Latin American Economics

What are Production, Distribution, and Consumption? Production-the process of making a product List two examples: Toys, Games, cars, Fruit Distribution- who gets the product and how does it get to them List two examples: trade, delivery, store, online, mail Consumption- what is done with the product List two examples: play it, drive it, eat it

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

What are the four types of Economies? Market Command Traditional Mixed

How does a command economy answer the questions? What to produce? The government decides what is needed by their citizens How to produce? The government decides how things will be produced, who will make the products and how much money they will earn For whom to produce? The government will decide how much of the product the citizens get and how much it will cost

How does a market economy answer these questions? What to produce? Entrepreneurs create new products and services How to produce? Business owners decide how much of the product is made and how much they will pay their employees For whom to produce? Business owners will advertise their product and set the price at what they believe people are willing to pay

The Economic Scale Pure Market Mixed Pure Command

How does a traditional economy answer these questions? What to produce? Community, tribe, family, location, traditions and customs How to produce? Climate, community, tribe For whom to produce? The community shares

Government of Latin America Quiz Brazil’s government leader is an elected President. Mexico has a Prime Minister. Cuba’s leadership is autocratic. In Latin America no one is forced to vote by law. Citizens have freedom of speech in Mexico and Brazil. There are many political parties in Cuba. You can speak out against the government in Cuba. Brazil’s government is very similar to the U.S.’s. Mexico has a federal government. Cuba has a presidential system.

Enrichment Which economic system do you think consumers would like the most? Which economic system would be the worst for competition between producers? A market economy has ___ ownership of property and resources? (private, government, or tribal) Which economic system is found in agricultural societies? Which is the most common economic system today?

Economy What to produce How goods are produced How people get products Traditional Climate, traditions, culture, location farming, hunting Trade, sharing Command the government government owned factories and farms government distributes products Market Buyers and sellers Private citizens, factories, technology Store, samples, mail, ebay, craig’s list

New vocabulary Demand- what the buyers desire Supply- goods made by the sellers Wage- money paid for work Nationalized- business owned by the government Private-owned- business owned the citizens

What are the differences? Pure Market Pure Command Citizens can own businesses Buyers and sellers decide how many goods are produced Buyers and sellers decide how much they cost Governments own businesses Government decides how many goods are produced Government decides how much things cost What are the differences?

What are the differences? Pure Market Pure Command Supply and Demand determines prices Privately own business Wages determined by employer Demand determines supply Government price control Nationalized businesses Wage control Government controls supply What are the differences?

Country Type of Economy Growing or Struggling What the government controls Canada Cuba Brazil

Canada Canada has a mixed market economy. Since WWII, Canada has progressed from a rural economy to a thriving industrial one based on manufacturing, mining and service industries. The government controls some areas like healthcare and postal service.

Cuba Cuba has a command economy. The government owns all resources and property, and decides what and how much are to be produced. Cuba’s economy has struggled since the breakup of the Soviet Union in the early 1990s because the Soviet Union was Cuba’s main trading partner.

Brazil Brazil has a mixed market economy, with strong agricultural, mining, manufacturing, and service segments. Brazil has the strongest economy of all the South American countries. The government controls some area like health care and the postal service.

Trade barriers What are the two kinds of trade barriers? Physical Examples: Mountains, forests, deserts, climate Political Examples: embargo, tariff, currency exchange, import quota, trade agreement between countries

Physical Trade Barriers Trade Helpers in Latin America Trade Blockers in Latin America Coast Panama Canal Amazon River Amazon rainforest Amazon Rainforest Andes Mountains Sierra Madre Mountains Atacama Desert Physical Trade Barriers

Political Trade Barriers Definitions Why would a country use this? Embargo- a ban on trade Tariff-a tax on imports Import Quota- a limit on imports Currency Exchange- different money in countries Trade agreement- an agreement concerning trade between two or more countries Disagree with a country to protect your country’s products Different currencies are worth different values To get things that your country needs Political Trade Barriers

Political Trade Barriers Embargo- a ban on trade Tariff-a tax on imports Import Quota- a limit on imports Currency Exchange- different money in countries Trade agreement- an agreement concerning trade between two or more countries

North America Free Trade Agreement United States, Mexico, Canada Removes trade Barriers such as Tariffs, embargos, import quotas Signed in 1993 To get items that you do not have Specialization-when a country focuses on producing a certain product Venezuela-oil Cuba-Sugar

Warm-up Why would a country use an embargo instead of a tariff? What is the main difference between a quota and a tariff? If a country wants to increase its number of imports would it use a quota?

GDP Total goods and services produced in a country. What would that include? Like the country’s paycheck

What are the four factors that impact economic growth? HOW??? Entrepreneurs- one that starts a new business Capital goods- factories, machinery, tools, computers, things needed to produce products Human Capital- workers Natural Resources- things found in nature They make the country money They are needed to make products Healthy, educated workers Use them make products and sell them to other countries What are the four factors that impact economic growth?