Banks

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Banks are institutions that safeguard some goods and money, that do business with these goods and that fulfill a social function by stimulating economic activities for people to participate in economic development. That is why one of the services that national banks are obliged to offer to individuals and institutions in a country is to […]

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Malthusian Trap

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The Malthusian trap is a theory originally proposed by the economist Thomas Robert Malthus in the late eighteenth century. Malthus proposed that improvements in technology would inevitably lead to a population increase that would put more pressure on resources. This would result in no change in quality of life, or a decrease in quality of […]

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The Marginal Revolution

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The decade of 1870 supposed a radical break with the previous political economy; this break was called the marginalist revolution, promulgated by three economists: English William Stanley Jevons; the Austrian Anton Menger; and the Frenchman Léon Walras. His great contribution consisted in substituting the theory of labor value with the theory of value based on […]

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The Invisible Hand

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The theory of the invisible hand is a metaphor that points to the market economy as a tool capable of achieving maximum social welfare while seeking self-interest. The British economist Adam Smith coined the concept of an invisible hand in the eighteenth century to describe the natural self-regulating phenomenon of the free market. A process […]

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Division of Labor – Understanding Economics

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The division of labor refers to the number of different tasks in which the work necessary for the production of a good or service is distributed, tasks that must be performed by different workers specialized in each one of them. For Smith the very purpose of economics was to know the laws that determined the […]

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Public Debt – Understanding Economics

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Public debt is the money that the state has borrowed to finance its spending and investment. When we speak of State we do not necessarily refer to the central government, but can be any level of government. Town councils, provincial councils, autonomous communities, etc. Public debt is understood as the set of outstanding obligations maintained […]

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