1. Government & Economic Systems =

2. Important terms Sovereignty is the idea that a territory or region has supreme authority over itself Autonomy is the idea that a person, state, territory, etc. can make decisions for itself, without outside interference

3. What is Government? Form of administering law and order in society Many different forms of government o Dictatorship o Fascist o Monarchy o Theocracy o Democracy o Republic o Oligarchy o Confederation o Federation

4. Government & Economics Graphic Organizer Notes Divide paper into three columns Column 1 – Government/Economic System Column 2 – Definition/Description Column 3 – Sketch image that illustrates how the government/economic system works

5. Dictatorship One person (or small group) control all aspects of society Examples: North Korea, Pol Pot Cambodia

6. Fascist Dictatorship that emphasizes the military (usually controlled by a military leader) Examples: Nazi Germany, Mussolini’s Italy

7. Monarchy Ruling family with various forms of power (from absolute to limited) Constitutional Monarchy: Modern United Kingdom Absolute Monarchy: England during Middle Ages

8. Theocracy A Deity is recognized as supreme ruler, but the Deity’s laws are interpreted by religious people (clerics, priests, mullahs, etc.) Iran, Vatican City

9. Democracy All citizens participate in making and passing laws, few exist in modern world o Also known as direct democracy Ancient Greece

10. Republic Simple definition: any govt. without a monarch Modern definition: constitutional govt. where citizens have a say in how they are governed “rule by law” Rome, United States

11. Oligarchy Power rests in a small group of people o Usually because of: Royalty Wealth Family ties Education Business Military Examples: Sparta, Soviet Union, South Africa (Apartheid)

12. Confederation Collection of territories that have loosely come together for common purposes. Usually: o Defense o Foreign Affairs o Common currency Examples: European Union, Iroquois League, Confederate States of America

13. Federation Collection of territories that have come together under a strong central government; but territories retain some autonomy. Examples: Malaysia, United States, Spain

14. What is Economics? Economics studies how individuals and societies seek to satisfy needs and wants through incentives, choices, and allocation of scarce resources. Oil & fuel LandDoctors Technology

15. Factors of Production Economic Resources o Natural Resources – raw materials found in nature that are used to produce goods o Human Resources – people ’ s knowledge, efforts, and skills used in their work o Capital Resources – used to produce goods and services (buildings, materials, and equipment) Scarcity – shortage of resources

16. Why Economic Systems? Nations use economic systems to determine how to use their limited resources effectively. Primary goal of an economic system is to provide people with a minimum standard of living, or quality of life. Different types of Economic Systems Traditional Economy Market Economy (Capitalism) Command Economy Mixed Economy

17. Traditional Economy Found in rural, under- developed countries– o Pygmies of Congo o Eskimos & Native tribes Customs govern the economic decisions that are made Farming, hunting and gathering are done the same way as the generation before Economic activities are centered around the family or ethnic unit Men and women are given different economic roles and tasks Advantages: people have specific roles; security in the way things are done Disadvantages: Technology is not used; difficult to improve

18. Market Economy (Capitalism) Also called a Free Market Economy or Free Enterprise Economy Businesses and consumers decide what they will produce and purchase and in what quantities Decisions are made according to law of supply & demand Supply and demand of goods and services determine what is produced and the price that will be charged. Advantage— competition to have the best products and services Disadvantage—huge rift between wealthy and poor Note: a true market economy does not exist.

19. Command Economy The government (or central authority) determines what, how, and for whom goods and services are produced. Two types: o Strong Command – where government makes all decisions (communism – China, Cuba) o Moderate Command – where some form of private enterprise exists but the state owns major resources (socialism – France and Sweden) Advantages o Guarantees equal standard of living for everyone o Less crime and poverty o Needs are provided for through the government Disadvantages o Minimal choices o No incentive to produce better product or engage in entrepreneurship Also known as a Planned or Managed Economy

20. Mixed Economy (Socialism) Combination of a market and a command economy Government takes care of people ’s needs Marketplace takes care of people ’s wants. Most nations have a mixed economy: United States, England, Australia Advantage— balance of needs and wants met by government and in marketplace Disadvantage— citizens have to pay taxes