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Understanding Economic Systems: From Traditional to Modern

Learn about different economic systems and how they impact countries worldwide. Explore key concepts such as supply and demand, GNP, GDP, and employment sectors. Understand economic stages of development from least developed to developed countries.

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Understanding Economic Systems: From Traditional to Modern

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  1. Bell Ringer • Answer the following questions in a short paragraph: • What is the condition of the US economy right now? • Why is it in this condition? • How does this affect you or your family?

  2. Economic Geography Objective: Students will be able to identify and distinguish b/w different types of economic systems from various regions.

  3. What is an Economy? What are goods and services? Production or exchange of goods and services by a group Goods – things to be traded, bought, or sold Services – things people do for others in exchange for payment Labor – work force, the workers

  4. What is Supply and Demand? • Supply – how much is available from market • Demand – how much is wanted by consumers

  5. What is the “Law of Supply and Demand”? • As supply increases, price goes down. • As demand increases, price goes up. • How much something costs is mainly a function of these two factors.

  6. What are GNP and GDP? GNP – “Gross National Product” Total value of all goods and services by a country over one year. Includes facilities overseas owned by domestic companies. GDP – “Gross Domestic Product” Total value of all goods and services within a country’s bordersover one year. This is a good indicator of the size of a country’s economy. Examples (2010 est.) USA – $14.5 trillion Mexico – $1.0 trillion Japan – $5.4 trillion China - $5.8 trillion Sudan - $0.07 trillion

  7. What is Per Capita GDP? • GDP per 1000 people, how “wealthy” the country is. • Roughly the amount of $$$ earned per person in a political unit per year. Similar to “Per Capita Income”, but not exactly the same. • Examples? U.S. = $47,000 Mexico = $14,000 Japan = $33,000 China = $7,500 Sudan = $2300

  8. What is Infrastructure? Basic support system to keep or start an economy going • Roads • Electricity • Water • Airports • Ports • Trains

  9. What are the 4 Economic Employment Sectors? Different levels of employment (jobs) based on variety of factors • Education level required to perform task • Location (geographic – available resources) • Location (to appropriate market)

  10. Gathering raw materials – natural resources taken from the earth Example: Mining, Fishing, Farming Primary Employment Sector

  11. Secondary Employment Sector • Manufacturing / Industry - Adding value to raw materials by changing their form • Example: Iron changed into an automobiles

  12. Tertiary Employment Sector • Business or professional services • Example: teachers, retail salespeople, doctors

  13. Quaternary Employment Sector • Provide info, research, management, etc. by highly trained personnel • Managers, scientists, software designers

  14. What are the 4 basic types of economic systems? • Traditional • Command • Market • Mixed

  15. Traditional Economy- Goods and services are exchanged without money-Also called “Barter”-Example: Primitive societies

  16. Market Economy • Goods and services are determined through Supply and Demand • Also called “Free Market Economy” or “Capitalism”. • Example: United States, in theory

  17. Command Economy • Production of goods and services determined by the government. • Also called “Planned Economy” • Example: Communist countries

  18. Mixed Economy • Combination of command and market economies • Goods and services for benefit of all • Example: Japan, Peoples’ Republic of China

  19. Economic Stages of Development

  20. Least Developed Country • GDP: Nearly none – collaped. • Per Capita Income: Very Low (less than $1000/yr) • Employment Sectors: “Primary” if any at all • Infrastructure: Very little to none • Lack of electricity • Lack of clean water • Lack of roads, Airports, Ports • Quality of Life: In crisis, collapsed infrastructure and economy. • Examples:Afghanistan, Somalia, Haiti

  21. Developing Country • GDP: Low • Per Capita Income: Low • Employment Sectors: Mostly “Primary” • Infrastructure: Relatively little • Lack of electricity • Lack of clean water • Lack of roads, Airports, Ports • Quality of Life: Low, little literacy, nutrition, or medical care • Examples: Burma, Jamaica, El Salvador

  22. Newly Industrialized Country (NIC) • GDP: Low/Medium but increasing • Per Capita Income: Low/Medium but increasing • Employment Sectors: “Primary” shifting to “Secondary” to varying degrees • Infrastructure: Increasing • Things are being built as wealth increases • Long process, very expensive • Quality of Life: Still low in most places, but improving in many ways Examples: India Mexico

  23. Developed Country • GDP: High • Per Capita Income: High • Employment Sectors: Mostly “Tertiary” and “Quaternary” • Infrastructure: Strong • High amount of roads, Airports, Ports • Clean water systems • Electricity available to all • Quality of Life: High, with good nutrition, medical care, education

  24. Picture A Picture C Which picture best fits each economic level? Picture D Picture B

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