1. Global Economy Chapter 11

2. Industrial Revolutions The process that takes place when technological innovations lead to more efficient and sophisticated machines to do the work that was previously done by humans North America went through 2 industrial revolutions to get to where we are now Some economists believe we are going through #3 now due to increased technology

3. Types of Resources Natural Resources = material that can be found in nature and exploited to make a profit Capital resources = any resource that is designed by society to further create wealth, eg. machinery, buildings, money needed for production Human resources = the people who live in a country and have the potential to work

4. Types of Economies Turn to page 269 in your text. You will be reading about the 4 different economies and answering questions about each

5. The Traditional Economy How is a traditional economy defined? What does it mean that the community is self sufficient? Describe the distribution of wealth What types of countries have these economies in today’s world? Read the case study “Shifting Cultivation in Borneo” Answer question 5a on page 278 about this case study

6. The Market Economy What is a market economy driven by? What does this mean? What happens when the demand for a product decreases? This type of economy is based on what? What does this mean? What is an example country with a market economy? What are the advantages and disadvantages of a market economy?

7. The Command Economy Who is the sole decision maker in this economy? What are they responsible for? Who owns the natural resources and techniques they use to produce them? What type of country would use these? What are the advantages and disadvantages to a command economy?

8. The Mixed Economy What are mixed economic systems? Why is Canada’s economy mixed? When does the Canadian government intervene in the economy and how?

9. Phases of Economic Development Economist W.W. Rostow developed the modernization theory to explain how countries industrialize 5 stages to theory

10. Stage 1- The Traditional Society Large agricultural sector Very limited manufacturing production Life centers around the family and people rarely leave the region they were born in Eg. Middle East in Biblical times

11. Stage 2- The Preconditions for Takeoff Countries productivity is low but new ideas emerge that challenge long standing traditions These ideas seem extreme at the time but they will lead to political changes that make a more effective government and lead to new ways of producing things Eg. Protestant reformation which lead people question their religious beliefs- 1500’s

12. Stage 3- Takeoff Traditions finally give way to new ideas and changes occur Great economic growth takes place but usually at the expense of family ties Religion becomes less important Eg. 1 st industrial revolution in Great Britain when the national income raised and funded the development of natural resources- 1800’s

13. Stage 4- The Drive to Technological Maturity Refinements in technology Production rates will increase allowing manufactures to sell to the domestic market and have enough left over for international trade Get a higher standard of living because of economic success Leisure time increases Eg. Great Britain reached this in 1840

14. Stage 5- High Mass Consumption Population primarily urban and living standards high for a majority of citizens Mass production of goods leads to mass consumption (people taught to “need” a products) Consumer spending will level off and the economy will stop growing = in period of recession

15. Activity Arrange yourselves into pairs You are your partner will be ranking the following jobs from the most important to the least important minerdoctorfactory worker foresterfirefighterbus driver garbage collectorteacher lawyerbankerathlete

16. When you have ordered them from most to least importance you will be joining another group to discuss your answers Each group should explain to the other group why they had the order they did As group of 4 you will now try to come up with a new order of most to least importance- negotiations will have to be made!

17. Sectors of the Economy 1. Resource Extraction  Most basic sector  Known as the primary sector  Includes farming, fishing, logging and mining  Products come directly from the natural environment

18. 2. Industry  Known as the secondary sector  Raw materials are being transformed by physical labour, mechanical energy and technology into finished products  Eg. iron ore is extracted from the earth in the primary sector and formed into steel in the secondary sector

19. 3. Services  Known as the tertiary sector  Helps to market and maintain the products which were made in the secondary sector  Eg. steel made in the secondary sector is bought by contractors to help frame a large house

20. Questions List how the 3 sectors of the economy would have produced the following: The textbooks you have at school The shirt you are wearing The cereal you eat in the morning