Economy and Business Terms - Charlie, your teacher of English
It is also the legal protection available to the shareholders of privately and publicly owned
corporations under which the financial liability of each shareholder for the company's debts and
obligations is limited to the par value of his or her fully paid-up shares. The company itself, as a
legal entity, is liable for the rest. Also called limited personal liability.
Logistics: Logistics is the general management of how resources are acquired, stored and
transported to their final destination. Logistics management involves identifying prospective
distributors and suppliers, and determining their effectiveness and accessibility. Ultimately,
management establishes a relationship with the appropriate companies or handles its own logistics
if it is more cost-effective to do so.
Macroeconomics: It's the field of economics that studies the behavior of the aggregate economy.
Macroeconomics examines economy-wide phenomena such as changes in unemployment, national
income, rate of growth, gross domestic product, inflation and price levels.
Macroeconomics is focused on the movement and trends in the economy as a whole, while in
microeconomics the focus is placed on factors that affect the decisions made by firms and
individuals. The factors that are studied by macro and micro will often influence each other, such as
the current level of unemployment in the economy as a whole will affect the supply of workers which
an oil company can hire from, for example.
Manufacturing: It is the process of converting raw materials, components, or parts into finished
goods that meet a customer's expectations or specifications. Manufacturing commonly employs a
man-machine
setup
with
division
of
labor
in
a
large
scale
production.
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Margin: It allows investors to buy securities by borrowing money from a broker. The margin is the
difference between the market value of a stock and the loan a broker makes. Related: Security
deposit (initial). In the context of hedging and futures contracts, the cash collateral deposited with a
trader or exchanged as insurance against default.
Margin Account: A margin account is a brokerage account in which the broker lends the customer
cash to purchase securities. The loan in the account is collateralized by the securities and cash.
Because the customer is investing with a broker's money rather than his own, the customer is using
leverage to magnify both gains and losses.
Market Coverage: Number of active retail and/or wholesale outlets (relative to a saturation level)
that sell a specific firm's brands in a given market. Required market coverage is achieved by
following concentrated marketing, differentiated marketing, or undifferentiated marketing strategy.
Merger: It's a decision by two companies to combine all operations, officers, structure, and other
functions of business. Mergers are meant to be mutually beneficial for the parties involved. In the
case of two publicly-traded companies, a merger usually involves one company giving shareholders
in the other its stock in exchange for surrendering the stock of the first company.
Minimum wage: It is the minimum amount of compensation an employee must receive for
performing labor. Minimum wages are typically established by contract or legislation by the
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