1. Political & Economic Systems 3-2

2. I. The World’s Countries O A. Almost 200 independent countries in the world today O B. 4 specific characteristics that define a country: O 1. Territory – land, water, & natural resources within its boundaries; boundaries can be natural divisions (rivers & mountains) and can be changed often (war & treaties)

3. O 2. Population – amount of people does not determine the existence of a country; citizens are usually guaranteed protection & in return usually pay taxes, serve in the military, or carry out other obligations O 3. Sovereignty – nation’s freedom from outside control; it can rule itself; act independently & protect its territory O 4. Government …

4. II. Types of Government O A. Government Structure O 1. nearly every country contains smaller units (states, provinces, etc.) O 2. unitary system – one central government that makes laws for the entire nation (GB & Japan) O 3. federation – government where some powers are given to the national government & some are given to local governments (USA) O 4. confederation – smaller political units keep most of the power & the central government has limited powers

5. O B. Government Authority O 1. authoritarian government – leaders hold all, or almost all, political power O 2. dictatorship – power is concentrated in a small group or even a single person O 3. totalitarianism – government tries to control every part of society (most extreme form of dictatorship)…(Nazi Germany until Hitler’s reign) O 4. monarchy – monarchs inherit their positions by being born into a ruling family (kings, pharaohs, sultans, etc.) O 5. democracy – people choose their leaders & have the power to set government policy

6. III. Types of Economic Systems O A. Traditional Economy – families produce goods & services for their own use (subsistence economy) FAMILIES PRODUCE FOR PERSONAL CONSUMPTION LITTLE SURPLUS LITTLE EXCHANGE OF GOODS

7. O B. Market Economy – system that gives great freedom to individuals and groups (free enterprise system) DETERMINE PRICES & PRODUCTION CONSUMERS LAWS OF SUPPLY & DEMAND PRIVATE ENTERPRISE GOVERNMENT REGULATIONS

8. O C. Command Economy – system that is controlled by a single, central government; government decides prices, how much will be made, etc. GOVERNMENT OWNS BUSINESSES OPERATES BUSINESSES DETERMINES PRODUCTION