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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, -Pakistan, Kuwait • Anarchy -no government

  4. Economic Systems what the country produces and who controls resources

  5. Traditional Economy Based on agriculture Example-the Amish Disadvantages (-) poor education hard work little money no technology Advantages (+) -healthy, peaceful -subsistence farming (make everything by themselves) -no pollution -everyone has useful skills

  6. Communism(command economy) Government controls all resources Example-N. Korea, Cuba Disadvantages (-) no private businesses poor quality of goods no freedom poverty, money 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 (-) No government regulations Pollution Child labor, no minimum wages High poverty • Advantages (+) • Businesses make lots of money • Easy to start a business

  8. Mixed Marketbased on private property, and limited government control Example U.S. Advantages (+) • You can own a business, and make a profit • Government collects taxes to spend on different programs (education, seniors, military) • Disadvantages (-) • High unemployment • Jobs outsourced to countries with cheaper labor • 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 (high production) • recession (U.S.) • (slow down in the economy) expansion depression Production Unemployment rate (%)- 8% -US 2012 8 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

  14. Assignments • Workbook p. 43,45,46 • Articles-North Korea, Cuba