1. Political and Economic Change
Soldier in Tiananmen Square, Beijing, China
Photo Copyright: Kelly Walker, 2009

2. Political and Economic Change
Usually, political and economic change occur together.
Serious problems occur when political change occurs without economic change.
China is an anomaly: Economic change has occurred without political change.
Photo Copyright: Kelly Walker, 2009

3. Political and Economic Change
Three Types of Political Change:
Reform
Revolution
Coup d’etats
Military Juntas controlled Nigeria from and
Photo’s: Public Domain
1966
Major-General Johnson Thomas Umunnakwe Aguiyi-Ironsi
In office: January 1966-July 1966
Yakubu Gowon
In office: August 1966-July 1979

4. Attitudes Toward Change
Radicalism: Rapid, dramatic changes need to be made in the existing society. (revolution)
Liberalism: Supports reform and gradual change.
Conservatism: Does not support change. Change is disruptive. Oppose revolution and reform.
Reactionary Beliefs: Opposes reform, but find the status quo unacceptable. They wish to turn back the clock to an earlier era. Willing to use violence.

5. Economic Concepts Primary Goals of most governments are to ensure:
Stable prices
Full Employment
Economic Growth
Street market in Beijing, China
Photo Copyright: Kelly Walker, 2009
Economies are subject to business cycles, which are characterized by fluctuations in the level of economic activity (GDP and GNP indicate health of the economy)
Business Cycles: a pattern of ups and downs in the economy

6. Economic Concepts
Scarcity: Society has limited resources and cannot produce all the goods and services people want.
Trade-offs (Choices): Scarcity necessitates trade-offs. Resources are limited, therefore, societies must carefully choose what to produce.
Xi’an, China
Photo Copyright: Kelly Walker, 2009

7. Economic Concepts
Opportunity Cost: Deciding to use a resource in one way costs the opportunity to use it for something else. Any decision that involves a choice between two or more options has an opportunity cost.
Brussels, Belgium
Photo Copyright: Kelly Walker, 2009

8. Economic Concepts
Guns and Butter: The more a nation spends on national defense (guns) the less they have to spend on consumer goods (butter). Therefore, the opportunity cost of spending more on national defense (guns) is having fewer consumer goods (butter).
Photo Copyright: Clipart.com

9. Economic Concepts Gross Domestic Product (GDP)
The total market value of all final goods and services the economy produces in a single year
Reveals the nations’ economic health
Includes only final goods, inflation can distort the significance of growth in the GDP.
Bikes for Rent: Paris, France
Photo Copyright: Kelly Walker, 2009

10. Economic Concepts Gross National Product (GNP)
London, United Kingdom
Photo Copyright: Kelly Walker, 2009
Gross National Product (GNP)
A measure of the nation’s total output of goods and services during a given period of time.
Differs from GDP in that products produced by foreign companies are excluded. (Hondas produced in the US would be excluded, the company is owned by Japan)

11. Economic Concepts The Benefits of Trade:
London, United Kingdom
Photo Copyright: Kelly Walker, 2009
The Benefits of Trade:
Imports are gains from trade, exports are payments
Trade is a two way street because imports and exports depend on one another
By importing goods and services and not making them yourself, you can concentrate on something you do better (specialization). You become more productive, so you can import more.
Specialization make nations wealthier.

12. Economic Concepts International Trade
Absolute Advantage- The ability to produce an item with fewer resources. US: wheat/Middle east: Oil
Comparative Advantage- The ability to produce an item at a lower opportunity cost than another producer.
London, United Kingdom
Photo Copyright: Kelly Walker, 2009

13. Economic Concepts Barriers to Trade
Tariff- a duty or tax on imports. Levied as a way to raise money.
Quotas- Restrictions on the number of specific goods that can enter a nation.
Preservation of Standards- Government rules or regulations. Labor, environment standards.
Export Subsidy- A payment by a country to its exporters, enabling them to sell their products abroad at a lower price than at home. European farmers are subsidized by their governments, who may then undersell other farmers in the world market.
London, United Kingdom
Photo Copyright: Kelly Walker, 2009

14. Economic Concepts The Global Economy
London, United Kingdom
Photo Copyright: Kelly Walker, 2009
The Global Economy
Capitalism: An “Invisible hand” controls the market prices of goods and services. (Little government control on the means of production) Also called a Market Economy or Free Enterprise System.
Communism: The government abolishes private property rights and takes ownership of property and resources. Command Economy.
Socialism: An economic system by which the government controls the means of production. Government controls utilities, market controls consumer goods.

15. Economic Concepts Final Slide
Global Challenges:
Will people in less developed nations be able to raise their incomes and achieve higher living standards?
Will the global economy become more open and integrated?
Will the world population grow rapidly, or will its growth decline and then stabilize?
How will developed nations support the growing number of older people in their populations?
Can the global economy grow while ensuring that the environment is protected and served?