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Trade and Economic Growth
SW Asia Unit 4
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Voluntary Trade Factors involved in Voluntary Trade Specialization
Trade Barriers Currency Exchange Control of Supply
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Specialization Define: -specialization: The products a country makes best and are demand in the world market. -interdependence: A relationship between countries in which they rely on one another for resources, goods, or services.
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Specialization Example: Mechanics working on cars.
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Specialization EQ: How does specialization encourage trade between countries? If a country produces the goods they can make most efficiently, that country can trade them for goods made by others that cannot be produced locally.
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Trade Barriers Definition: The prevention of free trade
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Trade Barriers Physical Trade Barriers: (give 2 examples) -mountains -deserts -lack of rivers, bodies of water
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Trade Barriers Political Trade Barriers: -tariff A tax placed on goods when they are brought (imported) into one country from another country. -quota A limit to the number of amount of a foreign-produced goods that is allowed into a country. -embargo A formal halt to trade with a particular country for economic or political reasons.
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System for Exchanging Currency
Define: -currency: Paper or coins that a country uses for its money supply. -international trade: Countries trading with each other to obtain resources, goods, and services. -exchange rate: A system of changing one type of currency to another.
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System for Exchanging Currency
Why does international trade require a system for exchanging currency between countries? So that it is possible to buy and sell goods between nations with different types of money.
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OPEC Organization of Petroleum Exporting Countries
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OPEC Define -supply: The amount of a good or service available for sale in a market. -demand: The amount of a good or service wanted in a market.
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OPEC What is the primary function of OPEC? To control the supply and price of oil.
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OPEC Give some examples of what petroleum (oil) is used for: cars lawn mowers machinery to make plastic products
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Economic Growth 4 Factors that influence Economic Growth Labor
Capital Goods Land(resources) Entrepreneurship
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Relationship between human capital and GDP
Define: -GDP: Gross Domestic Product The value of all goods and services produced within a country in a given year and converted into US dollars for comparison.
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Relationship between human capital and GDP
-human capital The knowledge and skills that make it possible for workers to earn a living producing goods or services.
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Relationship between human capital and GDP
Companies that invest in human capital are more_____________________. Countries that invest in human capital have ______________________GDP’s because_______________________ profitable higher they invest in educating and training their citizens.
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Relationship between human capital and GDP Think- Pair-Share
Example:
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Relationship between capital goods and GDP
Define: -capital goods The factories, machines, and technology that people use to make products to sell. 3 examples of capital goods: - oil producing technology - communications equipment assembly line machinery
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Relationship between capital goods and GDP
Companies that invest in capital goods are more__________. Countries that invest in capital goods have _________________ GDP’s because_________________________ profitable higher they can produce more goods in a quicker and efficient way.
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Relationship between capital goods and GDP Think-Pair-Share
Example:
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The Role of Oil in SW Asia Economy
Another name for oil is_____________. petroleum
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The Role of Oil in SW Asia Economy
Countries WITH oil in SW Asia tend to have: Countries WITHOUT oil (except Israel) tend to have: Higher GDP Higher standard of living Lower GDP Lower standard of living
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The Role of Oil in SW Asia Economy
Israel has very little _____. However, Israel has a ____________________ because they invested in ________ and ___________ goods for ___________ and _______________ industries. oil high GDP human capital technology communication
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Entrepreneurship Define: -entrepreneur Creative, original thinkers who are willing to take risks to create new businesses and products.
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Entrepreneurship risk
An entrepreneur is willing to take a_____ in order to make a________________. profit
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Entrepreneurship Think-Pair-Share
Example
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Answer EQ’s Paragraph form- use all of the vocabulary that are in your graphic organizers: What factors encourage economic growth? What factors encourage trade between countries?
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