European Economic Growth Factors

Essential Question: What factors influence a country's economic growth?

Economic Check Point Economics is the study of how a market makes, distributes, and consumes products and services. What are the 3 basic economic questions: –What to produce? –How to produce? –For whom to produce?

Gross Domestic Product (GDP) The total value of all the goods and services produced in a country in a year. Use to tell how rich/poor a country is. Often an indicator of Standard of Living (just like the literacy rate) –…it’s like a big (imaginary) calculator that keeps track of all the money spent in a country in a year.

Top 5 highest GDPs on Earth YEAR European Union $14,820,000,000,000 2 United States $14,660,000,000,000 3 China $10,090,000,000,000 4 Japan $4,310,000,000,000 5 India $4,060,000,000,000

Bottom 5 lowest GDPs on Earth YEAR Tuvalu $36,000, Montserrat $29,000, Tristan da Cunha $18,000, Niue $10,010, Tokelau $1,500,000

GDP per capita When you take the GDP and divide it by the population of that country. Is a more accurate picture of how much $$ a country has compared to the GDP

Top 5 highest GDPs per capita YEAR Qatar $179,000 2 Liechtenstein $141,100 3 Luxembourg $82,600 4 Bermuda $69,900 5 Singapore $62,100 *USA is # 47 with $47,200

Bottom 5 lowest GDPs per capita YEAR Eritrea $ Zimbabwe $ Liberia $ Democratic Republic of the Congo $ Burundi $300 *All in Africa

Private vs. Public Businesses Public means it is owned by the government Private means it is owned by citizens

Entrepreneur/Entrepreneurship Entrepreneurs are individuals who take risks in an economy by starting new businesses. Why do you think it is more difficult for entrepreneurs to act in a command economy?

Human Capital/Resource The skills that humans have to build things or perform services. Examples: –Education –Training –Health of Workers

Capital Good/Resource The things needed to make other goods Examples: Machines –Ice machine –Coin press Factories –A car manufacturing plant Technology –Computers –Software

Russia’s Economy Russia has had to shift from a command economy following the fall of their communist economy. They have moved towards a mixed market economy. During this shift Russia has struggled with high unemployment, a fall in value of the Russian currency (the Ruble), and inflation being high.inflation Russia has oil and sells it to other countries. Russia has a skilled labor force, and it’s gross domestic product* (or GDP) has been on the rise for the past few years, this gives hope that their economy will be strong soon. *GDP is the value of the goods and services produced in a nation within a year.

Germany’s Economy The reunification of East and West Germany has caused economic difficulty in Germany. Germany had to combine two very different economic systems. East Germany had a command economy, while West Germany had a mixed economy. They have combined a free market, some governmental control, and social welfare (to help the poor) to create a new mixed economy called a social market economy. Germany’s combined industrialized economy has become one of the strongest in Europe. Germany has a high literacy rate that reflects the high quality education required of Germany’s children, this investment in it’s people helps the economy.

United Kingdom’s Economy The UK has a mixed market economy The government controls some economic activity while private companies control others. The UK has a welfare system, socialized medicine, and the government is involved in overseeing fair business practices, banking, and the supply of money. Service Industries (banking, insurance, etc.) make up the largest part of their GDP. The discovery of oil in the North Sea has helped the UK be less dependent on other nations. The people of the UK have a high standard of living, and the literacy rate is among the highest in Europe.

International Trade The sale of goods or services across country borders Trade between different countries

Trade Barrier Barrier=wall Something that prevents trade Examples: –Tariff –Quota –Embargo –Geography (geography that prevents easy trade, like mountains, oceans, etc.)

Embargo A government order prohibiting the movement of merchant ships/planes/trading into or out of its ports. A government restriction on trade with a foreign nation.

Quota The amount of something that is allowed or admitted Examples: –A restriction on the quantity (number) of a good that can be imported during a specific time period would be called an “import quota”. –If the United States government only allows 50 tons of corn to be imported into the US each year, this would also be called an “import quota”. –If your teacher has given you 20 minutes to work on an assignment, your “time quota” is 20 minutes.

More QUOTA examples Money Quota: Your parents give you $20 a week to spend. Once you spend all $20, you have met your “money quota”. You will not receive any more money until next week. Paper Quota: Your job only allows you to use 1,000 sheets of paper per year. If you use all 1,000 sheets, then you have met your “paper quota”. You will not receive any more paper until next year.

Tariff a tax that the government puts on imported or exported goods.

Voluntary Trade Same as international trade, but the countries both benefit from trade and they voluntarily decide to trade with one another

Currencies of Europe Something you exchange for goods or services The money in circulation in any country

Currencies of Europe France, Italy, and Greece use the Euro. The Euro has pictures representing each of it’s member nations, much like our quarters for each state, here in the U.S.A. Below are Euro coins. All coins have the same front design These are some of the back designs for the 1euro piece representing different EU nations. FranceItalyGermany

Currencies of Europe SS6E6d Here are pictures of the Euro paper currency. 5 euro20 euro10 euro50 euro 200 euro 100 euro 500 euro

Currencies of Europe Russia’s currency is the Ruble. Unofficial Ruble Symbol Original Ruble Symbol 1 Ruble 5 Rubles50 Rubles

Currencies of Europe Poland’s currency is the zloty. 10 zloty20 zloty100 zloty200 zloty 5 zloty Zloty Symbol