Resources, Technology, and World Trade

Natural Resources Natural Resources are materials from the earth that people use to meet their needs. Soil, trees, wind, and oil are all natural resources Renewable Resources are natural resources that cannot be used up or can be replaced Sun, Wind, and Water cannot be used up, Forests can replace themselves Nonrenewable Resources can be used up, once they are used they are gone Gold, oil, and coal are nonrenewable

Economic Systems An Economic System is the method used to answer three key questions: what goods and services to produce, how to produce them, and who will receive them. There are four main types: Traditional Economy, Command Economy, Market Economy, and Mixed Economy. In a Traditional Economy individuals decide what to produce and how. Barter is used in traditional economies. Bartering is when something is exchanged directly for something else, money is not used.

The next type is a Command Economy The next type is a Command Economy. In a Command Economy the government makes the key decisions about resources. The government decides costs of products and wages of workers. There is very little economic freedom. The next is a Market Economy. In a Market Economy individuals make their own economic decisions. Supply and Demand is important in a Market Economy. Supply is what is made to sell and Demand is what goods and services people buy.

The fourth type is a Mixed Economy The fourth type is a Mixed Economy. In a mixed economy the other systems are combined An example is the United States where it is mainly a Market Economy, but the government is still involved.

Developed and Developing Countries A Developed Country has a mix of agriculture, a lot of manufacturing, and service industries Examples are the United States, France, and Japan Developing Countries have economies that are not as advanced, and they have very little industry. They are mainly agricultural Examples are Sierra Leone, Cambodia, and Guatemala

Newly Industrialized Countries are countries that are becoming more industrialized Examples are South Korea, Thailand, and Singapore South Korea, Thailand, and Singapore are also examples of emerging markets An Emerging Market is when there is rapid economic and industrial growth Closed Markets are also important. A closed market is when a country refuses to trade with other nations, or heavily restricts trade

World Trade Resources are not distributed evenly around the world so there is trade When a nation trades they export resources or products they have too much of They also import resources or products they don’t have

Barriers to Trade Nations try to manage trade with other countries to boost their own economies Some nations use taxes called Tariffs to increase the price of imported goods A Quota is another barrier to trade. A Quota is a limit on how many items of a product can be imported into a country

Free Trade In recent years, many countries have agreed to get rid of trade limits so goods can flow freely. This is called Free Trade An example of this is the North American Free Trade Agreement between Canada, the United States, and Mexico

Interdependence & Technology Growing trade means that countries rely on each other more and more. This is called Interdependence. Interdependence has happened partly because of new Technology Advances in transportation, such as airplanes, and in communications, such as the internet are have made Interdependence grow

Inflation, Recession, and Depression Inflation is the increase in prices and fall in the value of money Recession is a temporary economic decline Depression is a long term economic decline