Economy and Business Terms - Charlie, your teacher of English
Public Relations: It's a general means of promoting a business's company image with a view to
encouraging customers to buy its products and investors to buy its shares, as well, for example, as
influencing government policies on issues relevant to the company. Companies often appoint a PR
officer to liaise with the media in providing them with information and news about the company's
activities and its record on such matters as consumer protection and environmental pollution.
Sponsorship of sport and the arts, etc. represents an indirect way of building up customer goodwill
towards the company's products.
Purchasing Power: Purchasing power is the value of a currency expressed in terms of the amount
of goods or services that one unit of money can buy. Purchasing power is important because, all
else being equal, inflation decreases the amount of goods or services you would be able to
purchase.
In investment terms, purchasing power is the dollar amount of credit available to a customer to buy
additional securities against the existing marginable securities in the brokerage
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Quality Control: Quality control is a process through which a business seeks to ensure that product
quality is maintained or improved and manufacturing errors are reduced or eliminated. Quality
control requires the business to create an environment in which both management and employees
strive for perfection. This is done by training personnel, creating benchmarks for product quality,
and testing products to check for statistically significant variations.
A major aspect of quality control is the establishment of well-defined controls. These controls help
standardize both production and reactions to quality issues. Limiting room for error by specifying
which production activities are to be completed by which personnel reduces the chance that
employees will be involved in tasks for which they do not have adequate training.
Rate of return: The annual income from an investment as a percentage of the original investment.
In finance, return is a profit on an investment. It comprises any change in value and interest or
dividends or other such cash flows which the investor receives from the investment. It may be
measured either in absolute terms (e.g., dollars) or as a percentage of the amount invested. The
latter is also called the holding period return. A loss instead of a profit is described as a negative
return.
Ratification: It is the acceptance or confirmation of an act or an agreement that was signed
(executed) by the confirming party itself. A treaty, for example, is not enforceable or valid until the
ratification process is complete.
Raw Materials: Raw materials are materials or substances used in the primary production or
manufacturing of goods. Raw materials are often referred to as commodities, which are bought and
sold on commodities exchanges around the world. Raw materials are sold in what is called the
factor market, because raw materials are factors of production along with labor and capital.
Real interest rate: The real interest rate is the rate of interest an investor expects to receive after
allowing for inflation. It can be described more formally by the Fisher equation, which states that the
real interest rate is approximately the nominal interest rate minus the inflation rate. If, for example,
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