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1. SOUTHERN AND EASTERN ASIA

   EconomicUnderstandings
2. SS7E8 – a. Compare how traditional, command, and market economies answer the questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. Traditional Economy Decisions based on custom and past decisions Tradition means things that have been passed down from one generation to the next Typical in farming, herding, simple crafts and trades Very little money ever exchanges hands Examples: only find in rural India and rural China
3. SS7E8 – a. Compare how traditional, command, and market economies answer the questions of (1) what to produce, (2) how to produce, and (3) for whom to produce.
4. SS7E8 – a. Compare how traditional, command, and market economies answer the questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. Command Economy Centralized economy where government makes most decisions Government decides for the what, how, who Example: North Korea, China is still command but has begun to move from total government control
5. SS7E8 – a. Compare how traditional, command, and market economies answer the questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. Market Economy Society’s economic decisions are made by individuals A.K.A.: capitalism, free enterprise, or laissez-faire Laissez-faire: to allow them to do as they please Examples: Japan and South Korea
6. SS7E8 – b. Explain how most countries have a mixed economy located on a continuum between pure market and pure command. Mixed Economy Today, no countries in the world have economic systems that are purely traditional, purely command, or purely market systems. At least some free market and free enterprise as well as some government planning and control Examples: India
7. SS7E8 – b. Explain how most countries have a mixed economy located on a continuum between pure market and pure command.
8. SS7E8 – c. Compare and contrast the economic systems in China, India, Japan, and North Korea. China Originally designed as command system 1970’s farmers and factories were able to make more decisions Chinese government still has final authority in most matters
9. SS7E8 – b. Compare and contrast the economic systems in China, India, Japan, and North Korea. India ½ of population works in agriculture Green Revolution of 1960’s led to modernized farming, but also led to pollution of water due to fertilizer and pesticides Huge technology and service industry helping develop middle class.
10. SS7E8 – b. Compare and contrast the economic systems in China, India, Japan, and North Korea. Japan One of the most technologically advanced economies in the world Very little farmland and few natural resources Fishing is large industry One of most highly educated populations in the world
11. SS7E8 – b. Compare and contrast the economic systems in China, India, Japan, and North Korea. North Korea Least open and most government-directed economies in the world today Government owns all land, factories, and jobs Rich mineral resources have allowed for industry to grow, but is strictly controlled by government
12. SS7E9 – a. Explain how specialization encourages trade between countries. Not every country can produce all they need Specialization creates goods most efficiently Trade for goods not made locally
13. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos. Trade Barriers Anything that slows down or prevents one country from exchanging goods with another Made to protect local industries Also created due to political problems between countries
14. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos. Tariff Tax placed on goods when they are brought (imported) into one country from another country Purpose is to make imported good more expensive to protect local industry
15. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos.
16. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos. Quota Sets a specific amount or number of a particular product that can be imported or acquired in a given period Example: only 1500 cars can come from Japan in a given year Again, to protect local industry
17. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos.
18. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos. Embargo One country announces that it will no longer trade with another country in order to isolate the country and cause problems with that country’s economy Usually when 2 countries are having political disputes
19. SS7E9 – b. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos.
20. SS7E9 – c. Explain why international trade requires a system of exchanging currencies between nations. Currency: type of money used in a country Exchange rate: system of changing from one type of currency to another in order for countries with different currency to trade In order for them to trade with each other, they have to be able to figure out what goods cost in each currency
21. SS7E9 – c. Explain why international trade requires a system of exchanging currencies between nations.
22. SS7E10 – a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP). Human capital: knowledge and skills that make it possible for workers to earn a living producing goods or services GDP: total value of all goods and services produced by a country in a single year Companies and countries that invest in human capital are most likely to have profitable businesses and satisfied workers.
23. SS7E10 – a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP). India Rural India uses traditional economy to farm 25% of GDP One of the worlds top ten industrial nations Stressed education during past decades Leading software producer in the world
24. SS7E10 – a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP). China Heavy investment in human capital Four Modernizations program (1970’s) Farming Military Industry Scientific and technical research Economy continues to grow as a result
25. SS7E10 – a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP). Japan One of the most powerful industrial nations in the world Among most highly educated in the world Solid work ethic Ministry of International Trade and Industry (MITI): brings government leaders and business leaders together to keep track of how Japanese economy is responding to changes in world market
26. SS7E10 – b. Explain the relationship between the investment in capital (factories, machinery, and technology) and gross domestic product (GDP). Capital goods: factories, machines, and technology that people use to make products Very important to economic growth More efficiency leads to higher GDP VS
27. SS7E10 – c. Describe the role of natural resources in a country’s economy. Natural resource: something that is found in the environment that people need (water, trees, rich soil, minerals) India and China Good supplies of coal Japan Very few natural resources
28. SS7E10 – d. Describe the role of entrepreneurship. Entrepreneurs: creative, original thinkers who are willing to take risks to create new businesses and products.
29. SS7E10 – d. Describe the role of entrepreneurship. India Some of world’s largest companies started by Indian entrepreneurs China Relatively new Government decided to let entrepreneurs lead the way Japan Land of entrepreneurs