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Socials 11
Ms. Matthews
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An economy is a system of production, distribution and consumption of goods and
services within a country.
a) market economy – a system of allocating resources based only on the
interaction of market forces (eg. supply and demand); economic decisions
made by individuals with no government intervention
b) subsistence economy – an economy in which individuals produce to meet
their own basic needs with little internal or external trade
c) money economy – those activities involved in producing, distributing and
consuming goods and services
d) non-money economy – those activities for which it is difficult to assess value
(eg. housework and volunteering, the natural environment)
The GDP (gross domestic product) is the total value of goods and services produced by
a country over a period of time – often used to measure a country’s wealth and growth
rate of the economy
a) primary industries – produce raw materials such as wheat, wool and meat, and
make use of natural resources such as minerals and forests (eg.
hydroelectricity, coal, oil and natural gas)
b) secondary industries – manufacturing industries where basic materials are
turned into products that can be sold, such as the production of clothing
c) tertiary industries – those concerned with business and the provision of
services( eg. banking, marketing)
d) agglomeration – a concentration of particular industries in one place
eg. Silicon Valley in California – agglomeration for computer industry
 areas where economic activities are concentrated are called the economic core
and the areas that have fewer services or are not as wealthy are called the
economic periphery
Economic Issues in Canada
1) Regional Disparities
a) decentralization – the process of moving economic activities from the core
to the periphery
b) equalization payments – allow less wealthy provincial governments to
provide public services that are comparable to those provided in more
prosperous provinces
- these payments are made by the federal gov’t and are only
intended to support a province until its economy can do so on its
own
2) Brain Drain
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our economy has become more knowledge-based and the
demand for skilled worker has risen dramatically
the term ‘brain drain’ is used to describe what happens when a
country’s skilled professionals decide to move to another area to
work
it can occur within a country or between countries due to better
job opportunities in other areas, higher salaries lower taxes
while Canada gains many skilled workers due to immigration,
when we compare ourselves to the U.S., we lose more skilled
workers than we gain
Globalization is the trend towards a more integrated world economy, which means that
culture, technology and governance as well become integrated
Institutions of globalization include:
a) General Agreement on Tariffs and Trade (GATT)
- it established a set of rules to govern global trade and reduce
national trade barriers and competitive trade policies
b) World Trade Organization (WTO)
- 1994, meant to replace the GATT, but unlike GATT has status of
an official international organization
- it has 146 member states and 30 observers and includes the
General Agreement on Trade in Services (GATS) which affects
telecommunications, banking and investment, transport, education, health
and the environment
- the main functions are:
- administering WTO trade agreements
- forum for trade negotiations
- handling trade disputes
- monitoring national trade policies
- technical assistance and training for developing countries
- cooperation with other international organizations