David Ricardo was a classical economist who developed several key theories that still influence economics today.
Ricardo was a successful investor and MP who started writing about economics after he retired young from his fortune.
Ricardo is best known for his theories of comparative advantage, economic rent, and the labor theory of value.
Ricardo’s well-known theory of comparative advantage suggests that countries can gain an advantage in international trade if they focus on producing goods at the lowest opportunity cost compared to other countries.
Ricardo suggested that the value of a commodity is determined by the number of labor hours spent on its production.
An economist is an expert who studies the relationship between a society’s resources and its production or output, using a number of different indicators to predict future trends.
An absolute advantage is when a manufacturer can provide a greater quantity of a product or service for the same price or the same quantity at a lower price than its competitors.
Animal spirits come from the Latin spiritus animalis: “breath that awakens the human mind.” It was introduced by the British economist John Maynard Keynes in 1936.
Autarky refers to a state of self-sufficiency and is commonly used to describe countries or economies that seek to reduce their dependence on international trade.
Automatic Stabilizers is a permanent government policy that automatically adjusts tax rates and transfers payments in a way that stabilizes income, consumption, and business spending over the business cycle.
The balance of trade (BOT) is the difference between the value of a country’s imports and exports over a given period and is the largest component of a country’s balance of payments (BOP).
“Best Effort” is a legal term that represents the obligation of a party to a contract to take all possible steps to fulfill the terms of the agreement.