1. ECONOMIC SYSTEMS

2. TraditionalEconomy  An economic system based on traditions, routines, and beliefs  Usually a traditional product is made and sold or traded at open markets  The people in the system are closely involved in the operation  Roles are passed down through family members  http://player.discoveryeducation.com/index.c fm?guidAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179 667&CFTOKEN=21301558 http://player.discoveryeducation.com/index.c fm?guidAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179 667&CFTOKEN=21301558 http://player.discoveryeducation.com/index.c fm?guidAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179 667&CFTOKEN=21301558

3. Command Economy  A system based on central control of trade and production  A government decides what goods and services are produced  May limit what jobs can be held  The government decides EVERYTHING about this type of economy  http://player.discoveryeducation.com/index.c fm?guidAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179 667&CFTOKEN=21301558 http://player.discoveryeducation.com/index.c fm?guidAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179 667&CFTOKEN=21301558 http://player.discoveryeducation.com/index.c fm?guidAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179 667&CFTOKEN=21301558

4. (Free) Market Economy  A system that is managed by the people  It is based on supply and demand  Businesses control how much they produce  The people control how much they consume  A balance of what businesses want to produce and what people want to consume is important in this economy  http://player.discoveryeducation.com/index.cfm?gui dAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179667&C FTOKEN=21301558 http://player.discoveryeducation.com/index.cfm?gui dAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179667&C FTOKEN=21301558 http://player.discoveryeducation.com/index.cfm?gui dAssetId=78a7d498-2e0d-48f9-81b3- 0991fe803190&productcode=US&CFID=179667&C FTOKEN=21301558

5. Mixed Economy  This economy is based on a mixture of the other three  Few countries have a pure economic system  Most countries have a mixed economy  Governments own some businesses/industries  Private owners own the rest

6. Words to Know  Human capital – the value of people’s work  Trade barriers – any restrictions that makes trade difficult or impossible  Tariff – a tax on imported goods  Quota – a proportional part or share  Embargo – a limit on trade  Entrepreneur – people who use their money and talents to start a business

7. More Words to Know EEEExchange rate – the price that one country’s currency has compared to another country’s currency hhhh tttt tttt pppp :::: //// //// pppp llll aaaa yyyy eeee rrrr.... dddd iiii ssss cccc oooo vvvv eeee rrrr yyyy eeee dddd uuuu cccc aaaa tttt iiii oooo nnnn.... cccc oooo mmmm //// iiii nnnn dddd eeee xxxx.... cccc ffff mmmm ???? gggg uuuu iiii dddd AAAA ssss ssss eeee tttt IIII dddd ==== 7777 8888 aaaa 7777 dddd 4444 9999 8888 ---- 2222 eeee 0000 dddd ---- 4444 8888 ffff 9999 ---- 8888 1111 bbbb 3333 ---- 0000 9999 9999 1111 ffff eeee 8888 0000 3333 1111 9999 0000 &&&& pppp rrrr oooo dddd uuuu cccc tttt cccc oooo dddd eeee ==== UUUU SSSS &&&& CCCC FFFF IIII DDDD ==== 1111 7777 9999 6666 6666 7777 &&&& CCCC FFFF TTTT OOOO KKKK EEEE NNNN ==== 2222 1111 3333 0000 1111 5555 5555 8888 FFFFree enterprise – an economic system in which people, not government, decided what to make, sell, or buy

8. Gross Domestic Product  The total amount of goods and services that a country produces during a year  It shows individual purchasing power  It is useful in comparing levels of economic development

9. DIRECTIONS  Using your notes from this power point, complete the graphic organizer and questions on the worksheet I will give you.  Your book may be helpful in some cases.