ECONOMIES AND GOVERNMENTS

Chapter 4 Section 3

I. Economies of the World

A.a system that includes all of the activities that ppl and businesses do to earn a living

B.Economic Activity1. ways ppl make a living

a. farmingb. manufacturingc. services

2. level 1 - primary industry

a. traditional economyb. provide natural resources or

raw materials to others1. farming 2. fishing3. mining

c. provide raw materials1. grain2. seafood3. coal

3. Level 2 - secondary industries

a. use nat. resources or raw materials to manufacture goods

b. manufacturing: changing raw materials into finished products

1. furniture2. automobiles

4. level three – tertiary industry

a. goods and services exchangedb. sell products made in

secondary industriesc. provide services

1. healthcare2. mechanics3. teachers

5. level 4 - quaternary industry (US)

a. highest levelb. research and distribution of

infoc. ppl have specialized skills

and knowledge1. architects2. lawyers3. scientists

6. Economic Systems

a. most countries have mixed economies

b. traditional1. ppl grow own food and make own

goods2. trade thru barter: exchange

w/out $3. found in rural and remote

communities

i. farmersii. fishermeniii. hunter-gatherersiv. herders

c. market economy (US)

1. based on private ownership, free trade and competition

2. individuals and businesses free to buy and sell what the wish

3. price determined by supply and demand

4. AKA capitalism or free enterprise

d. command economy

1. central gov’t makes all economic decisions - what goods to produce, how much to produce, and what price will be

2. No. Korea and Cuba close to pure

3. Communist gov’t have command economies

II. Economic Development

A. level of econ. growth and quality of life

B. Economic Indicators1. measures of a country’s wealth2. Gross Domestic Product (GDP):

the value of all goods and services produced w/in a country in a single year

3. per capita GDP: total GDP divided by the number of ppl in that country

4. level of industrialization5. overall quality of life

a. industries and technologyb. healthcare and education