Economics is a science that has been present in all human activities since man, a gregarious animal by nature, adapted to live in society. However, it is poorly understood and studied, so I will try to explain the meaning of some of the most frequently used concepts in plain language.
Offer and demand. Basic principle by which all economic activity is governed. The higher the demand, the higher the prices, the higher the supply, the lower.
Stock Exchange. It is a market in which shares of companies are offered for sale, thus obtaining financing to grow their businesses.
Scholarship. It is the degree of acceptance that the shares have according to their real support and the expected growth expectation.
Central bank. It is the financial heart of a country, managed by an Independent Government of the powers, legislative and judicial executive, controls the national savings, the debts contracted inwards and outwards and the exchange rate with other currencies.
Income. They are the resources from taxes, products, profits, internal loans and foreign loans.
Expenses. They are the outflows of financial resources either to cover purchases of goods, expenses or services received.
Public deficit. It occurs when the federal government, together with state agencies such as Pemex, IMSS and CFE, among others, spends more than what is collected.
Trade deficit. It occurs when imports are greater than exports.
Foreign direct investment. It is carried out in our country by foreign people or companies, either looking for better returns on their capital or to lower production costs in their countries of origin.
Indirect foreign investment. It is the capital that the country manages to capture through the placement of securities or through loans obtained abroad.
Interest rate. It is the cost of paying a loan service obtained at a rate that was fixed for many years and caused financial havoc when it became variable.
Surplus. It is the excess of income over expenses, it is the profits of companies when they generate more income than expenses.
Gross Domestic Product (GDP). It is the total value of the country’s production of goods and services in a given period.
Nasdaq. It is the stock market where listed companies dedicated to the technology industry are traded, such as Microsoft, Intel, Apple, IBM, Linux, Unixys, among others.
New technologies. They are the ones that gave birth to a new technological era that will be marked in history as a revolution, such as the internet, the development of software, hardware, 5G, patents, designs, video games, online mail that replaced the fax, among other.
Crack. It occurs when a financial market loses more than 25% of its value in a given period, as happened in Mexico in December 1994 when the pins with which the economy was sustained were removed.
Inflation. It is an economic phenomenon that occurs when the prices of commonly used goods and services skyrocket and is generally accompanied by a devaluation of the peso against the dollar and other currencies.
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