Economic systems of europe
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Economic systems of europe

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Economic systems of europe Presentation Transcript

  • 1. Economic Systems of Europe 3/2/2009
  • 2. Basic Questions:
    • What to produce, how to produce, for whom to produce?
    • All nations of Europe must answer these questions
    • The economic choices that governments make affects its people and how strong its economy will be
  • 3. 4 factors of economic growth:
    • (only write what they are, you have the definitions)
    • Human capital: the value of people to an economy
      • Investing in health, education, and training of workers helps economy
        • Better education and training = coming up with new technology
        • Leads to better use of resources
  • 4. 4 factors of economic growth:
    • Capital goods: products that have value
      • Factories, machinery, new technology
    • Entrepreneurs: people who start new businesses to sell a new technique, idea, or product
    • Natural resources: land, air, water, and minerals
  • 5. Economic Growth takes time
    • It takes time for changes of an economy to take effect
      • Countries that were communist (command) economies and switched to democratic countries with mixed economies: improvement is slow
        • Ex: Romania: good resources, good human capital (educated people), bad economy…it had been communist, so there was an unwise use of capital goods…
  • 6. Specific countries…
    • Your instructions: listen as I quietly talk through the slide, then you may work at your table to make sure you fill in all the information you need on your graphic organizer…
  • 7. United Kingdom
    • Role of government:
      • Mixed economy: mostly market (people start businesses). Government controls some industries (welfare, medicine, oversees banking and money)
    • Economic history:
      • When economy struggled in past, government controlled economy more
        • After World War II, war had destroyed the country
        • Government took control of coal, oil, electricity, and shipbuilding
  • 8.
    • Factors of economic growth:
      • Human capital: skilled workers and competent managers
      • Capital goods: less efficient industries shut down, high-tech industries started to create jobs
      • Entrepreneurs: many successful entrepreneurs
      • Natural resources: makes wise use of what they have, including oil in the North sea
    • How are they doing?
      • Large population, high standard of living, low unemployment and inflation
  • 9. Russia
    • Role of government:
      • Mixed, trying to move towards a market economy
    • Economic history:
      • Communist for 70 years (part of the Soviet Union)
      • Government planned and owned everything in the economy (command)
        • Unwise use of resources and factories
      • Trying to make big change since end of U.S.S.R: taking a long time to improve
  • 10.
    • Factors of growth:
      • Human capital: skilled and educated workers (one thing the Soviet Union did well)
      • Capital goods:
        • returning businesses to private control (individual people own): many people resisted, thought government should own
        • improving factories and technology
      • Natural resources: has a lot of oil
    • How are they doing?
      • GDP has been growing a lot in recent years, showing they are doing better overall
  • 11. Germany
    • Role of government: mixed economy
    • Economic history:
      • Before reunification:
        • West Germany: mixed economy, efficient farms, strong industry
        • East Germany: command (communist) economy, collectivized (government-owned) farms, weak industry
      • Since reunification: west part of Germany has had to finance (pay for) improving east Germany
        • Changing economy of east Germany to be like the west has been difficult
  • 12.
    • Factors of economic growth:
      • Human capital:
        • strong, competitive education system.
        • Train students for skilled professions from early age.
      • Capital goods:
        • Large and successful industry (western part of the country)
    • How are they doing?
      • Some struggles because of reunification
  • 13. Discuss…
    • How are the economies of the United Kingdom, Russia, and Germany similar?
    • How can a country’s history affect its economy?
      • Consider instability vs. stability, past economic systems