Download The Economies of Asia - Social Circle City Schools

The Economies of Asia
Traditional Economy
• Needs are fulfilled in the same way as their
ancestors.
Command Economy
The government determines what will be produced,
how it will be produced and who it will be produced
for in society.
Market Economy
• Individual businesses
make their own decisions
about what to produce
and how to produce it
without government
regulations.
Mixed Economies
• Communist –The government
produces all of the consumers’
needs and wants.
• Socialist –The government
produces the consumers’ needs
and private businesses produce
the wants.
• Capitalist – Private businesses
produce most basic needs and
wants with some government
regulations.
Economic Systems
Pure
Market
Pure
Command
Iran
45%
Pure
Command
Israel
68%
Saudi
Arabia
64%
Pure
Market
South Africa
64%
Nigeria
55%
Pure
Command
Pure
Market
North Korea
2%
Pure
Command
India
China
54%
53%
Japan
73%
Pure
Market
India’s Economy
Mixed Economy
• It is a mixture of the traditional
and the modern.
• In villages, farmers still work in
the fields.
• There are also modern factories
and high-tech service industries.
• Almost 60% of India’s workforce
are farmers who grow barely
enough to feed their families.
• India’s leading crops are rice,
wheat, cotton, and tea.
• India is still considered a
developing country.
India’s Economy, Cont’d
• Its economy is large enough to
rank among the world’s top 10
industrial countries.
• Some Indians are very rich, but
most are still poor.
• Booming electronics industry,
producing computers, software,
televisions, CD players, VCR’s,
launched several
communications satellites
systems and leads the region in a
number of related fields.
• Bollywood films are as popular in
Southern and Eastern Asia as are
films in U.S.
China’s Economy
• When the Chinese
Communists took over in 1949,
they set up a nearly pure
command economy.
• The Communists took over an
economy that was almost
solely based on farming.
• Today, China produces
everything from satellites to
rockets to toys.
China’s Economy, Cont’d
• In the late 1970s, the
gov’t introduced elements
of free enterprise.
• Now, farmers can grow
and market their own
crops on part of their
rented land.
• Millions of Chinese have
started their own small
businesses.
Japan’s Economy
• Japan has few natural
resources, so it must
import many raw
materials to run its
industries.
• The country produces
about 1/3 of its energy
through nuclear power.
• Japan has the world’s
largest fishing industry.
• Fish is a major part of the
Japanese diet.
Japan’s Economy, Cont’d
• Japan is known for its
high-quality cars and
items like TVs, cameras,
and CD players.
• Their economic success
is due partly b/c of a high
literacy rate and partly b/c
of the peoples’ strong
work ethic.
• Japan’s market economy
depends on trade,
especially with countries
in the Pacific Rim.
North Korea’s Economy
• This is one of the world's most
centrally directed and least
open economies.
• The central government plans
the economy, controls what’s
produced, owns all land and
housing, and controls access
to jobs.
• Only 14% of North Korea’s
land can be farmed.
• It’s farmed by cooperativesgroups of farmers who work
the land together.
• Some people grow food for
themselves in small gardens.
North Korea’s Economy, Cont’d
• North Korea doesn’t
produce enough food to
feed its people and
historically imported
needed food from the
Soviet Union. When it
collapsed it lost its main
source of food and has
faced famine at times.
• Poor harvests in the mid
90s made things worse,
famine ensued, and
thousands starved to
death.
• North Korea is rich in
mineral resources.
• They make machinery,
iron, and steel, but their
factories use outdated
technology.
• The government has
invested in nuclear power
plants.
Gross Domestic Product (GDP)
Market value of all final goods and services produced in a country in a year (Final goods and services
have been purchased for final use. They are not for resale or further manufacture)
C
Consumption
Spending by households
on goods and services,
including spending on
such things as cars, food
and visits to the dentist.
This makes up 2/3 of the
GDP spending.
+
I
+
Investment
Spending on business
machinery, factories,
equipment, tools and the
construction of new
buildings.
N
Net Exports
Net exports are calculated (x-m)
where x is exports and m is imports.
Spending by people not
living in the US on goods
and services made in the
US
Minus
Spending by people in
the US on foreign goods
and services.
GM cars,
Coca Cola
minus
Call center service
The sum of CING is GDP
+
G
Government
Spending on all levels of
government on goods
and services, including
spending on the military,
schools and highways.
Factors that influence GDP (make it go up and down):
1) Investment in physical and human capital –
•
New Jobs / New Factories
2) Incentives to save, invest and increase productivity
•
Government / Employer
3) Low Inflation
•
Economic condition in which prices of goods and services increase
• Gas Prices, Grocery prices go up!
4) Political Stability
5) Economic Freedom
6) Free Trade