1. What will be produced? How will it be produced? Who will benefit?
Economic Systems
What will be produced?
How will it be produced?
Who will benefit?

2. Infrastructure
All things an economy needs to function. Railroads, highways, fiber optic lines, harbors, airports, telephone poles/lines,etc.

3. Levels of economic Development
Usually measured by economic indicators such as:
Gross Domestic Product- Total value of goods and services produced within a country.
Gross National Income- Total value of goods and services produced by a country.
What is the difference?

4. Other indicators
Per capita– refers to per person…..GDP per capita means the average GDP per person.
Life expectancy– average number of years a person will live. (helps indicate development)

5. Levels of development
Less Developed countries (LDC)-relying on a few products for export. Majority of the country earns a living through subsistence agriculture. Birthrates are high, development low.
Democratic Rep. of Congo, Mali, Niger, Chad
Newly Industrialized countries(NIC)-countries that are transitioning from primary to secondary activities. Birthrates are dropping development increasing.
China, India, Indonesia, Vietnam, Thailand, Mexico
Developed countries-economies are dominated by tertiary and quaternary activities. Birthrate is low, development high.
US, Canada, France, Sweden, Germany, Japan

6. North/South split
This refers to the more developed countries in the North and the less developed countries in the south.

7. Traditional Economies
Three questions are answered on the basis of customs, social patterns, religion, or other ideas handed down through time.

8. Terms associated with traditional economies:
Subsistence economy
Non-industrialized
Agricultural (rural)
Barter system
Dual economy
Examples: Chad, Haiti, Rwanda

9. Command Economies The state makes all economic decisions.
The government owns and operates means of production.

10. Terms associated with command economies:
Planned economy
Communism
Examples: Cuba, North Korea, Laos

11. Market Economies
Economic decisions are made by individuals in the marketplace.

12. Terms associated with market economies:
Free market
Free enterprise
Capitalism
Demand economy
Examples: United States, Japan

13. Mixed Economies
Mixed economies have features of both command and market economies.
There are no pure economies—they exist along a continuum from pure capitalism to command.
UK, US, Singapore

14. What is important to understand about this?
The way that countries answer the three basic economic questions can have a great effect on their economies.