measures the ease with which assets can be turned into cash.

The total stock of money that circulates within an economy.

Includes all physical money like coins and currency along with deposits on demand and liquid assets held by the central bank.

A much more inclusive measure of the money supply including notes and coins, but also less financial assets such as savings accounts.

Comprises of financial institutions and other organisations that wish either to borrow or to lend on a short-term basis.

Those markets in which financial securities such as shares and bonds are issued to raise medium - to long-term finance.

Financial assets such as shares that can be bought and sold on markets.

Short-term government securities, maturing after 91 days and sold at a discount on their face value.

Privately owned investment companies that provide services to wealthy individuals or to professional investors such as pension funds.

A short-term debt instrument issued by a company.

The government's economic and finance ministry, maintaining control over public spending and overseeing the UK's economic policy.

Financial securities issued by governments and companies with the aim of raising capital for repayment over the medium to long term.

Equal units of ownership of a company offering financial and other benefits.

The interest rate attached to the bond.

The date at which a bond is due for repayment.

Refers to the interest or dividends received from a security, usually expressed as a percentage based on the security's market price.

Those in which traders buy and sell currencies.

The price of one currency expressed in terms of another.

An amount of money borrowed by one person or organisation from another and repaid to an agreed schedule, usually with interest added.

Refers to the value of that part of a business's capital that is generated through the sale of shares.

A financial institution whose main business is taking deposits and making loans, though it may provide other financial services such as insurance.

Specialise in complex financial activities, such as assisting governments and businesses to raise capital or advising businesses on mergers with other businesses.

Items that are owned by a business. The assets of commercial banks include property, loans granted to customers, and investments in stocks, shares and Treasury bills.

Occur when two or more firms join together to form a new, larger business.

Exist when there is a risk to the whole market, system or even economy, as opposed to a risk linked to one organisation.

The purchase of a controlling interest in one business by another.

A process whereby investment banks support governments and companies in raising capital by issuing bonds and shares.

Sums of money paid into accounts held with financial institutions such as commercial banks.

Long-term loans provided for the purpose of buying property.

A financial statement recording the assets and liabilities of a business on a particular day at the end of an accounting period.

A debt that must eventually be paid. It represents a claim on assets.

Measures the ease with which assets can be turned into cash.

The finance raised through issuing shares and retaining earnings from previous trading periods.

Requires banks to hold sufficient high-quality liquid assets to exceed the net cash outflows of the next 30 days.

Measures the multiple by which the expansion in the money supply is greater than the increase in the monetary base.

The banknotes in circulation along with the balances or reserves held by commercial banks and building societies at the Bank of England. This is also referred to as central bank money.

Medium to long-term goals that are agreed to coordinate the activities of an organisation.

A measure of a business's performance that compares profits to another factor such as earnings.

A share in the profits of a company that are paid to some groups of shareholders.

Allow individuals and firms to borrow a specific sum of money that is secured against a property or other valuable asset, which is sold in the event of the borrower defaulting.

An individual or organisation that is owed money by another person or organisation.