onomi      on epts and erminolo ies        22.25
     in recent times as some of them were caught out by
     betting the wrong way on the market movements.
     Some of them also made huge losses by buying the       An act of unproductive retention of money or
     complex packages of debt that contain many of          goods.
     the US mortgage loans which turned sour.
          In recent years, there have been several high-       hog cycles
     profile hedge fund collapses. The Long -Term
     capital Management (LTCM) of the US failing in         The cycles of over and under production of goods.
     1998 had threatened the very stability of the US       This takes place due to time lag in the production
     financial system—looking at the level in impact        process–this happens in case of agricultural
     the regulators managed a bail out for it to prevent    products specially.
     an imminent financial collapse. In 2006, the world
     saw the collapse of another hedge fund in the US,         impossible trinity
     the Amaranth which lost $6.5 billion in a month
     in the natural gas market (The fund in place of a      This is a term to show the central bank’s dilemma
     bail out was closed down by the regulators with        in targeting for stable exchange rate, interest rate
     the investors losing heavily.)                         and inflation while announcing the credit and
                                                            monetary policy for the economy. As this task is
        herfinDAhl inDex                                    not only challenging but also not possible, it is
     This is a measure of the level of seller concentration called as the ‘impossible trinity’.
     in a market which takes into account the total
     number of firms and their relative share in the           inDiA’s sovereign rAting
     total market output. Also known as Herfindahl-
     Hirschman Index.                                       Presently, India is rated by six international credit
                                                            rating agencies, namely Standard and Poor’s
        hiDDen price rise                                   (S&P), Moody’s Investor Services, FITCH,
                                                            Dominion Bond Rating Service (DBRS), the
     A quantitative or qualitative decrease in a product    Japanese Credit Rating Agency (JCRA), and
     without changing the price.                            the Rating and Investment Information Inc.,
                                                            Tokyo(R&I). Information flow to these credit
        hiDDen tAx                                          rating agencies has been streamlined.
     Addition of an indirect tax into the price of a good
     or service without fully informing the consumer           inDifference curve
     as, for example, the magnitude of the excise duty
                                                            A curve on the graph showing the alternative
     in tobacco and alcoholic products is so high that
     the taxes are added to the products directly.          combinations of two products, each giving the
                                                            same utility/satisfaction.
        historic cost
                                                               inDuceD investment
     The original cost of purchasing an asset such as
     land, machine etc., which is shown in the balance      The part of investment (increase or decrease)
     sheet of a firm under this title with an adjustment    which takes place due to a change in the level of
     for the replacement cost of the asset.                 national income.