Trade Created by Danielle Ruff Cartersville Elementary School Third Grade

Economy When you buy a toy or sell lemonade, you are part of an economy. When people buy and sell things, they make an economy. An economy is the way that people make, sell, buy, and use things.

Producers An economy has many different parts that work together. Producers make goods or perform services.

Consumers Consumers buy goods or services. An economy depends on both producers and consumers.

Interdependence Producers and consumers also depend on each other. Producers need consumers to buy their goods or services. Consumers need producers to make and sell goods or services. Producers and consumers are interdependent. Interdependence is two or more people depending on each other for goods and services.

Market Most people are both producers and consumers. When you buy a toy, you are a consumer. When you sell lemonade, you are a producer. Producing and consuming happen in a market. A market is a place where people buy and sell goods.

Supply and Demand Supply and demand are part of every kind of economy, too. Supply is how much of a good can be had. All goods have a limited supply. Demand is how much people want to buy a good.

Scarcity Supply and demand set the market prices for goods and services. Price goes up when there is not enough supply of a good that people want. Scarcity is when there is not enough supply of a good.

Surplus When there is a surplus of a good, there are more of it than people want and its prices goes down.

Trade Buying and selling is called trade. Trade is an exchange. Most trade is the exchange of money for goods or services. People trade whenever they buy or sell anything.

Trade Places trade, too. All cities, states, and countries need trade. There is no place that con produce everything that it needs. Georgia farmers grown a lot of peanuts. In fact, Georgia leads the country in peanut production. California leads the country in growing grapes.

Consumers in Georgia buy grapes from California. Consumers in California buy peanuts from Georgia. Georgia and California are interdependent because consumers in one state depend on the goods produced in the other state.

Importing and Exporting Countries trade with one another, too. Goods from Georgia are part of our country’s trade with other countries. When one country buys something from another, it is called importing. When it sells something to another country, it is called exporting.

Import and Export An import is something that a country buys from another country. An export is something that a country sells to another country.

Example of Import and Export A country imports natural resources and finished products that it cannot make by itself. For example, the U.S. imports vanilla. Vanilla grows naturally in other parts of the world, but not in the U.S. The state of Georgia imports natural resources from Canada, Mexico, and China. It imports wood, salt, and stone from Canada, sugar from Mexico, and things made with iron from China.

Another Reason for Importing A country also imports things that it can get cheaper from another country. The U.S. imports clothing from China, although it can be made here. Countries also import things so that they can save their own natural resources. The U.S. imports oil from Mexico and the Persian Gulf region, even though it is expensive. But the U.S. has oil in Alaska and the Gulf of Mexico.

Finally, countries import things so that different kinds of products are available to consumers. The U.S. makes cars, but also imports cars from Japan, Germany, and Italy. Some consumers like Italian cars better than American cars.

Exporting The United States exports billions of dollars of products and natural resources every year. Georgia contributes to U.S. exports. It exports transportation equipment to Canada, paper to China, and Japan, and computers to Mexico.

Currency People in the United States use dollars to buy goods and services. People in other countries use their own currency. Currency is the money people used in a country.

Different Currencies CanadaChinaJapanMexicoU.S. DollarYuanYenPesoDollar $¥¥$$ The U.S. dollar and the Canadian dollar are not the same. Sometimes the symbol for money is the same, but may represent a different currency