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Middle East Economics Study Guide Name ____Key__________ Date _____ Per. _____ 1. In which type of economy are most of the economic decisions that are made based on custom and on the habit of how such decisions were made in the past? Traditional Economy 2. In which type of economy do government planning groups make the economic decisions for the workers? Command Economy 3. In which type of economy do individuals make the economic decisions, such as what to produce or what to buy? Market Economy **In a market economy you would find individuals who take risks in starting new businesses. (Entrepreneurs) 4. Nearly all modern economies in the world today have characteristics of both market and command economic systems. What do we call this type of economy? Mixed Economy 5. Why do most economies in the world today operate somewhere in between a market economy and a command economy? Most economies have found that they need a mix of a free market and some gov’t control to be successful. 6. What is the economy of Israel based on? Israel has a mostly market economy based on advanced technology. 7. What is the economy of Saudi Arabia based on? Saudi Arabia has rich oil reserves that allow the Saudi’s to buy other goods. 8. What is the economy of Iran based on? Iran has a mixed economy despite gov’t attempts to tighten control. 9. How is the economy of Turkey different than Israel, Saudi Arabia, and Iran? The gov’t is loosening its control of the transportation and communication industries. 10. What is “economic specialization”? Producing those goods a country can make the most efficiently so they can trade them for goods made by others that can’t be produced locally. 11. Saudi Arabia specializes in the production of ____________. Oil and natural gas 12. Israel specializes in the production of _____________. Agricultural technologies 13. What is a trade barrier? Anything that slows down or prevents one country from exchanging goods with another. **Trade barriers do NOT remain the same over time. 14. The United States announcing that it would no longer accept oil from or conduct any other type of trade with Iran would be an example of which type of trade barrier? Embargo 15. Israel deciding to accept only 1500 Sony Playstation units per year into the country each year from Japan is an example of which type of trade barrier? Quota 16. Saudi Arabia placing a tax on all fruit coming into the country from other nations is an example of which type of trade barrier? Tariff 17. OPEC was created in 1960 for what reason? It was created by some countries with large oil supplies who wanted to work together to try to regulate the supply and price of the oil they exported to other countries. **Know that OPEC has NOT only risen prices for the USA. 18. Why is it important to have a system to convert from one currency to another? This system makes it possible to trade between nations that have different types of money. 19. The knowledge, skills, and education provided to workers in an economy is called ___________________. Human capital 20. The factories, machines and technology that workers use to make other goods are called _______________. Capital goods 21. __GDP____is determined by taking the total value of all goods and services produced by a country in a single year. 22. Which nation in Southwest Asia is not a large producer of oil? Israel 23. Why have the Israelis made a large investment in human capital? They need well-trained workers because their economy depends on advanced technology. 24. What is an entrepreneur? What would be an example of an entrepreneur? A business person who is willing to take a risk to begin a new business. example: Someone who opens a clothing store.