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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