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Definition The dependency theory states that rich nations have benefitted tremendously over the years by importing raw materials and commodities from poor countries. But the increase in wealth in the developed world has been at the expense of the poor nations. What does dependency theory mean? The dependency theory was proposed by Raul...

Definition A budgeted balance sheet is an estimate of a company’s balance sheet at some future date. A projection is made for each account that appears in the balance sheet based on the company’s plans for the year. The accuracy of a budgeted balance sheet depends on the correctness of the...

Definition If inflation increases, a country’s central bank can use a contractionary monetary policy to cool the economy and bring down prices. In the U.S., the Federal Reserve can implement a contractionary monetary policy by increasing the “Federal Funds Rate,” which is the rate at which banks lend reserve balances to...

Definition Unit elastic refers to a change in price that results in a proportional change in demand for a certain product. An increase in price will lead to a fall in demand and a decrease in price will have the opposite effect, leading to an increase in demand. What does unit elastic...

Definition Net credit sales refer to the sales that a company makes on credit terms of, say, 30, 60, or 90 days, or some other credit period. If any goods are returned by customers or if the company offers a discount, these amounts are reduced from the sales figure to arrive...

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