What is Communism? Communism is a social, political, and economic ideology in which the means of production are owned communally, and it advocates for a classless society with little or no private ownership of property. The Communist theory was founded by German political philosophers and economists Karl Marx and Friedrich Engels in the second half…
What is Margin? The term “margin” refers to the amount deposited with a brokerage when borrowing money to buy securities. When an investor buys securities on margin, it means they are using borrowed money from the brokerage to invest in securities. In such a case, the broker acts as the lender; the investor acts as…
What is a Phantom Stock Plan? A phantom stock plan, also called a shadow stock plan, is a type of deferred employee compensation plan where the type of shares issued to plan participants are phantom shares instead of company shares. Phantom shares provide benefits similar to stock ownership but without actually issuing company shares. What…
What is Opaque Pricing? Opaque pricing or a non-transparent price refers to the pricing method for goods and services whose brand and/or detailed quality information is hidden during the sale process. It is targeted to consumers who make purchases primarily based on price and not on brand reputation or detailed product/service quality information. How Opaque…
What is Maquiladora? A maquiladora is a mode of manufacturing in Mexico that is established by a foreign company, involving the export of the manufactured goods to the company’s country of origin. The factories benefit from duty-free and tariff-free imports of raw materials, machinery, and equipment to be used in the manufacturing process. The manufactured goods…
What is Société Anonyme? Société Anonyme (SA) is a public limited company (PLC) similar to a public traded company in the U.S. The company is created and operated by specific rules and regulations explained in the French Commercial Code Article L-225. The corporation must consist of a minimum of at least two shareholders, but the…
What is the Effective Tax Rate? The effective tax rate can be defined as an average rate of tax payable by an organization or a person. The average rate at which an individual’s earned and unearned income is taxed is known as their effective tax rate. An individual’s earned income can be a salary or…
What is Deposit Multiplier? The deposit multiplier is essentially the amount of money kept in the reserve account of a bank (as a requirement) to allow for continued functionality, to meet the withdrawal demands of their clients, and to limit the potential risks associated with the depletion of their supplies. The deposit multiplier is the…
What is Hot Waitress Economic Index? The hot waitress economic indicator index is an informal and one of the miserable economic indicators used to measure an economy’s well-being. The indicator is constructed by compiling the average number of people working as waiters or waitresses. According to the index, when the economy is performing dismally, the…
