Economic Systems!

ECONOMIC SYSTEMS!

TRADITIONAL ECONOMIES

•Found in rural, non-developed countries (Asia, Africa, South America & Middle East)

•No technology

•Farming, hunting & gathering

MARKET ECONOMIES•based on supply & demand•Resources owned & controlled by individuals who compete to earn profits

•AKA Capitalism

•Competition among businesses determines price & increases quality of product

•US & Japan

COMMAND ECONOMIES

•Government makes decisions & determines how resources will be used

•Little freedom •no competition•No choices

Shortages common (due to poorly run factories & farms)

•Govt sets prices of goods/ services

•Govt decides jobs

•Examples: Cuba,N. Korea, China & old USSR

•AKA Communism

MIXED ECONOMIES

•Govt & individuals share decision making process

1. Govt regulates production of goods

2. Govt provides goods & services

3. Govt protects consumers & workers from unfair policies

•Individuals own means of production

MIXED ECONOMIES

•CANADA & most of W. Europe

FOUR FACTORS OF PRODUCTION

•Capital: (money to invest)

•Entrepreneurship: (those who open/invest

in business) •Land •labor

Business In the US 1.Anyone can open a

business2. Owners predict what

consumers will buy & at what prices.

3.Consumers have choices4.Owners will produce a

product if they make a profit.

OTHER TERMS•Tariff- tax on trade•Quotas- set limit/amount of items imported/exported

•Private property- owned by citizens, not govt

•Infrastructure- schools, building, bridges, roads, airports, etc

•Improved communication & transportation have made world smaller. (email, planes)

•Globalization- Companies sell products & hire workers all

over world

•Product availability- reach markets faster & easier

•Security- as people & info move freely abt world, security faces major challenge

•Flow of info-internet & TV allow people all over world to see events

GOVERNMENTS

•SUFFRAGE: The right to vote

•Universal Suffrage: all can

vote

DICTATORSHIP•1 strong ruler controls all govt powers

•Use fear, force. •No individual involvement

•Often after military victories

•Decisions made quickly•Cuba, Iraq

Democracy•People rule, directly or through

elected reps.People can vote or run for office

THE BRANCHES•EXECUTIVE: Enforces or carries out the law. Ex. President,

•LEGISLATIVE: Creates, writes, passes the law. Ex. US Congress

•JUDICIAL: interprets the law. Supreme Court

PRESIDENTIAL DEMOCRACY•Elect executive,

legislative & judicial members to represent the citizens

•Executive (president) elected by the people

Legislative jobs carried out through elected group of reps (Congress)

Allows for participation of the people

•Rights & freedoms guaranteed.

Executive

Legislative

Judicial

PARLIAMENTARY DEMOCRACY

•Similar to presidential.•Difference is EXECUTIVE branch (Prime Minister) is elected by Legislative branch (Parliament)

•Legislative elected by people

•Example: Great Britain

•Allows ind participation & rights & freedoms guaranteed

ABSOLUTE MONARCHY•One hereditary ruler (King or Queen) controls ALL govt powers

•No individual participation

• (Swaziland, Liechtenstein, Saudi Arabia)

CONSTITUTIONAL CONSTITUTIONAL MONARCHYMONARCHY

1. Powers of king/queen limited

2. Share power w/elected group of representatives & a constitution3. People vote &run for office

THEOCRACY•Govt headed by a religious leader who leads according to beliefs of 1 religion.

•Little individual participation

Monarchy:

Constitutional Monarchy

Traditional Monarchy Absolute MonarchyRepublics: Democracy Restricted Democratic

PracticeAuthoritarian

RegimeTotalitarian RegimeNon-

Sovereign:Protectorate Colonial Dependency Empire

SOURCES•Document, organization, or person that supplies info

•Reliable source: dependable with a reputation for accuracy. Ex. Report by a

university

•Credible source- reasonable. Matches other info about same topic

•Primary source: document or record or written account created by a person who took part in or witnessed an event. Anne Frank’s diary

•Secondary Source: written account created by a person who was not a

participant written some time after event