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English definition of “ratchet”

ratchet

noun [C]
 
 
/ˈrætʃɪt/
FINANCE, STOCK MARKET an arrangement by which managers are given increasing numbers of shares in a company in relation to increases in its profits or success: The sale has been rewarding for the chief executive, whose original 20% stake grew to 30% under a ratchet arrangement.
PRODUCTION a part of a machine that allows controlled movement in one direction only
a system that controls activity: Tightening the interest-rate ratchet to control inflation would risk tipping the economy into a nasty downturn.
(Definition of ratchet from the Cambridge Business English Dictionary © Cambridge University Press)
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