1. Economic Systems of Europe

2. Basic Questions: What to produce, how to produce, for whom to produce?
All nations of Europe must answer these questions
The economic choices that governments make affects its people and how strong its economy will be

3. 4 factors of economic growth:
Human capital: the value of people to an economy
Investing in health, education, and training of workers helps economy
Better education and training = coming up with new technology
Leads to better use of resources

4. 4 factors of economic growth:
Capital goods: products that have value
Factories, machinery, new technology
Entrepreneurs: people who start new businesses to sell a new technique, idea, or product
Natural resources: land, air, water, and minerals

5. Economic Growth takes time
It takes time for changes of an economy to take effect
Countries that were communist (command) economies and switched to democratic countries with mixed economies: improvement is slow
Ex: Romania: good resources, good human capital (educated people), bad economy…it had been communist, so there was an unwise use of capital goods…

6. United Kingdom Role of government: Economic history:
Mixed economy: mostly market (people start businesses). Government controls some industries (welfare, medicine, oversees banking and money)
Economic history:
When economy struggled in past, government controlled economy more
After World War II, war had destroyed the country
Government took control of coal, oil, electricity, and shipbuilding

7. Factors of economic growth:
Human capital: skilled workers and competent managers
Capital goods: less efficient industries shut down, high-tech industries started to create jobs
Entrepreneurs: many successful entrepreneurs
Natural resources: makes wise use of what they have, including oil in the North sea
How are they doing?
Large population, high standard of living, low unemployment and inflation

8. Russia Role of government: Economic history:
Mixed, trying to move towards a market economy
Economic history:
Communist for 70 years (part of the Soviet Union)
Government planned and owned everything in the economy (command)
Unwise use of resources and factories
Trying to make big change since end of U.S.S.R: taking a long time to improve

9. Factors of growth: How are they doing?
Human capital: skilled and educated workers (one thing the Soviet Union did well)
Capital goods:
returning businesses to private control (individual people own): many people resisted, thought government should own
improving factories and technology
Natural resources: has a lot of oil
How are they doing?
GDP has been growing a lot in recent years, showing they are doing better overall

10. Germany Role of government: mixed economy Economic history:
Before reunification:
West Germany: mixed economy, efficient farms, strong industry
East Germany: command (communist) economy, collectivized (government-owned) farms, weak industry
Since reunification: west part of Germany has had to finance (pay for) improving east Germany
Changing economy of east Germany to be like the west has been difficult

11. Factors of economic growth:
Human capital:
strong, competitive education system.
Train students for skilled professions from early age.
Capital goods:
Large and successful industry (western part of the country)
How are they doing?
Some struggles because of reunification

12. Discuss…
How are the economies of the United Kingdom, Russia, and Germany similar?
How can a country’s history affect its economy?
Consider instability vs. stability, past economic systems