The role of this glossary is to present brief definitions of most of the key concepts in economics and finance (in total 1064 names-definitions) as well as security markets (financial, capital, money) with aim the reader to be able to understand and become familiar with the terminology in the analyses that will present in the category economics.
Additionally, we hope that the reader by acquiring intimacy with the economic terminology, he will also love the science/art of economics, giving to it a significant part of his personal time.
In the following glossary we tried to include the most well-known definitions and terms in the field of Economics & Finance. If you still find that a term or definition is missing and you know that it can be included in this glossary, please do not hesitate to contact us via the contact form of our web-site (Contact Us) and the Liberal Globe will edit it and will include it.
Glossary Economics & Finance
There are currently 41 names in this directory beginning with the letter L.
L
is a measure of money supply, if highly liquid assets that adds to M3 short-term Treasury securities, commercial paper, long-term Eurodollars, saving bonds, and bankers' acceptance.
Labour and profit shares
is named the labour or wage shares which is the fraction of total income paid to workers; the profit share, is that portion of total income that goes to the owners of capital.
Labour force
is named the total number of individuals who are either working or actively looking for a job.
Labour force participation
is named the proportion of working-age people who are in the labour force.
Labour tax wedge
is named the difference between labour's cost to firms and wages received by workers.
Laffer curve
is named the relationship between government tax revenues and the average tax rate. Beyond some point, increases in tax rates are associated with decreases in tax revenues, because the distortionary effects outweigh the revenue gained.
Laissez-faire
is named the liberal economic theory which asserts that the properly functioning markets would deliver the best possible social outcome and will reject the any intervention by the government in economic affairs.
Lambda
is called the expected premium return (above the risk-free rate of interest) per unit of sensitivity to a common factor.
Last-in First-out method (FIFO)
is named a method of valuing inventories that assumes that the company's inventory is sold in inverse order of accumulation.
Law of one price
is called the principle that if two countries produce an identical good, then the price of this good should be the same throughout the world no matter which country produces it.
Leading indicators
are indicators which designed to provide advance warning of the state of the economy.
Lender of last resort
is named the central bank, where in its implicit commitment is to protect bank customers by providing failing banks with enough monetary base to avoid prevent collapse.
Letter stock (restricted stock)
is called the stock, which is unregistered and sold directly to the purchaser, rather than through a public offering. A stock like that must be held at least two years and cannot be sold even at that time unless ample information of the company is available while the amount sold is a relatively small percentage of the total shares outstanding.
Life-cycle theory
is a theory which states that the consumption choices are made with a planning horizon which is equal to the individual's expected remaining lifetime; so an individual will build up savings during working years and will exhaust them during retirement years.
Limit order
is called a trading order which specifies a limit price at which the broker must execute the order. The trade will be executed only if the broker can meet or better the limit price.
Limit order book (specialist's book)
is called the records which are kept by the specialist who detects the limit, stop, and stop limit orders that brokers want to execute in a particular security.
Limit price
is called the price which is specified when a limit order is placed with a broker, defining the maximum purchase price or minimum selling price at which the order can be executed.
Limited liability
is called an aspect of the corporate form of organization that prevents common stockholders from losing more than their investment if the corporation should default on its obligations.
Line of credit
is named a bank's commitment (for a specified future period) to provide a business with loans up to a given amount at an interest rate that is tied to some market interest rate.
Liquidity
is named the relative case and speed with which an asset can be converted into a medium of exchange.
Liquidity crisis
is called the inability which presents a borrower-country to service its debt although it is fundamentally solvent.
Liquidity management
is called all the set of decisions which are made by a bank in order to maintain enough liquid assets with aim to meet the bank's obligations to depositors.
Liquidity preference framework
is named a model developed by John Maynard Keynes that predicts the equilibrium interest rate based on the supply and demand for money.
Liquidity preference theory
is the theory that developed by Keynes and concerns the demand for money. It is an explanation of the term structure of interest rates. It holds that the term structure of interest rates is a result of the preference of investors for short-term securities that compensates investors for the greater interest rate risk entailed in holding longer-term securities.
LM curve
is called the money market equilibrium and it describes the relationship among the combinations of interest rates and aggregate output for which the quantity of money demanded equals the quantity of money supplied.
Load funds
are named the open-end mutual funds which their shares are sold by sales people who receive a commission that is paid at the time of purchase and this commission is immediately subtracted from the redemption value of the shares. In other words, a mutual fund that has a load charge.
Loan (scalper)
is named a member of an organized futures exchange who trades for his or her own account and has a very short holding period.
Loan sale
is a type of contract (also called a secondary loan participation) which according to its terms sells all of part of the cash stream from a specific loan and thereby removes the loan from the bank's balance sheet.
Loanable funds framework
is named a framework that determines the equilibrium interest rate using the supply and demand for bonds (loanable funds).
Long-run aggregate supply curve
is called the quantity of output supplied in the long-run for any given price level.
Lucas critique
is called the hypothesis that households and firms incorporate perceptions of the policy regime in their behavior; as a result, shifts in the policy regime can have fundamental effects on behavior.
