Price indexes are composite INDICATORS of the level of prices in the market being studied. Price indexes are used primarily to measure changes in the level of prices, or INFLATION. The BUREAU OF LABOR STATISTICS (BLS) maintains numerous price indexes for the U.S. economy.

Price floors are government-mandated minimum prices for goods and services.

Price fixing is an agreement between or among firms in an industry to set prices jointly in order to increase PROFITs. Horizontal price fixing is an agreement among directly competing firms, while vertical price fixing involves attempts by manufacturers to control the resale price of their PRODUCTs.

Price discrimination occurs when firms sell the same PRODUCTs to different customers at different prices. Some forms of legal price discrimination are widely practiced in U.S. markets and based on economic logic. However, price discrimination is illegal when it is used to reduce or eliminate COMPETITION.

Price ceilings are government-mandated maximum prices for goods and SERVICES. In the United States, local governments and the federal government have passed laws stating that the prices for certain goods and services could not go above a set amount. Unlike PRICE FLOORS, which are intended to keep prices high to protect producers, price ceilings are designed to keep prices low to help consumers.

See DISCOUNTING, PRESENT VALUE.

See HEALTH MAINTENANCE ORGANIZATION.

Predatory lending is the use of high fees, charges, and other unscrupulous lending practices to strip homeowners’ EQUITY.

Positioning is a company’s use of its MARKETING STRATEGY to create and maintain a particular image in the minds of its consumers. After identifying a target market, marketers attempt to influence how consumers view their PRODUCT or brand and how their organization is perceived relative to the COMPETITION.

A Ponzi scheme is a fraudulent financial-INVESTMENT proposition in which initial investors are promised extraordinarily high rates of return, usually to be realized after a short period of time. These very high rates of return attract a few initial investors who are paid with the funds of subsequent investors.

Pollution rights are a market-based system for dealing with environmental problems. At first, the idea of pollution rights may seem like an oxymoron—i.e., who gave anyone the “right” to pollute? The logic behind pollution rights is based on economics. First, most environmental systems can accept certain amount of pollution without seriously harming the environment (often called carrying capacity).

A political action committee (PAC) is a legal entity created for the purpose of raising MONEY for political purposes. PACs have become a central feature of the American political landscape at both the national and state levels.

Poison-pill strategies, also called shareholder rights plans, are a common defense used by companies to stop hostile takeovers. A poison pill makes the target company prohibitively expensive for the bidder (the individual or company initiating the takeover) to buy.

The Peter principle, named after Dr. Laurence Peter, is the MANAGEMENT theory that people tend to be promoted to one level beyond their competency. As stated in Peter’s book The Peter Principle—Why Things Always Go Wrong (coauthored with Raymund Hull), “In a hierarchy every employee tends to rise to his own level of incompetence.” The Peter principle is a widely quoted concept.

The peso crisis was the Mexican government’s near DEFAULT on its international debt obligations in 1994–95. The frightening but largely unreported aspect of the Mexican peso crisis was how dangerously close Mexico came to defaulting on all its debt. The unprecedented U.S.-IMF (INTERNATIONAL MONETARY FUND) financial support package was the largest international aid response since the MARSHALL PLAN in 1948.

All property that is not real estate is personal property. Personal property can be tangible or intangible and includes stocks, BONDS, RETIREMENT PLANs, cash, furnishings, vehicles, boats, jewelry, clothing, electronics and goods of all sorts, animals, COPYRIGHTs, PATENTs, TRADEMARKs, and CONTRACT rights, among many other things.

Personal-interview SURVEYS are one method market researchers use to collect information. Personal interview surveys are often conducted to collect information about customer needs and wants, opinions, demographics, and financial status. Personal-interview research can be conducted in peoples’ homes, businesses, prearranged focusgroup locations, or public places.

Personal finance is the management of individual or family resources to achieve financial security and other goals. Personal finance includes five basic activities: BUDGETING, SAVING, INVESTMENT, retirement planning, and estate planning. Most Americans engage in only a few personal financial- planning activities, leaving themselves and their dependents vulnerable to risks and surprises.

A performance appraisal or evaluation is a structured, formal interaction between a supervisor and a subordinate in which the subordinate’s work performance is evaluated and discussed. Performance appraisals are primarily used to determine pay raises, as tools to identify weaknesses and develop corrective actions, and as a means of motivating employees to improve their work performance.

Perfect competition (PC) is a term used to describe a market with many sellers of similar products and ease of entry into the market. Consumers and producers in perfectly competitive markets act independently and have knowledge of market choices and conditions. To most economists, perfect competition is the ideal level of COMPETITION against which markets are compared.

The Pension Benefit Guaranty Corporation (PBGC) is a little-known but important federal agency that provides INSURANCE guarantees for private, defined-benefit RETIREMENT PLANs. The PBGC was created by the EMPLOYEE RETIREMENT INCOME SECURITY ACT of 1974 and is financed primarily from insurance premiums paid by companies whose retirement plans they insure.

Payroll taxes, also known as EMPLOYMENT taxes, are levied on wages and salaries and are assessed on both employers and employees. Payroll taxes are collected by state governments and the federal government.

See COMPARABLE WORTH; EQUAL PAY ACT; EQUITY INCOME THEORY.

A patent is a protective right given to inventors by the federal government. Under patent law, inventors receive exclusive rights to their invention for a limited period of time. To obtain a patent, inventors provide information about their PRODUCT to the government.