Unit 8 Economic Systems of Africa JE # 4 What are the 4 factors of production or economic growth? Capital Goods Human Capital Natural Resources Entrepreneurship

Unit 8 Economic Systems of Africa Economic Vocabulary Review SS7E1a. Compare how traditional, command, and market economies answer the economic questions of what to produce, how to produce and for whom to produce. SS7E2a. Explain how specialization encourages trade between countries. Compare and contrast different types of trade barriers, such as tariffs, quotas, and embargos. SS7E2b. Explain why international trade requires a system for exchanging currencies between nations. SS7E3a. Explain the relationship between investment in human capital and GDP. SS7E3b. Explain the relationship between investment in capital and GDP. SS7e3d. Describe the rile of entrepreneurship. SS7G4c. Evaluate how literacy rate affects the standard of living.

Match’em Up 1. You will be divided into groups and given 3 envelopes. You must control your volume in your group. 2. one envelope contains an economic term, one contains the definition, and one contains an example. 3. Each group will have 8-9 terms to match to the definition and its example. 4. You cannot use any notes or textbooks. You must use your prior knowledge and context clues. 5. When your group is finished, raise your hand for me to check. 6. We will review the correct matches as a class.

Currency Money in any form that is accepted as a medium of exchange KSH (Kenyan Shilling), Saudi Riyal, Israeli Sheqalim, Turkey New Liras

Goods Products that consumers purchase to satisfy their wants Groceries, cars, electronics, gas, houses, clothes

Economics The study of how people, businesses, and societies choose to use scarce resources to satisfy their unlimited wants. Supply and demand

Three questions economic systems answer: What to produce, how to produce, and for whom to produce Neighborhood friends working from home using an assembly line method to produce gift baskets for booster club fundraisers

GDP – Gross Domestic Product The total value of goods and services produced in a country in a year $5,000,000

Capital Goods Resources such as factories, machinery, and tools that people use to make other goods Bulldozer, computer, shoe factory

Human Capital The knowledge and skills that allow workers to produce goods and services and earn an income Education, training, workers

Natural Resources Raw materials found in nature to produce goods Land, water, forests, minerals

Entrepreneurs People who bring natural resources, labor resources, and capital resources together to produce goods and services Oprah, Bill Gates, Sean Combs, Papa John

What happens to a country’s GDP when they invest in human capital and capital goods? Investment in human capital and capital goods increase a country’s GDP Education and training increases your knowledge and skills, and leads to higher paying jobs

Market Economy An economy where the government has a limited role in decision making, and the people help decide which or how many goods are produced Israel, US

Command Economy An economy where the government decides how many and which goods are produced and sets the price China, Vietnam, North Korea

Traditional Economy An economy where decisions are made based on social roles, cultures, and customs of the past A family’s status may determine whether they own a tractor

Mixed Economy An economy where countries use the best features of different economic systems Turkey, Saudi Arabia

International Trade Requires a system for exchanging currency between nations because different countries have different forms of currency 500 Riyal = $ US, 100 Sheqalim = $27.66 US, 10 New Lira = $6.97 US

International Trade Allows us the opportunity to purchase goods or services that we may not normally have available to us Fruit from Israel, coffee and cocoa beans from Africa, tanzanite from Tanzania

Specialization Occurs when a country cannot efficiently produce an item; but can get it by trading with another country that can Diamond mining, oil production (OPEC), grow rice

Tariff A fee (tax) charged for goods or services brought into a state or country from another country Japan charges 10% on imported peaches

Embargo When a government places restrictions on the import or export of certain goods 1990: UN proposed this on Iraq during the Persian Gulf War

Quota A limit on the amount of a product that may be imported during a given period of time 2002: Canada allowed the import of 150 million pounds of chicken at a low rate and any amount over that was charged a tariff of 200%

Consumers A person who buys and uses goods or services All living people who participate in daily trade-related activities

Literacy Rate The number of people over the age of 15 that can read and write Newspapers are written at a 5th grade level, the average level of most people

Trade Barriers Any law or practice that a government uses to limit free trade between countries Tariff, Embargo, Quota

Import To bring items into a country Machinery and tools to produce goods, foodstuffs, textiles

Export To ship items out to another country Agricultural products to Japan, component parts to China

Services Actions that satisfy our wants Going to the hair salon/barber, eating at a restaurant, having carpets professionally cleaned