FIELD OF STUDY OF ECONOMICS

Economics studies the correct distribution of scarce resources to satisfy the needs of the human being

It studies:

·         How prices are determinated

·         Financial markets behavior and the way in that capital is assigned to society

·         State`s interventions consecuences

·         Rent distribution

·         Public spending influence, taxes and budgetary deficit

·         How economic clycles are developed, their causes, unemployment oscillations and production

·         International trade functioning

·         Growth on countries on developing countries

Economics has two specific fields: macroeconomy and microeconomy

Microeconomy is the one who deals with economic behavior on the individual unity, the family, companies and economic sectors

Macoreconomy studies: income, employment, production, currency and public finances

29 economic crisis

Decapitalized suddenly many industries

The crisis burst all over the world

Created mistrust

Comunism and facism grow too much on this time

The number of unemployed people was huge

Continuous growth can`t be, economy has cycles

Before this crisis was deflation

New York stock house was the main focus of speculation

Broke also who had savings on banks and stock markets

Fear holds investment

Consumption contracts

Because countries are also in crisis their prices also go low and they put more products more cheaper than American`s on the market, and that way crisis becomes higher

In Germany a superinflation was created due to absence of investment and high interests, that decapitalized the industry

Happens mainly on Europe and USA

Causes

It’s produced due to an increase in price occasionated by speculation

After disproportionated growth of the 20s, a recession was on the horizon

Over production on a market that is not demanding new products ruin farmers

Sub consumption, higher classes are beneficiated and most of the people get`s more poor

Artificial stocks growth

Many people was in debt, because economy was going well

In Colombia

The crisis came when the economy had big incomes and external foreign currencies

Exportations were the double between 1924 and 1928, due to coffee and oil

On this period the country received 25 million dollars for the robbery of Panamá

Goods imports were also increased on real terms, 160% due to the accelerated growth of production and services making that internal demand was supplied with importations

One inicial manifestation of the crisis was the cut of external credit on the second half of 1928

There was a fall on the price of coffee, that produced a depressive phenomenon

Was impossible obtain new loans or put new bonds

Colombian government was on an interruption of capital flows and bigger payments on external debt

There was a paralyzation of public works, workers layed off and drop on prices