Economic Terms

Definition of '5/20 Rule'

Definition: The 5/20 rule is a norm of the Indian Aviation Ministry under which national carriers are required to have five years of operational experience and a fleet of minimum 20 aircraft to fly overseas. This is applicable to all commercial aviation organisations flying passengers.

Annual Financial Statement

Definition: Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year, from April 1 to March 31. This statement is called the annual financial statement. 

Description: It is divided into three parts, Consolidated Fund, Contingency Fund and Public Account. For each of these funds, the government has to present a statement of receipts and expenditure. 

Appropriation Bill

Description: Post the discussions on Budget proposals and the Voting on Demand for Grants, the government introduces the Appropriation Bill in the Lok Sabha. It is intended to give authority to the government to withdraw from the Consolidated Fund, the amounts so voted for meeting the expenditure during the financial year. 

Definition of 'Api Testing'

Definition: API (Application Programming Interface) testing is a type of software testing that aims to determine whether the APIs that are developed meet expectations when it comes to functionality, performance, reliability and security for an application. 

Definition of 'Asset Turnover Ratio'

• Definition: Asset turnover ratio is the ratio between the value of a company’s sales or revenues and the value of its assets.

• Asset turnover ratio can be a determinant of a company’s performance. The higher the ratio, the better is the company’s performance. 

Definition of 'Asteroids'

• Asteroids are actually minor planets which can neither be classified either as a planet or as a comet.
• These are generally in the direct orbit around the Sun, also known as the inner solar system.
• The larger forms of asteroids are also known as planetoids. These are different from the minor planets in the outer solar system in their volatile-based surfaces much like comets. These are generally known as asteroid belt.

• 4 Vesta. This is the only asteroid that can be seen even without binoculars because of the relatively reflective surface.

Definition of 'Balloon Payment'

Definition: Balloon payment is the lump sum payment which is attached to a loan, mortgage, or a commercial loan. This payment is usually made towards the end of the loan period. Balloon payment is higher than what you might be paying towards the loan on a monthly basis. 

Definition of 'Balance Of Payment'

Definition of 'Bancassurance'

Definition: Bancassurance means selling insurance product through banks. 

Definition of 'Bank Rate'

Definition: Bank rate is the rate charged by the central bank for lending funds to commercial banks. 

Definition of 'Base Rate'

Definition: Base rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers. 

Base Effect

The base effect is the distortion in a monthly inflation figure that results from abnormally high or low levels of inflation in the year-ago month. A base effect can make it difficult to accurately assess inflation levels over time. It diminishes over time if inflation levels are relatively constant.

Broad Money

Broad money is the most inclusive method of calculating a given country's money supply. The money supply is the totality of assets that households and businesses can use to make payments or to hold as short-term investments such as currency, funds in bank accounts and anything of value resembling money. 

Definition of 'Bankruptcy'

Definition: When an organisation is unable to honour its financial obligations or make payment to its creditors, it files for bankruptcy. A petition is filed in the court for the same where all the outstanding debts of the company are measured and paid out if not in full from the company’s assets. 

Definition of 'Bcci'

Definition:The board was formed in December 1928 as a society, registered under the Tamil Nadu Societies Registration Act. 

BCCI had 6 regional bodies as its first members. Today it has 30 full-time members, and is worth Rs 3,308 crore. 

Definition of 'Bearish Trend'

Definition: 'Bearish Trend' in financial markets can be defined as a downward trend in the prices of an industry's stocks or the overall fall in broad market indices.

 A fall in the prices of about 20% is identified as a bearish trend.

Definition of 'Benchmark Government Bond'

Definition: Benchmark government bond is a debt security issued by the Central government with a residual maturity of 10 years. 

Description: This bond is backed by sovereign guarantee. Hence investors don’t face any default risk. 

The coupon rate is decided by way of auction. This bond has the highest liquidity amongst similar maturity bonds. Once fixed, the coupon rate remains constant throughout the term of the bond. Only the yield changes commensurate with the interest rates and accordingly the price of the bond changes.

Definition of 'Black-box Testing'

Definition: Black-box testing is a testing strategy that ignores the internal mechanism of a system or component and focuses solely on outputs generated in response to selected inputs and execution conditions.

Definition of 'Blue Ocean Strategy'

Definition: 'Blue Ocean Strategy is referred to a market for a product where there is no competition or very less competition. This strategy revolves around searching for a business in which very few firms operate and where there is no pricing pressure. 

Definition of 'Brand Tribe'

Definition: A brand tribe could be regarded as a group of people who collectively identify themselves with the product and share similar views and notions about the brand. 

There are lot of brand tribes associated with products such as Apple, BMW, Harley Davidson, Audi, etc.