Terms & Definitions

It is the phenomenon whereby, as the foreign exchange rate rises, net exports first decline and then begin to increase.

It is the difference between the portfolio's return and the return predicted by CAPM: α = Rp − [Rf + β(Rm − Rf)]; a positive alpha is considered manager value added.

They must make their pricing and production decisions so as to maximise the profit of the whole group in formations such as cartels, duopolies and oligopolies.

It is a resource allocation in which the losses of individuals whose position worsens are compensated as far as possible while improving the position of some individuals.

It is the school of thought that argues changes in real income in the short run stem from demand shocks linked to spending and advocates government intervention in the economy through fiscal policy.

Or the Sweezy model, an oligopoly model in which demand for a firm's product depends on its response to rival firms' price changes.

Joint dominance is a legal concept without a direct economic counterpart. In general, it is thought that joint dominance occurs in markets where there are few large undertakings that can coordinate their behavior with tacit cooperation in order to keep prices above competitive levels. For this reason, explicit coordination is not necessary. Successful cooperation requires not only alignment in prices and product levels, but also

It is a group of independent undertakings that are employed together to carry out a certain project. It arises in situations involving large projects such as the construction market, where close cooperation between many undertakings is required.

Or abbreviated as L, the basic production factor describing the physical or mental work and labour performed by people.

Or abbreviated as DL, the quantity of labour that producers want to employ depending on different wage rates in a given period.

Or the labour market, the physical or virtual environment where those who supply labour and those who demand labour come together and the wage rate of labour is determined in the process.

It is the situation in a given period in which the amount of labour demanded in the market equals the amount of labour supplied.

It is the physical or virtual environment where those who supply labour and those who demand labour come together and where the wage rate of labour is determined in this process.

It is the average labour production per worker in a given period.

Or excess labor demand, the situation in which the quantity of labour demanded in the labour market exceeds the quantity supplied.

Or abbreviated as SL, the quantity of labour that households offer to the market depending on different wage rates in a given period.

A graphical tool showing the relationship between the wage level and the quantity of labour supplied, other things being equal.

Those who show a desire to work from the working-age population and participate in the labour market are accepted into the labour force. Those who are looking for work but have not yet found a job, in other words the unemployed, together with the employed, constitute the total labour force; the share of the unemployed in it is the unemployment rate.

It is the ratio of the labour force to the working-age population.

Or natural resource, abbreviated as N, a basic production factor describing land that can be cultivated or built on as well as every kind of resource that comes from the land and from nature.

It is the physical or virtual environment where land and natural resources are bought and sold and the land rent rate is determined in this process.

It is the situation in a given period in which the amount of land demanded in the market equals the amount of land supplied.

The Late Liquidity Window (GLP) refers to the overnight TL borrowing facility that the CBRT, in its capacity as lender of last resort, provides without limit to banks at the end of the day (between 16:00 and 17:00), against collateral, in order to prevent problems that may arise in the payment systems and to meet their temporary liquidity needs, and the overnight TL lending facility it provides under the same conditions so that liquidity surpluses can be evaluated.

A fundamental concept in economics stating that, other things being equal, as the price of a good rises, the quantity demanded of that good decreases or remains the same.

It is the basic economics concept stating that the additional benefit obtained from a product diminishes as more of it is consumed within a given period.

It is the basic economics concept stating that when at least one factor of production is fixed, the contribution of an increase in another variable factor to production will gradually decline.

It is the basic statistics concept stating that when a random event is repeated many times, the average result approaches the expected value.

It is the idea that product prices will be the same in every country provided there are no transportation costs and no trade barriers.

They are measurable factors that develop before a change is seen in basic macroeconomic aggregates such as national income and inflation.

The security arranged by asset leasing companies, in their own name and for the account and benefit of the certificate holders, with the aim of financing the assets taken over by purchasing or leasing, enabling their holders to be entitled, in proportion to their shares, to the incomes obtained from these assets.

It is the financing technique used to meet the medium-term funding needs of undertakings. It is a contract signed between the lessee and the lessor in which the lessee selects the asset and the lessor purchases it, the ownership remaining with the lessor while the use remains with the lessee.

The equipment was recognised as a finance lease because ownership transferred at the end of the term.(The equipment was recognised as a finance lease because ownership transferred at the end of the term.)

İngilizce tanım: A lease that transfers substantially all the risks and rewards of ownership to the lessee.

A concept expressing that, because of their capacity as monetary authority and their obligations to ensure financial stability, central banks are the final institution of application for participants, in the event that the funding shortages arising in the system cannot be met from the market, the participants applying to the central bank and benefiting from the facilities arranged under this name.

It is an institution that is ready to lend even when nobody is borrowing.

They are programmes that regulate the procedures for not penalising those who cooperate with the competition authority in order to uncover cartels, or for granting reductions on the penalties to be imposed. In Turkish competition law, the relevant regulation has been made with the Leniency Regulation.

Or abbreviated as L, the measure of market power calculated by dividing the difference between the price of a product and its marginal cost by the price.

It is the supporting document issued by the relevant distribution company for investments whose evaluation result in the production and connection applications of renewable energy investments is positive and that is also requested in incentive certificate applications.

A type of guarantee concerning the payment for exported goods, under which payment will be made once certain conditions are fulfilled. Banks or other financial institutions intermediate letter-of-credit transactions. Accordingly, a letter of credit is a kind of letter of guarantee sent by a financial institution to a correspondent bank in a foreign country, committing it to extend credit on its own account for a certain period, in a certain amount and in favor of a third party.

It is the development level determined by taking into account the economic, social, cultural etc. criteria of a country, province or district. Start-up It is the name given to innovative and risky ventures with rapid growth potential

It is increasing a position using leverage or derivatives; it magnifies returns and losses by the same proportion.

Example: High leverage increases the entity's financial risk.( High leverage increases the entity’s financial risk.)

İngilizce tanım: The use of debt to increase the potential return on equity.

The ratio of debt to equity or to total capital. Leverage ratios show a business's funding structure and make it possible to see what resources finance its assets and in what proportion. The leverage ratio developed under Basel III is calculated by dividing core capital by the total risk amount.

It is the interest rate applied by highly rated banks when lending to one another over the key currencies (US dollar, euro, pound sterling, Japanese yen and Swiss franc) in the London interbank market.

The document given by the municipalities, provincial special administrations, organized industrial zones or the Ministry of Industry and Technology, as a result of the conditions sought in the workplaces specified in the regulation according to the activity being met. Redemption: the transaction of eliminating the debt by the debtor through payments made at once or in certain periods. Import Substitution: the domestic production of products previously imported.

The facility providing the services of preserving agricultural products in healthy conditions and storing them for commercial purposes, within the scope of the Licensed Warehousing of Agricultural Products Law No. 5300. Lobbying: the activity of influencing the decisions given by governments or international organizations. Mineral Exploration Investment: the investment directed at extracting a mineral. Mineral Processing Investment: the investment directed at processing a mineral. Return to Origin: the returning of a good to the place it came from (the country of exit/where the trade was conducted)

It is a conceptual measure of how easily and quickly a financial asset can be converted into cash of an equivalent amount.

It is the criterion for the ability of any asset or value traded on the market to be bought and sold without affecting its market price. It is also expected that the trading volumes of assets or values with high liquidity will be high.

Example: The company maintained sufficient liquidity to meet its maturing obligations.(The company maintained sufficient liquidity to meet its obligations as they fell due.)

İngilizce tanım: The availability of cash and the ability of an entity to meet its short-term obligations.

A monetary policy instrument with the property of short-term bills, used with the aim of increasing the effectiveness of monetary policy and regulating the liquidity in the market (withdrawing the excess liquidity). According to Article 52 of the CBRT Law, the CBRT can issue liquidity bills with maturities not exceeding 91 days, in its own name and for its own account.

Refers to funding and market liquidity risk. Funding risk is the risk of an additional funding need arising from a mismatch between short-term cash inflows and outflows, while market liquidity risk refers to the risk involving the time and value at which financial assets can be converted into cash.

Example: The entity monitors its liquidity risk through maturity analysis.( The entity monitors liquidity risk through maturity analysis.)

İngilizce tanım: The risk that an entity will struggle to meet its financial obligations.

The Turkish lira credit support provided by the CBRT, in the event that uncertainty and insecurity form in the banking system and fund withdrawals accelerate, to the banks regarding which uncertainty and insecurity have formed but that have the ability to pay, in the form of advances with one-month maturities and for a maximum of one year, against collateral in an amount to cover the fund withdrawals, limited to twice their equity.

It is the situation in which increasing the money supply cannot affect aggregate demand because the nominal interest rate has fallen to the lowest level it can reach.

A graphical tool showing the relationship between aggregate production and the interest rate when the money market is in equilibrium.

; It is the budget of organizations such as municipalities and special provincial administrations within the local government scope.

Or abbreviated as LIBOR, the interest rate at which banks lend to one another for their unsecured overnight borrowings in the London money market.

In the microeconomic context, the conceptual time interval in which entry into or exit from the market is possible and all the production factors are variable. In the macroeconomic context, it is the conceptual time interval in which prices and wages are variable and the production factors can show full mobility among regions and sectors.

Or abbreviated as LRAS, the diagrammatic tool showing the long-run relationship between the general price level and the quantity of aggregate supply, with everything else held constant.

Or abbreviated as LRAC, the total cost per unit of product according to the scale chosen in the long run.

A graphical tool showing the long-run relationship between the price of a good and the quantity supplied in the market, other things being equal.

Or abbreviated as LRPC, the diagrammatic tool showing the relationship between the unemployment and inflation rates when expected and actual inflation are equal.

It is a graphical tool showing the relationship between the percentage share of households in a country by population and the percentage share of income these households receive.

It is the finding that according to Kahneman-Tversky's Prospect Theory losses feel about twice as heavy as equivalent gains; one of its consequences is that investors sell too late when in a losing position.

They are products whose demand in the market falls when the average income level rises.

It is a low share in the labour force of a country of those unemployed who are defined as people seeking work but not working in a job.

It is a tax levied as a fixed amount per unit of the object taxed.

They are products whose demand in the market rises more rapidly than that of other products when the average income level rises.

It is the maturity-weighted average present value of the bond's cash flows: for each t, t × PV is summed and divided by the price; yield.

They are the rules and practices the state uses to manage various macroeconomic aggregates, primarily national income and inflation.

It refers to politicians following unsustainable expansionary fiscal policies in the short term in order to look good to the public at the expense of harming the economy in the long term.

It is the branch of economics that treats economic decision-makers as a whole and studies their aggregate behaviour.

It is the foreign exchange rate regime in which nominal exchange rates are determined by the market but the monetary authority intervenes in the rate when it deems necessary.

It is the exchange rate regime in which exchange rates are freely determined in the market without an official rate target, but in which the authorities may intervene in the rates by selling foreign exchange to the market or buying foreign exchange from the market.

It is a systematic management approach meaning "Project Cycle Management" in Turkish, in which all stages of the project are operated in an interrelated manner.

It is the additional collateral call of the intermediary when the collateral in a leveraged position falls below the required level; if it is not met, the position is liquidated.

Or abbreviated as MC, the additional cost incurred to increase production by one unit.

Or abbreviated as ME, the additional expenditure made in order to buy one unit more of a product.

Or abbreviated as MPB, the additional benefit that one unit more of a product provides to the consumer.

Or abbreviated as MPC, the additional cost the producer incurs to increase production by one unit.

Or abbreviated as MP, the additional product resulting from using one unit more of a given production factor.

Or abbreviated as MPK, the change in the quantity of total product when the quantity of capital is increased by one unit.

It is the additional output brought by spending one unit more money on a given factor of production.

Or abbreviated as MPC, the change in private consumption spending when total income in an economy rises by one unit.

Or abbreviated as MPM, the change in the volume of imports when total income in an economy rises by one unit.

Or abbreviated as MPS, the change in the volume of private saving when total income in an economy rises by one unit.

Or abbreviated as MRS, the amount of one good that must be given up in order to consume more of another good without changing total benefit.

Or abbreviated as MRTS, the amount of one input that must be given up in order to use more of another input without changing total product.

Or abbreviated as MRT, the opportunity cost of producing one unit more of a given good in terms of another good.

It is the extra income earned when sales increase by one unit.

Or abbreviated as MR, the additional revenue resulting from selling one unit more.

Or abbreviated as MRP, the additional revenue resulting from using one unit more of a given production factor.

Or abbreviated as MRPK, the change in total revenue when the quantity of capital is increased by one unit.

Or abbreviated as MRPL, the change in total revenue when the quantity of labour is increased by one unit.

Or abbreviated as MRPN, the change in total revenue when the quantity of land or natural resources is increased by one unit.

Or abbreviated as MSB, the additional benefit that one unit more of a product provides to the consumer together with the whole of society.

Or abbreviated as MSC, the additional production cost that one unit more entails for the producer together with the whole of society.

Or abbreviated as MU, the additional benefit obtained from consuming one unit more of a product in a given period.

It is the additional benefit brought by spending one unit more money on a given good or service.

Or abbreviated as MV, the additional benefit that the purchase of one unit more of a product brings to a monopsonist buyer.

Or abbreviated as MVPL, the revenue obtained from selling the additional product resulting from increasing the quantity of labour by one unit.

They are names identifying products made within the boundaries of a geographically determined area, region or country that has a distinctive quality, reputation or other characteristic and in which at least one of production, processing or other operations takes place.

It is the physical or virtual environment where buyers and sellers come together and product prices are determined in this process.

Or basket of goods, the list of goods determined in order to represent the economy as a whole or a particular sub-sector.

It is a conceptual measure that indicates how competitive a market is by looking at the distribution of firms' market shares.

Or abbreviated as D, the quantity of the product that all buyers in the market want to buy at different prices in a given period.

It is a short- or long-lasting situation in which the market fails to reach its equilibrium point due to internal or external reasons.

It is the situation in a given period in which the amount of goods demanded in the market equals the amount of goods supplied.

It is the situation in which social welfare decreases as a result of a decline in the market's efficiency in production or distribution.

It is the interest rate in the money market that is determined by the interaction of money supply and money demand and that is paid for deposits and other investments.

Example: The loan was granted at the market interest rate. ( The loan was granted at the market rate of interest.)

English definition: The prevailing interest rate in the market.

A system in which, with the aim of increasing effectiveness in primary market transactions and facilitating the functioning of secondary markets, the treasury or central banks accept as counterparty only the banks and certain other institutions it selects according to certain criteria, in transactions such as debt security issuance (auction) and foreign exchange intervention. The institutions selected under the name of market maker have obligations such as transacting uninterruptedly in the secondary markets, giving quotations, and purchasing a certain amount of an issue.

It is the physical or virtual environment where buyers and sellers come together and product prices are determined in this process.

It is a measure of how much a buyer or seller can influence the market price of a given product.

It is the concept that describes the characteristics of the economic interaction arising from the distribution of the number and size of buyers and sellers in the market.

Or abbreviated as S, the quantity of the product that all sellers in the market want to sell at different prices in a given period.

It is the price of goods and services determined jointly by supply and demand in a free market.

Example: The market value of the land increased sharply. ( The market value of the land rose sharply.)

İngilizce tanım: The price at which an asset could be traded in the market.

Or clearing price, the price at which transactions take place when the market is in equilibrium.

The term for the master plan reports showing all the particulars of lands with determined cadastral status on plans at a scale of 1/2000 or 1/5000, prepared in a manner consistent with the environment or regional order plans. Master plans are created to show the uses of lands, the zone types, the population structure and the transportation systems. All these points are stated in a detailed report. The master plans show what form a settlement area will take in the future.

The Payback period, meaning the maturity or date for the repayment of a loan taken.

Example: The bond's maturity is ten years from issue. ( (The bond matures ten years after issue.)

İngilizce tanım: The date an instrument becomes due for settlement.

The required reserve amount that banks and other financial institutions must hold at the CBRT against their liabilities varies according to the maturity of those liabilities. Reserve requirement ratios are higher for short-term liabilities and lower for long-term ones. Thereby, by encouraging longer-term liabilities, the aim is to extend the average maturity of banks' liabilities.

It is the function and property of being used in the purchase of goods and services by money.

It is the division of money into mental pockets according to its source and intended use; it contradicts the principle of the convertibility of money into one another.

They are the costs that firms incur in order to change the nominal prices of products.

It is the school of thought that argues that wealth is determined by the amount of valuables owned and that commercial relations are fundamentally a zero-sum game.

It is the merger of two companies of their own accord into a single new company.

They are enterprises employing fewer than ten people on a yearly basis and whose annual net sales revenue or balance sheet does not exceed 3 million Turkish Lira.

They are credits granted to low-income persons and especially to women so that they can engage in a production activity that will earn their living.

It is the branch of economics that treats individual economic decision-makers and studies their behaviour.

They are small-scale banking and insurance services provided to people who have difficulty accessing the traditional financial system.

It is a calculation method that divides the net change by the average change in order to find the average percentage change in the economy.

The minimum efficient scale is the smallest scale at which average costs are minimized. This concept carries importance for understanding market structure. For example, in the case where the minimum efficient scale is smaller compared to the general size of the market, a greater number of firms is expected to be found in the market, and hence the market is expected to have a competitive structure.

It is the exemption of a certain part of the wage from tax.

It is the minimum wage determined by the state as the counterpart of labour for a certain period of time and which cannot be reduced by mutual agreement.

It is the economic system in which what is produced, how and for whom is decided by the interaction of buyers and sellers in the markets, but in which the state also has an influence.

Or club goods, goods that are excludable in consumption but do not create rivalry.

They are the incomes arising from the combination of different factors of production that cannot be separated.

It is the whole of mathematical definitions and relationships that serve to describe and predict an economic fact or behaviour by simplifying it to a certain extent.

The training applications specially designed — and the physical environments where these applications will be offered — to develop the application-oriented skills of enterprises, through learning by doing in experimental settings, on matters such as lean production, process improvement, product development and problem solving, within the scope of the efficiency increase and digitalization required for global competition in enterprises, and to transform firms by quickly putting these new skills into practice.

It is the set of theories arguing that, under the assumption that the velocity of money circulation is stable, there is a direct and proportional relationship between the money supply and the general price level.

Refers to the investments including the addition of parts suited to the machinery and equipment that have completed their technical and/or economic life in the production lines of existing facilities, or the replacement of existing machinery and equipment with new ones, the completion of the sections left incomplete in the facility, the direct raising of the quality of the final product or the changing of its model.

It is a sensitivity measure giving the percentage effect on price of a one-unit change in yield, found by dividing the Macaulay duration by (1+y): ΔP ≈ −D*·Δy.

It is the school of thought that argues changes in real income in the short run stem from demand shocks linked to money supply and advocates government intervention in the economy through rules-based monetary policy.

A monetary magnitude is calculated by subtracting the monetary sector's liabilities to one another from the total of the money in circulation and the various liabilities of the monetary sector (the central bank, banks and money market funds) that are monetary or convertible into money. There are various monetary magnitude definitions according to the degree of liquidity of the assets they contain: M1: consists of the total of the money in circulation and demand deposits. M2: consists of the total of M1 and time deposits. M3: M3, the most broadly defined money supply, consists of the total of M2, the funds provided from repos, money market funds and issued securities (with maturities of up to two years).

It refers to gold owned by the central bank and held as reserves.

It is the monetary policy principle that recommends the central bank increase the money supply in proportion to the growth rate of real GDP.

Refers to the decisions taken with the aim of influencing the availability and cost of money in order to reach aims such as economic growth, increasing employment and price stability. The institutions responsible for its implementation are central banks. In the CBRT Law, it is stated that the fundamental aim of the CBRT is to ensure price stability.

The board formed within the CBRT, charged and authorized with determining the monetary policy principles and strategies with the aim of ensuring price stability, and, within the framework of these strategies, determining the inflation target together with the government, taking the measures necessary to preserve the internal and external value of the Turkish lira, and determining, again together with the government, the exchange rate regime directed at establishing its parity against foreign currencies and gold. The Monetary Policy Committee, under the chairmanship of the Governor, consists of the Deputy Governors, a member to be elected by the Bank Council from among its members, and a member to be appointed by joint decision upon the Governor's proposal. The Undersecretary of Treasury or the Deputy Undersecretary he designates may attend the meetings without voting rights.

It can also be defined as the money-creating sector. It comprises the central bank, deposit banks, development and investment banks, participation banks and money market funds.

It is the monetary policy regime in which the central bank targets a certain growth rate for monetary aggregates such as the money supply and bank reserves.

Shows through which channels and to what extent monetary variables affect aggregate demand, the output gap and inflation. The monetary transmission mechanism is generally explained in three stages. The first stage determines the transmission of the changes in monetary policy implementations to variables such as interest rates, asset prices, expectations and the exchange rate. In the second stage, the said variables affect the demand for domestic and imported goods; in the third stage, aggregate demand and domestic pricing behaviors are determined, and domestic prices and import prices shape inflation. In addition, interest rates have direct effects on inflation, and exchange rates on the demand for imported goods and on import prices in local currency.

It is any object of value generally accepted as payment in exchange for goods and services.

It is a stock data showing the money, deposit and other monetary liabilities of the central bank and the banks, the loans extended by these institutions and their positions with respect to abroad. Under the residency principle, transactions of the banks' foreign organisations are not included.

A graphical tool showing the relationship between the nominal interest rate and the amount of money that economic agents wish to hold, other things being equal.

It is income consisting only of payments in the form of money.

Financing. IBAN (International Bank Account Number): the International Bank Account Number providing the standard for the automatic holding and validity of bank account numbers. IBAN, developed by ECBS (European Committee for Banking Standards), is a series of alphanumeric characters identifying an account held at a bank anywhere in the world. Having at most 34 characters, IBAN contains the ISO, the country code, two check digits and the bank account number. Processed and stored electronically

It is the market in which highly liquid financial instruments with a short-term maturity (90 days or less for international markets) are traded.

It is the situation in a given period in which the aggregate demand for money in the market equals the aggregate supply of money.

They are investment funds consisting of short-term and low-risk securities.

Or abbreviated as θ (read as theta), the coefficient showing how much money is created from one unit of reserves in the banking system.

Or abbreviated as MS, the amount of money created jointly by the central bank, commercial banks and the non-banking sector in a given period.

A graphical tool showing the relationship between the nominal interest rate and the quantity of money in the economy, other things being equal.

It is the firm that is the sole seller of a product that has no close substitute.

It is the difference that arises, due to imperfect competition, between the price of a factor of production and its marginal revenue product.

; A market structure with many buyers and sellers possessing incomplete information, product differentiation, and no barriers to entry.

A monopoly is the situation in which there is a single seller in the market. The demand curve facing the monopolist is negatively sloped. The comparison of the outcomes of the monopoly and fully competitive markets shows that the monopolist sets a higher price, produces less, and earns more than economic profit (monopoly rent). In this case, consumers face a high price in a way that causes a loss of welfare, and income flows from consumers to the monopolist undertaking

It is the market structure in which a product with no close substitute is supplied by a single seller and in which there are barriers to the entry of other sellers into the market.

It is the ability of a buyer or seller to determine the market price of a given product or to prevent competition.

It is a market structure in which a product supplied by more than one seller is demanded by a single buyer and where barriers to the entry of other buyers exist.

It is the fact that economic units make more risky choices when other people will bear the cost of an unfavourable outcome.

It is the borrower's announcement that it will be unable to pay all or part of its debts due to loss of its ability to pay. It generally ends in a restructuring of the debt between the debtor and the creditor.

It is a type of lien placed over immovable property securing a credit loan up to an amount reaching 1.5 or 2 times the credit, and which banks may accept as collateral especially for commercial loans. Usufruct Right is the right of a legal entity to use land not belonging to it.

It is a long-term investment instrument that enables people who lack sufficient savings for a down payment to become homeowners by paying in small monthly instalments as if they were paying rent.

Refers to a type of real estate financing system envisaging the extension of long-term housing credits against the mortgage to be realized over real estates such as houses and plots, by a bank or a similar financial institution. In this system, individuals make a certain down payment for the real estate they request, and the remaining amount is covered by the financial institution lending it. The said financial institution has the authority to seize the real estate until the amount it has lent (the credit) is repaid. The repayment of the debt can be realized with fixed or variable interest, following a predetermined payment series. Financial institutions can issue bonds and borrow by showing the mortgage credits they have extended as collateral.

( Multiple Zone Pricing System): Under this method, the same delivery price is applied to all buyers in a zone, while prices differ between zones.

It is the offering of more than one product for sale through tender at one time.

It is the coefficient showing how much a unit change in autonomous spending will affect equilibrium income.

The form taken by the moneys collected from the public in return for participation certificates being converted, by the investment companies, into a portfolio consisting of capital market instruments and of the gold and other precious metals traded on the national and international exchanges. These funds, managed by the investment companies, provide returns to investors in different ways depending on their properties and investment areas.