Economy and Business Terms - Charlie, your teacher of English
individuals involved in these collective efforts. Ultimately, incentives aim to provide value for money
and contribute to organizational success.
Income Gap: (or) Income inequality is the unequal distribution of household or individual income
across the various participants in an economy. Income inequality is often presented as the
percentage of income to a percentage of population. For example, a statistic may indicate that 70%
of a country's income is controlled by 20% of that country's residents.
Income tax: If you earn money in any capacity, you will probably pay income tax on it. From a
monthly wage to letting a second property or receiving the jobseekers' allowance - all are taxable.
Anyone who hides a profit they are earning is committing a criminal offence - so it is well worth
knowing what the rules are. The amount of tax you pay varies depending on the allowances and
rates set by the chancellor at the most recent budget.
Index: A statistical measure of the value of a certain portfolio of securities. The portfolio may be for
a certain class of security, a certain industry, or may include the most important securities in a given
market, among other options. The value of an index increases when the aggregate value of the
underlying securities increases, and decreases when the aggregate value decreases. An index may
track stocks, bonds, mutual funds, and any other security or investment vehicle, including other
indices. An index's value may be weighted; for example, securities with higher prices or greater
market capitalization may affect the index's value more than others. One of the most prominent
examples of an index is the Dow Jones Industrial Average, which is weighted for price and tracks 30
stocks important in American markets.
Inflation: It is the reduction in the purchasing power of a currency. Inflation has historically occurred
when a country prints too much of its currency in too short a period of time. Central banks attempt to
control inflation by raising interest rates when necessary, which decreases the amount of money in
circulation. Inflation is inevitable whenever wealth is created, but central banks attempt to keep it
between 2% and 3% whenever possible. See also: Deflation, Disinflation, Inflation tax.
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Inheritance Tax: It's a tax on the money or assets that one inherits from an estate, as opposed to a
tax on the estate itself. In the United States, inheritance taxes are levied at the state level and apply
to the inheritors rather than the estate of the deceased. Generally speaking, inheritance taxes vary
according to the inheritor's relationship with the deceased. For example, a spouse rarely, if ever, is
responsible for an inheritance tax. It should not be confused with an estate tax, which is a tax on the
estate before it is distributed.
Initial Public Offering (IPO): An initial public offering (IPO) is the first time that the stock of a
private company is offered to the public. IPOs are often issued by smaller, younger companies
seeking capital to expand, but they can also be done by large privately owned companies looking to
become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting firm, which
helps determine what type of security to issue, the best offering price, the amount of shares to be
issued and the time to bring it to market.

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