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International Business

International Business. Economic Systems All economies must answer three economic questions: What goods and services to produce? Manufacturing, Oil, Agriculture, Security How will goods and services be produced? Humans or Machines

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International Business

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  1. International Business Economic Systems All economies must answer three economic questions: • What goods and services to produce? Manufacturing, Oil, Agriculture, Security • How will goods and services be produced? Humans or Machines • What needs and wants will be satisfied with the goods and services produced? Are countries going to produce consumer goods (food) or government resources (military)

  2. International Business A Nation’s plan for answering the 3 economic questions is called its Economic System.

  3. International Business There are 3 basic economic systems

  4. International Business Command Economy – An economy in which resources are owned and controlled by the government.

  5. International Business Market Economy – An economy in which the resources are owned and controlled by the people of the country.

  6. International Business Traditional Economy – An economy in which goods and services are produced the way they have always been produced. It is used in countries that are less developed and are not yet participating in the global economy. This economy is usually centered on meeting the basic needs of the people.

  7. International Business Most nations of the world can be classified as a mixed economy. • A Mixed Economy combined elements of the Command and Market economies.

  8. International Business What do you think the United States economic system is?

  9. International Business Since individual businesses and consumers make most of the decisions about what is consumed, the United States best fits the definition of a Market economy.

  10. International Business What is another name for the economic system of the United States?

  11. International Business Capitalism– The private ownership of resources by individuals, rather than by the government.

  12. International Business Our economic system is based on four principles:

  13. International Business • Private Property (you can own, use or dispose of things of value) • Freedom of Choice (you can make decisions independently and must accept the consequences of those decisions)

  14. International Business • Profit ( the amount of money available to the business after all costs and expenses have been paid) • Competition ( the rivalry among businesses to sell their goods and services)

  15. International Business Two Closing Questions • In which economic system is the government’s role most limited? • In which economic system are you more likely to hold the same job and social stature as your parents and grandparents?

  16. International Business Two Closing Questions • In which economic system is the government’s role most limited? Market • In which economic system are you more likely to hold the same job and social stature as your parents and grandparents? Traditional

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