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Basic Economic Concepts: Understanding the Economy of a Nation

Learn about basic economic concepts such as imports, exports, barter system, tariffs, closed and emerging markets, supply and demand, inflation, recession, and depression.

jeffreykennedy
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Basic Economic Concepts: Understanding the Economy of a Nation

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  1. 7.2.spi.1. recognize basic economic concepts (i.e. imports, exports, barter system, tariffs, closed and emerging markets, supply and demand, inflation, recession, depression).

  2. K W L

  3. The economy of a nation is the system by which the nation organizes the production and distribution of goods and services that its citizens want and need.

  4. When one person trades their goods or services with another person for their goods or services, this direct exchange is called thebarter system.

  5. To provide for its citizens a country must consider what resources are available. Resources are: People to do labor Capital-Money, equipment, tools, & supplies Natural Resources- water, soil, metals, oil, & minerals.

  6. In a Communist or Socialist economy the government owns all the resources and businesses (all means of production) In theory, all citizens benefit from this system of economics. In a socialist economy, the price and the amount of a produced is not set by the government; therefore it is a cross between Communism & capitalism.

  7. In a capitalist economy private individuals own all the major businesses. If the government in a capitalist system does not control any aspect of business it is a free market economy.

  8. If the government restricts trading goods with other countries it is a closed market.

  9. Goods sent out of a country are calledexports. Goods sent to of a country are calledimports.

  10. When governments of two countries exchange goods and services without taxes (tariffs) or quotas it is involved in free trade. The North American Free Trade Agreement (NAFTA) provides for free trade between the counties in North America.

  11. Inflation occurs when the value of money drops, but the price of the goods and services go up. Recession occurs in a country when fewer goods are produced, fewer items are exported, and prosperity of its citizens is on the decline.

  12. If a recessioncontinues for a long period of time it is considered to be a depression.

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