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Definitions

Don't be intimidated by the terms used to describe the economy. Use this glossary and soon you'll be conversing eloquently.
  1. Fiscal Policy Definitions (28)
  2. Monetary Policy Definitions (27)
  3. Real Estate Definitions (19)
  4. Stock Market Definitions (52)
  5. Trade Policy Definitions (19)

Adjustable Rate Mortgage
A definition of adjustable rate mortgages, and how adjustable rate mortgages work.

What Is the American Dream Today?
The American Dream is the opportunity to pursue happiness and a better way of life regardless of circumstances of birth.

Asset-backed Commercial Paper
Asset-backed Commercial Paper (ABCP) is short-term corporate debt that is backed by assets such as real estate, autos and other commercial assets.

Auction-Rate Securities
Auction-rate securities were sold as high yielding money market funds until the demand for them collapsed in October 2008.

Banco del Sur
Banco del Sur is a Latin American development bank that would like to replace the World Bank in that region.

Bee Colony Collapse Syndrome
The bee colony collapse syndrome could cost the U.S. economy $15 billion, and lead to higher food prices.

What Is Banking?
Banking definition and role of banking in the US economy.

Beige Book
The Federal Reserve's description of the US economy.

Bilateral Trade Agreements
Definition of a bilateral trade agreements, which benefit both parties.

Black Tuesday
Black Tuesday was a stock market crash that kicked off the Great Depression of 1929. What is Black Tuesday and what caused it.

Bond Market
he bond market is where bonds and bond funds are bought and sold. These include corporate bonds, high yield bonds, Treasury bonds, savings bonds and municipal bonds.

Budget Deficit
When a government spends more than it makes.

Capital Gains Tax
What exactly is capital gains and the capital gains tax, and how capital gains and the capital gains tax affects you.

CDOs (Collateralized Debt Obligations)
Collateralized Debt Obligations were one of the derivative products that helped cause the financial collapse in 2008.

Central Banks
Central banks manage monetary policy throughout the world, and yet they are largely misunderstood.

Certificate of Deposit
Certificates of deposit are a safe investment. Therefore, they offer a low rate of return.

Commercial Real Estate
Commercial real estate is any property owned to produce income.

China's Currency: the Yuan or Renmimbi
What is the Chinese yuan.

Consumer Financial Protection Bureau
How the Consumer Financial Protection Agency works.

Consumer Spending
Consumer spending drives 70% of the U.S. economy. But what do these statistics mean? What are the current consumer trends and habits?

Consumer Spending Trends
Consumer spending drives 70% of the U.S. economy. What are the current consumer spending trends and habits?

Credit Card Debt
The definition of credit card debt, the statistics on the average credit card debt per family, what constitutes excessive credit card debt and how it influences the economy.

Deregulation
Deregulation is when the government seeks to allow competition in highly regulated industries, usually some form of utility.

Discount Rate
The Federal Reserve Discount Rate is the rate that the Fed charges banks to borrow from its discount window.

Discount Window
The Federal Reserve's discount window is how the Fed lends money overnight to banks.

Economies of Scale
Reducing cost per unit due to large size.

Employment
How the U.S. Government defines employment.

Emerging Markets
Definition of emerging markets.

What Is the Euro?
What is the euro, what is the history of the euro dollar exchange rate, and what is the impact of the euro on the U.S. economy?

Fed Funds
Fed funds, or Federal Reserve funds, are loans that banks make to each other to meet reserve requirements at Federal Reserve Banks.

FIRREA
Explains what is FIRREA, or the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Futures Contracts
A definition of futures contracts, which includes commodities futures contracts and oil futures contracts.

Fixed Rate Mortgage
Definition of fixed rate mortgages, how fixed rate mortgages work, and how they differ from other mortgages.

Free Trade Agreements
Definition of free trade agreements.

GDP
Gross Domestic Product. How big the economy is.

GDP Per Person
Definition of GDP per capita.

Goldilocks Economy
Just like Goldilocks' porridge - an economy that is neither too hot nor too cold.

Income Per Capita
Definition of Income per capita.

What Are Interest Rates and How Do They Work?
A definition of interest rate, including central bank interest rates.

Interest-only Loan
A definition of an interest-only loan, in which the borrower's monthly payment goes only towards the interest.

International Trade Administration
The International Trade Administration's role in the U.S. trade policies.

Labor
A definition that shows how labor is a key component of supply.

Lame Duck Session of Congress
Congress has a lame duck session after the November elections but before the newly elected Congress leaders take office in January. What impact does the lame duck session of Congress have on the fiscal policy and the economy?

LIBOR
The LIBOR rate is that interest rate that banks charge each other for overnight loans.

Mark to Market
Mark to market is a way of a valuing assets at their current price.

Mandatory Spending
The part of the U.S. Budget that is mandated by entitlement programs.

Monetarism
A definition of monetary policy and how it is different from fiscal policy.

Money Market Funds
Explains what money market funds are and how money markets affect the U.S. economy.

Mortgage
A mortgage is a specialized loan to make homeownership more accessible.

Most Favored Nation Status
Definition of Most Favored Nation trading status.

Multilateral Trade Agreements
The definition of a multilateral trade agreements, which benefit everyone.

Natural Unemployment Rate
The natural unemployment rate is present in even a healthy economy.

New Home Builder
New home builders have been hit hard by the recession.Find out how new home builders affect the economy.

New Home Start
When ground is broken on a new home.

OECD
The Organization for Economic Cooperation and Development is a valuable research organization for understanding the economic outlook for most of the world's major economies.

Off-Budget
A definition of off-budget revenue, which is primarily "borrowed" from the Social Security Trust Fund.

Peg
Many countries peg their currency to the dollar. This means this keep the value of their currency at a certain level relative to the dollar.

Per Capita
Definition of GDP per capita.

Ponzi Pyramid Scheme
What is a Ponzi pyramid scheme? Who is Charles Ponzi?

Price Fixing
Definition of price fixing, and how price fixing affects the U.S. economy

Prime Interest Rate
The prime interest rate is what banks charge their best customers.

Private Equity
Private equity is private ownership, as opposed to stock ownership, of a corporation.

Profit Margin
A definition of profit margin and how it relates to profit.

Purchasing Power Parity
Understand purchasing power parity.

Real Estate
A broad term which includes residential, commercial, industrial and vacant land.

Recession
When a good economy turns bad.

Reserve Requirement
The Federal Reserve requires that banks keep a certain amount of cash on hand each night.

Retail Banking
Banking definition and role of banking in the US economy.

S&P Rating
Definition of the S&P rating system, how the S&P rating system is used, and why S&P rating is so important to the U.S. economy.

SARPSCO - Indian Ocean Trade Protection
SARPSCO, an organization of countries bordering the Indian Ocean,

Savings and Loans
Savings and loans (S&L's) are special types of banks created to promote home ownership.

What Is the S&P 500?
Definition of the S&P 500, one of the most closely followed stock market indices.

Shariah banking
Islamic banking follows shariah law.

Secondary Mortgage Market
How mortgages are sold by the banks to investors.

Swap Lines
A swap line is an arrangement between central banks to exchange currency.

Tariff
Definition of tariffs and custom taxes which are levied on imported goods.

Trade Promotion Authority
The President's Trade Promotion Authority allows the President to negotiate trade agreements efficiently.

TARP Program
What are TARP funds, and what is TARP money to be used for? An explanation of the TARP capital purchase program.

Tranches
Tranches were used to create more complicated derivatives by slicing them into investments with similar risk characteristics.

Stock Market Correction
The difference between a stock market correction and a stock market crash.

Unfunded Mandate
A definition of unfunded mandates and how they are declining throught UMRA.

Stock Market Crash
A stock market crash is different from a correction, decline, and a bear market. Find out how to identify a crash, and how to tell if the stock market is about to crash. Most important, learn what to do to protect yourself from a stock market crash.

Unilateral Trade Agreements
A definition of unilateral trade agreements, which benefit only one side.

Yen Carry Trade
A low yen vs strong dollar exchange rate all allowed currency traders to borrow yen at a low interest rate and invest it in a currency with a high interest rate. This was known as the yen carry trade.

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