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Basic Economic Terms list with explanation. Alphabets - C

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What is Call Loan?
A loan which may be terminated or called at any time by the lender or borrower.

What is Call Money?
Funds borrowed by discount houses from the clearing and houses banks in many countries, and which they employ in holding a portfolio of assets. A high proportion of these funds are borrowed literally at call.?

What is Call Option?
Refers to a contract giving the option for buying shares at a future date within a prearranged time limit.

What is Capacity?
The term used for the estimated maximum level of production from a plant on a sustained basis,permitting all necessary shut - downs, holidays etc.

What is Capacity Utilization?
Refers to the ratio of actual output to potential output.What is Capital?
Capital is one of the factors of production and has been defined as wealth used in the production of further wealth. For business purposes, capital generally has to be considered in terms of money.

What is Capital Asset?
The term used for an asset, which is not bought or sold as part of the everyday running of a business. Examples include real estate, plant equipment.

What is Capital Authorised, Nominal or Registered?
Synonymous terms for capital fixed by the Memorandum of Association of a company.

What is Capital Expenditure?
Expenditure of a non-recurrent nature resulting in the acquisition of assets.

What is Capital Employed?
The term used for the capital in use in a business; it consists of the total assets minus the current liabilities.

What is Capital Employed?
The relation of profit to the estimate of average capital employed to yield a ratio, commonly called the primary ratio, as follows: Primary ratio = Profit/Capital

What is Capital Gain?
Refers to the difference between the purchase price of an asset and its resale price at some later date, where that difference has been positive.

What is Capital Goods?
Goods which are made for the purpose of producing consumer goods and other capital goods, e.g. machinery of all kinds. This term is synonymous with 'producers goods'.

What is Capital Intensity?
The ratio of capital to labour employed in production.

What is Capital Market?
A market comprising institutions which are involved in the purchase and sale of securities, e.g., the new issue market and the stock exchange.

What is Capital Market Instruments?
Financial instruments like company shares and bonds, long-term government bonds, and local government bonds.

What is Capital Output Ratio?
Means the ratio of the amount of capital to the amount of output produced by that capital.

What is Cartel?
Refers to a formal agreement between business firms to co-operate on agreed norms relating to prices & output. Cartels mostly occur in oligopolies.

What is Cash?
Money in the form of bank notes and coins.

What is Cash Crops?
This term used for crops grown by peasant farmers specifically for sale in the market as opposed to crops directly consumed for subsistence purposes.

What is Cash Flow?
Refers to the sum of retained earnings and depreciation provision made by firms. As such it is the source of internally generated long ? term funds available to the company.

What is Cash Market?
The term used for a market for the immediate delivery of, and payment for, commodity.

What is Cash Reserve Ratio (CRR)?
All banks must keep a certain percentage of their total time (like fixed deposits) anddemand (like savings accounts) liabilities with the RBI. The CRR is fixed by the RBI and is hence variable. The upper limit of CRR is 15% while there is no lower limit.

What is Central Excise Duties?
These duties are levied by the Central Government on commodities, which are produced within the country. But commodities on which State Governments impose excise duties (as for instance, on liquor and drugs) are exempted from Central Excise Duties.

What is Certificate of Deposit (CD)?
A document, which is issued by a bank acknowledging a deposit of money with it and constituting a promise to repay that sum, to the bearer, at a specified future date. It is negotiable i.e., can be transferred.

What is Cheap Money?
A term used to describe a situation where bank rate and other rates of interest are low. A policy of cheap money may be adopted in a time of industrial depression to stimulate recovery.

What is Cheque?
A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise on demand.

What is C.I.F (Cost, Insurance and Freight)?
Term used of goods shipped where the price includes shipping and insurance charges.

A C.I.F?
Quotation implies that the seller must ship the goods, meeting all charges upto on board and paying insurance and freight.

What is Closed Economy?
A concept which is used mainly in theoretical models to describe an economy having no external trade, which is completely self-sufficient and insulated from external processes.

What is Collusion?
Means an agreement between firms to co-operate so as to avoid mutually damaging rivalry.

What is Commercial Banks?
A general term denoting those banks, which conduct a general rather than a specialized type of business. They accept deposits, make advances, etc.

What is Committee?
A committee is a group of persons constituted to deal with specific issues or problems of the organisation.

What is Communication?
The process by which people attempt at sharing meaning through the transmission of symbolic messages.

What is Company?
A joint stock company is a legal entity set up for the purpose of conducting commercial or industrial operations, and with a capital divided into shares, held by members.

What is Company Savings?
Refers to that part of firms' profits which have neither been paid out in taxes nor distributed to shareholder as dividend.

What is Consumer Credit?
Refers to a loan, which is given to the consumer for a short period of time, for the purchase of a specific commodity. This can take the form of hire purchase or be in the form of a personal loan from a bank.

What is Consumer Durable?
A commodity of relatively long life, like a refrigerator or a washing machine, as distinct from, say foodstuffs.

What is Consumer Goods?
Products in the actual form in which they reach domestic consumers.

What is Consumer's Surplus?
Means the excess of the price which a person would be willing to pay rather than go without an article over that which he/one actually pays; it may be termed as consumers rent.

What is Consumption?
Means the act of using goods and services to satisfy current wants.

What is Consumption Expenditure?
Refers to aggregate expenditure on goods and services to satisfy current wants.

What is Contango?
A stock exchange term meaning carry-over. A broker who wishes to postpone settlement of a transaction to the following account may do so on payment of interest on the sum due. The term Contango is also used to mean the extra payment itself.

What is Control?
Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions issued and principles established. It has for its object to point out weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything, people, things, action. (Henry Fayol)

What is Controlling?
Controlling is the process of ensuring that the organisation is moving in the desired direction and that progress is being made towards the achievement of goals.

What is Contract?
An agreement, oral or written whereby one party undertakes to do or not to do something for the other party to the contract.

What is Convertibility?
Refers to the freedom to exchange any currency for another currency at the current exchange rate.

What is Copyright?
The sole right to reproduce a literary work or a musical composition. It gives the owner a monopoly of a particular piece of property, which like other property can be assigned in return for payment to another person or persons.

What is Corporate Tax?
Corporate tax is a tax on income of the companies.

What is Cornering?
It is the condition of the market in which almost the entire supply of particular security is held by an individual or a group of individuals. The speculator who corners the security will dictate his own price.

What is Corporate Paper?
Notes which are sold by large corporations in the money market as a means of getting funds.

What is Corporate Risk?
The total risk involved in a business is termed as corporate risk. It comprises two types of risk. Financial risk which arises out of debt finance, and business risk i.e., the basic risk involved in the firm?s day to day operations.

What is Corporation?
The term used for a contemporary form of business having two distinct characteristics: it is a legal entity separated from its owners,the stockholders; and it is usually on a scale much larger for the sole proprietor or partnership to manage or fund.

What is Cooperation?
Cooperation refers to the collective efforts of people who associate voluntarily to achieve specified objective.

What is Coordination?
Coordination is the task of blending the activities of individual and group efforts in order to maximise the contribution towards the accomplishment of common goals.

What is Cost?
The cost of producing a certain output of a commodity is the sum of all the payments to the factors of production engaged in the production of that commodity.

What is Cost of Sales?
The cost which is incurred in a manufacturing unit in converting raw materials into a finished product: such costs include raw materials, labour, and factory overheads.

What is Cost of Production?
Expenditure which is incurred by way of payments for rent, mortgages, interest on loans, dividends, salaries and wages, buildings, plant and machinery and raw materials, in the production of a commodity or a service, including development and marketing costs.

What is Countervailing Duty?
A duty imposed on imported goods where there is evidence of an export subsidy in the country of origin which may adversely affect the domestic producers in the importing country.

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