Unit 9 Economics of Latin America Vocabulary + Cuba and Brazil

SS6E1 The student will analyze different economic systems. ECONOMIC STANDARD SS6E1 The student will analyze different economic systems. a. Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. b. Explain how most countries have a mixed economy located on a continuum between pure market and pure command. c. Compare and contrast the basic types of economic systems found in Cuba and Brazil. NEW!

What are the 3 economic questions every economy must answer?

What are the 3 basic economic questions?! What to produce? How to produce? For whom to produce?

SS6E1a: Types of Economies Traditional Command Market economic questions are answered by what happened in the past, customs, and tradition economic questions are answered by the government economic questions are answered by the buyers and sellers

Citizens have MORE freedom Citizens have LESS freedom SS6E1b: Mixed Economy An economic system that features of both market and command economies Pure Command Pure Market 6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes. Citizens have MORE freedom Citizens have LESS freedom

SS6E1c: Economies of Cuba and Brazil

SS6E1c: Economies of Cuba and Brazil Republic of Cuba Federative Republic of Brazil Mixed Economy Close to command Government owns most factories and farms Some farmers aloud to keep extra money made on crops Mixed Economy Citizens own most factories and farms Government controls some large industries like steel production

SS6E1c: Economies of Cuba and Brazil Cuba: most economic decisions made by the government! Brazil: most economic decisions made by the people!

SS6E1c: Economies of Cuba and Brazil on the Economic Continuum U.S. Cuba Pure Command Pure Market

ECONOMIC STANDARD SS6E2 The student will give examples of how voluntary trade benefits buyers and sellers in Latin America and the Caribbean. a. Explain how specialization encourages trade between countries. b. Compare and contrast different types of trade barriers, such as tariffs, quotas, and embargos. c. Explain the functions of the North American Free Trade Agreement (NAFTA). d. Explain why international trade requires a system for exchanging currencies between nations.

SS6E2a- Specialization Countries may specialize in producing certain goods that they can trade for goods they need from other countries Specialization: focus on producing one or two goods really well Advantages: Produce goods in less time Produce goods for less money

SS6E2b- Trade Barriers TARIFF QUOTA EMBARGO Trade=voluntary exchange of goods and services among people and countries TARIFF QUOTA EMBARGO tax on imports limit placed on the number of imports coming into a country government order stopping trade with another country

SS6E2c- NAFTA Canada, United States, and Mexico Purpose: increase trade between the three countries by creating a FREE trade zone No tariffs

SS6E2d- Currencies Currency: the money people use to make trade easier Exchange Rate: price of one nation’s currency in terms of another nation’s currency

ECONOMIC STANDARD SS6E3 The student will describe factors that influence economic growth and examine their presence or absence in Latin America a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP). b. Explain the relationship between investment in capital (factories, machinery, and technology) and gross domestic product (GDP). c. Describe the role of natural resources in a country’s economy. d. Describe the role of entrepreneurship.

SS6E3abcd- Economic Factors Human Capital Definition: Workers with skills necessary to produce effectively How do you invest? Education, training, & health of the workers in a business or country If a country or business invests in it’s human capital, GDP will likely increase

SS6E3abcd- Economic Factors Physical Capital Definition: Factories, machines, tools, and technology How do you invest? Purchase NEW materials to produce more products faster If a country or business invests in physical capital it will be able to produce more  GDP will likely increase

SS6E3abcd- Economic Factors Natural Resources Definition: Gifts of Nature” – Arable Land, Minerals, Water, Forests If a country or business has plenty, you can supply your people and have some left over to sell  GDP will likely increase

SS6E3abcd- Economic Factors Entrepreneur Definition: Person who creates their own business by using their own money Entrepreneurs start business’s that make goods or provide services this provides jobs  GDP will increase

ECONOMIC STANDARD SS6G4 The student will describe the cultural characteristics of people who live in Latin America and the Caribbean. c. Evaluate how the literacy rate affects the standard of living.

SS6G4c – Literacy Rate A literate person is one who can read and write. Being literate is a major factor in whether a person can get a job and be successful in the workplace. Literacy rate is the percentage of a country’s population over the age of 15 that can read and write.

High Literacy Rate = High Standard of Living SS6G4c – Literacy Rate The standard of living (how well the people live) is often higher in countries where the literacy rate is high High Literacy Rate = High Standard of Living

Unit 9 – Latin America Economics Review Answer the questions in your notes using the textbook Traditional Economy: pg. 66 Command Economy: pg. 67- 68 Market Economy: pg. 68-69 Mixed Economy: pg. 70-71 Brazil & Cuba: pg. 72-73 Specialization: pg. 74 Trade Barriers: pg. 75 Exchanging Currencies: pg. 77- 78 Human Capital: pg. 78-79 (Physical) Capital: pg. 79-80 Natural Resources: pg. 81 Entrepreneurs: pg. 82-83