General Finance

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Welcome to the General Finance section of Financial Dictionary. The purpose of this section is to define common financial terms used in everyday life. Unfortunately debt has become an integral part in the lives of most people and almost everybody in the western word has become a borrower. Often a person, who doesn't have sufficient income to qualify for a loan, needs a co-borrower who also becomes responsible for the loan repayment. On the other site of the debt equation sits the lender. One of the most common loans is the mortgage loan. The homebuyer signs a purchase agreement with the seller and borrows money from the lender to pay for the house (real property).

When you use almost any financial product the business/individual that offers you the product frequently receives commission for the service. For example if you lease an apartment the real estate broker that found you the apartment will receive a fee from the landlord.

The financial crisis crushing markets worldwide, has forced central banks and governments to change their monetary policy and fiscal policy and ease money supply in order to get credit flowing again. Governments worldwide are running huge budget deficits in attempt to revive weakened economies. With GDP (Gross Domestic Product) shrinking and economic recession the order of the day, consumers have stopped spending and left many corporations and franchises struggling to acquire working capital and survive. Globalization is also taking heavy toll on developed economies, with thousands of workers losing their jobs. The inflation or deflation debate still rages, while the middle class is shrinking at alarming speed.

You can also learn the definitions of following financial terms – Contract, Estate, Generally Accepted Accounting Principles (GAAP), Insurance, Social Security, Gross National Product (GNP), and Accounting.

This section of the site describes frequently used financial words that do not fit in other site categories. To learn more about these terms just follow the links above.