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Activities, Systems, and Measure of Wealth

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Presentation on theme: "Activities, Systems, and Measure of Wealth"— Presentation transcript:

1 Activities, Systems, and Measure of Wealth
Economy Activities, Systems, and Measure of Wealth

2 What is an Economic Activity???
All of the activities that people do to earn a living. Example: going to work, making things, selling things, buying things, and trading services. There are four levels of economic activity: Primary Industries Secondary Industries Tertiary Industries Quaternary Industries

3 Primary Activities that directly involve natural resources or raw materials. Example: Farming, mining, cutting down trees Secondary Changing raw materials or natural resources into finished products. Example: The sawmill turns trees into lumber. Example: Making cereal or bread products out of corn, wheat, oats, etc…

4 Tertiary Activities that handle goods that are ready to be sold to consumers. Example: Stores, banks, companies Example: Trucks and trains that move products to stores. Quaternary Activities and people that deal mostly with information instead of goods. Example: Researchers, Administrators, Managers

5 the economy of a country???
How do we measure the economy of a country??? Gross National Product GNP is the value of all goods and services that a country produces in a year. (How wealthy or poor a country is.) Per Capita GNP GNP divided by the population. This shows individual purchasing power and is useful for comparing levels of economic development. (Standard of living.)

6 Developed vs Developing
Countries that have strong primary, secondary, tertiary, and quaternary industries Countries that are moving towards development. Most people work in primary activities. Wealthy countries: United States, Australia, Canada, Germany, France, U.K. Poor countries: Most African countries, several Asian countries, several Latin American countries Good: health care, technology, education, jobs, and high literacy rate, etc… Poor: health care, education, technology, high birth rate, high population growth, etc…

7 What is an economic system???
Countries organize their economies in different ways called economic systems. Most countries organize their economies by answering three basic questions: What (and how many) goods and services will be produced? How will these products be produced? How will these products and wealth gained from their sale be distributed? There are three economic systems that most countries use. The main difference between them is the role the government plays in answering the above questions.

8 Capitalsim (Market Economy)
People, as consumers, help determine what will be produced by buying or not buying certain products. (Supply and Demand) Privately owned companies and businesses base their production on the action of the consumers. Companies compete for consumers’ business, which drives the cost of products. The government plays a limited role by providing some goods and services such as highways, postal service, education, etc… The government also protects people against unfair business practices. (monopolies) Countries: United States and several Western Europe countries (France, U.K., Germany) Most developed countries.

9 Communism Planned Economy
The government makes all economic decisions. (opposite of capitalism) The government owns and runs all major farms, factories, utilities, stores, companies. The government decides what (and how many) products will be made, wages, and the prices of products. Countries: Cuba and China

10 Socialism (Mixed Economy)
Government owns and operates industries such as transportation, communications, banking, mining, steel, etc… People own and operate other industries such as stores and farms. Government believes every citizen is entitled to basic goods and services such as health care, child care, pensions, housing, etc… (Welfare States) Countries: Canada

11 Traditional Economy Economic decisions are based on customs and traditions: tribal laws, rituals, religious beliefs, habits developed by ancestors. Location: Parts of Africa, Asia, Latin America, Pacific Islands

12 Government Systems and Authority

13 What is government??? Laws Providing Services Military
Government is the institution through which a society makes and enforces its public policies and provides for its common needs. Laws Providing Services Keep order within a society. Avoid chaos and crime. Transportation Health care Communications Postal Service National Parks Leadership Providing food Regulating money Military Protects society from outside threat.

14 Types of Government Systems
Unitary Federal The central government makes laws and decisions for the entire country. Countries: Japan, U.K. The power in the government is divided between the central government and state governments. Countries: U.S. Confederation State governments hold all of the power and work together for defense or foreign affairs. Example: The south U.S. during Civil War

15 Government Authority Dictatorship Monarchy Democracy
A leader or group hold all of the power and make all decisions. Most dictators use military force or political terror to gain and exercise power. People are not free to express opinions. Examples: Hitler, Hussein, Castro (Cuba) A leader that holds all of the power and makes all decisions. Inherit position by being born into the ruling family. Kings, queens, shahs, pharoahs Today most monarchs are symbolic and do not have the same powers. Saudi Arabia, U.K. (constitutional monarchy) Democracy People choose their leaders and have power to set government policy. United States

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