The Economics of South and East Asia Diana Vela and Gabby Alvarez 3 rd Period Mr. Yoder

Production Before we produce, what questions do we need to answer? –What to produce –How to produce it –For whom do we produce it for –And most importantly, what type of economic system do we have?

Economic Systems Command Economy – The government decided the factors of production. –Examples: China, North Korea, Cuba Traditional Economy – Local / Village leaders decide the factors of production –Example: Afghanistan, some areas of India Market Economy – The people through their purchases and the government (in certain areas) through policies decide the factors of production. –Examples: India, Japan, South Korea

China, India and Japan All three have a market economy, but China still controls much of the production with-in their country. India has mostly a market economy, but areas with- in India have characteristics of a traditional economy. Mainly in the rural farming areas. Japan – has primarily a market based economy. Consumers, through their purchases decide what, how, and how much to produce in Japan. Pure Command Pure Market ChinaIndiaJapan

Natural Resource "Gifts of nature" that can be used to produce goods and services; for example, rivers, oceans, lakes, air, mineral deposits, forests and actual fields of land. Question: When does a natural resource become a capital resource? Answer: 1 example: When a business is built on land, like a shopping mall.

Capital Resource These are resources that are made and used to produce and distribute goods and services; some examples include trucks, tools, machinery and factories.

Capital Resource and GDP Japan’s lacks many natural resources and must import a lot of natural resources, but their investment in Capital resources have greatly contributed to their high GDP China – One of the worlds leading producers of natural resources, and though they spend a lot of money on capital resources, just as much money in capital resources is being invested in China by foreign investors. Both have helped its GDP. India – Like China, India depends of foreign investors to build up its Capital resources.

Human Capital The education, training, skills, experience that a worker gains or brings to their employer. IT IS NOT HOW MUCH A PERSON MAKES!!!!

Human Capital and GDP Japan – After WWII invested heavily in their human capital and became one of the strongest economies in the world and they still are. One of the strongest GDPs in the world India – Believes in entrepreneurship and has special funds allocated to give to entrepreneurs to start their own business. Also is one of the largest produces of software in the world, but the majority of Indians still farm. GDP has increased through the investment in their citizens, but India still has a long way to go to bridge the gap between the haves and have nots. Most people in the farming sector well below the poverty line. China – One of the world’s strongest economies, but China makes the majority of their money through international business. China is getting better in training their people, but like India, most people in China live below the poverty line. NOTE: Though a country may have a high GDP, it does not guarantee that it’s citizens are doing economically well. Communist style governments like China, along with extreme populations (China and India) play a huge part in the wealth of its citizens.

Entrepreneurship A person who fronts the money to produce goods and services. Example: Truett Cathy started the Chik-Fil-A business with his own money.

The Factors of Production Cycle Entrepreneur