Economic Systems3-3 The Human Geography

Economy a system in which people make,exchange, and use things that have value

Producers owners and workers

Consumers people who buy and use products

Capitalism an economic system in which individuals own most businesses

Vocabulary

Communism an economic system in which the central government owns

factories, farms, and offices

Developed Nations a nation with many industries

and advanced technologies

DevelopingNations nations with few industries and

simple technologies

Vocabulary

Economy is a system in which people

make, exchange, and use things that have value

Producers are owners and workers

Consumers buy and use productsWhich are you?

Different kinds of economies

What will be produced?Who will it be produced for?How will it be produced?

Ex. Rockin’ ElmoPSP

Basic Questions

Capitalism

Free Market economy -producers compete freely

for consumers’ business

Save money in banks. Banks lend money for interestPeople investOwners also invest money

Private Ownership

Communism is an economic system where the central government owns farms, factories and offices

Government controls:- the prices of goods and

services- how much is produced- how much workers are paid

* Few countries use communism

Government Ownership

Barely any pure economic systems

U.S.A. – government build and maintain roads and

provide other servicesCommunism – few private owned businesses

Government owns some industries and others have private owners = mixed

ownership

Mixed Ownership

Developed vs. developing nations

Developed Nations: USA, Canada, Japan, Europe - 1/5 of world’s people - Goods made in factories - Most live in towns and cities - Enough food and water - Get an education and healthcare - Commercial farmsProblems: - Unemployment: not everyone can find work - Pollution

Levels of Economic Development

Developing Nation: Africa, Asia, Latin America

- No great wealth - Feed families off of farms (subsistence farmers)Little to no machinery on farms - Great challenges: Disease, food shortage, unsafe water, poor education and healthcare, political unrest

Sell natural resources: Saudi Arabia, South Africa

Level of Economic Development

Specialties: we trade based off of countries specialties

Interdependent means to depend on one another

Developed nations trade for what?Developing nations trade what?

Trade alliances reduce the cost of trade: good or bad?

NAFTA: North American Free Trade Agreement (USA, Canada, Mexico)

European UnionBusinesses increase sales to other countries.

Consumers pay less.

New Trade Patterns