What are External Economies of Scale? External economies of scale refer to factors that are beyond the control of an individual firm, but occur within the industry, and lead to such a cost benefit. For example, if the government imposes higher tariffs on the import of a certain good, then it is beneficial for all…
What are Explicit Costs? Explicit costs are business operating costs, or expenses, that are easily quantifiable and identifiable. Also referred to as accounting costs, the explicit costs of a company are recorded in its books (accounting ledgers) and become listed expenses on the company’s financial statements – such as its balance sheet and income statement….
What is Financial Statement Manipulation? Financial statement manipulation refers to the practice of using creative accounting tricks to make a company’s financial statements reflect what the company wants its performance to look like rather than its actual performance. Despite numerous steps taken by legislatures and regulatory bodies – such as the Securities and Exchange Commission…
What is the Knowledge Economy? The knowledge economy is focused on the essential importance of human capital in the 21st-century economy. The rapid expansion of knowledge and the increasing reliance on computerization, big data analytics, and automation are changing the economy of the developed world to one that is more dependent on intellectual capital and…
What are Krugerrands? Krugerrands are gold bullion coins minted in South Africa. The Krugerrand was first minted in 1967, a co-production of the South African Mint and the Rand Refinery, a precious metals refining company. The coin’s name is derived from the name, Paul Kruger, and the South African rand, the basic unit of currency…
What is the Kyoto Protocol? The Kyoto Protocol is a treaty created by the United Nations in 1997 that aimed to reduce carbon emissions worldwide, thereby combating global warming or climate change. The name, Kyoto, was derived from the city in Japan where the protocol was adopted. The Kyoto Protocol was an extension of the…
What is a Bullish Engulfing Candlestick? A bullish engulfing candlestick shows a pattern of trading prices for a particular security, indicating a reversal in price trends. A candlestick is a type of chart that represents the four important prices for intraday trading: opening, closing, day’s high and day’s low, for any security. Understanding Bullish Engulfing…
What is Double-Spending? Double-spending is a problem that arises when transacting digital currency that involves the same tender being spent multiple times. Multiple transactions sharing the same input broadcasted on the network can be problematic and is a flaw unique to digital currencies. The primary reason for double-spending is that digital currency can be very…
What are Dual-Class Stocks? Dual-class stocks refer to a stock offering structure within a company. A dual-class structure means that a company offers two types (or classes) of stocks. The purpose of offering class A and class B stocks, for example, is to differentiate between stocks with different dividend payouts and decidedly different voting rights….
What is Dollarization? Dollarization is the process by which a country decides to use two currencies – the local currency and generally a stronger, more established currency like the US dollar. A dollarization process can either be partially or completely done. Many times, it is performed because residents no longer believe in the domestic currency…
