1. SS7E5 The student will analyze different economic systems. Compare and contrast the economic systems in Israel, Saudi Arabia, and Turkey.

2. 3 Type of Economies Traditional Command Market Most countries are not purely any of these. That is why we have a 4 th type, called Mixed.

3. Economic Continuum CommandMarket Most economies have elements of both systems. So, most economies are Mixed. However, they may lean closer to one or the other.

4. Israel’s Economy Mixed, but on the Market side. What to produce? A large portion of Israel’s GDP comes from high tech manufacturing, financial services, and agriculture. How to produce? Israel has substantial government ownership of business, but is gradually privatizing companies. For whom to produce? The private sector produces goods and services for domestic and international markets based on the market price system.

5. Saudi Arabia What to produce? World’s leading producer of OIL. petrochemicals, mining, and refining. How to produce? Over 95% of the oil industry in the country is operated by the government. Most other major industries have significant government involvement. Since the 1980s, the Saudi government has been trying to increase private ownership of business For whom to produce? 1/3 of Saudi Arabia’s GDP is based on exports to other countries. (This is due to the economy’s reliance on the oil sector.)

6. Saudi Arabia Continued 1/3 of labor force are specialized labor from other countries. Some private industry, but much is owned by the government. Does this type of economy look more like a Command or Market?

7. Turkey What to produce? Turkey has a diversified economy with large service, manufacturing, and agricultural sectors. How to produce? Since the late 1980s, Turkey has gradually moved from a government directed economy to more private enterprise….still mostly government directed. For whom to produce? 1/5 of Turkey’s production is exported. The remainder is consumed by domestic consumers and the government.

8. Turkey Continued Where on the Economic Continuum would Turkey fall?

9. Iran What to produce? Major Oil Producer, but also good in manufacturing, textiles, building products, and agriculture. How to produce? Some private companies, but the government maintains tight control of most industries. For whom to produce? Oil is exported, but economic sanctions are hurting the economy.

10. Specialization Occurs when one country can produce a good or service at a lower opportunity cost than another country. This encourages trade with other countries It helps the economy Do you think Over Specialization could be a problem? Why?

11. Anything that slows down or prevents one country from exchanging goods with another

12. A tariff is a tax placed on goods when they are (imported) brought into one country from another. The purpose is to make the imported item more expensive than a similar item made locally.

13. When one country announces that it will no longer trade with another country in order to isolate it and cause problems with that country’s economy. This usually happens when two countries are having a political dispute.

14. OPEC Organization of Petroleum Exporting Countries Iran, Iraq, Kuwait, Saudi Arabia, Qatar, Libya, Algeria, Angola, Venezuela, UAE, Nigeria, Ecuador Influences the price and supply of oil Not all Middle Eastern countries are a part of OPEC Not all OPEC countries are from the Middle East If Supply, what happens to Price???

15. Human Capital The work force Education and Training Knowledge and skill that make it possible for workers to earn a living producing goods and services.

16. GDP Gross Domestic Product The value of all goods and services produced in a nation in a given year.

17. Human Capital and GDP Does Literacy and Education have an impact on GDP? Explain.