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 82 names in this directory beginning with the letter M.
M2
is a measure of money that adds to M1 money market deposit accounts, money market mutual fund shares, small denominations time deposits, savings deposits, overnight repurchase agreements, and overnight Eurodollars.
M3
is a measure of money that adds to M2 large denomination time deposits, long-term repurchase agreements, and institutional money market fund shares.
Maintenance margin requirement
is named the minimum actual margin that a brokerage firm will permit investors to keep in their margin accounts.
Majority voting system (straight voting system)
in the frame of a corporation, is called the method of voting in which a stockholder is permitted to give any one candidate for the Board of Directors a maximum number of votes equal to the number of shares owned by that shareholder.
Managed float regime (dirty float)
is named the current international financial environment in which exchange rates fluctuate from day to day, but central banks attempt to influence their countries' exchange rates by buying and selling currencies.
Managed investment company
is an investment company with a portfolio that may be altered at the discretion of the company's portfolio manager.
Margin account
is called the account which is maintained by an investor with a brokerage firm in which securities may be purchased by borrowing a portion of the purchase price from the brokerage firm or may be sold short by borrowing the securities from the brokerage firm.
Marginal Extreme Market Loss
is named the factor that shows the contribution of an asset in the portfolio to the total Extreme Market Loss of the portfolio. The Marginal Extreme Market Loss for a specific asset reflects how the portfolio's Extreme Market Loss would change if the investor were to sell that asset and keep the cash proceeds.
Marginal productivity of capital
is called the additional output that will be produced by employing an additional unit of capital in the production process.
Marginal productivity of Labour
is called the additional output that will be produced by employing an additional unit of labour in the production process.
Marginal propensity to consume (mpc)
is named the slope of the consumption function line that measures the change in consumer expenditure which results from an additional dollar of disposable income.
Marginal purchase
is called the purchase of securities which are financed by borrowing a portion of the purchase price from a brokerage firm.
Marginal rate of substitution
is called the rate at which one commodity cab be substituted for another without changing total utility.
Marginal return on investment
is called the additional income, which is expressed as a percentage, earned on each additional dollar invested in an asset.
Marginal tax rate
is called the amount of taxes which is expressed as a percentage and is paid on each additional dollar of taxable income received.
Mark-down
is called the difference in prices between what an investor's broker receives and what the investor receives for a security sold in the over-the-counter market.
Mark-up
is called the difference which exist in prices between what an investor pays and what the investor's broker pays for a security purchased in the over-the-counter market.
Mark-up pricing
is called the percentage by which a firm increases the selling price of goods above the average or unit costs of production.
Marked (or marking) to the market
is called the process of calculating on daily basis the actual margin in an investor's account.
Market beta
is called a relative measure of the sensitivity of an asset's return to changes in the return on the market portfolio.
Market capitalization
is called the aggregate market value of a security which is equal to the market price per unit of the security multiplied times the total number of outstanding units of the security.
Market discount function
is called the set of discount factors on all default-free bonds across the spectrum of terms-to-maturity.
Market efficiency
is called the possessions that asset prices reflect all available information and risks attached to any single asset.
Market efficiency capital (demand for capital)
is called the quantity of capital desired by an investor at varying interest rate levels.
Market equilibrium
is called a condition that arises when the number of people that are willing to buy (demand) equals the number of people that are willing to sell (supply).
Market index
is named a collection of securities whose prices are averaged to mirror the overall investment performance of a market for financial assets.
Market order
is named a trading order which instructs the broker to buy or sell a security immediately at the best obtainable price.
Market portfolio
is called a portfolio that includes the total of all risky assets. The proportion invested in each asset (security) equals the percentage of the total market capitalization represented by the security.
Market risk
is called that party of a security's total risk that is related to moves in the market portfolio and, hence, cannot be diversified away.
Market segmentation theory
is called an explanation of the term structure of interest rates. It states that various investors and borrowers are restricted by law, preference, or custom to hold certain maturity ranges. Spot rates in each market segment are determined by supply and demand conditions there.
Market timing
is called a form of active management that entails shifting an investor's funds between a surrogate market portfolio and a risk-free asset, depending on the investor's perception of their near-term prospects.
Markup pricing
is called the percentage by which a firm increases the selling price of goods above the average or unit costs of production.
Matched sale-purchase transaction
is called an arrangement in which the FED sells securities and the buyer agrees to sell them back to the FED soon; it is also called a 'reverse repo'.
Mathematical model
is called a list of equations formalizing postulated linkages between exogenous and endogenous variables.
May day
is a marking date (1 May 1975) where the New York Stock Exchange ended its fixed-commission rate requirement and permitted member firms to negotiate commission rates with customers.
Member firm (member corporation or member organization)
is named a brokerage firm with one or more memberships in an organized security exchange.
Menu costs
are called lump-sum costs which are incurred when takes place a nominal price or wage adjustment.
Merchandise trade balance
is called the sum of exports less imports of merchandise goods for a country vis-à-vis the rest of the world over some time period.
Merger
is called an arrangement which takes place between two corporations that decide to combine with aim to make one larger corporation.
Methods of moments
are called an estimation method in which the sample moments are equated to the population moments and the parameters are solved for.
Mismatch
is called a situation which arise when the labour market doesn't clear because workers and vacancies are of such different industrial, occupational, or location nature that are not enough job matches to take place.
Mispriced security
is called a security that is trading at a price substantially different than its intrinsic value.
Model
is named a set of economic linkages, including the assumptions made in drawing up the list of endogenous and exogenous variables.
Modern quantity theory of money
is named the theory that changes in aggregate spending are primarily determined by changes in the money supply.
Monetarism
this multifaceted school of thought concludes that monetary policy is best used by targeting the rate of growth of the money supply. In other words, the quantity of money has the major influence on economic activity and the price level to the view that money affects only nominal-not real-variables. Monetarists reject activist policies because of uncertainty, lags and government incompetence.
Monetarist
is named someone who is a follower of Milton Friedman and he sees changes in the money supply as the primary source of movements in the price level and aggregate output and who views the economy as inherently stable.
Monetary aggregates
are called various definitions of the money stock; differing largely by their degree of liquidity (M1, M2, M3 and L).
Monetary neutrality
is called a proposition that in the long-run a percentage rise in the money supply is matched by the same percentage rise in the price level, leaving unchanged the real money supply and all other economic variables such as interest rates.
Monetary policy
is called the set of actions which are taken by central banks with aim to affect monetary and financial conditions in an economy. In other words, the management of the money supply and interest rates.
Monetary theory
is called the theory that relates changes in the quantity of money to changes in economic activity.
Monetary union
is named an agreement which take place among sovereign countries to use a common currency.
Monetization
is called an open market purchases of Treasury bills by the central bank, or more generally, the lending that takes place by the central bank to the government to cover its deficit.
Monetizing the debt
is called the method to finance the government spending by which the government debt issued to finance government spending is removed from the banks of the public and is replaced by high-powered money instead.
Money demand function
is called the relationship between real money demand and its determinants: real GNP, the nominal interest rate and the cost of bank transactions.
Money illusion
is named the term which is used to describe the failure to distinguish monetary from real magnitudes.
Money market
is called a financial market in which only short-term debt instruments (maturity less than one year) are traded.
Money multiplier
is called a ratio that relates the change in the money supply to a given change in the monetary base.
Money supply
is called anything that is generally accepted in payment for goods or services or in the repayment of debts.
Moral hazard
is called a condition that occurs after a transaction in which one party to the transaction has incentives to engage in behavior that is undesirable from the other party's point of view.
Mortgage bond
is called a bond which is secured by the pledge of specific property. In the event of default, bondholders are entitled to obtain the property in question and sell it to satisfy their claims on the issuer.
Mortgage trust
is called a type of REIT that invests primarily in mortgages as well as construction and development loans.
Multinational firm
is called a company whose business operations and financial investments extend across several countries.
Multiple correlation coefficient
is called the square root of the coefficient of determination, R2, from a multiple regression.
Multiple deposit creation
is called a process by which the FED supplies the banking system with $1 of additional reserves and deposits increase by a multiple of this amount.
Multiple growth model
is named that type of dividend discount model in which dividends are assumed to grow at different rates over specifically defined time periods.
