Economics dictionary terms beginning with the letter S
 
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Sale and repurchase agreement is an agreement between two financial institutions to lendor borrow money for a short period of time with the borrower handing over securites as collateral for the loan to the lender.

Sales revenue maximisation is a hypothesis that firms aim to maximise sales rather than profits. It is an alternative hypothesis to the traditional profit maxmising view of firms.

Say's law argues that supply creates its own demand. The production of goods will create sufficient demand that all the goods will be sold.

Scarcity arises because human wants are unlimited while the supply of factos is limited.

Search theory is a branch of economics that studies buyers or sellers that cannot instantly find a trading partner and must therefore spend time, effort and resources searching for a partner with whom to transact. For example, workers seeking an employer or consumers seeking a products.

Seasonal unmemployment is unemployment that is associated with particular times of the year. For example, hotel employees laid off in the winter season or buiding workers temporarility laid of during the winter season.

Second best theory is a theory that argues that in the presence of more than one distortion to an economy the removal of a particular distortion may or may not make society better off.

Secondary action occurs when workers in another organisation go on strike to support workers in another orgainisation. For example police officers go on strike in support of ambulance workers.

Secondary Market  the market for buying and selling a security that has already been issued on the primary market.

Second best solution is a second best solution to the problem at has. While the benefits may exceed the costs the second best solution has an inferior benefit to cost impact than the first best solution.

Second degree price discrimination occurs when a a firms charges a lower price as more of the units of the good or service are purchased.

Securitization the creation of a security which is backed by a stream of cash  flows from a pool of preexisting assets and receivables or from future prospective cash flows.

Self-fulfilling speculation occurs when speculators cause prices to follow the direction they predicted the secuirt woiuld move in. for example, if speculators expect a share to rise and then all start buying the share then the price rise can become self-fulfilling.

Semi-strong market efficiency occurs when current prices of a secuity fully reflect all publicly available information so that excess risk adjusted profits cannot be made by trading on the same information set.

Sensitivity analysis looks at the performance of an economic model or forecast when allowing for different values of relevant parameters in the model to see how they affect the performance of the model or forecast.

Set aside is part of the Common Agricultural policy that lmakes payments for farmers to look after part of their land rahter than farm it.

Shares are a security that give the holder ownership rights in a compnay, the owner of the shares has a claim on the net assets of the company and may or may not receive a dividend from any trading profits.

Short selling to sell a bond or share that the seller does not own in the hope that the price will fall and can be bought back at a lower price. Traders are short on a security if they have a negative net position in that security or asset.

Short termism is an expression that captures the idea that firms and shareholder tend to make decisions based on short term performance at the expense of taking longer term decisions which will likely lead to superior performance over the longer term.

Sight deposits are deposits that can be withdrawn from an acccount immditely and at no penalty to the depositor.

Social benefit is the private benefit from consumption of a good or service plus an benefits that will accrue to third parties. Ffor example, eduction benfits the individual that consuimes it but also benefits society by reducing the probability of unemployment and crime.

Social cost is the private cost of production plus any additional costs which accrue to third parties. for example in producing a good a firm may impose additional costs to societ if the production of the good leads to river pollution which needs to be cleared up.

Social efficiency is a position where it is not possible to make someone better of in society without making someone else worse off.

Social discount rate is a rate of discount thaty reflects society's preference for present benefits over future benefits. The higher the social disount rate makes it less likely that a future project will be fiunded as it makes the future benfits have a lower net present value.

Social impact standards are measures that seek to control pollution due to their adverse impact on peoples health and well being.

Sole proprietorship a firm with a single owner that has unlimited liability.

Special Drawing Rights (SDRs) are an artificial currency created by the international monetary fund in 1969 to increase global liquidity. The SDR is made up of four currencies, the dollar, euro, yen and pound sterling.

Special Purpose Vehicle (or Entity) a legal entity created by financial institutions that can be used for specific financial transactions such as bundling together assets and the associated cash flows to generate a new security or investment vehicle.

Specialisation involves the division of the production pricess into different tasks with workers specialising in only one of the tasks, this usually leads to greater efficiency and higher output per worker.

Specific tax is a fixed tax per unit regardless of the value of the unoit. For example, a $10 per unit tax on whisky could be levied regradless on the price or quality of th whisky.

Speculation involves taking a risky financial position in the hope of making a profit.

Speculators are people who buy or sell financial securites, commodities or other assets in the hope of making a profit.

Spot exchange rate the price of one currency in terms of another currency for immediate delivery

Spot Market  a market in which the commodity/asset/security is paid for and delivered immediately. Often used in the currency market when talking about the spot exchange rate between one currency and another.

Stabilising speculation occurs when speculation reduces volatility in the price of something with speculators selling as price rises and buying as the price falls.

Stagflation occurs when there is a significant rise in unemployment combined with rising inflation.

Stakeholders are the people such as shareholders, managers, bondholders, suppliers and employees in a company which have a stake in the success of a business or organisation.

Standardised unemployment rate is a measure of the unemployment rate that has been standardised by the Organisation for Economic Cooperation and Development swo that each country's unemployment rate can be compared. According to the OECD measure a person is unemployed if they are of working age, actively looking for work in the last month and available to start work within two weeks.

Steady state equlibrium describes an equlibrium in which markets clear but economic variables may be growing at a constant rate and in the absence of economic shocks will continue to do so.

Sterilization refers to using an offsetting open market operation to neutralize the effects of foreign exchange operations on the domestic money suppply. For example if a non US country  buys dollars with newly created domestic currency then an sale of deomestic Treasury securites is used to prevent the domestic money supply expanding.

Stock refers to the outstanding amount of an economic or financial variable. For example the stock of government debt, the housing stock and the stock of capital in an economy.

Stocks an American terms for shares. Stocks give the holder an ownership stake in a publicly listed company.

Stop-go policies refers to a cycle of Goverment policies which are designed to slow down and then accelarate economic growth.

Strategic alliance is a relationship between two or more parties to pursue a set of agreed goals such as the launch of a new product or service while at the same time remaining idependent.

Strategic trade theory is a branch of international economics which argues that strategic interventions by governments in the form of subsidies or other means of protection can shift profits from foreign firms and industries to domestic firms and industries.

Strong form market efficiency argues that security prices fully reflect both publicly avaliable and privately held information. If the strong form of market efficiency holds then insider trading would not result in abnormal profits.

Structural fiscal deficit is the fiscal deficit that would occur if the economy was growing at its underlying trend rate of growth. When the economy is growing below trend the structural fiscal deficit will be lower than the headline fiscal deficit. When the economy is growing above trend the structural fiscal deficit will be higher than the headline fiscal deficit.

Structural unemployment is long term unemployment caused by technological change, foreign competition or declining demand for a product whereby the laid off workers do not have the skill set required to work in other parts of the economy.

Structuralists is a school of economic thought that emphasizes the importance of structral features such as political and institutional factors of an economy when undertaking an economic analysis of the economy. The School of thought is widely used in development economics to examine the likely effets of economic policies designed to promote economic development.

Sub-prime borrower is a person  that takes out a mortgage debt but who has a low income and high probability of default.

Sub prime debt is debt that has a high risk of default since the debt security relies upon repayments from sub prime borrowers.

Subsistence economy is an economy that  only produces enough goods for its citizens to have a basic standard of living and there is little to no surplus for other things such as investment and capital formation.

Substitute goods are goods which can be considered a substitutes for consumers . If the price of one good goes up then the demand for a subsitute will rise so that the cross price elasticity of demand for the two goods is positive.

Substitution effect of a price change measures the impact of a change in the price of a good on the demand for that good holding the price of other goods constant and holding the consumers real income constant.

Substitution effect of a wage change measures the effect of a change in workers wages in the amount of hours they are willing to work while holding their real income constant.

Substitution effect of a change in the tax rate measures the effect of a change in the tax rate  on the amount of work that a worker is willing to do while holding their real income constant.

Sunk costs are one off costs of production that are incurred regardless of whether the good is actually produced or not. For example, research and development costs for a new product.

Supernormal profits are any profits above the level of normal profits.

Supply curve shows different quantities of a good or service that will be supplied at different prices or a given period of time.

Supply side-economics is an approach that argue that the best way to increase aggregate supply and economic growth is through market oriented economic policies such as privatization, education, undermining monopolies, weakining Trade Unions, less bureaucracy and red tape, lowering taxes etc

Sustainable growth means a rate of economic growth which can be maintained without creating significant economic and environmental problems for future generations. For example, rapid growth today may exhaust resources and create environmental problems for future generations such as depleting oil and gas reserves, deforestation and causing problems such as global warming.












 









































Spot price  the price for immediate delivery.