2. Page 1: Economic Systems
1) What to produce? How to produce? For whom to
produce?
2) Traditional economies rely on traditions to answer the
questions.
3) Governments answer the questions in command
economies.
4) Individuals (supply and demand) answer the
questions in a market economy.
5) Most countries have a mixed economy because they
need a combination of government regulation and
private ownership to be successful.
3. Page 2: Voluntary Trade
1) Countries need an exchange rate so they can
trade with each other even if they have different
currency.
2) Countries specialize in goods that they can easily
make and trade for goods they can’t.
3) A tariff is a tax on imports.
4) Quotas are limits placed on imports.
5) An embargo is a halt to all trade.
6) I think….
4. Page 3: Factors of Economic Growth
1) The four factors of economic growth are land, labor,
capital, and entrepreneurship.
2) An entrepreneur is a person who takes the risk of
opening a business.
3) GDP is the Gross Domestic Product, and it shows the
value of all goods produced in a country in a year.
4) Human capital is the value of people’s work. It
increases with investment in education and health.
5) Capital goods are goods used to make other goods
(factories, technology).
6) The higher the investment in human capital and
capital goods.
5. Page 4: Distribution of Power
1) The three ways governments distribute power
are unitary, confederation, and federal.
2) The central government has all the power in
unitary. Regional authorities have very little or
none.
3) The regional authorities have the power in a
confederation.
4) In a federal government, central and regional
authorities share power.
5) OPEC and the United Nations are
confederations.
6. Page 5: Citizen Participation
1) The three ways governments are divided
based on citizen participation are autocracy,
oligarchy, and democracy.
2) An oligarchy is when a small group rules.
3) An autocracy is when one person has all the
power.
4) Sudan is an autocracy.
5) In a democracy, citizens have the most
participation, then oligarchy, then autocracy.
7. Page 6: Democracies
1) A democracy is a type of government where
people vote.
2) The two types of democracies are presidential
and parliamentary.
3) The leader of a presidential democracy is the
president.
4) The leader of a parliamentary democracy is a
prime minister.
5) Citizens get to vote directly for a president. A
prime minister is elected by members of a
parliament (who were elected by citizens).