EUROPEAN ECONOMIES

Free- Enterprise/Market economy

◻An economy that allows business owners to make decisions with little government interference

◻Ex. Members of the European Union

Collective, Non-free economy

✕ An economy that allows the government to decide how many of and which goods are produced and at what price.

✕ Ex. Eastern European Countries before the Fall of Communism

Types of industry

◻Commodities/Manufacturing- goods/products

◻Services- something provided to others that is not a good

trade

◻ Imports◻A product brought

into a country through trade or sale

◻Exports◻A product traded

with or sold to another country

Natural resources

◻Raw materials used to make goods◻Primary Industries (ex. Oil Drilling in North

Sea)◻Having many natural resources supports

industrial growth

Availability of Goods & Resources

◻Why might a country need to import goods and/or natural resources?

◻How might this affect their economies? What about their workforce?

◻How might an abundance of natural resources in a country be beneficial?

Ex. Oil is a natural resource that is scarce in Europe, therefore it must be imported from other countries.

◻When Resources cannot meet demand

◻To depend on another country’s resources and/or having another country depend on your resources.

Scarcity Interdependence

Waterways As Corridors – The Peninsula of Peninsulas

◻ The abundance of ports, harbors, coastlines, and rivers in Europe, makes trading of imports and exports easy.

Free – Trade zone

◻Lifts Border Restrictions◻Eliminates Tariffs (gets rid of fees/taxes on

imports and exports)◻Makes Development Loans◻ In some cases, develops a

common currency

Ex: European Union is a free-trade zone (or trade corridor)

Labor Force

◻Workers needed to make the goods or provide the services

Industrialization

◻The manufacturing of products in factories

Gross Domestic Product (GDP)

◻GDP = the value of all goods and services produced within a country for a given period. Considered an indicator of a country’s standard of living.

◻GDP Per capita = per person

◻What might a high GDP per capita tell you about a country?

Standard of living

◻ A measure of quality of life◻ We use many demographics to measure this:⬜ GDP Per Capita (wealth of individuals)⬜ Gross Domestic Product (GDP) (wealth of the country)⬜ Life Expectancy⬜ Literacy Rate⬜ Infant Mortality

US versus European Countries

◻How does the standard of living in the US compare to the standard of living in the UK, France, Germany, & Russia? (Use your matrix)

◻US info:◻GDP per capita - $51,700◻ Infant mortality – 5.9◻Life expectancy – 79◻Literacy rate – 99%