How an Economic System Works Topic 6

How an Economic System Works Choose the correct stage of the economic process: A factory deciding what shoes to make and making them? Distribution, consumption or production A shop selling the shoes? Distribution, consumption or production A person buying the shoes? Distribution, consumption or production 2) Choose the correct type of economy described below: The government makes all of the decisions about what goods to produce and services to offer, how to distribute them ,and which individuals can consume them – communist, free market or mixed Private companies make the production and distribution decisions, and are motivated by making profits. This means that they produce only those goods and services that they think people will want to buy, and set prices at a level that will allow the companies to make money after all of their costs have been paid. Individuals are free to buy any goods and services that they can afford. – communist, free market or mixed c) The UK economy has mixtures of a the two extreme types of economy – communist, free market or mixed 3) In the UK the private sector produces the goods and services where a profit can be made and the government provides public sector services. Which 4 of the following are public services? Parks, trains, military, British Airways, universal education, health 4) A company that was owned by the government and is now owned by the private sector is known as? Privatised, nationalised 5) If the government spends more money on the army, is it likely to have less to spend on the NHS? True or False 6) An upward spiral leads to what? Boom or Recession 7) A downward spiral leads to what? Boom or Recession 8) What is full employment? When everyone has a job or when everyone who is able & willing to work are in paid employment 9) Price stability is the government? Stabilising the value of the pound, low inflation, balancing the budget 10) Which sector? A) NHS, Outwood Academy Valley, Army - Public, Private, Third sector B) Tesco, Barclays Bank, Toyota - Public, Private, Third sector C) Charities, Oxfam, Save the Children, Christmas meals for the elderly - Public, Private, Third sector

11) Questions on the public sector: How many people work in the public sector? 5.8 million 15.8 million 25.8 million What percentage of workers work in the public sector? 18.8% 28.8% 38.8% How much revenue did the government receive to spend on the public sector in 2014? £47 bn, £470 bn, £4,700 bn 12) Questions on the private sector: How many people work in the private sector? 14.3 m 24.3 m 34.3 m What is the revenue of the private sector? £330 bn £1,330 bn £3,330 bn How many businesses are there in the UK? 0.9 m, 4.9 m, 14.9 m 13) Size of businesses. How many people work in a small business? Less than 5, less than 10, less than 50 How many people work in a medium sized business? Less than 10, less than 50, less than 250 What percentage of businesses are small & medium in the UK? 42%, 65%, 82% 99.9% What percentage of businesses are sole traders? 35.3% 55.3% 75.3% 14) Charity sector Which 3 of these are in the charity sector? RSPCA, BBC, NHS, Royal Mail, Children in Need How many charities are there in the UK? 63,709 or 163,709 In 2014 charities rose how much? £61 bn £161 bn How many people work for charities in the UK? 0.6 m 1.6 m 2.6 m A large charity is classed as one that raises more than? 1 m or 10m per year 15) Which will always be higher for a business profit or turnover? 16) People pay tax every month as they earn it. This is known as? PAYE, TaxGo, PayNow 17) Doing ethically good things as a business is known as? Corporate Social Responsibility (CSR) or Ethically Good Business (EGB) 18) Which 2 of the following are ethical (CSR)? Maximising profit, reducing pollution, developing employees, good promotion 19) Pret-A-Manger employ homeless people and ex-criminals to help them. Is this ethical and CSR? Yes or No 20) What is the main objective of most businesses? To make a profit or to do good for society 21) A business that main aim is to do good for society rather than profit maximisation is known as a ? Social enterprise or multi national 22) The main aim of the third sector is? To improve social justice, increase profits or increase employment

Nationalised or privatised industries In the past, more services were run by the government, including the railways, the Royal Mail and the electricity company. These were known as ‘nationalised industries’ but all of the services have since been sold to private companies, in a process called‘ privatisation’. What do you think are the advantages of nationalised industries? What do you think are the advantages of privatised industries?

Define Key terms Banking industry Capacity building Charity sector Communist economy Corporate social responsibility (CSR) Corporation tax Economic downturn Economic growth Free-market economy Full employment Gross domestic product (GDP) Gross profit Inflation rate Mixed economy Net profit Non-governmental organisation (NGO) Payroll giving Price Price stability Private sector Profit Public sector Recession Social enterprise Social responsibility Third sector Turnover Unemployment rate Define

How an Economic System Works Choose the correct stage of the economic process: A factory deciding what shoes to make and making them? Distribution, consumption or production A shop selling the shoes? Distribution, consumption or production A person buying the shoes? Distribution, consumption or production 2) Choose the correct type of economy described below: The government makes all of the decisions about what goods to produce and services to offer, how to distribute them ,and which individuals can consume them – communist, free market or mixed Private companies make the production and distribution decisions, and are motivated by making profits. This means that they produce only those goods and services that they think people will want to buy, and set prices at a level that will allow the companies to make money after all of their costs have been paid. Individuals are free to buy any goods and services that they can afford. – communist, free market or mixed c) The UK economy has mixtures of a the two extreme types of economy – communist, free market or mixed 3) In the UK the private sector produces the goods and services where a profit can be made and the government provides public sector services. Which 4 of the following are public services? Parks, trains, military, British Airways, universal education, health 4) A company that was owned by the government and is now owned by the private sector is known as? Privatised, nationalised 5) If the government spends more money on the army, is it likely to have less to spend on the NHS? True or False 6) An upward spiral leads to what? Boom or Recession 7) A downward spiral leads to what? Boom or Recession 8) What is full employment? When everyone has a job or when everyone who is able & willing to work are in paid employment 9) Price stability is the government? Stabilising the value of the pound, low inflation, balancing the budget 10) Which sector? A) NHS, Outwood Academy Valley, Army - Public, Private, Third sector B) Tesco, Barclays Bank, Toyota - Public, Private, Third sector C) Charities, Oxfam, Save the Children, Christmas meals for the elderly - Public, Private, Third sector

11) Questions on the public sector: How many people work in the public sector? 5.8 million 15.8 million 25.8 million What percentage of workers work in the public sector? 18.8% 28.8% 38.8% How much revenue did the government receive to spend on the public sector in 2014? £47 bn, £470 bn, £4,700 bn 12) Questions on the private sector: How many people work in the private sector? 14.3 m 24.3 m 34.3 m What is the revenue of the private sector? £330 bn £1,330 bn £3,330 bn How many businesses are there in the UK? 0.9 m, 4.9 m, 14.9 m 13) Size of businesses. How many people work in a small business? Less than 5, less than 10, less than 50 How many people work in a medium sized business? Less than 10, less than 50, less than 250 What percentage of businesses are small & medium in the UK? 42%, 65%, 82% 99.9% What percentage of businesses are sole traders? 35.3% 55.3% 75.3% 14) Charity sector Which 3 of these are in the charity sector? RSPCA, BBC, NHS, Royal Mail, Children in Need How many charities are there in the UK? 63,709 or 163,709 In 2014 charities rose how much? £61 bn £161 bn How many people work for charities in the UK? 0.6 m 1.6 m 2.6 m A large charity is classed as one that raises more than? 1 m or 10m per year 15) Which will always be higher for a business profit or turnover? 16) People pay tax every month as they earn it. This is known as? PAYE, TaxGo, PayNow 17) Doing ethically good things as a business is known as? Corporate Social Responsibility (CSR) or Ethically Good Business (EGB) 18) Which 2 of the following are ethical (CSR)? Maximising profit, reducing pollution, developing employees, good promotion 19) Pret-A-Manger employ homeless people and ex-criminals to help them. Is this ethical and CSR? Yes or No 20) What is the main objective of most businesses? To make a profit or to do good for society 21) A business that main aim is to do good for society rather than profit maximisation is known as a ? Social enterprise or multi national 22) The main aim of the third sector is? To improve social justice, increase profits or increase employment