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Economics in Asia

Economics in Asia. SS7E8: The student will analyze the different economic systems. Economic Systems. ALL economic systems must answer 3 basic questions: What goods and services will be produced? How will these goods and services be produced?

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Economics in Asia

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  1. Economics in Asia SS7E8: The student will analyze the different economic systems

  2. Economic Systems • ALL economic systems must answer 3 basic questions: • What goods and services will be produced? • How will these goods and services be produced? • Who uses the goods and services that are produced?

  3. Types of Economic Systems: Traditional Economy: • economic decisions are made based on custom and habits (they trade or barter their goods/no money is used; problem with this is people need things & are unable to barter to obtain them)

  4. Types of Economic Systems (continued…) : Command Economy: • the government makes most of the economic decisions for the workers (government decides what will be bought and sold, and what the prices will be; • Example: North Korea

  5. Types of Economic Systems (continued…) : Market Economy: • economic decisions are made by individuals who decide what to produce and what to buy (the consumers and the market); also called capitalism, free enterprise, or laissez-faire (French term meaning let them do as they please)

  6. Mixed Economies • All modern economies today have characteristics of both market and command economic systems and are called mixed economies • India is a good example of a mixed economy; the government makes decisions about farming and industry but free enterprise is common

  7. Mixed Economies (continued…) • China is similar to a command economy though in recent years many entrepreneurs are found there • Nearly all countries today have mixed economies because they are a combination of free enterprise and some government

  8. Economic systems of Asia: China • Under Mao ZeDong, traditional farms were made into collective farms • Great Leap Forward and Cultural Revolution were attempts by the Chinese to improve their economy • In the 1970s the Chinese economy was changed using a program called the Four Modernizations: • Farmers were given more control and were allowed to sell surplus items and keep the profits • Industry shifted to the production of consumer goods • Special Economic Zones were set up along the coast to encourage foreign companies to do business with China • The results were mixed; Coastal areas grew but some farm areas fell behind

  9. China Continued… • Today, many Chinese have their own small businesses • At least half of China’s workers remain in farming • There are many examples of a market economy in China today which makes it more of a mixed economy

  10. India • Half the population works in agriculture • Green Revolution - India’s attempt to modernize Indian farming; new types of seeds along with fertilizers were introduced • Farm production increased but so did water pollution from the fertilizers

  11. India Continued… • Today India leads the region in the growth of technology and service industries • India produces computers, software, televisions, CD players, and DVD players • India has a popular movie and film industry; Bollywood films are as popular there as films made in the U.S. • The success of these industries has caused India to develop a growing middle class

  12. Japan • Japan has one of the most technologically advanced economies in the world; • only the U. S. and China have more productive economies • The government has a close relationship with major industries and the people have a strong work ethic • They are able to invest more money in technology & industry because they do not need it for the military

  13. Japan Continued… • Japan has very few natural resources or farmland • Japan must import all of its oil • About 1/3 of Japan’s energy is supplied by nuclear power • Crops are planted in terraces carved out of the hillsides

  14. Japan Continued… • The Ministry of International Trade and Industry (MITI) helps companies decide what products will sell best on the global market; the government sets tariffs on imported goods that compete with products made in Japan • Japan has one of the most highly educated populations in the world; • competition for places in high school and college is hard!

  15. North Korea • North Korea has one of the least open and most government directed economies in the world • The communist party controls the government and the economy with the majority of power in the hands of Premier Kim Jong-il • The government owns all the land and factories and decides what jobs will be done and who will do them

  16. North Korea Continued… • North Korea has a command economy • Agriculture does not produce enough food to feed the population • farms are made into cooperatives (collectives) owned by the government • 1990s they had several years of poor harvests and thousands faced starvation; Kim Jong-il would not take aid from the countries like the U.S. • One problem with the economy of North Korea is that the government has spent millions on the military rather than investing the money in other areas of the economy

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