1. THE UNITED STATES ECONOMY Chapter 4 Section 3

2. The Study of Economics Things that make up our market economy Business start ups & shutdowns Rise and fall of people’s confidence in something Increase and decrease of jobs State of the economy Investors Service providers (monopolies) Manufacturers Consumer choices (what if we don’t like something?)

3. Goods and Services You want the new Ariana Grande CD How will you earn money for it? Raking leaves Babysitting Mowing the grass The CD itself is called a good. Goods versus Services Goods – any object you can buy to satisfy a want Services – any action that meets a want

4. What to Buy? Have basic needs you have to satisfy to live Food Clothing Housing Transportation Childcare Medical treatment Wants Music Skates Computer games Vacation Movies

5. A Growing Economy Nations must produce goods and provide services to support their economy. To continue a growing economy business have to keep production at a high level. This allows them to keep up with demand. Factors of production: Ingredients needed for production to happen. Natural Resources – raw materials used to make goods Labor Resources – workers needed to make goods Capital Resources – machines, factories, and supplies needed Entrepreneurs – bring the resources together to produce goods and services.

6. The United States Economy One of the wealthiest in the world GDP – “Gross Domestic Product” tells the total value of all goods and services of a country. Use this to compare different countries US industries services Health care Legal services Communications – publishing, TV, radio, phones, mail delivery Finance – banks and stock markets Manufacturing – food products, cars, clothing Electronics – TV, computers, sound equipment

7. Free Enterprise or Market Economy US citizens make most economic decisions in our economy. Free enterprise/market economy – government does not control the economy How much or which goods are produced Set prices or tell you where to work. Free Enterprise elsewhere Canada Western Europe Japan Some Latin American countries

8. Supply and Demand Consumers – the people who use goods and services Profit – the money that remains after all costs to produce something have been paid Rice Krispy Treat Supply and Demand Competition – the rivalry among businesses to sell goods to consumers Ford vs Chevrolet Apple vs Android / Microsoft Pepsi vs Coke

9. Other Economic Systems Countries combine features from 3 types of economic systems Market, command, and traditional economies Command Economy The Government decides how many of which goods are produced AND sets the price. Countries: North Korea, Cuba, China has pieces of Market and Command Economies Traditional Economy Social roles and culture determine the economy A family’s status can determine whether they own a tractor Counties: India has both Traditional and Market Economies

10. The Global Economy Communication and transportation have helped increase the trade among countries The movement of people has helped create a worldwide economy, with the US being a leader Expanding trade can open new markets we didn’t have before Countries can create barriers to restrict trade Tariffs or taxes on things that are imported British Tea