chapter 18: comparative market structures
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Chapter 18: Comparative Market Structures. Throughout the 20 th century, developed countries fell into three main categories: Capitalism Socialism Communism . Capitalism. ADVANTAGES. DISADVANTAGES. Can’t satisfy everyone Not as many public goods Based on demand – may ignore the poor . - PowerPoint PPT PresentationTRANSCRIPT
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Chapter 18: Comparative Market
Structures
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• Throughout the 20th century, developed countries fell into three main categories: –Capitalism–Socialism–Communism
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Capitalism
ADVANTAGES
• Efficient
• Freedom
• Decentralized
• Consumer satisfaction
DISADVANTAGES
• Can’t satisfy everyone
• Not as many public goods
• Based on demand – may ignore the poor
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SocialismADVANTAGES
• People use the election process to influence the WHAT,
HOW, and FOR WHOM questions…
Politicians provide many basic needs
DISADVANTAGES
• Less efficient as capitalism
• If workers have a government
guarantee of a job, hard work may be
scarce
• High taxes
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Communism ADVANTAGES
• Everyone is on an equal
socioeconomic field
DISADVANTAGES
• Central authority sets prices
• State owns the factors of
production
• Lacks effiency
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Transition to Capitalism• When the Cold War ended,
communist nations had many difficulties
• Privatization – making government owned businesses into privately owned businesses
• Governments had difficulty letting go of power
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Rise and Fall of Communism
• 1917 – Lenin overthrew the Russian czarist government and established communism
• Stalin established collectivism – the forced common ownership of farms, factories, and trading
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Transitioning from Communism to
Capitalism • Russia & other eastern European
countries have had different success stories
• Most struggled to establish the privatization of their businesses
• Some countries sold vouchers, some sold the businesses to foreign investors
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The Black Market: when goods are sold illegally
• Eastern European countries established black markets during
the transition to privatization
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Word Bank• NAFTA• Infant
Industry• Collectivism • Import• Protectionist• Socialism• WTO• Solidarity• Black Market• Quota
• Export• Tariff• Trade Deficit• Capitalism• Privatization• Free Trader• Foreign
Exchange• Communism• Trade Surplus• Collateral
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Chapter 19Developing Countries
Section 1
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Economic Development• 1.2 Billion people worldwide live off
of earning $1 per day
• A shortage of natural resources, limited education & technology, and corruption slow poor countries from developing
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Most Wealthy Countries
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TURN TO PAGE 523 IN YOUR
TEXTBOOK
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Obstacles to Development
1. POPULATION GROWTH:
– Developing countries have a high crude birthrate – number of live births per 1,000 people
– Increased life expectancy
– Some people feel that societies should work for zero population growth
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More Obstacles to Development
2. Limited natural resources
3. Lack of appropriate education and technology
4. Religion
5. Debt
6. Corruption
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Helping with Development
• IMF (International Monetary Fund) – gives economic advice to developing countries; loans currency
• World Bank – an international corporation that makes loans and gives financial assistance to developing countries
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The World Bank (cont.)• Advises countries to
reduce trade barriers
• Also recommends that these countries invest in their people
• Help them help themselves
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Section 2 & 3: Financing Economic
Development
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Stages of Economic Development
1. Primitive Equilibrium – no formal economic organization
2. Transition
3. Takeoff
4. Semi-development
5. High Development
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The European Union • No regulation
for the flow of workers
• Citizens hold a common passport
• The Euro was first produced
in 2002
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OPEC• Cartel – a group of
producers or sellers who agree to limit production of a product to control prices
• Organization of Petroleum Exporting Countries
• Cartel on Oil
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South Korea• Example of a developing
country that became successful
• 11th largest economy in the world