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Rationing
From LoveToKnow 1911
"==RATIONING== In the articles Food Supply and Savings Movement the general question of food control during the World War is dealt with.

 


Rationing
Related Category: Economics: Terms and Concepts
allotment of scarce supplies, usually by governmental decree, to provide equitable distribution.

Capital rationing
Placing one or more limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on parts of, and/or the entirety of, the capital budget. ...

credit rationing
allocation of loans to creditworthy borrowers by other than pure market means. Credit rationing occurs when interest rates are kept below the level at which an unregulated market would set, leading to an excess of demand for loans.

capital rationing - Related Articles
How to Set the Hurdle Rate for Capital Investments
Best Practice ...

HARD CAPITAL RATIONING - A capital budget that under no circumstances can be violated.
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Rationing
Although economists say that rationing is what the PRICE MECHANISM does, what most people think of as rationing is an alternative to letting PRICES determine how scarce economic resources, ...

Rationing - Where the government restricts the amount of a good that people are allowed to buy.
Range - The difference between the highest and lowest values in a set of data.

job rationing a reason for unemployment in which the quantity of labor supplied is greater than the quantity demanded because the real wage is too high. (21) ...

Credit Rationing
Restriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans.
Investment Tax Credit ...

Capital Rationing. Shortage of funds that forces a company to choose between projects.
Capital Structure Mix of different securities issued by a company.

RATIONING: The distribution or allocation of a limited commodity, usually accomplished based on a standard or criterion. The two primary methods of rationing are markets and governments. Rationing is needed due to the scarcity problem.

Rationing, however, comes at a cost. The government must undertake the difficult job of adjusting rations to reflect fluctuating supplies and demands and the needs of individual consumers.

Rationing
The artificial restriction of raw materials, goods or services. Rationing commonly occurs when governments fear a shortage and want to make sure people have access to necessities, such as after a natural disaster or during a war.

The rationing of foreign currencies, bank drafts, and other instruments for settling international financial obligations by countries seeking to ameliorate acute balance-of-payments difficulties.

Credit Rationing
A restriction in the supply of a loan so that excess demand for credit exists at the market price. In perfect market economics, supply and demand schedules intersect at a price that clears the market.

Credit rationing can occur when interest rates have been trending either up or down. In the latter, defaults often prompt new and higher margin requirements.

Capital rationing that under no circumstances can be violated.
Hard currency
A freely convertible currency that is not expected to depreciate in value in the foreseeable future.

Capital rationing is a procedure resorted to when a firm is unable to undertake all the investment projects that yield returns in excess of financing costs because of a limited availability of funds.

Non-price rationing devices All methods used to ration scarce goods that are price controlled. Whenever the price system is not allowed to work, non-price rationing devices, such as "first-come, first-serve" with queuing, result.

capital rationing The placement of restrictions on the quantity of new investments or projects... capital requirement A permanent base of funds needed for the normal operation of a business.Also...

"Soft" capital rationing
Constraints on spending that under certain circumstances can be violated or even viewed as constituting targets rather than absolute limits.
Soft currency ...

The line defined by every combination of the risk-free asset and the market portfolio. The line represents the risk premium you earn for taking on extra risk. Defined by the capital asset pricing model.
Capital rationing ...

Rationing of foreign exchange, typically used when the exchange rate is fixed and the central bank is unable or unwilling to enforce the rate by exchange-market intervention.
Exchange equalization fund ...

Valuation Opportunity Cost The potential increase in firm value associated with investments that are for gone due to capital rationing.

The subprime crisis pushed for credit rationing, due to small market confidence. The interbank market dried up because of difficulties in evaluation assets and liabilities.

World War II rationing and price controls were accompanied by extensive black market activity involving illegal dealings in meat, sugar, automobile parts, penicillin and other regulated commodities as well as widespread evasion of rent controls.

Zero-one integer programming An analytical method that can be used to determine the solution to a capital rationing problem. Zero prepayment assumption The assumption of payment of scheduled principal and interest with no payments.

During wartime, black markets tend to thrive due to rationing or short supply. During World War II, many countries had a hard time importing basic goods to meet demand, thereby driving up prices on the black market.

This process of 'means testing' is a way of rationing public funds, but it can also be an expensive process to administer.

Black market trading breaks government regulations or legislation and is particularly prevalent during times of shortage, such as rationing, or in industries that are very highly regulated, such as pharmaceuticals or armaments.

Present Value Index (PVI)
The ratio of the NPV of a project to the initial outlay required for it. The index is an efficiency measure for investment decisions under capital rationing.

Credit Rating
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Credit rationing ...

Critics also argue that HMO physicians are not allowed to perform thorough testing procedures because of the demands of HMO management to limit costs and that this ultimately leads to rationing of medical treatment.

See also: Expense, Capital rationing, Banks, Cost of capital, Transaction costs

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