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Specialization & Interdependenc
eMs. Ramos
Alta Loma High School
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How does specialization
lead to Economic Interdependence
?Ms. Ramos
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How did people live 200 years ago?
Ms. Ramos
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•They grew their own food, built their house, made their own tools & clothing, and performed many other tasks themselves.
Ms. Ramos
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Specialization Improves Productivity
•Smith wrote about advantages of specialization–Division of labor
•As productivity increases, more G&S are available & standard of living increases
Ms. Ramos
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•Need lg society to sustain
Ms. Ramos
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Specialization Encourages Trade
• Don’t produce everything- need to trade
• “We trade with others because it frees up time and resources to do things that we are better at”
- Charles Wheelan
• Are we able to be self sufficient today?
Ms. Ramos
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•Trade is a VOLUNTARY EXCHANGE
•Traditional economies- Barter•Market economies- money
Ms. Ramos
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•Money is …–Useful when value generally accepted
–Easy to carry –Convenient for transactions
Ms. Ramos
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Trade creates Economic Interdependence
•depend on others/ other countries
Ms. Ramos
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http://www.shutterstock.com/pic-23004469/stock-photo-a-typical-american-hearty-breakfast.html
dullmensclub.com
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http://www.shutterstock.com/pic-23004469/stock-photo-a-typical-american-hearty-breakfast.html
dullmensclub.com
Columbian Coffee
Florida Orange Juice
Idaho Potatoes
Iowa Eggs
Nebraska Pork
Kansas Wheat
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•Smith & the Founders believed trade & econ interdependence were key to nation’s growth–Prob when states est trade barriers w/one another
–Difficult to develop national economy
Ms. Ramos
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madmen.wikia.com
peoplequiz.com
Ms. Ramos
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Not to worry!!!…. Commerce Clause Art. I, sec. 8 to the rescue“Congress shall have the Power…To regulate Commerce with foreign Nations, and among the several states”
Ms. Ramos