Command Economy – The government owns most of the resources and determines the production of goods...
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Transcript of Command Economy – The government owns most of the resources and determines the production of goods...
![Page 1: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods.](https://reader035.fdocuments.net/reader035/viewer/2022062422/56649f125503460f94c25106/html5/thumbnails/1.jpg)
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Command Economy – The government owns most of the resources and determines the production of goods and services.
Market Economy – Production of goods and services is determined by the demand from consumers. Also called “capitalism.”
Mixed Economy – A combination of market and command.
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Three Levels
Primary
Secondary
Tertiary
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Primary Activities
(Dealing directly with natural resources.)
Examples:
• Fishing
• Farming
• Forestry
• Mining
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Secondary Activities
(Manufacturing and processing.)
Examples:
• Steel mills
• Automobile assembly
• Saw mills
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Tertiary Activities
(Services)
Examples:
• Transportation
• Retail sales
• Information Technology Services
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1. Different levels of natural resources
• Renewable—Soil, water, forests
• Nonrenewable—Fossil fuels (oil, coal, natural gas) and metals (gold, iron, copper, bauxite)
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2. Human resources
• Level of education
• Level of skills.
• Entrepreneurial and managerial abilities
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3. Capital resources
• Level of infrastructure
• Availability and use of tools, machines, and technologies
• Availability of money for investment
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How advanced an economy is.
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Why are some country’s economies more developed than others?
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Why are some country’s economies more developed than others?
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Why are some country’s economies more developed than others?
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The purpose of a colony is to provide natural and human resources to enrich the “motherland.” The
people of the colony usually do not share the wealth.
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Many of the world’s poorest nations were once colonies of imperial powers?
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MEASURING THE ECONOMYMEASURING THE ECONOMY
The value of all goods and services produced The value of all goods and services produced in a nation in a year.in a nation in a year.
GDP divided by total population.GDP divided by total population.
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Source: World Bank
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G-7 nations: United States, United Kingdom, France, Germany, Italy, Japan, Canada.
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The merging of regional economies in which nations become interdependent on each other.
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How does globalization effect your life?
• Cheaper products
• More competition for jobs
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A trading nation’s ability to produce something at a A trading nation’s ability to produce something at a lower cost than another trading nation.lower cost than another trading nation.
Portugal
• 2 hours to produce 1 jug of grape juice.
• 6 hours to produce a yard of cloth.
Germany
• 4 hours to produce 1 jug of grape juice.
• 3 hours to produce a yard of cloth.
Make and trade grape juice.
Make and trade cloth.