Category: Economics

What is Deflation?

What is Deflation? What is deflation? Deflation is the decline in the price for goods and services. It can also be referred to as the increase in the value of real money. In other words, it’s the value that the current currency will go up per unit of goods or services. Deflation Explained Deflation often

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Fiat Money

See Also: Cash Cycle Categories of Banks What are the 7 C’s of banking? Currency Exchange Rates Currency Swap Fiat Money Definition The definition of fiat money is currency made into legal tender. Furthermore, a governmental entity backs this tender to ensure its legitimacy. Fiat Money Explained Normally, fiat money is issued for a government

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Direct Material Variance Formulas

See Also: Direct Cost vs Indirect Cost Direct Materials Variance Analysis Direct Labor Variance Formulas Cost Driver Direct Material Variance Formulas Commonly used variance formulas for direct materials include the direct material price variance and the direct material quantity variance. Below are the formulas for calculating each of these variances. Direct Material Price Variance Direct

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Federal Funds Rate Definition

See Also: Interest Rate Swaps LIBOR Interest Rate Definition Interest Rate Risk Prime Lending Rate Libor versus Prime Rate Interest Rate in Selecting Loan Federal Funds Rate Definition The federal funds rate definition, or fed funds rate, is the target interest rate for overnight lending and borrowing transactions between banks. The Federals Open-Market Committee (FOMC)

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Direct Labor

See Also: Direct Cost vs Indirect Cost Cost Driver Direct Materials Direct Labor Variance Formulas Absorption Cost Accounting Direct Material Variance Formulas In accounting, direct labor (DL) costs are the costs associated with paying workers to make a product or provide a service. The workers must be clearly involved in producing the product or providing the service. Direct

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Euronext Definition

See Also: New York Stock Exchange (NYSE) London Stock Exchange (LSE) Frankfurt Stock Exchange (FSE) Shanghai Stock Exchange (SSE) Euronext Definition What is the Euronext definition? The Euronext exchange was formed in the year 2000 through a merger between the Amsterdam, Paris, and Brussels exchanges. In addition, it is one of the larger exchanges in

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Efficient Market Theory

See Also: Economic Indicators Economic Value Added Supply and Demand Elasticity Business Cycle Porters Five Forces of Competition Efficient Market Theory Efficient market theory hypothesis proposes that financial markets incorporate and reflect all known relevant information. The validity of efficient market hypothesis is debated; however, whether or not efficient market hypothesis is valid, it is useful

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Economic Value Added

See Also: Activity Based Management Capital Structure Management How to collect accounts receivable How to manage inventory Why Exit Planning Economic Value Added Definition Economic value added (EVA) measures the effects of managerial actions. It also focuses on managerial effectiveness in a given year. Economic Value Added Formula Use the following formulas to calculate the

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Economic Production Run (EPR)

See Also: Economic Value Added Economic Order Quantity Accounting Income vs Economic Income Supply Chain and Logistics Work in Progress Economic Production Run (EPR) Definition Economic production run is the most cost-efficient quantity of units to produce at a time. When managers of a manufacturing operation make decisions about the number of units to produce

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Economic Order Quantity (EOQ)

See Also: Economic Value Added Economic Production Run Accounting Income vs Economic Income Inventory Turnover Ratio Supply Chain and Logistics Economic Order Quantity (EOQ) Economic order quantity is the size of an order that minimizes both the purchasing costs and the inventory carrying costs. When making purchasing decisions, it is necessary to consider the cost

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Economic Indicators

See Also: Consumer Price Index Stagflation Balance of Payments What are the Twin Deficits? The Feds Beige Book Economic Indicators Definition Economic indicators are macroeconomic data that describe the condition of an economy. So, use them to determine whether an economy is prosperous and expanding or troubled and contracting. For example, a high unemployment rate

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Economic Income Definition

See Also: Economic Order Quantity (EOQ) Accounting Income vs. Economic Income Economic Production Run (EPR) Problem With Days Sales Outstanding Example Economic Income Definition Economic income is the way for companies to account for changes in the value of a given asset in the market. It generally recognizes unrealized gains, in addition to recognizing realized

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