Modern World Economic

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Nov 8, 2013 (3 years and 9 months ago)

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Unit 20

Modern World Economic
Issues

Stop and Think!


Partner A
: Identify one business that is
moving from using people to machines.


Partner B
: Identify another.

Unit 20


Modern World Economic Issues


Modern World Economic
Issues

Types of
economic
systems

North

vs.

South

issues

Rise of the
Pacific economic
community

International

trading
agreements

Essential

Questions

I. Types of Economic Systems


TYPE

Who owns the businesses?

Who makes the economic decisions

Examples

Market

(capitalism

-

Adam Smith)

Private Citizens

The market

Great Britain

Command

(Socialism
Communism)

The government

(“the society”)

Government officials

Cuba (USSR)

Mixed

Small businesses are owned by
private citizens and the large
businesses are owned by the
government

Generally the public with
some government
influence

USSR under
Lenin

China under
Mao Zedong

Stop and Think!


Partner A
: Explain a market economy


Partner B
: Explain a command economy


Partner A
: Explain a mixed economy

Which heading best completes the partial outline
below?

I.
_____________________


A. Market System


B. Profit incentive


C. Entrepreneurs


1.
Forms of government

2.
Characteristics of capitalism

3.
Structure of the Guild System

4.
Elements of Culture


In a command economy, economic
decisions are mostly influenced by


1.
Consumer demands

2.
Government policies

3.
Private investors

4.
Banking practices



“A group of planners makes all economic
decisions. The group assigns natural, human,
and capital resources to the production of
those goods and services it wants. The group
decides how to produce them and to whom to
distribute them.”


This description best applies to the

1.
Manorial economy of feudal Europe

2.
Mercantile economy of the 1700s in Europe

3.
Command economy of the Soviet Union

4.
Market economy of the United States

Which statement best describes how a command
economy functioned in the Soviet Union?




1.

The laws of supply and demand controlled
the economy.



2.

Trade policies mandated that imports exceed
exports.



3.

The success of the agricultural sector
controlled the price of manufactured goods.



4.

A central authority determined the type and
quantity of goods to be produced.

Which statement describes one major
aspect of a command economy?


1.
Supply and demand determines what will
be produced

2.
Most economic decisions are made by
the government

3.
The means of production are controlled
by labor unions

4.
The economy is mainly agricultural

What has the end of communism in the
Soviet Union caused many countries in
Eastern Europe to do?


1.
Shift to a command economy

2.
Maintain a communist form of
government

3.
Pursue free
-
market economic policies

4.
Join the Warsaw Pact

II.
International Trading Agreements


NAFTA

=
North American Free Trade
Agreement

An economic plan to ease trade between
Canada, Mexico, and the US



The major reason the Mexican Government
strongly supported the North American Free
Trade


Agreement (NAFTA) was that this agreement
would


1. raise tariffs on United States products entering
Mexico

2. reduce Mexico’s economic dependence on
Europe

3. promote investment and economic growth in
Mexico

4. stimulate trade
between

Asia and Latin
America



International Trading
Agreements


OPEC

=
Organization of Petroleum Exporting
Countries

An economic alliance

of oil producing nations

They determine how

much oil will be

produced


which

determines what the

p
rice

of oil will be on the

open market


The Organization of Petroleum Exporting

Countries (OPEC) is best known for its efforts to


(1) develop workable alternatives to fossil fuels

(2) bring Western oil technology to the Middle

East

(3) stop the export of oil to non
-
Arab nations

(4) establish production quotas to control the

price of oil

Since the creation of the Organization of
Petroleum Exporting Countries (OPEC),
member nations have joined together to


1. determine the supply of oil on the world
market

2. establish a policy of independence in
trade

3. maintain a low price of oil per barrel

4. isolate themselves from the rest of the
world


Which group of countries earns much
of their revenue from the sale of oil?


(1) China, Korea, Jordan

(2) Turkey, Brazil, Lebanon

(3) Argentina, Malaysia, Chile

(4) Saudi Arabia, Nigeria, Venezuela

International Trading
Agreements



The European Union (EU)

Many European nations joined together in an
economic association




to make trading easier between

the nations

Their monetary unit is

now called the “Euro”


In recent years, a major success of the
European Union (EU) has been the


1. creation of a single military force

2. rejection of national sovereignty

3. adoption of a single language

4. elimination of trade barriers


Stop and Think!


Partner B
: Explain NAFTA


Partner A
: Explain OPEC


Partner B
: Explain the European Union


* Organization of American States


* European Union


* North American Free Trade Agreement
(NAFTA)


These organizations and agreements are
examples of

1.
Political isolation

2.
Military alliances

3.
Regional cooperation

4.
Collective security

III.
North vs. South Issues


North vs. South?

:


NORTH


highly industrialized


high literacy rate


high standard of living


SOUTH


industry not yet developed


poor
education systems


much poverty


Stop and Think!


Partner A
: Explain how the northern
hemisphere seems to differ from the
southern.

“developing” nations
:


nations that are trying to become more modern


they are often refereed to as being “Third World” nations

(The “West” = 1st World
-

the old Communist nations =
2nd world)


Characteristics of a developing
nation
:


Lack of modern technology


Too much dependency on a single cash
crop


Too much international


debt (taxes can’t help


the people → they have


to pay back loans)

Characteristics of a developing
nation
:


Lack of industry


Few
skilled

workers


Poor
access

to raw materials


Little investment


money (capital)


Political


instability

Stop and Think!


Partner B
: What is a developing nation?


Partner A
: Identify the characteristics of a
developing nation.

International Assistance
Organizations:


These provide economic
assistance to “developing”
areas when needed


The World Bank


UNICEF

(United Nations


Children’s Fund)


The World Health organization

(the “WHO”)


The International Monetary
Fund

(the “IMF”)


These
provide
economic
assistance to
“developing”
areas when
needed

Stop and Think!


Partner A
: Explain 2 International
Assistance Organizations


Partner B
: Explain the other 2

IV.
Rise of the Pacific Economic
Community


Re
-
emergence of Japan

AFTER WWII:


U.S. Occupation/Aid


Following WWII


the U.S. “occupied” Japan
and provided economic aid to


rebuild Japanese businesses


The U.S. provided a market for


cheap industrial products from


Japan


The Japanese Industrial Style



At first


they copied what worked in
other industrial nations


Then


they developed their own
methods


teamwork


robotics

Why Japan had such great
industrial success



Their Educational System: helped train
workers for industry


There is little military: government can
focus spending on industry


Their government helped the businesses:


Tariffs: taxes on products coming into Japan
from other nations


Embargoes: certain products are restricted
from being allowed into the country

Their “Balance of Trade”



After awhile


Japan developed a
favorable “balance of trade” with the U. S.

(they made more money off the U.S. than
we made off them)


Stop and Think!


Partner A
: How did Japan rebuild after
WWII?


Partner B
: Why did they have such great
success?


Partner A
: What is a balance of trade?

Which statement concerning modern Japan
is most accurate?


1. Japan has modernized while maintaining
some elements of its traditional culture

2. Japan has become a leader in global
peacekeeping efforts

3. Japan has taken an active role in
international military events

4. Japan has severed all traditional ties in
favor of western values





A study of Japan’s economy since World War
II would lead to the conclusion that:


1. government support of technological advances
can improve a nation’s economic position

2. imperialism is necessary for the economic
development of a nation

3. a communist system leads to economic
prosperity

4. the feudal system is more economically
productive than the market system





In recent years, which factor has been a major
reason for the economic tensions between the
United States and Japan?


1. Japan’s trade deficit with the United States was
very high

2. the United States refused to place quotas on
Japanese goods

3. the United States imported more from Japan
than it exported to Japan

4. Japan lowered tariffs on goods imported from
the United States


Rise of “Asian Tigers”


Rapidly developing nations in Asia are
known as the “Asian Tigers”


They include: Taiwan, Hong Kong,
Singapore, and South Korea


The Future?


China: as they convert from Communism
to Capitalism


South East Asian nations: Vietnam


Indonesia
-

Malaysia