What is Unilateral Transfer? Recorded when transfers of resources that affect a nation's income or product in the current period occur without a quid pro quo; the country receiving the transfer neither provides nor promises to provide anything of economic value, measurable in monetary terms, in return. Related Topics Trade Balance: Surplus and Defic...

What is Alpha Risk? Alpha Risk refers to the risk that a null hypothesis (one which states that there is no difference between two variables) will be discarded even when it is absolutely correct. Usually known as the Type I error, the null hypothesis, in this case, states that there is no difference in two variables that are being tested, like zero ...

What is the Neutrality Of Money? The neutrality of money is a theory that maintains that changes in the supply of money in an economy only affect nominal variables and not real variables. This means that when the Cbetra bank decides to change the supply of money, nominal variables such as prices, wages, and exchange rates are affected and not the re...

What is the Winterling Crisis Matrix? The Interlink Crisis Matrix, or simply crisis matrix, designed by Klaus Winterling, is an analytical tool that categorizes risk along two parameters: Probability of Occurrence - The matrix identifies three levels of probability - low, medium, and high. Effects of the Risk - This concerns the impact if the uncert...

What is a Restricted Stock Unit? A restricted stock unit (RSU) is a restricted security or lettered stock that a company issues to its employees as a form of compensation. Restricted stock units can also be described as a promise by an employer to an employee that some shares of the company's stock would be issued to such employee on a future date. ...

What is a Direct Public Offering? A direct public offering (DPO) is also called a direct listing or direct placement. It is a type of offering that is not backed by an intermediary such as an investment bank, rather, companies are allowed to offer their securities directly to the public. A DPO completely removes the need for a company to use a broke...

What is the Ratchet Effect? The Ratchet Effect refers to the escalation of production, price, or wage that tends to self-perpetuate and resist fall back. People are influenced by the previous best or highest level, which makes it difficult to reverse the change.  For example, if a person receives a 12% salary hike during the last appraisal and is of...

What is the Radner Equilibrium? The Redner equilibrium refers to an economic concept that suggests that if an economic decision maker has unlimited computational capacity she can allocate resources in an optimal manner. This economic concept (theory) was first explained by an economist by the name Roy Radner, hence the term, Radner equilibrium. Back...

How does the Production Possibilities Frontier reflect Comparative Advantage? Absolute advantage simply compares the productivity of a worker between countries. It answers the question, “How many inputs do I need to produce shoes in Mexico?” Comparative advantage asks this same question slightly differently. Instead of comparing how many workers it ...

What is the Gig Economy? Gig economy refers to a hiring environment where jobs are mostly temporary and flexible (that is they can be completed from any place without prior physical connection with the assigner) and companies prefer hiring on contract rather than employee in-house workers.   Some notable examples of services in gig economies are Ube...