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Glossary

The glossary in this Portal provides definitions of core terms closely related to the medium-term expenditure framework; and links to other online glossaries.

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Word

Definition

Leasing (of an asset)

Leasing refers to the renting of an asset for a given period of time, as an alternative to outright purchase.

Legislature

Elected representatives who have responsibility for passing legislation, including the appropriation act, which gives the executive authority to make expenditures according to the budget.

Liability

· A liability is an obligation which requires one unit (the debtor) to make a payment or a series of payments to the other unit (the creditor) in certain circumstances specified in a contract between them. It must be recognized in the statement of assets and liabilities only when: it is probable that the future sacrifice or service potential or future economic benefits will be required; and · the amount of the liability can be measured reliably.

Liberalization

In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. Liberalization of autocratic regimes may precede democratization (or not, as in the case of the Prague Spring). In the arena of social policy it may refer to a relaxation of laws restricting for example divorce, abortion, homosexuality or drugs. Most often, the term is used to refer to economic liberalization, especially trade liberalization or capital market liberalization.

Life cycles

Predictable stages of development.

Life-cycle hypothesis

The Life cycle hypothesis (LCH) is an economic concept analysing individual consumption patterns. It was developed by the economists Irving Fisher, Roy Harrod, Alberto Ando and Franco Modigliani. Unlike the Keynesian consumption function, which assumes consumption is entirely based on current income, LCH assumes that individuals consume a constant percentage of the present value of their life income.

Liquidation

A defensive strategy that entails selling or dissolving an entire organization. In finance, liquidation is also sometimes used as convenient shorthand for converting an asset to cash.

Loans

Loans are financial assets that are created when creditors lend funds directly to debtors, that are evidenced by non-negotiable documents, or for which the lender receives no security evidencing the transaction.

Local government (or local authorities)

Local government is a collection of public bodies with authority over a subdivision of a significant area of a country’s territory. It is either the third tier in federal countries or the second and third tiers in unitary countries (regions, counties, municipalities, etc.) To exist as a separate entity, a local government body must have the authority to exercise powers independently from other levels of general government.