Download Economic Vocabulary Review

Unit 8 Economic Systems of Africa
JE # 4 What are the 4 factors of
production or economic growth?
Capital Goods
Human Capital
Natural Resources
Entrepreneurship
Unit 8 Economic Systems of Africa
Economic Vocabulary Review
SS7E1a. Compare how traditional, command, and market
economies answer the economic questions of what to produce,
how to produce and for whom to produce.
SS7E2a. Explain how specialization encourages trade between
countries. Compare and contrast different types of trade barriers,
such as tariffs, quotas, and embargos.
SS7E2b. Explain why international trade requires a system for
exchanging currencies between nations.
SS7E3a. Explain the relationship between investment in human
capital and GDP.
SS7E3b. Explain the relationship between investment in capital
and GDP.
SS7e3d. Describe the rile of entrepreneurship.
SS7G4c. Evaluate how literacy rate affects the standard of living.
Match’em Up
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You will be divided into groups and given 3
envelopes. You must control your volume in your
group.
one envelope contains an economic term, one
contains the definition, and one contains an
example.
Each group will have 8-9 terms to match to the
definition and its example.
You cannot use any notes or textbooks. You must
use your prior knowledge and context clues.
When your group is finished, raise your hand for
me to check.
We will review the correct matches as a class.
Currency
Money in any form that is
accepted as a medium of
exchange
KSH (Kenyan Shilling), Saudi
Riyal, Israeli Sheqalim, Turkey
New Liras
Goods
Products that consumers
purchase to satisfy their wants
Groceries, cars, electronics,
gas, houses, clothes
Economics
The study of how people,
businesses, and societies choose
to use scarce resources to satisfy
their unlimited wants.
Supply and demand
Three questions economic
systems answer:
What to produce, how to
produce, and for whom to produce
Neighborhood friends working
from home using an assembly line
method to produce gift baskets for
booster club fundraisers
GDP – Gross Domestic Product
The total value of goods and
services produced in a country in
a year
$5,000,000
Capital Goods
Resources such as factories,
machinery, and tools that people
use to make other goods
Bulldozer, computer, shoe
factory
Human Capital
The knowledge and skills that
allow workers to produce goods
and services and earn an income
Education, training, workers
Natural Resources
Raw materials found in nature to
produce goods
Land, water, forests, minerals
Entrepreneurs
People who bring natural
resources, labor resources,
and capital resources together
to produce goods and services
Oprah, Bill Gates, Sean
Combs, Papa John
What happens to a country’s
GDP when they invest in human
capital and capital goods?
Investment in human capital and
capital goods increase a country’s
GDP
Education and training increases
your knowledge and skills, and
leads to higher paying jobs
Market Economy
An economy where the
government has a limited role in
decision making, and the people
help decide which or how many
goods are produced
Israel, US
Command Economy
An economy where the
government decides how many
and which goods are produced
and sets the price
China, Vietnam, North Korea
Traditional Economy
An economy where decisions
are made based on social roles,
cultures, and customs of the past
A family’s status may determine
whether they own a tractor
Mixed Economy
An economy where countries
use the best features of different
economic systems
Turkey, Saudi Arabia
International Trade
Requires a system for
exchanging currency between
nations because different
countries have different forms of
currency
500 Riyal = $133.32 US, 100
Sheqalim = $27.66 US, 10 New
Lira = $6.97 US
International Trade
Allows us the opportunity to
purchase goods or services
that we may not normally have
available to us
Fruit from Israel, coffee and
cocoa beans from Africa,
tanzanite from Tanzania
Specialization
Occurs when a country cannot
efficiently produce an item; but
can get it by trading with another
country that can
Diamond mining, oil production
(OPEC), grow rice
Tariff
A fee (tax) charged for goods or
services brought into a state or
country from another country
Japan charges 10% on imported
peaches
Embargo
When a government places
restrictions on the import or
export of certain goods
1990: UN proposed this on
Iraq during the Persian Gulf
War
Quota
A limit on the amount of a
product that may be imported
during a given period of time
2002: Canada allowed the
import of 150 million pounds of
chicken at a low rate and any
amount over that was charged a
tariff of 200%
Consumers
A person who buys and uses
goods or services
All living people who participate
in daily trade-related activities
Literacy Rate
The number of people over
the age of 15 that can read and
write
Newspapers are written at a
5th grade level, the average
level of most people
Trade Barriers
Any law or practice that a
government uses to limit free
trade between countries
Tariff, Embargo, Quota
Import
To bring items into a country
Machinery and tools to produce
goods, foodstuffs, textiles
Export
To ship items out to another
country
Agricultural products to Japan,
component parts to China
Services
Actions that satisfy our wants
Going to the hair salon/barber,
eating at a restaurant, having
carpets professionally cleaned