1. what to produce? 2. how to produce? 3. for whom to produce?
DESCRIPTION
Customs and habits of the past help people decide what to produce, how to produce, and for whom to produce.TRANSCRIPT
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Economic Terms
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1. What to produce?
2. How to produce?
3. For whom to produce?
Questions All Economic Systems Must Answer:
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Customs and habits of the past help people decide what to produce, how to produce, and for whom to produce.
Traditional Economy
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Government planning groups make the basic economic decisions.
Command Economy
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Economic decisions are guided by changes that occur between buyers and sellers in the market place.
Market Economy
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There is NO PURE COMMAND or MARKET Economy!!!
Cuba Germany U.K.
Mixed Economy
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TARIFF – a tax on imports (goods shipped into a country)
Trade Barriers
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Quota – a limit placed on the number of imports that may enter a country
Trade Barriers
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Embargo – a government order to stop trade with another country
Trade Barriers
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an area where there are NO tariffs between the countries in the zone
The European Union is an example of a Free Trade Zone.
Free Trade Zone
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27 countries in Europe that work together to be a more powerful force in the world.
When together, they have more people, more$, and more land area. (This helps smaller European countries be more powerful.)
European Union (E.U.)
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The money people use to make trade easier
U.S.A. – U.S. Dollars
Russia – Rubles
Much of Europe – Euro
Currency
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the stuff, or people, that are necessary for businesses
Human Capital – workers
Physical Capital - supplies
Capital
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the total of all the goods and services produced in a country in one year
Gross Domestic Product (GDP)
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Without natural resources, countries must import what they need from other countries.
Natural Resources
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someone who risks his/her own money and time to create a business to make a profit
Entrepreneur
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The economic level of people in a country
HIGH LOW
Standard of Living
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the percentage of a country’s people who can read and write
Literacy rate affects a country’s standard of living!!
Literacy Rate