Adam Smith. The Classical Economics of Adam Smith. Focuses on physical resources in defining its factors of production : Land or natural resources – naturally-occurring goods such as water, air, soil, minerals, etc. Labor – human effort used in production
The Classical Economics of Adam Smith Focuses on physical resources in defining its factors of production: • Land or natural resources – naturally-occurring goods such as water, air, soil, minerals, etc. • Labor – human effort used in production • Capital – not a factor of production, but used to purchases machinery, tools and buildings
Factors of Production In economics, factors of production (or productive inputs) are the resources employed to produce goods : • Transformed by the production process • Land (natural resources, gifts from nature) • Labor (the ability to work) • Capital goods (human-made tools and equipment • Rents to the land owners, but not F. of P.
The Wealth of Nations • Invisible hand • Free market
Where Is The Cash That Buys T-Bills ? • Cumulative trade deficits since 1985 total $8.2 Trillion
Ten Largest World Banks - Capitalization • 1. ICBC, China • 2. China Construction Bank, China • 3. Bank of China, China • 4. HSBC, UK • 5. JP Morgan Chase, US • 6. Wells Fargo, US • 7. Banco Santander, Spain • 8. Mitsubishi UFJ Financial, Japan • 9. Bank of Communications, China • 10. Intesa Sanpaolo, Italy