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Command Economy – The government owns most of the resources and determines the production of goods and services.

Market Economy – Production of goods and services is determined by the demand from consumers. Also called “capitalism.”

Mixed Economy – A combination of market and command.

Page 3: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Three Levels

Primary

Secondary

Tertiary

Page 4: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Primary Activities

(Dealing directly with natural resources.)

Examples:

• Fishing

• Farming

• Forestry

• Mining

Page 5: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Secondary Activities

(Manufacturing and processing.)

Examples:

• Steel mills

• Automobile assembly

• Saw mills

Tertiary Activities

(Services)

Examples:

• Transportation

• Retail sales

• Information Technology Services

Page 7: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Page 8: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

1. Different levels of natural resources

• Renewable—Soil, water, forests

• Nonrenewable—Fossil fuels (oil, coal, natural gas) and metals (gold, iron, copper, bauxite)

Page 9: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

2. Human resources

• Level of education

• Level of skills.

• Entrepreneurial and managerial abilities

Page 10: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

3. Capital resources

• Level of infrastructure

• Availability and use of tools, machines, and technologies

• Availability of money for investment

Page 11: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

How advanced an economy is.

Page 12: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Why are some country’s economies more developed than others?

Page 13: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Why are some country’s economies more developed than others?

http://upload.wikimedia.org/wikipedia/commons/6/61/Graph_rel_share_world_manuf_1750_1900_01.png

Page 14: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Why are some country’s economies more developed than others?

Page 15: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

The purpose of a colony is to provide natural and human resources to enrich the “motherland.” The

people of the colony usually do not share the wealth.

Page 16: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Many of the world’s poorest nations were once colonies of imperial powers?

Page 17: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

MEASURING THE ECONOMYMEASURING THE ECONOMY

The value of all goods and services produced The value of all goods and services produced in a nation in a year.in a nation in a year.

GDP divided by total population.GDP divided by total population.

Page 18: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Page 19: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Page 20: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

Source: World Bank

Page 21: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

G-7 nations: United States, United Kingdom, France, Germany, Italy, Japan, Canada.

Page 22: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

The merging of regional economies in which nations become interdependent on each other.

Page 23: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

How does globalization effect your life?

• Cheaper products

• More competition for jobs

Page 24: Command Economy – The government owns most of the resources and determines the production of goods and services. Market Economy – Production of goods

A trading nation’s ability to produce something at a A trading nation’s ability to produce something at a lower cost than another trading nation.lower cost than another trading nation.

Portugal

• 2 hours to produce 1 jug of grape juice.

• 6 hours to produce a yard of cloth.

Germany

• 4 hours to produce 1 jug of grape juice.

• 3 hours to produce a yard of cloth.

Make and trade grape juice.

Make and trade cloth.

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