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The World’s People
Government & Economy
Chapter 4, Section 3
The governments of the world include democracy, monarchy, dictatorship, and
communism.
• Governments:
o Make and enforce laws
o Regulate business and trade
o Provide aid to people
o Help shape the culture and economy of a country as well as the daily lives
of people who live there
•
Many countries have democratic governments.
o A democracy is a form of government in which the people elect leaders
and rule by majority.
o Some work to protect the freedoms and rights of their people.
o Others restrict the rights and freedoms of their people.
Other Types of Government
• Monarchy:
o One of the oldest types of government
o Ruled directly by a king or queen, the head of a royal family
o In some, power is in the hands of just one person.
o In others, many democratic practices are used.
•
Dictatorship:
o A single powerful ruler has total control.
o Leader is called a dictator
o Often rules by force
o People have few rights and no say in their own government.
•
Communism:
o A political system in which the government owns all property and
dominates all aspects of life in a country
o Leaders are chosen by the Communist Party or by Communist leaders.
o People have restricted rights and very little freedom.
Different economic activities and systems exist throughout the world.
• The economy is a system that includes all of the activities that people and
businesses do to earn a living.
•
Countries use a mix of different economic activities and systems.
•
Geographers divide economic activities into four levels.
Four Levels of Economic Activity
• Primary Industry
o People earn a living by providing raw materials or natural resources to
others.
 Examples include farming, fishing, and mining
•
Secondary Industry
o Use natural resources or raw materials to manufacture other products
 Example: automobile manufacturers use steel and other materials
to build cars and trucks.
•
Tertiary Industry
o Goods and services are exchanged
 Includes people who sell the products made in secondary industries
and people who provide services rather than goods, such as health
care
•
Quaternary Industry
o Involves the research and distribution of information
 People work with information rather than goods and often have
specialized knowledge and skills.
Economic Systems
• Traditional Economy
o System in which people grow their own food and make their own goods
o Trade may take place through barter, or the exchange of goods without
the use of money.
o Often found in rural and remote communities
•
Market Economy
o System based on private ownership, free trade, and competition
o Individuals and businesses are free to buy and sell what they wish
o Prices determined by the supply and demand for goods
o Sometimes called capitalism
•
Command Economy
o System in which the central government makes all economic decisions
o Government decides what goods to produce, how much to produce, and
what prices will be.
o Communist governments own and control most business in their
countries.
Geographers group the countries of the world based on their level of economic
development.
• Economic Indicators
o Measures of a country’s wealth used by geographers to decide if a country
is developed or developing
o One measure used is gross domestic product (GDP) – the value of all
goods and services produced within a country in a single year.
o Other indicators include a country’s per capita GDP, level of
industrialization, and overall quality of life.
•
Develop and Developing Countries
o Developed countries have strong economies and a high quality of life;
usually have high per capita GDP
o Developing countries have less productive economies and a lower
quality of life; usually have lower per capita GDP