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INFLATION PREMIUM: The difference between the nominal interest rate and the real interest rate. The role of the inflation premium is, quite simply, to adjust the interest rate for inflation. The nominal interest rate (the one on the loan contract) includes a real interest rate needed by the lender and a surcharge equal to the expected inflation rate used to maintain the purchasing power of the future payments. This expected inflation rate is the inflation premium.
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LONG-RUN MARGINAL COST The change in the long-run total cost of producing a good or service resulting from a change in the quantity of output produced. Like all marginals, long-run marginal cost is an increment of the corresponding total. It is the change in long-run total cost divided by, or resulting from, a change in quantity. Long-run marginal cost is guided by returns to scale rather than marginal returns.
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BLUE PLACIDOLA [What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors looking to buy either a T-shirt commemorating the second moon landing or a coffee cup commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki. Be on the lookout for fairy dust that tastes like salt. Your Complete Scope
This isn't me! What am I?
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The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
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"Don't judge each day by the harvest you reap but by the seeds that you plant. " -- Robert Louis Stephenson, writer
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APT Arbitrage Pricing Theory
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