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NAFTA, the North American Free Trade Agreement is an economic pact permitting free trade between the USA, Canada, and Mexico. NAFTA extends a free trade agreement made between the USA and Canada in 1988. The treaty was signed in 1992, ratified in 1993, and took effect in 1994. It provides for the complete removal on all trade tariffs between the member countries, with tariffs on agricultural products to be phased out. Chile applied to join and in 1994 negotiations over its admittance began.
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The naira is the currency of Nigeria.
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In economics, naive diversification is an investment strategy in which an investor simply invests in a number of different assets in the hope that the variance of the expected return on the portfolio is lowered.
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The Napoleon was a former French gold coin of twenty francs weighing 6.45 grams.
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In economics, a narrow market is an inactive market, which displays large fluctuations in prices due to a low volume of trading.
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Nash equilibrium is an equilibrium in an economy, in which every individual is maximizing his or her utility, taking into account the actions of all other individuals. A central concept in game theory (which permits the solution of problems in bargaining theory), the Nash equilibrium has been known for many years but was first formally stated by John Nash in 1950.
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In Britain, national assistance was formerly a weekly allowance paid to various groups of people by the state to bring their incomes up to minimum levels established by law. It has now been replaced by various other state benefits.
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National banks are American commercial banks established by federal charter, which requires them to be members of the Federal Reserve System. The free banking system of the State of New York in 1838 gave all parties freedom to establish banks, and required securities to be deposited with the State for bank issues. In December, 1861, Secretary Chase recommended to Congress a similar system of national banks. He repeated this recommendation in 1862. The Act of February the 25th, 1863, authorized the free formation of banks, entitled to issue notes to the amount of ninety per cent of the par value of the United States bonds which each bank deposited with the Treasury Department. The system was to be supervised by an official called the comptroller of the currency. $300,000,000 of bank notes in all might be issued. A revised act was passed on June the 3rd, 1864. The Act of 1865 taxing State bank notes forced most of these to become national banks. The Act of 1870 increased the total amount of issue to $354,000,000. The system greatly benefited the Government in the placing of its bonds, and gave the country a superior system of banking, the Government guaranteeing the notes. By the end of the 19th century there were nearly 4000 national banks, with capital amounting to nearly $700,000,000, and deposits aggregating nearly $1,800,000,000.
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The National Bureau of Standards is an organization, founded in 1901, whose function is to establish and maintain standards for units of measurements.
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The National Consumer Council is an organization set up by the British government in 1975 to watch over consumer interests and speak for the consumer to the government, nationalized industries, and independent industry and commerce. It deals only with issues of policy.
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The National Economic Development Council is an advisory body on general economic policy in Britain, composed of representatives of government, management, and trade unions. It was established in 1962.
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The National Enterprise Board was a public corporation established in 1975 to help the economy of the UK. In 1981 it merged with the National Research and Development Council to form the British Technology Group.
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In economics, the national income is the total of all incomes accruing over a specified period to residents of a country and consisting of wages, salaries, profits, rent, and interest.
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The National Institute of Economic and Social Research is an organisation founded in 1938 with the aim of increasing knowledge of the social and economic conditions of contemporary society. It conducts research by its own staff and in co-operation with the universities and other academic bodies. The Institute publishes a quarterly analysis of the economic situation and prospects in the National Institute Economic Review.
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National Insurance is a levy in Britain for social security purposes, notionally intended to fund sickness and unemployment benefits and national retirement pensions. There are four classes of payment: Class 1 primary and secondary, paid by employees and employers respectively, based on the wages and salaries of employees; Class 2, a weekly sum paid by the self-employed; Class 3, voluntary contributions to keep up contribution requirements; Class 4, a further levy on the self-employed based on levels of profit.
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The UK Department for National Savings was established in 1969, having previously been known as the Post Office Savings Department. It is responsible for administering a wide range of schemes for personal savers, including premium bonds, income bonds, deposit bonds, and yearly savings plans. In addition the department has offered a range of National Savings Certificates costing either œ10 (up to 1981) or œ25 (from 1981), some of which have been index-linked. The income they pay is income- tax free and the element of capital gain is free of capital-gains tax.
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The National Savings Bank is a savings bank operated by the Department for National Savings through the agency of the Post Office. It offers ordinary accounts with a minimum deposit of œ1 and a maximum of œ10,000, and investment accounts paying a higher rate of interest for deposits of between œ5 and œ100,000.
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The National Savings Stock Register is an organisation run by the Department for National Savings to enable members of the public to purchase certain Treasury stock and other gilts as an alternative to the main Bank of England Register. Purchases and sales are made by post and income is taxable, but is paid before deduction of tax (unlike the Bank of England Register). Because transactions are carried out by post, this method does not provide the maximum flexibility for dealing in a moving market.
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National superannuation is a pension paid to some elderly people by the Department of Social Welfare in New Zealand.
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A natural monopoly is a monopoly in which the minimum efficient scale of production is greater than or equal to the total demand, as, for example, in electricity distribution. More generally, monopolies may exist as a result of barriers to entry, government privilege, or limited information. It is important that legislators know which type of monopoly they are confronting, since enforcing competition in markets in which there are barriers to entry is likely to increase efficiency, while the same policy directed at a natural monopoly can be expected to reduce efficiency. It is usually argued that natural monopolies are best harnessed for the benefit of the public by regulation, taxation, or nationalisation.
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In economics, the natural rate of unemployment is the rate of unemployment consistent with the productive potential of an economy. The concept was introduced by Milton Friedman, who argued that any attempts by governments to reduce unemployment below the natural rate would necessarily fail. In the context of the Phillips curve, this means that there is no long-term inverse relationship between inflation and unemployment. More recently it has been argued that there is not even a short- term inverse relationship. Econometric attempts to estimate the natural rate of unemployment have proved inconclusive, although some have claimed that increasing unemployment in the 1970s and 1980s has been due to a steady rise in the natural rate. However, it is not clear why the natural rate should vary with time.
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In business, natural wastage refers to the method by which an organisation can contract without making people redundant, relying on resignations, retirements, or deaths. If the time is available, this method of reducing a work force causes the least tension.
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The Navigation Acts (sometimes called Acts of Trade and Navigation) were legislation passed by Great Britain in the 17th and 18th centuries to promote and protect British industry and commerce against foreign competition. The navigation act of 1651 stipulated that goods imported or exported by British colonies in Africa, Asia, or America be shipped on vessels constructed by English shipbuilders and sailed by crews that were 75 percent English. Goods imported from the colonies into England also had to arrive on English vessels. Goods from foreign countries were restricted to vessels from the exporting nation or to English ships. The term English referred to individual nationality and not to place of residence, and the colonists and colonial shipping were considered English.
The act of 1660 specified certain articles, principally tobacco, rice, and indigo, that the colonists could export only to another British colony or to England. Later statutes such as the Woollens Act of 1699, the Hat Act of 1732, and the Iron Act of 1750 were attempts to prevent manufacturing in the British colonies that might threaten the industrial economy of England. The trade and navigation acts were a development of the mercantile system, an economic policy prevailing in Europe through the 16th, 17th, and 18th centuries. The regulations had clear advantages for British subjects in the New World. American shipbuilding prospered because of the requirement that all vessels be English-made. Producers of most of the named articles found a stable, protected market in England and in their sister colonies.
A system of export bounties and rebates was set up and actually kept prices of English goods lower than those that would have prevailed under a system of open competition. During the period of the French and Indian War, however, when Parliament was forced to seek increased revenues to pay the costs of defending the New World colonies, British officials determined to levy heavier duties under the provisions of the acts of trade and navigation. American colonists found these duties onerous, and they are usually considered among the indirect causes of the American Revolution. The
Navigation Acts were repealed in 1849.
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In finance, near money are liquid assets that can be converted to cash very quickly, such as a bank deposit or bill of exchange.
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In economics, a necessity is a good or service whose consumption is seen as essential in order to maintain a minimum standard of living in a society; for example, food and shelter.
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Negative income tax (NIT) is a means of targeting social security benefits to those most in need. The payments would be made through the income-tax system by granting personal allowances to taxpayers so that the standard rate of income tax on these allowances would constitute a minimum amount required for living. Those with high incomes would obtain that amount as an income-tax relief, while those with incomes lower than the allowance would have a negative income-tax liability and be paid the appropriate sums. The principal objection to the system is that to cover the needs of the disadvantaged the wealthier would obtain excessively high allowances.
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The neoclassical school is the mainstream school of thought in economics, deriving from the work of the Marginalists, who defined value in relation to scarcity and regarded the balance of supply and demand as determining equilibrium prices. This method was first applied in microeconomics and used to describe the utility and profit-maximizing behaviour of individuals and firms. The neoclassical approach was set out by Alfred Marshall in his Principles of Economics, published in 1890; modern microeconomic textbooks remain remarkably similar to this work. The application of neoclassical principles to macroeconomics has been somewhat slower, since it was not immediately accepted that economic aggregates reflect the sum of individual choices. However, the development of general equilibrium theory has enabled neoclassical macroeconomists to conform to a similar pattern to that earlier established in microeconomics.
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The net asset value (NAV) of an organisation is the total assets less all liabilities and all capital charges (including debentures, loan stocks, and preference shares). The net asset value per share is the NAV divided by the total number of ordinary shares issued.
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Net assets are the assets of an organisation less its current liabilities. The resultant figure is equal to the capital of the organisation. Opinion varies as to whether long-term liabilities should be treated as part of the capital and are therefore not deductible in arriving at net assets, or whether they are part of the liabilities and therefore deductible. The latter view is probably technically preferable.
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The Net Book Agreement (NBA) was an agreement between publishers and booksellers according to which booksellers will not offer books to the public below the price marked on the cover of the book. Exceptions include school textbooks, remainders, and books offered in a national book sale. Set up in 1899, the agreement was registered under the Restrictive Trade Practices Act (1956) and the Resale Prices Act (1964) as being in the public interest.
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Net book value (NBV) is the value at which an asset appears in the books of an organisation (usually as at the date of the last balance sheet) less any depreciation that has been applied since its purchase or its last revaluation.
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The net worth of an organisation is the value of the organisation when its liabilities have been deducted from the value of its assets. Often taken to be synonymous with net assets (i.e. the total assets as shown by the balance sheet less the current liabilities), net worth so defined can be misleading in that balance sheets rarely show the real value of assets; in order to arrive at the true net worth it would normally be necessary to assess the true market values of the assets rather than their book values. It would also be necessary to value goodwill, which may not even appear in the balance sheet.
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The neutrality of money is a belief, originating from the theories of new classical macroeconomics, that the quantity of money in the economy can only affect prices (i.e. inflation), rather than such real variables as investment or the level of employment. As the economy will always operate at the natural rate of unemployment and government policies will be fully anticipated by individuals with rational expectations, choices will be adjusted to counter the effects of government policy. For example, if a government tries to raise investment, the price of investment goods will rise; this will discourage previously planned purchases, which will no longer be made, so all that will have changed will be prices, which will have increased.
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New classical macroeconomics is a school of thought that developed in the 1970s by applying the concept of rational expectations to macroeconomic theory. Keynesians and monetarists argued that fiscal or monetary policy could be used to raise the level of output and employment in the economy at least in the short term; the new classicists, however, claimed that this was not true. In their view any reflation of the economy will be fully anticipated by individuals and firms, who will adjust their behaviour in such a way that the economy will remain unchanged in real terms. For example, if the government increased public expenditure to create jobs, taxpayers - realising that this would have to be paid for through higher taxes in the future - would reduce their present expenditure by an equal amount in order to save money to pay future tax bills. Nevertheless, the extra money injected into the economy would raise prices and cause inflation.
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The New Economic Policy (NEP) was an economic programme in the Soviet Union run from 1921 to 1928, that permitted the private ownership of industries, etc.
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New England Shilling was the name given to the first coins issued in 1652 by the mint established in that year at Boston, America. They were of the value of '12d, 6d and 3d peeces', stamped N E on the face and XII, VI or III on the reverse to denote the value.
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The New Netherlands Company was formed in 1615 after the ascent of the Hudson River by the Englishman who gave that river his name. Hudson was at that time in the employ of Holland. The company was founded by Amsterdam merchants, who obtained a monopoly of the trade for three years, and established a settlement at Manhattan and trading posts on the Delaware River. The company was succeeded by the Dutch West India Company.
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The New York Stock Exchange is the main stock exchange in the USA. It is situated on New York City's Wall Street. Founded in 1792, it is an unincorporated organisation with over 1500 members.
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A night safe is a service provided by commercial banks, enabling customers to deposit cash with the bank after banking hours. By using this service shopkeepers, etc., can avoid keeping large sums overnight. A special wallet provided by the bank is inserted into a safe in the outside wall of the bank to which customers are given the key. The following day the wallet is opened, either by the customer himself or by a bank clerk, and his account is credited accordingly.
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The Nikkei Dow Index is an index of Japanese industrial blue chip shares that gives an indication of the movement of share prices at the Tokyo Stock Exchange.
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Silver ninepences were common until 1696. They were very pliable coins and were frequently bent and given as love tokens.
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No-par-value (NPV) denotes a share issued by a company that has no par value. Dividends on such shares are quoted as an amount of money per share rather than as a percentage of the nominal price. No-par-value shares are not allowed by UK law but they are issued by some American and Canadian companies.
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The Noble was an ancient coin, so called on account of the superior quality of the gold used in its minting. Nobles were originally disposed of as a reward for good news or important service done. Edward III was the first who coined rose nobles and gave one hundred of them to Gobin Agace of Picardy for showing him a ford across the River Somme, when he wanted to join his army.
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A nominal account is a business ledger account that is not a personal account in that it bears the name of a concept, e.g. light and heat, bad debts, investments, etc., rather than the name of a person. These accounts are normally grouped in the nominal ledger.
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Nominee shareholding is shareholding held in the name of a bank, stockbroker, company, individual, etc., that is not the name of the beneficial owner of the shares. A shareholding may be in the name of nominees to facilitate dealing or to conceal the identity of the true owner. Although this cover was formerly used in the early stages of a take-over, to enable the bidder clandestinely to build up a substantial holding in the target company, this is now prevented by the Companies Act (1981), which makes it mandatory for anyone holding 5% or more of the shares in a public company to declare that interest to the company. The earlier Companies Act (1967) made it mandatory for directors to openly declare their holdings, and those of their families, in the companies of which they are directors.
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Normal economic profit is the theoretical minimum profit required to keep an entrepreneur in a particular business. It must be at least as much as he could earn by investing his capital in some other business. If the entrepreneur was to earn abnormally high profits, new firms would enter the industry and the entrepreneur's profits would fall; if the entrepreneur's profit was too low he would leave the industry, allowing others to make better profits. Thus in perfect competition only normal profits can be made. In a monopoly, abnormally high profits can be earned as a result of barriers to entry.
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In economics, a normal good is a good for which the absolute level of demand increases as income expands. This does not necessarily mean that a consumer will spend the same proportion of his income on a normal good as his income expands, but it does mean that he will spend more in absolute terms. Another way of saying this is that the income elasticity of demand is greater than zero. The assumption that goods are normal is usually made in economic analysis for the purposes of simplification.
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Normative economics is an economic analysis that includes judgements about what ought to be done, rather than simply theorising. For example, Keynesian analysis contains both positive elements (the study of involuntary unemployment) and normative elements (the recommendation that fiscal policy should be used to reduce unemployment). Unfortunately, it is usually difficult to separate the positive from the normative in an economic theory.
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Nose tax was a popular name for a poll tax imposed upon the Irish by the Danes in the ninth century. Defaulters were punished by having their nose split, whence the popular name.
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A nostro account is a bank account conducted by a British bank with a bank in another country, usually in the currency of that country.
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A note issuance facility (NIF) is a means of enabling short-term borrowers in the eurocurrency markets to issue euronotes, with maturities of less than one year, when the need arises rather than having to arrange a separate issue of euronotes each time they need to borrow. Revolving underwriting facility (RUF) achieves the same objective.
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Nuevo sol is the currency of Peru, introduced in 1991 to replace the Inti.
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Abbreviations
Money
