What Is Contraction? Contraction, in economics, refers to a phase of the business cycle in which the economy as a whole is in decline. A contraction generally occurs after the business cycle peaks, but before it becomes a trough. According to most economists, when a country’s real gross domestic product (GDP)—the most-watched indicator of economic
What Is a Contractionary Policy? A contractionary policy is a monetary measure to reduce government spending or the rate of monetary expansion by a central bank. It is a macroeconomic tool used to combat rising inflation. The main contractionary policies employed by the United States government include raising interest rates, increasing bank reserve requirements, and
What Is Contraction Risk? Contraction risk is a type of risk faced by holders of fixed-income securities. It refers to the risk that the debtor might pay back the money borrowed more quickly than anticipated, thereby reducing the amount of future interest income received by the security holder. Contraction risk is therefore a component of
What Is Contract Logistics? Contract logistics involves the outsourcing of resource management tasks by one company to a third-party company. Contract logistics companies specialize in matters such as planning and creating supply chains, designing facilities, warehousing, transporting and distributing goods, processing orders and collecting payments, managing inventory, and sometimes handling certain aspects of customer service.
What Is Contractors’ All Risks (CAR) Insurance? Contractors’ all risks (CAR) insurance is a non-standard insurance policy that provides coverage for property damage and third-party injury or damage claims, the two primary types of risks on construction projects. Damage to property can include improper construction of structures, the damage that happens during a renovation, and damage to temporary work erected on-site. Third parties including subcontractors
What Is Contract Size? The term contract size refers to the deliverable quantity of a stock, commodity, or financial instrument that underlies a futures or options contract. It is a standardized amount that tells traders the exact quantities that are being bought or sold based on the terms of the contract. Contract sizes are often
What Is Contractual Liability Insurance? Contractual liability insurance protects against liabilities that the policyholder has assumed from entering into a contract of any nature. Key Takeaways Contractual liability insurance protects against liabilities that policyholders assume when entering into a contract.Contractual liability involves the financial consequences emanating from liability, not the assumption of the indemnitee’s liability
What Is the Contra Proferentem Rule? The contra proferentem rule is a legal doctrine in contract law which states that any clause considered to be ambiguous should be interpreted against the interests of the party that created, introduced, or requested that a clause be included. The contra proferentem rule guides the legal interpretation of contracts
What Is a Contrarian? Contrarian investing is an investment style in which investors purposefully go against prevailing market trends by selling when others are buying and buying when most investors are selling. Berkshire Hathaway Chair and Chief Executive Officer (CEO) Warren Buffett is a famous contrarian investor. Contrarian investors believe that people who say the market
What Is Contributed Capital? Contributed capital, also known as paid-in capital, is the cash and other assets that shareholders have given a company in exchange for stock. Investors make capital contributions when a company issues equity shares based on a price that shareholders are willing to pay for them. The total amount of contributed capital
