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ECONOMIC TERMINOLOGY- K - L

PUBLISHED BY: SURENDER KUMAR
OCTOBER 25, 2012

   
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ECONOMIC TERMINOLOGY- K - L

KNOWLEDGE ECONOMY

A label applied to modern economies in which 'knowledge-intensive’ activities (that involve the creation, processing and interpretation of information) account for a substantial, growing chunk of employment and output.

 

 

Some examples are education, retail, BPOs, banking, IT, media and telecom. The term was used first in the 1960s because services started accounting for more employment than agriculture, manufacturing and mining.

 

 

 

 

KNOWLEDGE PROCESS OUTSOURCING (KPO)

KPO is a process in which knowledge-based services (like the services of Advocates, Engineers etc.) are sought from foreign countries mainly because of wage rate differences.

 

 

 

 

LAFFER CURVE

Given by the American economist Prof. Arthur Laffer. It represents the relationship between total tax revenue and corresponding tax rates. Basically, it describes how changing the tax rate affects the tax collections.

 

 

 

 

LAISSEZ FAIRE

The idea of that the government has no business to intervene in economic activities. Was given full support by the classical economists, who had inherited it from Adam Smith.

 

 

 

 

LEGAL TENDER

Is a form of payment which must be accepted in legal settlement of a money debt. For example, the fifty-rupee note and the hundred-rupee note in India are legal tenders but the 50 paise coins, cheques and postal orders are not. Contrarily, in the USA, all coins and currency are legal tenders and cannot be refused in debt settlement.

 

 

 

 

LIQUIDITY

The extent to which an asset can be quickly turned into money. A current account bank deposit is a liquid asset because it can be withdrawn immediately. An office building, by contrast, will take a considerable time to dispose of. A company is said to be liquid if a high proportion of its assets are in cash or readily saleable securities.



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