1. Economy and
Economic
Systems
Flipped Lesson
Please take notes on the page
titled “What is Economy?” in
you Unit 2 packet.

2. What is Economy???
Economy is the way a country uses its money
and resources (such as workers and land) to
produce, buy, and sell goods and services.

3. Vocabulary
 Life Expectancy: the amount in years the
average person can expect to live when they are
born
 Gross Domestic Product (GDP): total amount in
dollars of products a country can produce in one
year. (Foods, services, trade, money earned by
workers)
 Per Capita: amount per person (average)
 Literacy Rate: percentage of adults that can read
and write

4. Vocabulary
 Developed: economically and technologically
advanced, contains all types of industry
 Developing: little or no modern
technology, working to improve their economy for
the health and safety of their people
 Underdeveloped: little to no infrastructure
(buildings, roads, etc.) and economy is based on
agricultural industry. Very low life expectancy and
literacy rates, extreme poverty
 Industry : areas of economic activity

5. Economy
 Most of the time a country’s economy
depends on it’s development.
 Countries with higher life expectancy, GDP
and Literacy Rates tend to be more
developed countries
 Countries with low life expectancy, low GDP,
and low literacy rates tend to be
underdeveloped countries.

6. Types of Industry
 Agricultural - primary industry, take a natural resource
from the earth. Ex: Farming, mining, oil
 Manufacturing – secondary industry, taking a natural
resource and making a product out of it Ex: Oil sent to a
refinery to make gasoline
 Retail – tertiary industry, Products made in
manufacturing to sell in stores. Ex: Gasoline made in
refinery sold at the gas station
 Wholesale – sell of goods to anyone other than the
standard single consume. Ex: Costco – pay a
membership and buy in bulk
 Research – quaternary industry, gathers information for

7. Types of Economy
 Now that we know about the factors that helps us
determining the type of economy a country has
lets talk about the different types of economic
systems…
 Free-Enterprise
 Socialist
 Communist

8. Free Enterprise
 Individual companies make important
economic decisions
 Companies decide the price of goods and
how much of a product is produced
 Follows the law of supply and demand
 Individuals own private property and decide
what jobs they will have

9. Socialist
 government functions as a democracy, but it
has a large role in people’s lives
 It uses tax money to take care of many of its
people’s needs: health care, college
tuition, maternity leave, etc.

10. Communist
 Government owns the property
 Government sets the prices and wages
 Government tells people what jobs they will do
 Government tells industry how much to produce
 Sometimes this is referred to as a “command”
economy
 Government typically focuses money towards the
military and not the people