1. ECONOMIC SYSTEMS

2. Economic Sectors
Define the terms primary, secondary, tertiary, quaternary and quinary
Why does secondary employment reach a peak in the industrial stage ?
Account for the changes in the relative importance of tertiary and quaternary sectors over time.

3. ECONOMIC SYSTEMS
Economic systems are an important part of any culture
Every society (culture) must answer the basic economic questions:
What to produce
How to produce it
Who will get what is produced

4. ECONOMIC ACTIVITY
The “economy” refers to all the production and exchange activities that go on every day (i.e. buying and selling).
This process is ongoing and is often complex and too big for us to really comprehend
Economic activity can exist on many levels from a simple street market right through the to complex financial transactions between major corporations.

5. Global Economies
Trade is the most vital element in the growth of the global economy.
In 1948, 23 nations agreed to reduce tariffs on each other’s exports under the General Agreement on Tariffs and Trade (GATT). This was the first multilateral agreement. Since then there have been eight “rounds” of flobal trade talks.

6. Global Economies
The top ten global economies according to the traditional measure, gross domestic product (GDP). Eight of the top ten are in the north or developed world.
The rapid growth rates experienced by some of the largest developing countries , economists predict that they could raise their share of world output from around one sixth to almost a third by 2020.

7. ECONOMIC SYSTEMS & CHANGE
Economic systems can change over time.
Traditional systems were largely rural in nature
Since the early 1980s, many countries which had a reasonable balance between public and private ownership (mixed economies).
They have privatised most of their publicly owned industries on the premise that private ownership is more efficient.

8. REASONS FOR CHANGE Changes in income levels View the future
Debt levels
Unexpected changes in income
Confidence in the future of the economy
The level of economic activity in the world
Political events around the world
Natural Disasters
Major sporting events
Changes in prices of raw materials
Changes in prices of stocks and shares on the world stock markets

9. INFLUENCES ON THE ECONOMIC SYSTEM
Cultural influences on the economic system
World view of the culture
Technological level of the culture
Political structure of the culture
Non-cultural influences
Relative location & accessibility
Topography & Climate
Resources available from the environment

10. Factors of production in all economic systems
Land – real estate and natural resources – raw materials
Labor – mental and physical efforts applied to “land” and “capital” to facilitate production
Management or entrepreneurship – that segment of labor which organizes land, capital, and the other segment of labor to produce goods and services
Capital – the tools and facilities needed for production

11. PHYSICAL FACTORS What does nature provide that is useful?
Elements of physical place with economic significance:
Climate and flora and fauna
Topography: landforms
Soil
Rivers (nature and flow) OR lack of rivers
Mineral deposits

12. TYPES OF ECONOMIC ACTIVITIES
Primary
Secondary
Tertiary
Quaternary
Quinary

13. Primary Economic Activities
The simplest, closest to nature, use of earth products
Hunting & gathering
Agriculture and animal husbandry – growing plants and harvesting the fruit and raising animals for sale
Extracting minerals from the earth – various ores, crude oil, natural gas, etc.
Fishing
Lumbering

14. Secondary Activities: Manufacturing
Industrial Locational Models
Variable costs have important role in location decisions: transportation charges, labor rates, power costs, plant construction or operation expenses, interest rates of money, raw materials
Seeking to reach a large enough market cheaply enough to produce profits
Alfred Weber – placed much weight on transportation costs

15. Secondary Activities Continued
World Manufacturing Patterns and Trends
Four major industrial clusters: Eastern Anglo-America, Western and Central Europe, Eastern Europe, and Eastern Asia
Post-industrial economies developing in Anglo-America and Europe (iron belt to rust belt)
Significant industrial clusters are developing in other places such as Mexico – pockets of development in the “third world”
High Tech Patterns – emergence of “sun belt”
Electronics, robotics, less dependent on location of raw materials

16. Tertiary and Beyond Tertiary Services – service sector
Growing sector in older, industrialized economies
Has replaced secondary activities as the largest sector in the U.S. economy
Beyond Tertiary –
Quarternary – Advanced services
Information handling, management, & research – particularly in the computer areas
Specialized knowledge, high-tech skills, i.e. national accounting firms (serving a nation-wide market)
Quinary – Executive decision-making
Special, highly-paid skills, top executives, etc.
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