1. Economics
The social science that deals with the production, distribution, and consumption of goods and services

2. Forms of Economics
Market Economy: Production is owned and operated for profit
The people run the businesses
Mixed Economy: Production is a combination of both private and state run businesses
Most economies in the world are mixed economies
The United States has a mixed economy

3. Forms of Economics Command Economy
Production is controlled by the state
Cuba, North Korea, and Iran
Traditional Economy
Production is the result of ritual, habit, and custom
It is often generational and occurs generation after generation
Parts of Africa, South America, Asia, and tribal areas tend to have traditional economies

4. Developed vs. Developing
Social, demographic, and economic indicators distinguish less developed countries from developed countries
Gross Domestic Product (GDP)
The amount of goods and services produced by a state in one year
A key indicator of the level of development of a state
Per Capita GDP
Total GDP number divided by the population to deliver a per person share of GDP

5. Characteristics of Developed Countries
Utilize natural resources
Energy and Power
High literacy rates
High GDP
Stable economy
Good medical care
Long life expectancy
Stable government
Examples – United States, United Kingdom, Germany, and Japan

6. Characteristics of Developing Countries
Poorly utilize natural resources
High poverty rate
Low literacy rate
Low GDP
Unstable economy
Inadequate medical care
Low life expectancy
Weak industrial base
Unstable government
Examples – Haiti, Kenya, Rwanda, Vietnam

7. Economics Vocabulary Embargo: Suspension of trade with another country
Boom/Bust Cycle: Up and down cycle of a market economy characterized by alternating periods of economic growth and contraction
Recession: Short term negative GDP growth in a State’s economy
a decrease in GDP for six months
Depression: Long term, persistent negative GDP in a State’s economy
an economic depression is a really long and persistent recession

8. Economic Information
Africa’s economy depends on its abundant mineral resources
The Middle East’s economy depends on oil/petroleum
Many countries economies depend on world demand for their goods to succeed
Latin American countries have a hard time attracting investments from world groups due to political instability
Literacy Rate is most often based on the percent of the population over the age of 15 that can read and write