Archives: Terms

Definition of Rationality Rationality in economics refers to the quality of being based on or in accordance with reason or logic. Rationality involves making decisions that maximize an individual’s utility or benefit, given the available information and constraints. In economic theory, it is often assumed that individuals act rationally by […]

Definition of Rates Rates refer to the specific amount of a charge or payment with respect to a particular item, based on a set of conditions or an agreed standard. Broadly speaking, rates come in various forms and are utilized in numerous contexts within economics and finance. They can be […]

Definition of Rateable Value Rateable Value, also known as Rateable Rental Value or Assessed Value, is a valuation given to a property by a local authority that determines the amount of property tax or business rates that the owner needs to pay. This value is typically based on the estimated […]

Definition of Rate Support Grant Rate Support Grant is a financial mechanism used primarily in the United Kingdom to allocate funds from the central government to local authorities. The purpose of the rate support grant is to adjust for disparities in revenue-raising capacities among local authorities, thereby ensuring that each […]

Definition of Rate of Return Regulation Rate of return regulation is a framework used by government agencies to control the profits earned by utility companies. This model aims to ensure that these companies do not exploit their monopoly power by charging excessively high prices to consumers. Regulatory bodies set the […]

Definition of Rate of Return The rate of return (RoR) is the gain or loss on an investment over a specified period, expressed as a percentage of the investment’s initial cost. This metric is vital in assessing the efficiency and profitability of various investment strategies. Essentially, the RoR helps investors […]

Definition of Rate of Interest The rate of interest, often simply referred to as the interest rate, is the percentage of a sum of money charged for its use over a period of time, typically expressed annually. This can apply to money borrowed or invested. For borrowers, it is the […]

Definition of Rate of Growth The rate of growth refers to the percentage increase in a particular variable over a specified period of time. Commonly used in economics to measure changes in critical economic indicators such as Gross Domestic Product (GDP), population size, and company revenues, the rate of growth […]

Definition of Rate of Exchange The rate of exchange, also known as the exchange rate, is the value at which one currency can be exchanged for another. It is essentially the price of one country’s currency in terms of another country’s currency. Exchange rates are determined by various factors including […]

Definition of Ratchet Effect The ratchet effect refers to a situation in which an organization’s or individual’s decision-making and behavior become constrained by previous decisions, leading to a reluctance or inability to reverse course even when circumstances change. This concept is often applied in economic and organizational contexts where initial […]