Download Ch. 2 Economics Systems

Ch. 2 Economics Systems work sheet
8/27
L.O.
I will be able to list the characteristics of a free enterprise
(MARKET) system.
1:3 Economic Questions
1.
Economic question:
What to produce?
Summary of Economic question
Because of scarcity, no country can produce
every good or service. USA is a market economy
and individuals decide what to produce.
2.
Economic question:
How to produce?
Summary of Economic question
Will use machines or human physical labor?
Will the govt. decide or will the individual?
3. Economic question:
For whom will the goods be produced?
Summary of Economic question
Will govt. decide who gets g/s, or will it be left to
individuals who can pay?
Comparing free enterprise (market economy)
with socialism (command economy)
4. What is free enterprise?
Individuals control all or most of the resources
and control their use.
5. What two terms are sometimes used to refer to
free enterprise?
Capitalism or market economy
6. What is socialism?
Govt. controls and owns most resources if not all.
7. What two terms are sometimes used to refer to
socialism?
Command economy, or communist economy
8.
Comparing information
Area
Free Enterprise
Socialism
Resources
Controlled and by private
individuals.
Govt. controls and may own
them.
Govt.s role in the economy
Govt. plays a smaller role in
the 3 basic economic
questions.
Govt. sets production levels,
in response to the 3
economic questions.
Economic plans
There no plans by the govt.
individuals make the
decisions
Govt. sets plans for
production of g/s
Income distribution
Less attention is paid to
this.
Govt. will redistribute from
rich to poor.
Controlling prices
Price fluctuate (go up and
down) do to market forces
Govt. will control prices on
all or at least certain goods.
Private property
Sacred – people take better
care of stuff they own
Govt. owns most property
because they think they will
be more fair.
Cheaters never prosper!
8/31
L.O. I will know the characteristics of a mixed economy.
9.
What is a mixed economy?
There is no such thing as a pure free enterprise (market)
economy. In the US, govt. controls a bunch of stuff.
10. Why is a mixed economy not considered a major
economic system along with free enterprise and
socialism?
There are varying degrees of free enterprise and
socialism in individual countries, so you can’t just put
mixed on them.
11. What is a traditional economy?
3 economic questions are based on customs, skills, and
culture.
Why is a traditional economy not considered a major
economic system?
There really isn’t any pure traditional economies out
there today. Most economies are mixed.
CHAPTER 2, SECTION 1 pg. 15
Skip # 1
2.
Self-interest
Self-interest cause people to work hard and take risks,
which benefits society.
3.
Division of labor
12.
The division of labor creates greater productivity and wealth.
Competition
Keeps price down and quality up.
5.
Government
Should provide national defense, a system of justice,
and public works.
In questions 6-8, briefly describe the views of Karl Marx
on the topics listed.
6.
Value of produced goods
All value comes from labor
7.
Capitalism
Exploits laborers
4.
Development of nations
Will develop through 6 stages from primitive to
pure communism.
8.
9-18 - YOU ARE ON
YOUR OWN! - DUE
TODAY!
I feel sorry for reporters
CHAPTER 2 SECTION 2
9/1
L.O. I will know what technological innovation made
globalization a reality.
Evidence of the Movement Toward Globalization
1.
Decline in U.S. tariff rates
1946 rate 40%. 2005 2.6%
2.
Increase in foreign exchange trading
1998 $820 million, 2004 $1.5 trillion
3.
Increase in foreign direct investment
$23 billion in 1975, $644 in 1994
4.
Increase in U.S. personal foreign investment
2% owner of foreign stock in 1980, 14% in 2005
Increase in membership in the World Trade
Organization (WTO)
18 countries in 1948, 148 om 2005
6.
Easier worldwide communication
****The internet has made communication way more
efficient and faster
Causes of the Movement Toward Globalization
7.
The end of the Cold War
The barrier standing in the way of trade was gone
8.
Advanced technology
Communication became much faster due to the
internet
5.
COLD WAR IS OVER!
9/3
L.O. I will be able to identify countries that have
benefited from globalization.
9. Policy Changes
Countries have decided to open their door to
increase trade
Benefits of Globalization
10. Benefit:
Higher income
Description:
The living standard has dramatically increased for
poor countries like India and China.
Benefit
In the last 30 years hunger and child labor has
been cut in half
Description
200 million people in the world were raised up
out of poverty in the last 20 years
12. Cost
Increased income inequality
Description
Today rich countries had 10 Xs the income as
poor countries, now it is 75Xs
11.
Response
Critics of globalization says it causes income
inequality, but supporters say it raises
everyone’s income
13. Costs
Loss of American jobs
Description
Many American jobs are going to India and
China as well other poor countries – pay is
much cheaper.
Response
The US off—shores jobs to other countries, but
Other countries off-shore jobs to the US too.
14. Costs
More power to big Corporations.
Description
Many think that major corporations will control
the world. They will be located in the US, Britain
and France
Response
Supporters of corps. say that the top 100 major
corps. only produce 4.3 % of all output of goods
Older Brothers Are Jerks!