1. Europe’s Economy

2. Produced, Distributed, Consumed
Produced = to make
Distributed = to give out
Consumed = to take in

3. Traditional Economy
In a traditional economy, the customs and habits of the past are used to decide what and how goods will be produced, distributed, and consumed.
People know early in life what type of job they are going to have
Their careers are based on what their parents do.

4. Command Economy
command economy is when the government planning groups make the basic economic decisions
The Government determines what :
Goods will be produced
What services will be completed
The prices of goods and services
How much money each person will make

5. Market Economy
In a market economy, decisions are guided by changes in prices that occur between individual buyers and sellers in the marketplace.
The law of Supply and Demand determines the price people pay for things
Supply: the amount of goods available
Demand: how many consumers want the goods.

6. However… Mixed Economies
There are no “pure” market or command economies anymore… now countries have…
Mixed Economies
This means that countries have a “mixture” of both market and command economies.

7. Economic Systems
Pure
Command
Pure Market
Mixed Economy

8. 100 Economic Systems Pure Market Pure Command Mixed Economy
United Kingdom 79%
Economic Systems
Germany 71%
Russia 42%
6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
100
Pure
Command
Pure Market
Mixed Economy

9. Super Important Words
Trade- the voluntary exchange of goods and services among people and countries benefitting both parties
Imports- goods purchased from other countries
Exports- goods sold to other countries

10. Super Important Words Trade Barriers- ways of limiting trade
Tariff- a tax on imports
Quota - a limit placed on the number of imports that may enter a country.
Embargo- a government order stopping trade with another country to put pressure on the government of that other country.

11. Super Important Words
Gross Domestic Product (GDP) - the total value of all the goods and services produced in a country in one year.
Human Capital- workers of a business or country including their education, training, skills, and health
Physical Capital- factories, machines, technologies, buildings, and property needed for a business to operate
Entrepreneur- one who risks his or her own money, time, ideas, and energy to start and run a business

12. Super Important Words Scarcity- limited supply of something
Specialize- the division of labor; work is divided into parts for workers, factories, or countries to become expert at producing certain goods

13. Questions How many basic types of economic systems are there?
Name the economic systems.

14. Answers How many basic types of economic systems are there? 3
Name the economic systems. Traditional, Command, Market

15. 100 Economic Systems Pure Command Mixed Economy Cuba 28% Pure Market
Canada 81%
Brazil 57%
Cuba 28%
6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
100
Pure
Command
Pure Market
Mixed Economy

16. 100 Economic Systems Pure Command Mixed Economy Australia 83%
6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
100
Pure
Command
Pure Market
Mixed Economy