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 actions.
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 purchasing 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 their contribution to the good. The latter is the VA. Then, GDP was already formed when final goods or services were produced.
Free people daily generate their economy. Unfortunately, although economics concepts are linked to us, sometimes we may perceive them as very distant. I invite you to reflect when you listen to news about 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.