O
| Term | Definition |
|---|---|
| Oligopoly | A market structure characterized by a small number of large firms that dominate the industry. Oligopolistic markets often result in strategic interactions among firms, such as price competition or collusion. |
| Opportunity Cost | The cost of forgoing the next best alternative when making a decision. It represents the value of the best alternative that must be sacrificed in order to choose a particular option. |
| Open Market Operations | Monetary policy tools used by central banks to buy or sell government securities in the open market. The aim is to influence the money supply, interest rates, and overall economic activity. |
| Outsourcing | The practice of contracting out certain business functions or processes to external third-party providers. Outsourcing is often done to reduce costs, focus on core competencies, or access specialized expertise. |
| Overhead Costs | Indirect costs incurred by a business that cannot be directly attributed to a specific product or service. Overhead costs include expenses such as rent, utilities, and administrative salaries. |
| Overcapacity | A situation in which a firm or industry has the ability to produce more goods or services than the market demands. Overcapacity can lead to reduced prices, lower profits, and economic inefficiency. |
| Overhead Ratio | The ratio of a company’s overhead costs to its total revenue. It is a measure of how efficiently a business is managing its indirect expenses. |
| Output Gap | The difference between a country’s actual output and its potential output. A positive output gap indicates the economy is operating above its potential, while a negative gap suggests it is operating below potential. |
| Output/Input Ratio | A measure of productivity that compares the quantity of output produced to the quantity of inputs used. A higher output/input ratio indicates greater efficiency. |
| Outlier | An observation or data point that significantly deviates from the rest of the data set. Outliers can impact statistical analyses and should be carefully considered when interpreting results. |
| Over-the-Counter (OTC) Market | A decentralized market where financial instruments, such as stocks and bonds, are traded directly between buyers and sellers without a centralized exchange. OTC markets are often used for less liquid or customized securities. |
| Operating Income | Also known as operating profit or operating earnings, it is a measure of a company’s profitability from its core business operations. It is calculated by subtracting operating expenses from gross profit. |
| Outsider System | A system of corporate governance where shareholders play a more passive role, leaving management decisions to professional managers. In contrast, an insider system involves more direct shareholder involvement in decision-making. |
| Owner’s Equity | The residual interest in the assets of a company after deducting liabilities. It represents the ownership claim on the company’s assets and is equivalent to the difference between assets and liabilities. |
| Open Economy | An economy that engages in international trade and has economic transactions with other countries. In an open economy, factors such as imports, exports, and exchange rates play a significant role. |
| Output Gap | The difference between actual output and potential output in an economy. A positive output gap indicates the economy is operating above its potential, while a negative gap suggests it is operating below potential. |
| Orderly Market | A market condition characterized by a fair and transparent trading environment where prices reflect true market values. Government authorities may intervene to maintain an orderly market during periods of volatility. |
| Offshore Banking | The practice of holding bank accounts or conducting financial transactions in a foreign country. Offshore banking is often chosen for financial privacy, tax benefits, or regulatory advantages. |
| Operating Cash Flow (OCF) | The cash generated or used by a company’s core operating activities. It provides insights into a company’s ability to generate cash from its primary business operations. |
| Offshore | Where the usual rules of a person or firm’s home country do not apply. It can be literally offshore, as in the case of investors moving their money to a Caribbean island tax haven. Or it can be merely legally offshore, as in the case of certain financial transactions that take place within, say, the City of London, which are deemed for regulatory purposes to have taken place offshore. |
| Okun’s Law | A description of what happens to unemployment when the rate of growth of GDP changes, based on empirical research by Arthur Okun (1928-80). |
| Oligopoly | When a few firms dominate a market. Often they can behave together as if they were a single monopoly, perhaps by forming a cartel or colluding informally through non-price competition. |
| Term | Definition |
|---|---|
| Oligopoly | A market structure characterized by a small number of large firms that dominate the industry. Oligopolistic markets often result in strategic interactions among firms, such as price competition or collusion. |
| Oligopsony | An oligopsony is a market form in which the number of buyers is small while the number of sellers in theory could be large. |
| Open Economy | An economy that allows the unrestricted flow of people, capital, goods and services across its borders; the opposite of a closed economy. |
| Open-Market Operations | Central banks buying and selling securities in the open market to control interest rates or the growth of the money supply. They trade government bonds and treasury bills. |
| Opportunity Cost | The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) something but also the economic benefits (utility) that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else. |
| Optimal Currency Area | A geographical area within which it would pay to have a single currency. It can vary in size, spanning several countries or being smaller than an individual country. |
| Optimum | As good as it gets, given the constraints you are operating within. For the concept of optimum to mean anything, there must be both a goal, say, to maximize economic welfare, and a set of constraints, such as an available stock of scarce economic resources. Optimizing is the process of doing the best you can in the circumstances. |
| Option | An option is a contract giving the buyer the right, but not the obligation, to buy (in the case of a call) or sell (in the case of a put) the underlying asset at a specific price on or before a certain date. |
| Organizational Economics | Organizational economics (also referred to as economics of organization) involves the use of economic logic and methods to understand the existence, nature, design, and performance of organizations, especially managed ones. |
| Output Gap | How far an economy’s current output is below what it would be at full capacity. On average, inflation rises when output is above potential and falls when output is below potential. |
| Outsourcing | Shifting activities that used to be done inside a firm to an outside company, which can do them more cost-effectively. Big firms have outsourced a growing amount of their business since the early 1990s, including increasingly offshoring work to cheaper employees at firms in countries such as India. |
| Outward Investment | Investing abroad. |
| Over the Counter (OTC) | Financial securities that are bought or sold through a private dealer or bank rather than on a financial exchange. |
| Overheating | When an economy is growing too fast and its productive capacity cannot keep up with demand. It often boils over into inflation. |
| Overshooting | The common tendency of prices in financial markets initially to move further than would seem strictly necessary in response to changes in the fundamentals that should, in theory, determine value. |
| Overhead Costs | Indirect costs incurred by a business that cannot be directly attributed to a specific product or service. Overhead costs include expenses such as rent, utilities, and administrative salaries. |
| Overcapacity | A situation in which a firm or industry has the ability to produce more goods or services than the market demands. Overcapacity can lead to reduced prices, lower profits, and economic inefficiency. |
| Overhead Ratio | The ratio of a company’s overhead costs to its total revenue. It is a measure of how efficiently a business is managing its indirect expenses. |
| Output/Input Ratio | A measure of productivity that compares the quantity of output produced to the quantity of inputs used. A higher output/input ratio indicates greater efficiency. |
| Outlier | An observation or data point that significantly deviates from the rest of the data set. Outliers can impact statistical analyses and should be carefully considered when interpreting results. |
| Over-the-Counter (OTC) Market | A decentralized market where financial instruments, such as stocks and bonds, are traded directly between buyers and sellers without a centralized exchange. OTC markets are often used for less liquid or customized securities. |
| Operating Income | Also known as operating profit or operating earnings, it is a measure of a company’s profitability from its core business operations. It is calculated by subtracting operating expenses from gross profit. |
| Outsider System | A system of corporate governance where shareholders play a more passive role, leaving management decisions to professional managers. In contrast, an insider system involves more direct shareholder involvement in decision-making. |
| Owner’s Equity | The residual interest in the assets of a company after deducting liabilities. It represents the ownership claim on the company’s assets and is equivalent to the difference between assets and liabilities. |
| Term | Definition |
|---|---|
| Oligopoly | A market structure characterized by a small number of large firms that dominate the industry. Oligopolistic markets often result in strategic interactions among firms, such as price competition or collusion. |
| Oligopsony | An oligopsony is a market form in which the number of buyers is small while the number of sellers in theory could be large. |
| Open Economy | An economy that allows the unrestricted flow of people, capital, goods and services across its borders; the opposite of a closed economy. |
| Open-Market Operations | Central banks buying and selling securities in the open market to control interest rates or the growth of the money supply. They trade government bonds and treasury bills. |
| Opportunity Cost | The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) something but also the economic benefits (utility) that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else. |
| Optimal Currency Area | A geographical area within which it would pay to have a single currency. It can vary in size, spanning several countries or being smaller than an individual country. |
| Optimum | As good as it gets, given the constraints you are operating within. For the concept of optimum to mean anything, there must be both a goal, say, to maximize economic welfare, and a set of constraints, such as an available stock of scarce economic resources. Optimizing is the process of doing the best you can in the circumstances. |
| Option | An option is a contract giving the buyer the right, but not the obligation, to buy (in the case of a call) or sell (in the case of a put) the underlying asset at a specific price on or before a certain date. |
| Organizational Economics | Organizational economics (also referred to as economics of organization) involves the use of economic logic and methods to understand the existence, nature, design, and performance of organizations, especially managed ones. |
| Output Gap | How far an economy’s current output is below what it would be at full capacity. On average, inflation rises when output is above potential and falls when output is below potential. |
| Outsourcing | Shifting activities that used to be done inside a firm to an outside company, which can do them more cost-effectively. Big firms have outsourced a growing amount of their business since the early 1990s, including increasingly offshoring work to cheaper employees at firms in countries such as India. |
| Outward Investment | Investing abroad. |
| Over the Counter (OTC) | Financial securities that are bought or sold through a private dealer or bank rather than on a financial exchange. |
| Overheating | When an economy is growing too fast and its productive capacity cannot keep up with demand. It often boils over into inflation. |
| Overshooting | The common tendency of prices in financial markets initially to move further than would seem strictly necessary in response to changes in the fundamentals that should, in theory, determine value. |
| Overhead Costs | Indirect costs incurred by a business that cannot be directly attributed to a specific product or service. Overhead costs include expenses such as rent, utilities, and administrative salaries. |
| Overcapacity | A situation in which a firm or industry has the ability to produce more goods or services than the market demands. Overcapacity can lead to reduced prices, lower profits, and economic inefficiency. |
| Overhead Ratio | The ratio of a company’s overhead costs to its total revenue. It is a measure of how efficiently a business is managing its indirect expenses. |
| Output/Input Ratio | A measure of productivity that compares the quantity of output produced to the quantity of inputs used. A higher output/input ratio indicates greater efficiency. |
| Outlier | An observation or data point that significantly deviates from the rest of the data set. Outliers can impact statistical analyses and should be carefully considered when interpreting results. |
| Over-the-Counter (OTC) Market | A decentralized market where financial instruments, such as stocks and bonds, are traded directly between buyers and sellers without a centralized exchange. OTC markets are often used for less liquid or customized securities. |
| Operating Income | Also known as operating profit or operating earnings, it is a measure of a company’s profitability from its core business operations. It is calculated by subtracting operating expenses from gross profit. |
| Outsider System | A system of corporate governance where shareholders play a more passive role, leaving management decisions to professional managers. In contrast, an insider system involves more direct shareholder involvement in decision-making. |
| Owner’s Equity | The residual interest in the assets of a company after deducting liabilities. It represents the ownership claim on the company’s assets and is equivalent to the difference between assets and liabilities. |
| Term | Definition |
|---|---|
| Oligopoly | A market structure characterized by a small number of large firms that dominate the industry. Oligopolistic markets often result in strategic interactions among firms, such as price competition or collusion. |
| Oligopsony | An oligopsony is a market form in which the number of buyers is small while the number of sellers in theory could be large. |
| Open Economy | An economy that allows the unrestricted flow of people, capital, goods and services across its borders; the opposite of a closed economy. |
| Open-Market Operations | Central banks buying and selling securities in the open market to control interest rates or the growth of the money supply. They trade government bonds and treasury bills. |
| Opportunity Cost | The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) something but also the economic benefits (utility) that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else. |
| Optimal Currency Area | A geographical area within which it would pay to have a single currency. It can vary in size, spanning several countries or being smaller than an individual country. |
| Optimum | As good as it gets, given the constraints you are operating within. For the concept of optimum to mean anything, there must be both a goal, say, to maximize economic welfare, and a set of constraints, such as an available stock of scarce economic resources. Optimizing is the process of doing the best you can in the circumstances. |
| Option | An option is a contract giving the buyer the right, but not the obligation, to buy (in the case of a call) or sell (in the case of a put) the underlying asset at a specific price on or before a certain date. |
| Organizational Economics | Organizational economics (also referred to as economics of organization) involves the use of economic logic and methods to understand the existence, nature, design, and performance of organizations, especially managed ones. |
| Output Gap | How far an economy’s current output is below what it would be at full capacity. On average, inflation rises when output is above potential and falls when output is below potential. |
| Outsourcing | Shifting activities that used to be done inside a firm to an outside company, which can do them more cost-effectively. Big firms have outsourced a growing amount of their business since the early 1990s, including increasingly offshoring work to cheaper employees at firms in countries such as India. |
| Outward Investment | Investing abroad. |
| Over the Counter (OTC) | Financial securities that are bought or sold through a private dealer or bank rather than on a financial exchange. |
| Overheating | When an economy is growing too fast and its productive capacity cannot keep up with demand. It often boils over into inflation. |
| Overshooting | The common tendency of prices in financial markets initially to move further than would seem strictly necessary in response to changes in the fundamentals that should, in theory, determine value. |
| Overhead Costs | Indirect costs incurred by a business that cannot be directly attributed to a specific product or service. Overhead costs include expenses such as rent, utilities, and administrative salaries. |
| Overcapacity | A situation in which a firm or industry has the ability to produce more goods or services than the market demands. Overcapacity can lead to reduced prices, lower profits, and economic inefficiency. |
| Overhead Ratio | The ratio of a company’s overhead costs to its total revenue. It is a measure of how efficiently a business is managing its indirect expenses. |
| Output/Input Ratio | A measure of productivity that compares the quantity of output produced to the quantity of inputs used. A higher output/input ratio indicates greater efficiency. |
| Outlier | An observation or data point that significantly deviates from the rest of the data set. Outliers can impact statistical analyses and should be carefully considered when interpreting results. |
| Over-the-Counter (OTC) Market | A decentralized market where financial instruments, such as stocks and bonds, are traded directly between buyers and sellers without a centralized exchange. OTC markets are often used for less liquid or customized securities. |
| Operating Income | Also known as operating profit or operating earnings, it is a measure of a company’s profitability from its core business operations. It is calculated by subtracting operating expenses from gross profit. |
| Outsider System | A system of corporate governance where shareholders play a more passive role, leaving management decisions to professional managers. In contrast, an insider system involves more direct shareholder involvement in decision-making. |
| Owner’s Equity | The residual interest in the assets of a company after deducting liabilities. It represents the ownership claim on the company’s assets and is equivalent to the difference between assets and liabilities. |