What is a Sabbatical? The word sabbatical originates from the Biblical Sabbath, which is the observance of the day of rest or time of worship on the seventh day. In the field of education, a sabbatical or paid leave is commonly taken from teaching after seven years. Until today, religious sabbatical laws define the regulations…
What is Income Elasticity of Demand? Income elasticity of demand measures the relationship between the consumer’s income and the demand for a certain good. It may be positive or negative, or even non-responsive for a certain product. The consumer’s income and a product’s demand are directly linked to each other, dissimilar to the price-demand equation….
What is Income Smoothing? Income smoothing is a term used to refer to the different strategies and approaches used by accountants and financial analysts to monitor or control the impact of high rises and sudden drops in corporate income. Income smoothing also involves the manipulation of benefits, innovative accounting methods, and the implementation of generally…
What is the Smoot-Hawley Tariff Act? The Smoot-Hawley Tariff Act raised around 900 import tariffs by an average of 40% to 60%. Also referred to as the United States Tariff Act of 1930, its purpose was to safeguard U.S. businesses and farmers. Rather, it added extensive stress to the Great Depression. The law got its…
What is Incremental Analysis? Incremental analysis (also referred to as the relevant cost approach, marginal analysis, or differential analysis) is a decision-making tool used to assess financial information and derive a decision between two or more alternatives. Incremental analysis is used by businesses to analyze any existing cost differences between different alternatives. The method incorporates…
What Does “Jointly and Severally” Mean? The term or phrase “jointly and severally” is a legal term used to describe a partnership whereby each party or member holds equal responsibility for liability. A common term for “jointly and severally” is “joint and several liability.” In all partnerships or groups of people, it is important to…
What are Incoterms? Incoterms are a set of rules or regulations published by the International Chamber of Commerce (ICC) to encourage and regulate international commerce and trade. Incoterms are formally known as international commercial terms and are recognized worldwide. The terms are set out to clarify and differentiate the respective obligations of buyers and sellers…
What is an Implied Contract? An implied contract is a non-verbal and unwritten – yet still legally binding – contract that exists based on the behavior of the parties involved or on a set of circumstances. Implied contracts are relatively rare compared to the more commonplace express contract, which is usually a formal, written agreement…
What is Imperfect Competition? Imperfect competition is an economic concept used to describe marketplace conditions that render a market less than perfectly competitive, creating market inefficiencies that result in losses of economic value. In the real world, markets are nearly always in a condition of imperfect competition to some extent. However, the term is typically…
What is an Implicit Cost? An implicit cost is a non-monetary opportunity cost that is the result of a business – rather than incurring a direct, monetary expense – utilizing an asset or resource that it already owns. The cost is a non-monetary one because there is no actual payment by the business for the…
