By Francisco A. Castellanos-Sosa
20 Jul 16 - 12:00
Concepts such as Gross Domestic Product (GDP), Value Added (VA), Foreign Direct Investment (FDI), or Exchange Rates (ER) are usually blamed on issues in which citizens do not participate. However, this reasoning is entirely misleading as these and all the components of the economy are derived from our daily acting.
Both the supply and demand of products assign a market price to each good or service under the assumption of a free market and perfect competition. This can be observed through the purchase of food and other goods at nearby supermarkets and grocery stores. That is why the prices of some products tend to rise or fall. They are determined according to variations in supply and demand.
Sellers assign a higher value than the original cost to each product as they seek to compensate for the contribution they gave to the good. The latter is the VA. And now, GDP has already been formed when final goods or services were produced.
Free people daily generate their economy. Unfortunately, although economics concepts are linked with us, sometimes we may perceive them as very distant. I invite you to reflect differently when listening to news regarding the economy, and to observe the citizen-side behind every one of the things you hear or read about.
Your freedom is the economic power of your country!
*** This is a translation of a published article in Monterrey's ABC Journal on July 20, 2016.