1. Economics
Human Geography

2. Economics Systems
An economy consists of the production and exchange of goods and services among a group of people. The way people produce and exchange goods is called an economic system.

3. Economic Systems – 4 Types
Socialist - Syria
Communist - China
Free Enterprise - USA
Traditional - Indonesia

4. What are the two main production methods in traditional economies?
Subsistence agriculture – growing only enough to feed the farmer and his family. There is rarely a surplus so very little is sold or traded. Economic growth is slow.
Cottage industries – people use their spare time to weave cloth, make furniture and clothes. Producing goods by hand. Help farmers and their families meet their needs and may give them extra income during the winter months. The entire family works together.

6. What is a Free Enterprise / Market System?
Economic system in which people own their own goods and property. (aka – capitalism or market system)
People invest their money in different ways (factories, machines, and land)
They may gain a profit.
Prices are established by the interaction of supply and demand.

7. What are the two main production methods in free enterprise economies?
Commercial agriculture – farmers grow food not just for themselves, but in order to sell it to others for cash. Crop production is intended for distribution to wholesalers and retailers, such as supermarkets and grocery stores. Large scale makes production cheaper.
Commercial industries – goods are manufactured in factories for sale throughout the country or overseas.

9. What is the Command / Communist system?
Is an economic system in which all important economic decisions are made by government leaders.
The leaders decide what, how, and for whom goods and services will be produced. (command economy)
Government officials develop national plans, often for five-year periods, that specify which goods will be produced.
In theory, there are no social classes in a communist system.
Cooperation is supposed to replace competition, allowing everyone’s needs to be met.
Karl Marx

10. What is the Socialist / Mixed system?
It is an economic system in which the most important businesses producing goods (mines, factories, businesses) are owned by the government rather than by individuals.
the difference between socialism and communism is that socialism encourages private ownership of small businesses (such as shops and small manufacturers).
Referred to as “free market socialism” at times because they do not involve state planning.

11. The Wealth of Nations
Location and Resources are import factors in determining the potential wealth of nations.
Natural resources are materials on or in the earth that have economic value. There are three basic types of natural resources: renewable, nonrenewable, and inexhaustible energy sources.
Relative location can be very important. For example, a landlocked country - one with no outlet to the sea—must find ways to get goods to and from its land.

12. Sustainable Development
Sustainable development means using resources in a way that can meet future as well as present human needs. To achieve sustainable development means using renewable resources at a slower rate, so that nature is able to replenish itself. In other words, nations must find ways to achieve economic growth without the reckless, wasteful, and harmful use of natural resources.

13. What are the levels of economic activities?
Primary, Secondary, Tertiary, Quaternary
Primary
Makes direct use of natural resources
Agriculture
Forestry
Mining
Secondary
Converts the raw material into new products.
Food processing
Manufacturing
refining
Tertiary
The economic activities are service industries.
Variety of services performed by people and businesses.
Quaternary
These are activities that involve information processing and management.

14. Economic Development Refers to how advanced an economy is-
Advanced economies are more developed countries (MDCs)
Lower standards of living and less advanced technologies are less developed countries (LDCs)
Countries moving from less to more developed economies are “newly industrialized” or “emerging economies” or “more developed”

15. In 1990, the United Nations developed the Human Development Index (HDI) for ranking countries based on their level of economic development – they look at demographic, economic, social, and political indicators.

16. Economic Indicators
What is GNP?
→ The total value of all goods and services produced by a nation’s residents despite where they live (here or abroad) GNP = gross national product.
What is GDP?
→ It is the total value of all goods and services produced within a nation in a year, resident or foreign. (GDP = gross domestic product.)

18. Globalization & Outsourcing
→ Globalization is the creation of a global culture. Due to air travel, news, TV, and the internet, trade and the exchange of products with other cultures is common today. Each society borrows or adapts what it finds best in other societies.
→ Outsourcing – jobs and business on foreign land with foreign employees. (Saves $ for corporate, but is a negative effect of globalization.)

19. NAFTA
(North American Free Trade Agreement) was created to facilitate trade between Canada, The United States, and Mexico.

20. European Union
The EU is an economic and political union of member states.
The EU forms a large area in which people and goods can pass freely.
The members also cooperate on many matters
They follow EU directives and regulations.
They use the EURO (common currency);
Citizens of member states elect representatives to a European Parliament in Strasbourg, France.