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Economic Systems

Economic Systems. p.128. Country’s Systems. Political System -how the government is set up . Economic System - what the country produces -who controls resources. Political Systems. Republic/Democracy -people vote for government representatives- USA

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Economic Systems

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  1. Economic Systems p.128

  2. Country’s Systems • Political System -how the government is set up • Economic System - what the country produces -who controls resources

  3. Political Systems • Republic/Democracy-people vote for government representatives- USA • Constitutional Monarchy-king or queen and elected parliament- Great Britain, Spain • Dictatorship-ruled by a single leader supported by the military, no elections-Iraq under Saddam Hussein • Oligarchy-a group of rich people in charge, no elections-Pakistan, Kuwait • Anarchy-no government

  4. Economic Systemswhat the country produces and who controls resources

  5. Traditional Economy Based on agriculture Example-the Amish Disadvantages (-) • Advantages (+)

  6. Communism(command economy) Government controls all resources Example-N. Korea, Cuba Disadvantages (-) No private businesses Poor quality of goods -no freedom poverty, $ spent on military • Advantages (+) • -safe • Free college, and healthcare • -equal pay

  7. Capitalism(market economy) Based on private property, no government control (no country) Disadvantages (-) The poor, crime • Advantages (+) • Businesses make lots of money

  8. Mixed Marketbased on private property, and limited government control Example U.S. Advantages (+) You can own a business, and make a profit • Disadvantages (-) • -high unemployment • Expensive colleges, • Expensive healthcare

  9. The U.S. Economic System p.131 • 1. private property- we can own a house, land • 2. freedom of choice- we can buy at different stores • 3. freedom of enterprise- we can own a business • 4. limited government control- government collects taxes, and regulates businesses (no child labor, minimum wages, no pollution)

  10. Factors of Production p.133 Capital- money Entrepreneurs-businessmen Technology • Land • Labor-workers

  11. Prices in a Free MarketLaw of Supply and Demand • Goods on the market what people want to buy • Supply___ Prices____ Supply___Prices___ • Demand__Prices____ Demand_ Prices___ • Competition__Prices__ Quality___

  12. The Business Cycle prosperity • recession (U.S.) expansion depression Production-high or low Unemployment rate (%)- 10% -US 2011 10 people out of 100 don’t have jobs The Great Depression-1929-1939 25% unemployment

  13. Deficit and Debt p. 162 Budget- plan how much $ we can save and spend Trade-buying and selling goods Exports=Imports=Balance of Trade Exports> Imports=Trade Surplus Exports< Imports=Trade Deficit Free Trade-trading with other countries without paying tariffs (taxes on imported goods) Income=Expenses=Balanced Budget Income> Expenses=Budget Surplus • Income< Expenses=Budget Deficit

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