Substitutes
Definition: Substitute goods are often termed as having competitive demand. The consumer can swap between the two goods and maintain the same degree of satisfaction. Some goods have very close substitutes, while others do not.
Substitutes Two goods are substitutes when either one can be used for consumption to satisfy a similar want - for example, coffee and tea. The more you buy of one, the less you buy of the other.
Substitutes - Any good that can stand in for another good to satisfy similar needs or desires. The degree of substitutability is measured by the magnitude of the positive cross elasticity between the two.
substitutes. This drove down yields on government debt to levels that appeared low on a theoretical basis (for example, if compared to trend nominal GDP growth).
By Giles Keating
Methods for Dealing with Inflation Risk
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Are there substitutes for the product or service offered?
Is there a tendency for the industry to compete ruinously on price to squeeze margins?
Gross substitutes
Two goods are gross substitutes if a rise in the price of one causes and increase in demand for the other.
Group of Seven (or Eight)
G-7 (or G-8)
Group of Seventy Seven
G-77.
Group of Ten ...
Hedging substitutes basis risk for price risk. Basket Applies to derivative products. Group of stocks that is formed with the intention of either being bought or sold all at once, usually to perform index arbitrage or a hedging program.
Hedging substitutes basis risk for price risk. Basket options Packages that involve the exchange of more than two currencies against a base currency at expiration.
There are elements of flexibility in the use of human resources, that allow to monitor trends and adequately impact on substitutes in demand for products. Participations in other companies, including insurance, fuel the risk of contamination3.
The immense growth of credit and its embodiment in instruments that can be used as substitutes for money has led to the promulgation of a view respecting the value of money which may be called the " credit " theory.
Some generalizations about what seems to determine price-elasticities: Goods that are less urgently or specifically desired by consumers (often because there are very many other close substitutes readily available on the market) generally would be ...
This hypothesis assumes that the various maturities are perfect substitutes and suggests that the shape of the yield curve depends on market participants' expectations of future interest rates.
It substitutes the bank's credit for the buyer's and eliminates the seller's risk. It is used extensively in international trade. A commercial letter of credit is normally drawn in favor of a third party, called the beneficiary.
In the extreme, a "pure" monopoly is a market containing one and only ONE seller of good, a good with absolutely, positively no substitutes. The product is absolutely, certifiably unique.
It's also true of fuel consumption, where few substitutes exist. In 2006, when gasoline prices skyrocketed, demand for gasoline was only slightly affected.
The simple-sum approach, Mt, which is still in use by some central banks, adds up imperfect substitutes, such as currency and non-negotiable certificates of deposit, ...
When the production of a good or service with no close substitutes is carried out by a single firm with the MARKET POWER to decide the PRICE of its OUTPUT.
But such a factor is likely to be used in substitutes for the industry's product, and an increased price of that factor will have effects on the supply of those substitutes.
A basic premise of the extensive economic literature on pension policy in the United States is that pension benefits are not free goods: they are provided to workers as substitutes for current wages.
An instrument by which a bank substitutes its credit for that of a customer to enable him to finance the purchase of goods or to incur other commitments.
If an elasticity is much larger than one, it suggests the two goods are nearly interchangeable; they are close substitutes.
During your shoestring days, look for lower-cost substitutes before incurring substantial expenditure. For example, don't go out and buy a new fax machine, a new answering machine, a new photocopier.
Letters of Credit by a Bank: The bank, as issuer, substitutes its creditworthiness for a recipient customer and buyer in a single or series of sales transactions.
IRC section 469(j)(2)(A) substitutes "any" ownership of stock for the 10 percent requirement in the definition of "employee-owner.
A credit substitute is an off-balance sheet instrument where the FI is at risk for the entire notional value. Examples of credit substitutes include undrawn but committed lines of credit, guarantees, letters of credit, ...
Complementary goods are the opposite of substitutes: demand for a good will fall if the price of a substitute is reduced.
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transactions among participating depository institutions; such electronic transactions are substitutes for paper checks and are typically used to make recurring payments such as payroll or loan payments.
Organizational architecture is the administrative system that substitutes for market forces within a given firm. These systems must measure performance, reward and punish performance, and partition decision rights.
Oganizational chart ...
A financial institution that is licensed to deal with money and its substitutes by accepting time and demand deposits, making loans, and investing in securities. The bank generates profits from the difference in the interest rates charged and paid.
Goods and services produced and consumed domestically that are not close substitutes to import or export goods and services.
Nonvoting stock
A security that does not entitle the holder to vote on the corporation's resolutions or elections.
Some people use indemnity plans as supplements to, rather than substitutes for, more comprehensive health insurance. Others use low-cost indemity plans for short-term coverage.
Indenture ...
The uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for
price risk.
Bond-equivalent basis
The method used for computing the bond-equivalent yield.
Parasitic advertising often occurs when two products are close substitutes for one another.
The company is vulnerable to non-printed substitutes form other media; in terms of replacement, margins and sales volumes; the company is less attractive as an investment opportunity than publishing groups focused on specific target markets ...
Electronic clearing and settlement system for exchanging electronic transactions among participating depository institutions; such electronic transactions are substitutes for paper checks and are typically used to make recurring payments such as ...
Letter of Credit - A financing instrument issued by a bank to an individual or corporation by which the bank substitutes its own credit for that of the borrower (buyer) in return for a fee paid by the borrower.
Basis risk The uncertainty about the at the time a hedge may be lifted. substitutes for .
Basket trades Related: .
The uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk.
Basket ...
monopoly one firm in an industry selling a product for which there are no close substitutes. (10)
monopsony a situation in which there is a single buyer of a particular good or service in a given market. (12) ...
An assignment of contract is an act by which one person substitutes another as a party to a contract, either for some or all of the purposes of the contract. The assignment of rights and liabilities under contracts is limited by law.
Basis risk
Uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for price risk.
Insurance therefore substitutes a small certain cost (premium) for a large uncertain financial loss that would otherwise exist. Common types of insurance are, Life, health, home, contents, vehicles and mortgage repayment insurance.
Substitute goods - goods that you might purchase instead of a particular good. For example, different types of bread are substitutes for each other.
Nontradables
Goods and services produced and consumed domestically that are not close substitutes to import or export goods and services.
Therefore, each firm has an incentive to cut prices, but, this actually leads to a price war. If products are perfect substitutes this assumes price will be driven down to marginal cost.
Domestic Liquidity - The aggregate of money supply, quasi-money or savings and time deposits, and deposit substitutes.
There are many reasons for a declining industry: consumer demand may be steadily evaporating, the depletion of a natural resource may be occurring, or there may be the emergent substitutes because of technological innovation.
The premiums on health insurance indemnity plans may be lower than on other plans, but the fixed payments may cover only a fraction of your medical bills. Most advisers suggest that indemnity plans should not be considered substitutes for more ...
except for the amount and expiration date, are similar, and the same documents presented under the "back to back" L/C are subsequently used against the L/C in favour of the buyer. However, the buyer or beneficiary of the first credit, substitutes his ...
/ Monopolistic Competition, the firm faces a downward sloping demand curve. Its price does affect the quantity sold either because it is the only firm in the market (a monopoly) or because the products in its market are not perfect substitutes ...
Substitutes - Products that can replace one another such as butter and margarine.
Supply - A schedule of how much producers are willing and able to sell at all possible prices during some time period.
However, suppose that the specialist substitutes (matches) her own firm's 5,000 shares of XYZ. That is, the firm's own shares are sold instead of the order that came in previously.
 See also: Expense, Equilibrium, Expected return, Systematic risk, Banks
  
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