1. Modern World Economic Issues
Unit 20
Modern World Economic Issues

2. Stop and Think!
Partner A: Identify one business that is moving from using people to machines.
Partner B: Identify another.

3. Modern World Economic Issues
Unit 20 – Modern World Economic Issues
Modern World Economic Issues
Types of economic systems
North
vs.
South
issues
Rise of the Pacific economic community
International
trading agreements
Essential
Questions

4. I. Types of Economic Systems
Who owns the businesses?
Who makes the economic decisions
Examples
Market (capitalism
- Adam Smith)
Private Citizens
The market
Great Britain
Command (Socialism Communism)
The government (“the society”)
Government officials
Cuba (USSR)
Mixed
Small businesses are owned by private citizens and the large businesses are owned by the government
Generally the public with some government influence
USSR under Lenin
China under Mao Zedong

5. Stop and Think! Partner A: Explain a market economy
Partner B: Explain a command economy
Partner A: Explain a mixed economy

6. Which heading best completes the partial outline below?
_____________________
A. Market System
B. Profit incentive
C. Entrepreneurs
Forms of government
Characteristics of capitalism
Structure of the Guild System
Elements of Culture

7. In a command economy, economic decisions are mostly influenced by
Consumer demands
Government policies
Private investors
Banking practices

8. “A group of planners makes all economic decisions
“A group of planners makes all economic decisions. The group assigns natural, human, and capital resources to the production of those goods and services it wants. The group decides how to produce them and to whom to distribute them.”
This description best applies to the
Manorial economy of feudal Europe
Mercantile economy of the 1700s in Europe
Command economy of the Soviet Union
Market economy of the United States

9. Which statement best describes how a command economy functioned in the Soviet Union?  1. The laws of supply and demand controlled the economy.  2. Trade policies mandated that imports exceed exports.  3. The success of the agricultural sector controlled the price of manufactured goods.  4. A central authority determined the type and quantity of goods to be produced.

10. Which statement describes one major aspect of a command economy?
Supply and demand determines what will be produced
Most economic decisions are made by the government
The means of production are controlled by labor unions
The economy is mainly agricultural

11. What has the end of communism in the Soviet Union caused many countries in Eastern Europe to do?
Shift to a command economy
Maintain a communist form of government
Pursue free-market economic policies
Join the Warsaw Pact

12. II. International Trading Agreements
NAFTA = North American Free Trade Agreement
An economic plan to ease trade between Canada, Mexico, and the US

13. The major reason the Mexican Government strongly supported the North American Free Trade
Agreement (NAFTA) was that this agreement would
1. raise tariffs on United States products entering Mexico
2. reduce Mexico’s economic dependence on Europe
3. promote investment and economic growth in Mexico
4. stimulate trade between Asia and Latin America

14. International Trading Agreements
OPEC = Organization of Petroleum Exporting Countries
An economic alliance
of oil producing nations
They determine how
much oil will be
produced  which
determines what the
price of oil will be on the
open market

15. The Organization of Petroleum Exporting
Countries (OPEC) is best known for its efforts to
(1) develop workable alternatives to fossil fuels
(2) bring Western oil technology to the Middle
East
(3) stop the export of oil to non-Arab nations
(4) establish production quotas to control the
price of oil

16. Since the creation of the Organization of Petroleum Exporting Countries (OPEC), member nations have joined together to
1. determine the supply of oil on the world market
2. establish a policy of independence in trade
3. maintain a low price of oil per barrel
4. isolate themselves from the rest of the world

17. Which group of countries earns much of their revenue from the sale of oil?
(1) China, Korea, Jordan
(2) Turkey, Brazil, Lebanon
(3) Argentina, Malaysia, Chile
(4) Saudi Arabia, Nigeria, Venezuela

18. International Trading Agreements
The European Union (EU)
Many European nations joined together in an economic association
 to make trading easier between
the nations
Their monetary unit is
now called the “Euro”

19. In recent years, a major success of the European Union (EU) has been the
1. creation of a single military force
2. rejection of national sovereignty
3. adoption of a single language
4. elimination of trade barriers

20. Stop and Think! Partner B: Explain NAFTA Partner A: Explain OPEC
Partner B: Explain the European Union

21. * Organization of American States
* European Union
* North American Free Trade Agreement (NAFTA)
These organizations and agreements are examples of
Political isolation
Military alliances
Regional cooperation
Collective security

22. III. North vs. South Issues
NORTH – highly industrialized – high literacy rate – high standard of living
SOUTH – industry not yet developed – poor education systems – much poverty

24. Stop and Think!
Partner A: Explain how the northern hemisphere seems to differ from the southern.

25. “developing” nations:
nations that are trying to become more modern
they are often refereed to as being “Third World” nations (The “West” = 1st World - the old Communist nations = 2nd world)

26. Characteristics of a developing nation:
Lack of modern technology
Too much dependency on a single cash crop
Too much international
debt (taxes can’t help
the people → they have
to pay back loans)

27. Characteristics of a developing nation:
Lack of industry
Few skilled workers
Poor access to raw materials
Little investment
money (capital)
Political
instability

28. Stop and Think! Partner B: What is a developing nation?
Partner A: Identify the characteristics of a developing nation.

29. International Assistance Organizations:
These provide economic assistance to “developing” areas when needed
The World Bank
UNICEF (United Nations
Children’s Fund)
The World Health organization (the “WHO”)
The International Monetary Fund (the “IMF”)
These provide economic assistance to “developing” areas when needed

30. Stop and Think!
Partner A: Explain 2 International Assistance Organizations
Partner B: Explain the other 2

31. IV. Rise of the Pacific Economic Community
Re-emergence of Japan AFTER WWII:
U.S. Occupation/Aid
Following WWII  the U.S. “occupied” Japan and provided economic aid to
rebuild Japanese businesses
The U.S. provided a market for
cheap industrial products from
Japan

32. The Japanese Industrial Style
At first  they copied what worked in other industrial nations
Then  they developed their own methods
teamwork
robotics

33. Why Japan had such great industrial success
Their Educational System: helped train workers for industry
There is little military: government can focus spending on industry
Their government helped the businesses:
Tariffs: taxes on products coming into Japan from other nations
Embargoes: certain products are restricted from being allowed into the country

34. Their “Balance of Trade”
After awhile  Japan developed a favorable “balance of trade” with the U. S. (they made more money off the U.S. than we made off them)

35. Stop and Think! Partner A: How did Japan rebuild after WWII?
Partner B: Why did they have such great success?
Partner A: What is a balance of trade?

36. Which statement concerning modern Japan is most accurate?
1. Japan has modernized while maintaining some elements of its traditional culture
2. Japan has become a leader in global peacekeeping efforts
3. Japan has taken an active role in international military events
4. Japan has severed all traditional ties in favor of western values

37. A study of Japan’s economy since World War II would lead to the conclusion that:
1. government support of technological advances can improve a nation’s economic position
2. imperialism is necessary for the economic development of a nation
3. a communist system leads to economic prosperity
4. the feudal system is more economically productive than the market system

38. In recent years, which factor has been a major reason for the economic tensions between the United States and Japan?
1. Japan’s trade deficit with the United States was very high
2. the United States refused to place quotas on Japanese goods
3. the United States imported more from Japan than it exported to Japan
4. Japan lowered tariffs on goods imported from the United States

39. Rise of “Asian Tigers”
Rapidly developing nations in Asia are known as the “Asian Tigers”
They include: Taiwan, Hong Kong, Singapore, and South Korea

40. The Future? China: as they convert from Communism to Capitalism
South East Asian nations: Vietnam – Indonesia - Malaysia