| Business and Economic Terms-India |
| Keynes |
UK economist who urged state intervention to achieve full employment. |
| Liabilities |
Money owed. |
| Limited companies |
Companies which have limited liability |
| Liquidity ratio |
The proportion of a commercial bank's assets which can be converted into cash quickly. |
| Liquidity trap |
When the rate of interest is so low (and the price of bonds is so high) that everyone anticipates a future fall in the price of bonds. |
| Long-run |
Period of time when all factor inputs, including capital, can be changed. |
| Lorenz curve |
A curve showing the proportion of income earned by a cumulative percentage of the population. |
| Macroeconomic policies |
Policies designed to influence the level of employment, the price level, economic growth and the balance of payments. |
| Marginal cost curve |
A curve showing the addition to total cost resulting from producing one more unit. |
| Marginal propensity to consume |
The proportion of each extra pound of disposable income spent by households. |
| Marginal propensity to save |
The proportion of each extra pound of disposable income not spent by households. |
| Marginal revenue |
The income received from the sale of one extra unit. |
| MEA |
Multilateral environmental agreement |
| MERCOSUR |
Southern Common Market |
| MFA |
Multifibre Arrangement (replaced by ATC) |
| MFN |
Most-favoured-nation |
| Microeconomics |
The behavior of an individual consumer, firm and industry. |
| Monetarists |
A group of economists who believe that changes in the money supply have a significant impact on the economy. |
| Money illusion |
May occur where people confuse changes in nominal balances with changes in real balances. |
| Monopolistic competition |
An industry made up of a large number of small firms who produce goods which are only slightly different from that of all other sellers. |
| Monopsony |
A market where there is only a single buyer. |
| Most favored nation (MFN) |
A country’s trade policy that gives to a trading partner the same customs and tariff treatment as the most favored nation. |
| MTN |
Multilateral trade negotiations |
| Multi Fiber Agreement (MFA) |
Provision of GATT governing international trade in textiles that lets a country apply numerical restrictions on textile imports when it considers them necessary to prevent market disruption. MFA provides a framework for regulating international trade in textiles and apparel. It covers wool, man-made (synthetic) fibers, silk blends and other vegetable fiber textiles and apparel. |
| Mutual Fund |
US name for an open-ended managed fund not quoted on a stock exchange, equivalent to a unit trust in the UK. Mutual funds are a popular way for individuals to spread the risk ofinvesting in bonds and equities and are much used for retirement savings. |