POL101Y1 Lecture Notes - Comparative Advantage, Navigation Acts, Plaza Accord
Document Summary
How the rest got rich political economy 101. Economics has less to do with people and more to do with systems. One of the first countries to have a central bank. Increase in flow of money as result: lots of trade dutch sold the service of trade, dutch east india trading company first multinational corporation that sold stock. The flute critical to maritime innovation: main ship used in dutch east india trading company, cheap to produce, required less manpower, shallow hull could reach shallow ports, large cargo capacity. Market principle: increase supply decrease price, decrease price increase consumption. Increase consumption increase trade and market share. Fast forward to chinese manufacturing: lowering of wages lowering of cost of production increased supply of finished goods reduced price increased demand. The price function: intersection of supply and demand curve, increase supply decrease price. Principles of the market economy: 1.
