law and economics

A boycott is a refusal to deal with a particular person, business, or country, usually carried out collectively to achieve economic or political goals. In antitrust law, the term refers to a concerted refusal to deal with a purchaser or seller, which can raise legal issues if it restrains trade.

A buyback refers to when a corporation repurchases its own outstanding stock. By doing so, the number of overall shares in the market drops and the value of each individual share tends to increase. Issuing a buyback offer is not binding on any individual shareholders and merely represents the corporation's offer to purchase shares at a given price. 

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Cap-and-trade is a system that limits aggregate emissions from a group of emitters by setting a “cap” on maximum emissions. It is characterized as a market-based policy to reduce overall emissions of pollutants and encourage business investment in fossil fuel alternatives and energy efficiency.

See: cap and trade.

[Last reviewed in November of 2024 by the Wex Definitions Team]

Capital is any asset used for a productive purpose. It can include tangible items, such as cash or machinery, or intangible items, such as intellectual property or human capital. 

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A capital account is used in accounting to record individual ownership rights of the owners of a company.

Capital assets are tangible and generally illiquid property which a business intends to use to generate revenue and expects its usefulness to exceed one year. On a balance sheet, capital assets are represented as property, plant, and equipment (PP&E). Examples include land, buildings, and machinery. Businesses may depreciate capital assets over the course of their expected useful life. 

Capital expenditures (CapEx) are funds used to acquire, upgrade, or maintain capital assets. Capital expenditures are reflected in the cash flow statement, and can be calculated by adding current depreciation with the change in plant, property, and equipment (PP&E) from the previous accounting cycle.

Capital gains refers to profits gained from the sale of capital assets. Almost everything someone owns and uses for personal or investment purposes is a capital asset. This includes a home, personal-use items like household furnishings, vehicles, or intangibles such as stocks or bonds held as investments.

Capital investments can refer to a business’s acquisition of a capital asset or a type of loan by a financial institution in a business. In the latter, a financial institution, commonly a venture capital group, loans a business money in exchange for a promise of repayment or a share of the profits. 

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