Economic, Commercial and Trade Terms

ARBITRATION Referring dispute to disinterested party called arbitrator for decision, which will be binding. ANNUITY Payment of a fixed amount periodically for a limited time. It is an investment on which the owner receives not only interest on his money but also return of his capital. BALANCE OF TRADE The difference between the value of imports and exports. It is favourable when the value of exported goods exceeds the value of imported goods. If it is reverse balance is unfavourable. BALANCE SHEET Statements of accounts, generally os a business house prepared at the end of a year, showing debits and credits under broad heads, in order to find out the profit and loss positions in the outgoing year. BARTER Exchange of commodity with other commodities without the interface of any form of currency. BOND Document by which a government, a company or a person agrees to pay a sum of money in a certain time. BUDGET Annual estimate of expenditure and revenue of a country or a subordinate authority like a corporation. BILL OF EXCHANGE Written order by a drawer to pay sum on given date ot named payee. BUYER'S MARKET An economic phenomenon where there are more goods in market than demanded and so the buyers can dictate the prices of goods. CLEARING HOUSE Place where officials of the banks meet daily to exchange cheques drawn on the respective banks and settle the account by the payment of balances only. COOPERATIVE FARMING Joint farming wherein farmers pool their land, capital and resources and divide the produce at the end of the harvest in proportion to their land put in the pool. The farmers retain their proprietary rights. CEILING ON LAND AND HOLDING Imposition of a maximum limit of the land which an individual should have. Its purpose is rational distribution of land. DEATH DUTY (ESTATE DUTY) A sort of tax imposed on the property inherited at death of its previous owner. DEVALUATION Government's step to reduce the value of its own currency relatively to a foreign currency. It aims to increase exports and reduce imports. DEFLATION A monetary state characterised by decrease in the supply of money and bank deposits and falling profits, wages, incomes and employment accompanied by unemployment and falling prices. DEMONETISATION The governmental measure of depriving metallic coins or paper currency od specified denominations of its status money. It is meant to unearth the hidden money which is unaccounted for purpose of income tax assessment. EXCISE DUTY Duty levied on goods manufactured within the country. FOREIGN EXCHANGE Transfer of money of one country to another. INFLATION Increase in the quality of money in circulation without any corresponding increase in goods; so, it leads to rising prices spiral. LAISSEZ FAIRE An individualistic theory advocating private initiative in trade and non-interference by State in commercial or business ventures. LOCKOUT  Closure of a factory by owners to force the workers to accept the imposed terms. MALTHUSIAN THEORY OF POPULATION It states that the food supply increase in arithmetical progression while population increase by geometrical progression resulting in over-population. OCTROI Tax imposed on articles coming inside a city. PUBLIC SECTOR Applies to State enterprises or undertaking. RECESSION An economic phenomenon characterised by excessive production, less demand, tight money market. SOFT CURRENCY Currency of a country with which we have favourable balance of trade. STERLING AREA Group of countries of Commonwealth (except Canada) keeping their reserves in sterling and not gold or dollars. TARIFFS Measures undertaking by one country to protect industry against trade competition from outside.