meaning Flashcards
1) Interest
extra money you receive( or have to pay) if you have invested ( or of you have borrowed) a sum of money.
2) Interest rate
amount of interest that must be paid ( expressed in percentage )
3) To borrow
To take money from someone with an agreement to repay it later, usually with interest.
4) To lend
To give money to someone with the expectation of getting it back, often with interest.
5) Loan
the sum of money borrowed
6) Principal
is the original amount borrowed excluding any interest payments
7) A debt
a sum of money that you owe someone
9) In/into debt
you owe money
Out of debt
you succeeded in paying all the money that you owe
11) A debtor
is a country, organization or a person who owes money
12) A creditor
the people who you owe money to
- Flourish
grow or develop successfully
- Frugality
being careful not to spend too much money or eat too much food
- Agenda
specific aim or reason for a particular group to do something
- Basic needs
the basic necessities needed to survive, like food clothes, shelter and nothing extra
- Moral slide
decline in standards of moral (good, fair and honest) behaviour
- Truism
something that is so obviously true it is not worth saying
- Trading
buying and selling shares
- High turnover
large numbers
- Changing hands
being bought and sold
- Spectacular gains
big increase in values
- Blue chips
large, well established, famous companies with history of profit in good and bad economic times
- Bull market
rising prices
- Record high
highest level ever
- Close
end of a working day
- Bullish
optimistic
- To go through a barrier
to surpass a key level/ to pass the ‘round number
- Panic selling
selling shares for any price
- New five-year lows
their lowest point for five years
- Spectacular declines
large decreases
- Wiped off the value
taken off the total share value
- 10 per cent of total market capitalization
the total value of shares listed on the market going down by 10 per cent
- Bear market
falling prices
- Bearish
pessimistic
A rally
prices starting to rise again
- Stock market collapse/ crash
very serious drop in the value of shares on the market, with serious economic consequences.
Internationalization
banks are expanding beyond their home countries and operating globally
Homogenization
becoming more similar across different countries
IPO (Initial Public Offering)
when a private company sells its share to the public for the first time on the stock market. This helps with raising money for the company and allows investors to buy ownership.
Market indexes
if there is demand for shares in a company, its share price goes up, if not, the share price goes down. The overall value of shares traded on a stock market is shown by an index ( plural indexes / indices).
- Retail banks
receiving deposits, making loans
- Building Societies
arranging mortgages
- Insurance companies
offering life insurance, providing pensions
- Investment banks
arranging mergers, arranging or fighting takeover bids, issuing shares or bonds, financial advice
If Bank Rate decreases
Borrowing becomes cheaper, saving becomes less rewarding, and inflation tends to increase.
If Bank Rate increases
Borrowing becomes more expensive, saving becomes more rewarding, and inflation tends to decrease.
The Bank Rate (Bank of England Base Rate)
he UK’s most important interest rate, set by the Bank of England’s Monetary Policy Committee (MPC). influences all other interest rates in the UK economy.
Interest
The cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved.
Inflation target
The Government sets a target for inflation, and the Bank of England adjusts interest rates to keep inflation within this target. Generally, when demand for goods and services exceeds supply, inflation tends to rise.
Consumer Prices Index (CPI)
A measure of inflation calculated using a ‘basket of goods’ that includes around 180 000 separate price for 700 items. It is updated monthly by the Office for National Statistics (ONS) and used for the Government’s inflation target. (Calculation of the inflation )
b. Inflation
The rate of increase in the prices of goods and services, expressed as a percentage. If inflation is 3%, it means prices are 3% higher than a year earlier.
The Bank Rate (also called the base rate) influences overall economic activity. If inflation is above target
the MPC raises interest rates to reduce spending and slow inflation. If inflation is below target, they lower interest rates to encourage spending and help inflation rise.
The Monetary Policy Committee (MPC)
responsible for adjusting the Bank Rate to meet this target ( MPC meet 8 time a year to set the interest rate) . Their second objective is to support the government’s economic goals, including growth and employment.
a. Monetary policy
the process by which the Bank of England sets interest rates and takes other measures to achieve a target inflation rate.
Meager
Not a lot
Lender of last resort
lending money to financial institutions in difficulty ( can only be done by the Central banks)
Bank run
a large number of customers withdraw their deposits from a bank at the same time because they fear the bank may fail. (creating finacial crises)
- Central banks
supervise the banking system, set minimum interest rates, issue banknotes, control money supply and act as lender of last resort.
- Commercial banks
trade in money, hold deposits, provide loans, investment advice and foreign exchange services.
- Investment banks
specialize in raising funds for industries, financing international trade, underwriting securities and handling mergers and takeovers.
- Merchant banks
similar to investment banks but only act as intermediaries and offer advisory services.
- Building societies
provide mortgages, lending money to homebuyers at higher interest rates than banks
- Supranational banks
institutions like the World Bank and the European Bank for Reconstruction and Development, which support economic development.
