Investor Glossary-deficitInvestor Glossary-deficitInvestor Glossary-deficitInvestor Glossary-deficitInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Deficit

The HTML to link to this page
 

Deficit is an economic condition in which spending exceeds income. One example of a deficit would be a situation, in which a nation's imports exceed its exports, creating a trade deficit. Another example is a company's losses surpassing its profits. In such an event an organization is said to have a budget deficit. A prolonged state of deficit may be perilous to any entity, including a government. Namely, extensive periods of deficit may lead to inflation. When deficit occurs, governments may turn to borrowing in order to correct the resulted imbalance. Borrowing to compensate for revenue shortfall is called deficit financing. Though deficit financing may initially stimulate the economy, it is a short term solution. For in perpetuity, deficit financing can substantially inflate interest rates.



Rate this deficit definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: Key Rate Duration, margin rate, stock split, irrevocable trust, required rate of return, 1031 exchange, debt service coverage, ex-dividend, ex-dividend date, covered put, 401a, average price per share, Zero Cost Collar, deferred tax, liquidity ratio, phantom income, reverse mortgage, current ratio, 1035 exchange, inflation, class C shares, balance sheet, per diem, diluted share, wholly-owned subsidiary, annual return, VIX, option premium, limit order, EBITDA, deferred revenue, stock market close, APR, in escrow, FICO score, command economy, implied volatility, open position, risk management, dividends payable, real GDP, 144a, FTSE, minority interest, LIBOR, cancelled check, labor relations, retained earnings, quality assurance


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use