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Basic Economic Terms list with explanation. Alphabets - J and L

J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

What is Jobber?
A jobber is an independent dealer in securities. He purchases and sells securities in his own name. He is not allowed to deal with non-members directly.

What is Labour?
All human resources which are available to society for use in the process of production.

What is Labour Costs Per Unit of Output?
Refers to the cost of the labour in real terms which is involved in making each unit of output.

What is Laissez-Faire?
Refers to a policy of non-interference by the State in economic affairs.

What is Lateral Communication?
Communication between departments of an organization that generally follows the work flow rather than the chain of command, and thus provides a direct channel for coordination and problem solving.

What is Lateral Integration?
This occurs when a firm branches or absorbs other businesses engaged in producing commodities related in same way to its own main products.

What is Lease?
The term used for an agreement in which one agent obtains the right of use of some property owned by another agent for a given period of time in return for an agreed fixed charge (which is generally paid in periodic instalments).

What is Letter of Credit?
A document which is issued by a bank on behalf of a customer which guarantees payment by the bank of cheques drawn by the customer, or more commonly today of bills drawn on that customer by parties from whom he has bought goods. Letters of Credit are used largely in association with bills of exchange, to which they give added security in the financing of foreign trade.

What is Letter of Hypothecation?
The term used for a letter from an exporter to his bank authorizing it, in the event of the importer failing to accept or pay a bill of exchange, to sell the goods exported and remit the proceeds less expenses.

What is Liabilities?
Refers to any claims, actual or potential, of an individual or institution. The term usually refers to financial liabilities of which the commonest form has been a debt of any kind. Thus, some deposits, which are banker's debts, are commonly termed as 'deposit liabilities'.

What is Lien?
Means a claim against property. A bond is usually secured by a lien against specified property of the company.

What is LIFO (Last In, First Out)?
This is a method of costing adopted by firms which carry many items of stock of the same kind bought at different times and at different prices as shown in the books. Under the more common FIFO system, it is assumed that whenever an item is sold it was the first to be purchased, whereas under the LIFO system it is assumed to have been purchased last.

What is Limited Liability?
Means the restriction of an owner's loss in a business to the extent of the capital that he has invested in it.

What is Line Organisation?
Line organisation refers to a direct chain of command from top to bottom. Here, the lines of direction are straight and vertical. Every superior has complete command over his subordinates and every subordinate is directly accountable to only one superior immediately above him.

What is Liquid Assets?
Means assets either in the form of money or which can be quickly converted into money.

What is Liquidation (Winding Up)?
Refers to the process where-by the existence of a company gets terminated, its property having been realized and distributed among its creditors and in the event of a surplus, among its members.

What is Liquidity?
The term indicates availability of cash, and of assets readily convertible into cash (called liquid assets), to meet immediate obligations; a volume of reserves plus credit facilities, reflected in an ability to meet current financial liabilities in cash.

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