What is Excess Capacity? Excess capacity (or unutilized capacity) occurs when a firm operates or is producing output at less than the optimum level. It can happen when there is a market recession or increased competition, where demand declines and firms are forced to reduce capacity to decrease costs. To increase demand, companies typically decrease…
What is Home Modification? Home modification refers to the alteration of both temporary and permanent features in the indoor or immediate outdoor environment that potentially impedes independent living for people with disabilities. It is a form of intervention meant to enable people living with disabling conditions to continue living in their homes and restore the home…
What is a Home Mortgage? A home mortgage is a loan provided by a lender – usually a bank, mortgage company, or other financial institution – to purchase a residence. The home mortgage agreement requires the borrower to transfer the title of the property to the lender, with a condition to transfer back the title when…
What is the Home Mortgage Disclosure Act (HMDA)? The Home Mortgage Disclosure Act (HMDA) is a U.S. federal law that was enacted in 1975, and it requires financial institutions to provide certain mortgage data to the public. Specifically, the law requires lenders to maintain records of their lending practices. Its goal is to create transparency in…
What is the Home Market Effect? The home market effect is a trade theory that argues that countries that exhibit higher demand for some products locally tend to record higher sales of the same products in foreign markets. The home market effect hypothesis was first hypothesized by Stephan Linda (1961) and later formalized by Paul…
What are Monetary Aggregates? Monetary aggregates are measures of the money stock in a country. Central banks measure money aggregates and present them in the form of end-of-month national currency stock series. In the U.S., monetary aggregates are conventionally labeled as M0, M1, M2, and M3. The categories come with different definitions, as follows: M0: The sum of…
What Does Monetize Mean? The word “monetize” is used to refer to the process of converting an item into cash. In the banking sector, monetize may be used to mean the process of turning an asset into legal tender. It can also be used informally to mean the exchange of possession for a cash equivalent…
What is Money? Money refers to any verifiable record that is accepted as a medium of exchange for payment of goods and services and repayment of debts in a specific country. Throughout history, governments adopted different forms of money, such as gold, silver, coins, and banknotes. The value of money is not necessarily derived from…
What is Money Flow? Money flow is a technical indicator used to assess the future movement of prices based on demand and supply. It is used to construct the difference between uptick and downtick dollar trading volume. Money flow, whether flowing in or out, indicates the current excess supply or demand. Traders determine whether the…
What is a Home Mortgage Interest Deduction? A home mortgage interest deduction is an itemized deduction that allows homeowners to deduct any interest on loans that are used to build, improve, or purchase their primary residence, and sometimes, second homes. Taxpayers are required to itemize their deductible mortgage interest on Form 1040 to claim mortgage…
