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Basic Economic Terms list with explanation. Alphabets - B

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What is Backward Integration?
The expansion of a business which takes the form of acquiring control over firms supplying it with its raw materials.

What is Backward Linkage?
Refers to the relationship between an industry or firm and the suppliers of its inputs. A change in the output of the industry willget transmitted backwards to the suppliers of its inputs by changing in demand for inputs.

What is Bad?
Means a commodity or product which produces disutility for its consumer.

What is Balanced Budget?
A budget is said to be a balanced budget when current income equals to current expenditure.

What is Balance Sheet?
This is an ordered statement of
  1. the economic resources or assets of a company or other business organisation, each item having a value set upon it;
  2.  the financial claims of persons or organizations upon the value of these assets.
What is Balance of Payments?
Refers to the relation between the payments of all kinds made from one country to the rest of the world and its receipts from all other countries.

What is Balance of Trade?
Refers to the relationship between the values of a country?s imports and exports, i.e., the 'visible' balance. These items only form a part of the balance of payments, which also get influenced by
  1. 'invisible' items and
  2. movement of capital.
What is Bank Credit?
Refers to the lending by the banking system, by whatever means: bank advances, discounting bills or purchasing securities.

What is Bandwagon Effect?
Refers to the effect whereby as the price of the goods falls and demand by some sections or individuals in the community expands, other individuals or sections ?imitate? the reactions and expand their demand also.

What is Bank Deposits?
The funds deposited in bank accounts. In reality they are simply records of indebtedness of a bank to the depositor and they arise from the character of banks as financial intermediaries.

What is Bank Note?
A note issued by a bank for a sum of money which it promises to pay the bearer on demand.

What is Bankruptcy?
A legal proceeding under which the property of an insolvent debtor is taken for the benefit of his creditors generally.

What is Barter?
Refers to the method of exchanging goods and services directly for other goods and services without employing a separate unit of account or medium of exchange.

What is Bear?
A bear is a speculator who sells securities in anticipation of a fall in prices of securities.

What is Bid?
The term used for an offer of payment which an individual or organization makes for possession or control of assets, input, goods or services.

What is Bill?
A short-term debt instrument, which is in the form of a document ordering the drawee (i.e., the debtor) to pay the drawer (the creditor) a stated sum at a specified date, or 'at sight' which means on demand. Once it is accepted, i.e., signed by the drawee (who may be an accepting house or bank) and ?endorsed?, i.e., signed on the back by the acceptor, a bill becomes negotiable and may get discounted, i.e., sold at a discount on its face value, at a rate which reflects current short term rates of interest.

What is Bill of Exchange?
A Bill of Exchange is an instrument in writing, containing an unconditional order, signed by the banker,directing a certain person to pay a certain sum of money only to or to the order of a certain person or to the bearer of the instrument.

What is Black Market?
Any illegal market which has been established in a context where prices have been fixed at minimum or maximum level, usually by government. Thus, when maximum prices have been fixed, trading may occur at prices above the maximum.

What is Blown Up Price?
Descriptive of the final price of goods following a rise in the price of basic materials and fuel.

What is Blue Chip?
A consistently growing company both in terms of profit as well as market share is called a blue-chip company.

What is Blue Chip Rate?
Refers to the lowest interest rate payable by borrowers having the highest credit rate.

What is Book Value?
In its balance sheet a company may value assets in the form of asset investments at the prices shown in its books, namely the prices at which they were purchased, even though their current price on the stock exchange may be higher or lower.

What is Boom?
Refers to a period of expansion of business activity. It is opposite of slump or recession. A boom reaches a peak when the economy has been working at full capacity.

What is Brain Drain?
Means the migration of educated and skilled labour from poorer to richer countries.

What is Brand?
A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and todifferentiate them from those of competitors.

What is Break-Even?
Carrying on business in which neither profit nor loss is made.

What is Broker?
One who buys and sells bonds and other financial assets. He is employed by other people on account of his knowledge of market conditions and procedures and because of his expert knowledge of the commodity dealt in. A Broker is usually paid commission for his services, known as 'brokerage'.

What is Brokerage?
A fixed cost which is charged by the broker for cash of investment or encashment of bonds and other financial assets.

What is Budget?
A budget is a financial statement showing the estimates of receipts and expenditure. The budget is divided into two parts : (a) revenue budget and(b) capital budget.

What is Budget Deficit?
Budget deficit is the difference between total revenues and total expenditure.

What is Bull?
A bull is a speculator who purchases securities in anticipation of a rise in prices of securities.

What is Bullion?
Precious metals like gold or silver which have been held in bulk in the form of ingots or bars.

What is Business Plan?
A Business Plan is a formal document containing a mission statement, description of the firm's goods or services, market analysis, financial projections and a description of management strategies for attaining goals.

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  1. Thanks for the info... it was very useful..


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