Unit 8 Economic Systems of Unit 8 Economic Systems of AfricaAfrica

JE # 4 What are the 4 factors of JE # 4 What are the 4 factors of production or economic growth?production or economic growth?

Capital GoodsCapital Goods

Human CapitalHuman Capital

Natural Resources Natural Resources

EntrepreneurshipEntrepreneurship

Unit 8 Economic Systems of Unit 8 Economic Systems of AfricaAfrica

Economic Vocabulary ReviewEconomic Vocabulary ReviewSS7E1a. Compare how traditional, command, and market SS7E1a. Compare how traditional, command, and market economies answer the economic questions of what to economies answer the economic questions of what to produce, how to produce and for whom to produce.produce, how to produce and for whom to produce.SS7E2a. Explain how specialization encourages trade SS7E2a. Explain how specialization encourages trade between countries. Compare and contrast different types between countries. Compare and contrast different types of trade barriers, such as tariffs, quotas, and embargos.of trade barriers, such as tariffs, quotas, and embargos.SS7E2b. Explain why international trade requires a SS7E2b. Explain why international trade requires a system for exchanging currencies between nations.system for exchanging currencies between nations.SS7E3a. Explain the relationship between investment in SS7E3a. Explain the relationship between investment in human capital and GDP.human capital and GDP.SS7E3b. Explain the relationship between investment in SS7E3b. Explain the relationship between investment in capital and GDP.capital and GDP.SS7e3d. Describe the rile of entrepreneurship.SS7e3d. Describe the rile of entrepreneurship.SS7G4c. Evaluate how literacy rate affects the standard SS7G4c. Evaluate how literacy rate affects the standard of living.of living.

Match’em UpMatch’em Up

1.1. You will be divided into groups and given 3 You will be divided into groups and given 3 envelopes. You must control your volume in envelopes. You must control your volume in your group.your group.

2.2. one envelope contains an economic term, one one envelope contains an economic term, one contains the definition, and one contains an contains the definition, and one contains an example. example.

3.3. Each group will have 8-9 terms to match to the Each group will have 8-9 terms to match to the definition and its example.definition and its example.

4.4. You cannot use any notes or textbooks. You You cannot use any notes or textbooks. You must use your prior knowledge and context must use your prior knowledge and context clues.clues.

5.5. When your group is finished, raise your hand for When your group is finished, raise your hand for me to check.me to check.

6.6. We will review the correct matches as a class.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 currency500 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