Economic Geography Chapter 4

What is an Economic System? defined: the way people produce and exchange goods and services

4 Basic Types of Economic Systems Traditional Goods and services are traded without money; barter system Command Government-controlled production and pricing Market Supply and demand, market economy Mixed Combination of command and market

4 Levels of Economic Activity Primary Gather raw materials Secondary Adding value to raw materials by changing their form Tertiary Service industry Quaternary Research, management, info tech

Resources Renewable Non-renewable Inexhaustible Replace thru natural processes Trees, fish Non-renewable Once removed from the ground, they do not replenish Metals, petroleum, gemstones Inexhaustible Planetary processes used for power Sunlight, wind, geothermal

Economic Support Systems Infrastructure Defined: basic support systems needed to keep an economy going, includes – Power (electricity) Communications (telephone, internet) Transportation (roads, mass transit) Water (supply to support population) Sanitation (sewage, trash collection) Education systems (K-12 schools, colleges)

Per Capita Income, GNP and GDP Average amount of $ earned by each working person in a political unit GNP total value of all goods and services produced BY a country over a period of a year or other specified period of time (includes products made outside of USA) GDP total value of all goods and services produced WITHIN a country over a period of a year of other specified period of time (only in US borders)

Economic Development Developing Nations Developed Nations Low GDP Limited at all levels of economic activities Lack industrial base Struggle to meet citizen’s basic needs Developed Nations High per capita income Varied economy Lots of quaternary activity Highly Developed Nations Western Europe, Japan, Canada, USA