1. Economics

2. What is Economics? Economics is the study of the production, distribution, and use of goods and services. There are 3 basic questions that economics answer: 1- What to produce? 2- How to produce? 3- For whom to produce?

3. Supply and Demand ◦ Price of a good rises or falls depending on how many people want it or amount available ◦ Brainpop- Supply & Demand Brainpop

4. What are the different types of economic systems? 1. Traditional-  Based on customs and traditions  Use hunting and agriculture  Community relies on itself for all needs 2. Command-  Government owns ALL industry (Communism, Socialism)  Government provides all goods and services the people need  Government determines what is produced, price and wages

5. Economic Systems (cont.) 3. Market-  Businesses are privately owned (Capitalism)  Workers produce goods and services  Workers paid from profits as determined by owners 4. Mixed-  Blend of other 3 systems  **ALL COUNTRIES HAVE A MIXED ECONOMY!!**

6. Economic Systems Pure Market Pure Command Russia Germany United Kingdom Cuba Brazil Canada Australia United States

7. What influences economic growth?  Natural Resources- supplied by nature  Human Resources- employees  Capital Resources- equipment  Technology  Trade  Entrepreneur- person who takes a risk and gains possible reward of operating a new business

8. Trade  Import- bring products in from another country  Export- send products out to another country  Specialization- each country specializes in certain products or services  How does specialization encourage trade?

9. Trade Barriers- used to limit trade to protect businesses from foreign competition  Tariff- tax on imports  Quota- limits the number of imports from certain countries  Embargo- ban on trade with certain countries

10. Trade Agreements- increase trade and increase wealth  NAFTA (North American Free Trade Agreement)- U.S., Canada, and Mexico join in free trade between each other with no tariffs or other trade barriers

11. Gross Domestic Product (GDP)  The total value of goods and services produced in a country during a given time period  Way to compare the economies of different countries CountryU.S. Dollars United States$36,200 China$3,600 India$2,200 Saudi Arabia$10,500 France$24,400 Zimbabwe$2,500 Estimated 2000 Per Person GDP

12. Personal Money Management  Income- money that comes from getting paid  Credit- borrowed money (ex. Credit cards, loans)  Investing- spending money in hopes of earning more money than is spent (ex. stocks, collecting baseball cards)