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 other
industries, Research based, technologically advanced.
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
