Economy

Economy

• Work• Making things• Buying things• Trading

• All of these examples are ways that our Economy is stimulated.

How does our text define Economics????

• Economics– The study of the production, distribution, and

use of goods and services.

Can you tell me how we measure a country’s Economy???

Measuring our Economic Value• GDP…

– Gross Domestic Product• Defined as the value of all goods and services that a

country produces in one given year.

• Gross Domestic Product can also tell you about a country’s Standard of Living..

The __________ a country’s standard of living, the higher the GDP will be…

The __________ a country’s standard of living, the lower the GDP will be….

2 Types of Countries…

• The countries of the world are divided into two different categories based on the country’s industrialization….

• Industrialized Countries

• Developing Countries

Industrialized Countries

• Countries are classified as Industrialized when….– The country has more manufacturing and less

agriculture..– Access to Healthcare Systems– High Literacy Rate

• Examples…– USA, Canada, Japan, as well as most European

Countries.

Developing Countries• Developing countries are moving toward

industrialization..– 2/3s of the worlds people live in developing

countries.

• Characteristics of developing countries…– Poor, primary industries– Fishing, Farming, Mining, and Forestry– Crowded Cities, low Literacy Rate– Limited access to Healthcare– Examples…

• Mexico and S. Korea

2 types of Developing Countries

• Third World Countries…– Show some economic growth. These

countries lack the economic opportunities of most industrialized countries.

• Fourth World Countries….– Countries that show no economic growth.

Study this Chart…...Country Population Population

Growth RatePer Capita GDP Life Expectancy Literacy Rate Telephone Lines

United States 290.3 million 0.9% $37, 600 77 97% 194 million

France 60.1 million 0.4% $26,000 79 99% 35 million

South Korea 48.2 million 0.% $19,600 75 95% 24 million

Mexico 104.9 million 1.4% $8,900 72 92% 9.6 million

Poland 38.6 million 0.0% $9,700 73 99% 8 million

Brazil 182.1 million 1.1% $7,600 71 86% 17 million

Egypt 74.7 million 1.8% $4,000 70 57% 3.9 million

Myanmar 42 milllion 0.5% $1,700 55 83% 250,000

Mali 11.6b million 2.8% $900 45 46% 23,000

Looking at the Chart in your book….

• What countries have the highest GDP?

• What countries have the highest Literacy Rates?

• What might this connection be?

3 Economic Questions

• What to produce?

• How to produce?

• For whom to produce?

3 Types of Economies

• Market or Free Enterprise Economies

• Command Economies

• Tradition Based Economies

• Mixed Economies

Market or Free Enterprise

• An economy in which business owners and consumers make all economic decisions about what to make, sell, and buy.

Command Economies

• An economy in which the government owns most of the industries and makes most of the economic decisions.

Tradition Based Economies

• Exchange of goods and services based on customs and traditions.

Mixed Economies

• An exchange of goods and services based on at least two other types of economic systems.