THE AMERICAN ECONOMY

Amos- EconomicsChapter 19

BELL RINGER

You are a contractor building a house. Using the 4 factors of production, outline the building of this house. Use necessary factors of production to create this house.

BELL RINGER

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GROSS DOMESTIC PRODUCT (GDP)

Total value of all final goods and services produced in a country

GROSS DOMESTIC PRODUCT

GDP used to measure standard of living Per Capita GDP= Output per person in

a country GDP measures quantity not quality

ECONOMICS SECTORS/ CIRCULAR FLOW Market economics flow in a circular

model Market economics are divided into

sectors:1. Consumer Sector- Income Earned

A. Factor Markets- Productive Resources are bought and sold

2. Business Sector- Income SpentA. Product Markets- Goods and services are sold

3. Government Sector- Expenditures and Revenue

4. Foreign Sector- less the 4% of GDP

CIRCULAR FLOW CHART

Independent Practice: Complete the circular flow chart given to you by the teacher.

ECONOMIC GROWTH

Productivity- Amount of output produced by input over a given period

Specialization- Produce goods better than someone else

Division of Labor- Breaking down jobs

Human Capital- People’s skills, abilities, and motivation

Economic Interdependence- Relationship between producers and consumers to fulfill needs and wants

GIVE ADAM SMITH A HAND

Economist Wrote: The Wealth

of Nations Laissez- faire

Economics- “To be left alone”

Invisible hand theory with limited government interference

WHAT MAKES CAPITALISM WORK?

Markets Economic Freedom Private Property

Rights Competition The Profit Motive Voluntary Exchange

Create a six fingered hand to include:

Adam Smith’s Bio in the palm

Six factors that make capitalism work along the fingers

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JOHN MAYNARD KEYNES

More government influence in market economies

Tools: Taxes, Deficits, and Spending

Revamped previous knowledge on free market economies

Keynesian Theory

Karl Marx

• Wrote: Communist Manifesto

• Became the ruling economic system in Russia after WWI

Communism

Communist Manifesto

• The Communists do not form a separate party opposed to other working-class parties. They have no interests separate and apart from those of the proletariat as a whole. They do not set up any special principles of their own, by which to shape and mould the proletarian movement. The Communists are distinguished from the other working-class parties by this only: 1. In the national struggles of the proletarians of the different countries, they point out and bring to the front the common interests of the entire proletariat, independently of all nationality. 2. In the various stages of development which the struggle of the working class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.

Traditional v. Command

Graphic Organizer

• Command, Market, Mixed- Chapter 26-2• Traditional- page 724