What are Accounts in Financial Accounting?  An account is a record of the balance, increases, and decreases in specific assets, liability, equities, revenues, and expenses. What is a General Ledger? A general ledger is a record of all the accounts used by the company. A list of all ledger accounts of the company can be found in what's called the "ch...

What is Backwardation? This relates to the price of a futures contract as it nears expiration. A futures contract usually trades at a higher price when it nears expiration than when it is further away. This is as a result of the spot price being above the futures price and since these to have to merge eventually, the future's price increases to matc...

What is Hyperinflation? Hyperinflation is exceptionally fast or unmanageable increase in prices (inflation) within an economy. Statistically, hyperinflation occurs when a country's inflation rate exceeds 50 percent over the period of a month. What Causes Hyperinflation?  Hyperinflation is generally caused by a disproportionate amount of spending or ...

What is New-to-Export? New-To-Export is a term used for describing the enterprises that are new in the export business. Companies enter the export business to gain access to new markets and customers. There are certain rules required to be followed while sending a shipment abroad. The new-to-exports businesses often find it difficult to understand a...

What is a Defined Contribution Plan? It is a retirement benefit plan where the employees make a contribution each month until retirement to fund their retirement plans. For individual accounts set up for this plan, employees contribute a fixed percentage of their monthly salary to fund this account. The employers may also contribute a matching porti...

Why is Tracking Real GDP Important?  Real GDP is important because it is highly correlated with other measures of economic activity, like employment and unemployment.  When real GDP rises, so does employment. The most significant human problem associated with recessions (and their larger, uglier cousins, depressions) is that a slowdown in production...

What are Twin Deficits? Twin deficits refers to the situation where a country has both a budget deficit and a trade deficit at the same time.  Back to : ECONOMIC ANALYSIS & MONETARY POLICY Related Topics What is Government Spending? Autonomous Spending Autonomous Consumption Fiscal Policy Expansionary Fiscal Policy Contractionary Fiscal Policy P...

What is the Stock Purchase Agreement? The stock purchase agreement is the central contract between the parties where the business agrees to exchange as specific number of shares of the business venture for the agreed upon funding. The stock purchase agreement is made up of the following elements: What is the Preamble?  This provision identifies the ...

What is a Distributive Negotiation? A distributive negotiation is a situation in which interests or objectives of the parties are the same and are mutually exclusive. These situations are characterized by a finite or fixed amount of resources. The interest(s) or objective(s) of the other party are in direct conflict with yours.  Further explanation ...

What is a Market Risk? Market risk refers to the risk where there is a possibility of an investor experiencing a decrease in value of an investment as a result of changes in financial market factors. Note that you cannot completely eliminate market risk through diversification. However, you can hedge against by diversifying it into assets that have ...