Fundamental Analysis Definitions

Nominal GDP

Nominal GDP refers to change in gross domestic product that does not take inflation into account. Real GDP is calculated to take inflation into account, providing a more accurate measurement of change over time. See also: GDP

Global Macro

Global Macro describes a trading strategy that takes into account international macroeconomic issues.

G7

G7 refers to the seven leading industrial nations: United States, Germany, Japan, France, United Kingdom, Canada and Italy.

Fundamental Analysis

Study of basic, underlying factors that will affect the supply and demand of the security being traded. Fundamental analysis looks at the cause of market movement, while technical analysis studies the effect in the form of price action. See also: Technical Analysis, Econom

Trade Deficit

Refers to a country’s excess of imports over exports.

Budget Deficit

Refers to the situation where government spending is greater than government revenue.

BRIC Countries

BRIC Countries refers to the rapidly developing group of countries that are Brazil, Russia, India and China. The term was first used in a thesis written by Jim O’Neill, a global economist at Goldman Sachs. The BRIC countries are all rapidly moving towards full industrialization. O’Neill

Fiat System

The Fiat System refers to the use of money as a storage medium for purchasing power. As opposed to the barter system. See also: Fiat Money, Commodity Money

Fiat Money

Refers to money which a government has said to be legal tender. See also: Fiat System, Commodity Money

Federal Reserve Board

The governing body of the Federal Reserve System. The seven members of the Board of Governors are appointed by the president, subject to Senate confirmation, and serve 14-year terms. The board sets Fed policy regarding the discount rate and reserve requirements. T