BUSINESS ETHICS

Paula Alejandra Delgadillo Velásquez GROUP A

Joan Sebastian Silva V

Vocabulary
GDP -Gross Domestic Product
Currency/ money
Fiscal/taxes
Budget/deficit /surplus
Recession/ Depression/stagnation
Bubble/Burst
Boom/bust

CONVERSATION

Sebastian: Hello Alejandra, do you know what is the GDP of 2020 in Colombia? They asked
me in class, but I do not remember.

Alejandra: Hi Sebastian, I read in the DANE that it had a variation of -6.8% compared to
2019, but I don't know what GDP is, could you tell me?

Sebastian: Of course the Gross Domestic Product, Is the final value of the goods and services
produced within the geographic boundaries of a country during a specified period, normally a
year.

GDP growth rate is an important indicator of the economic performance of a country.

Alejandra: In other words, Colombia went through a period of temporary economic decline
during which trade and industrial activity declined due to a drop in GDP. A recession?

Sebastian: It is true, the covid-19 affected the economy of the whole world and if things
continue like this, we could face a depression.

Alejandra: What is depression is not the same as a recession?

Sebastian: A depression is a severe and prolonged downturn in economic activity, an

extreme recession that lasts three or more years or which leads to a decline in real gross
domestic product (GDP) of at least 10% for example the great depression in 1930

Alejandra: I understand, as the 1930s economic crisis. But how do you know when a crisis
is approaching?

Sebastian :Usually these are major crises are recognized by the beginning of stagnation,
however, in the case of 1930s crisis before the bust of the economy there was a boom, since
1920s was a period of great economic activity but after a bust was generated that finally
resulted in the great depression in the 1930s
BUSINESS ETHICS
Paula Alejandra Delgadillo Velásquez GROUP A
Joan Sebastian Silva V
Do you know how to get out of a crisis?

Alejandra: If we are in a period of recession or depression, the government and the bank
must work hand in hand.
the government can act with all its fiscal policy instruments
-To get out of stagnation, the tax is usually raised and the budget is reduced
-Increase exports and decrease imports to reduce the deficit or have a surplus, it should be
important for a country to maintain its positive trade balance.
-and the most important thing for me is to regain people's trust, because if not, this creates
uncertainty and the economy could stagnate even more.

Do you know any other world crisis ?

Sebastian: Yes, the financial 2008 crisis due to the bust of the housing bubble in the United
States in 2006, This crisis caused the currency of the United States to devalue

Alejandra : Oh really ? But do you know. What is the currency?

Sebastian: Of course, it is the dollar. By the way, it is the most used currency for
international transactions.

Alejandra: Exactly, but clearly in the crisis that you just mentioned to me, the financial
system entered bust, economic growth slowed down rapidly, the inflation decreased, and as
was an extreme case they thought that would cause deflation.

Hey and speaking of the dollar, do you know how much money is paid today for this in
Colombia?

Sebastian: Yes, Today the dollar is at 3,552 Colombian pesos, you know that the dollar can
change from one day to the next, in fact in the face of the coronavirus crisis, in 2020 it
reached its highest value (4,128).

Alejandra: This pandemic is really worrying for the economy.

It was a pleasure talking to you about the economy and clarifying some concepts that were
not clear to me.

Sebastian: Thanks Alejandra,it's my pleasure.

BUSINESS ETHICS
Paula Alejandra Delgadillo Velásquez GROUP A
Joan Sebastian Silva V