CALL TO ORDER 1. How is a dollar worth anything if it’s only a piece of paper? 2. What if I went to the store to buy a bag of chips, and they wouldn’t take my money… what could I do?

Government’s Role in Economy TermDefinition Economy The production and consumption of goods and services in a country

Wait, what does production mean? First, let’s look at some pictures of production Try to predict its meaning by looking at the pictures

Wait, what does production mean? TermDefinition Production The use of machines, tools and labor (workers) to manufacture goods (things) for sale

Producing (manufacturing) military aircraft

Producing (Manufacturing) parts of military aircraft

Now, what does consumption mean? Let’s look at some pictures of consumption Try to predict its meaning by looking at the pictures

Government’s Role in Economy TermDefinition Consumption The purchase of goods and services by consumers (people)

Look at the definition again TermDefinition Economy The production and consumption of goods and services in a country (nation)

Economic Questions the Government has to think about Economic Questions What to produce How to produce For whom to produce When to produce How much to produce?

1)What to produce? In other words, what things should we manufacture? Cars? Houses? Computers? Canned Foods? Airplanes? Weapons? Shoes? Clothes?

2) How to produce In other words, how are we going to make these things? Should we use more computers and less workers (people)? Should we use more workers and more tools? Should we use only machinery and no workers?

3) For whom to produce In other words, who do we make these things for? For children aged 1 to 6? For the military? For seniors over age of 65? For teenagers? For the rich? For the poor?

4) When to produce In other words, at what point in time should we make these things? In the spring time so it is ready in the summer? Produce in mornings because workers are more awake? Work day and night to make things faster?

5) How much to produce? In other words, about how many of these things should we produce? A year supply? A month supply? A three year supply? Millions? Hundreds of thousands? A few thousand? Just a few hundred?

HSA Style Question #1 The government of China tells factory managers to increase their use of computers in manufacturing. What economic question is most affected by the government's actions? A) what to produce B) how to produce C) for whom to produce D) when to produce

There are 4 types of Economy Traditional Command Market Mixed

HSA Style Question #2 A company decides to install more machines and lay off workers. Which economic question is being directly addressed? A) how to produce B) what to produce C) for whom to produce D) how much to produce

Traditional Economy Keywords/Phrases: Customs (values) Inherited (born into) job Hunting and Farming common

Command Economy The government controls and owns businesses the gov’t businesses and citizens Keywords/Phrases: Government control National production Government ownership

Market Economy Keywords/Phrases: Private Ownership Competition Individual

And now…. Take a look at the scenario that I’m giving you. Discuss it with your group and then put it in the appropriate space on the back board. TRADITIONAL MARKET COMMAND