Post on 19-Jan-2016
ECONOMIC UNDERSTANDINGS
UNIT ONE
SOUTHWEST ASIA
SOUTHWEST ASIA (MIDDLE EAST)
ECONOMIC UNDERSTANDINGS
ECONOMIC UNDERSTANDINGS
SS7E5 – THE STUDENT WILL ANALYZE DIFFERENT ECONOMIC SYSTEMS.
CRCT PREP 107 -108
EQ – WHAT ARE THE THREE BASIC ECONOMIC
QUESTIONS?
A. COMPARE HOW TRADITIONAL, COMMAND, AND MARKET ECONOMIES ANSWER THE ECONOMIC
QUESTIONS OF (1) WHAT TO PRODUCE? (2) HOW TO
PRODUCE? (3) FOR WHOM TO PRODUCE? CRCT PREP
107 -108
ECONOMICS IS USING LIMITED RESOURCES TO
SATISFY UNLIMITED NEEDS AND WANTS.
HOW DO WE DETERMINE WHAT KIND OF ECONOMIC
SYSTEM IS PRESENT?
• BY HOW THE SYSTEM ANSWERS THE 3 ECONOMC QUESTIONS
• WHAT TO PRODUCE?
• HOW TO PRODUCE?
• FOR WHOM TO PRODUCE?
WHAT ARE THE THREE ECONOMIC QUESTIONS?
• WHAT IS GOING TO BE PROCUCED?
• HOW IS IT GOING TO BE PRODUCED?
• FOR WHOM IS IT GOING TO BE PRODUCED?
3 TYPES OF ECONOMIC SYSTEMS
TRADITIONALCOMMAND
MARKET
IN TRADITIONAL ECONOMIC SYSTEMS,
MOST ECONOMIC DECISIONS ARE BASED UPON LONGSTANDING
CUSTOMS.
WHICH ECONOMIC SYSTEM IS BASED ON OLD
TRADITIONS AND CUSTOMS?
• TRADITIONAL
IN COMMAND ECONOMIC SYSTEMS, MOST
ECONOMIC DECISIONS ARE MADE BY
GOVERNMENT PLANNERS.
WHICH ECONOMY SYSTEMS DEPENDS ON GOVERNMENT
PLANNERS TO MAKE DECISIONS?
• COMMAND
IN MARKET ECONOMIC SYSTEMS, CONSUMERS,
THROUGH THEIR PURCHASES, MAKE MOST
ECONOMIC DECISIONS.
WHICH ECONOMIC SYSTEM DEPENDS ON CONSUMERS
WISHES?
• MARKET
CHARACTERISTICS OF PURE MARKET ECONOMIES
• LITTLE OR NO GOV. CONTROL
• FREEDOM OF ENTERPRISE
• FREEDOM OF CHOICE
• PRIVATE PROPERTY
• PROFIT INCENTIVE
• COMPETITION
NO COUNTRY HAS A PURE COMMAND OR PURE MARKET ECONOMIC
SYSTEM, MOST COUNTRIES COMBINE ASPECTS OF BOTH OF THESE PURE ECONOMIC
SYSTEMS.
MIXED ECONOMIES CONTAIN
CHARACTERISTICS OF BOTH A COMMAND AND
MARKET ECONOMY. MOST ECONOMIC SYSTEMS IN THE WORLD TODAY ARE
MIXED.
TRADITIONAL, COMMAND, AND MARKET SYSTEM ARE
THE THREE TYPES OF ECONOMIC SYSTEMS.
WHAT ECONOMIC SYSTEM COMBINES MARKET AND
COMMAND SYSTEMS?
• MIXED ECONOMIC SYSTEM
WHAT ARE THE THREE BASIC ECONOMIC
SYSTEMS?• MARKET
• COMMAND
• TRADITIONAL
SS7E5 THE STUDENT WILL ANALYZE DIFFERENT ECONOMIC SYSTEMS.
EQ – WHAT IS A MIXED ECONOMY?
B. EXPLAIN HOW MOST COUNTRIES HAVE A MIXED ECONOMY LOCATED ON A
CONTINUUM BETWEEN PURE MARKET AND PURE
COMMAND.
CRCT PREP – 108 - 109
• How many basic types of economic systems are there?
• Name the economic systems.
• Which economic system do most textbooks say is the most common throughout the world?
• How many basic types of economic systems are there? 3
• Name the economic systems. Traditional, Command, Market
• Which economic system do most textbooks say is the most common throughout the world? Mixed. The GCEE states that mixed is not an economic system but rather a blending of two different types of systems.
Economic Systems
Pure
MarketPure
Command
Economic
Systems
Pure
MarketPure
Command
Iran
45%
Saudi Arabia
64%
Israel
68%
Economic
Systems
Pure
MarketPure
Command
Nigeria
55%
South Africa
64%
Economic
Systems
Pure
MarketPure
Command
North Korea
2%
India
54%
Japan
73%China
53%
QUIZ TO HERE
QUIZ IN 3 MINUTES
GET OUT SOME BLANK PAPER AND NUMBER 1-10
QUESTIIONS 1, 2, 3. WHAT ARE THE THREE BASIC
ECONOMIC QUESTIONS?
4. HOW DO WE DETERMINE WHAT KIND OF ECONOMIC
SYSTEM IS PRESENT?
5. WHICH ECONOMIC SYSTEM IS BASED ON OLD
TRADITIONS AND CUSTOMS?
QUESTIONS 6, 7, 8. WHAT ARE THE THREE BASIC ECONOMIC SYSTEMS?
9. IN WHAT KIND OF ECONOMIC SYSTEM DO GOVERNMENT PLANNERS ANSWER THE 3
BASC ECONOMIC QUESTIONS?• A. traditional
• B. COMMAND
• C. MARKET
10. WHAT DO WE CALL AN ECONOMY THAT HAS
FEATURES OF A MARKET ECONOMY AND FEATURES
OF A COMMAND ECONOMY?
A. COMPARE AND CONTRAST THE ECONOMIC SYSTEMS IN ISRAEL,
SAUDI ARABIA, IRAN AND TURKEY.
CRCT PREP 109
CB – 144-146
EQ – WHAT ARE THE FEATURES OF THE
ECONOMIC SYSTEMS IN ISRAEL, SAUDI ARABIA, AND
TURKEY.
ISRAEL
ISRAEL’ ECONOMY(1) WHAT TO PRODUCE? A
LARGE PROTION OF ISRAEL’S GDP COMES FROM
HIGH TECH MANUFACTURING,
FINANCIAL SERVICES, AND AGRICULTURE.
(2) HOW TO PRODUCE? ISRAEL HAS SUBSTANTIAL
GOVERNMENT OWNERSHIP OF BUSINESS, BUT IS
GRADUALLY PRIVATIZTING COMPANIES.
FOR WHOM TO PRODUCE? IN ISRAEL THE PRIVATE
SECTOR PRODUCES GOODS AND SERVICES FOR
DOMESTIC AND INTERNATIONAL MARKETS
BASED ON THE MARKET PRICE.
WHERE WOULD YOU PLACE ISRAEL ON THE CONTINUUM?
Economic SystemsISRAEL
Pure
MarketPure
Command
WHERE WOULD YOU PLACE ISRAEL ON THE CONTINUUM?
• ISRAEL WOULD FALL SLIGHTLY TO THE MARKET SIDE OF CENTER OF THE CONTINUUM
SAUDI ARABIA
WHAT TO PRODUCE?
SAUDI ARABIA’S ECONOMYWHAT TO PRODUCE?SAUDI ARABIA IS THE
WORLD’S LEADING PRODUCER OF OIL. THE
SAUDI GOVERNMENT CONTINUES TO INVEST IN
PETROCHEMICALS, MINING AND REFINING.
SAUDI ARABIA
HOW TO PRODUCE?
(2) HOW TO PRODUCE?OVER 95% OF THE OIL
INDUSTRY IN THE COUNTRY IS OPERATED BY THE
GOVERNMENT. MOST OTHER MAJOR INDUSTRIES HAVE
SIGNIFICANT GOVERNMENT GOVERNMETN INVOLVEMENT.
CONTINUED
SAUDI ARABIA RELIES HEAVILY ON SPECIALIZED
LABOR FROM OTHER COUNTRIES. ESTIMATES
ARE THAT A THIRD OF THE LABOR FORCE FALLS INTO
THIS CATEGORY.
SINCE THE 1980”S SAUDI GOVERNMENT HAS BEEN
TRYING TO INCREASE PRIVATE OWNERSHIP OF
BUSINESS AND ENCOURAGE MORE JOINT VENTURES WITH PRIVATE FOREIGN
COMPANIES.
SAUDI ARABIA
FOR WHOM TO PRODUCE?
FOR WHOM TO PRODUCE? ONE THIRD OF SAUDI
ARABIA’S GDP IS BASED ON EXPORTS TO OTHER
COUNTRIES. (THIS IS DUE TO THE ECONOMY’S RELIANCE
ON THE OIL SECTOR.)
WHERE WOULD YOU PLACE SAUDI ARABIA ON THE
CONTINUUM?
Economic SystemsSAUDI ARABIA
Pure
MarketPure
Command
WHERE WOULD YOU PLACE SAUDI ARABIA ON A
CONTINUUM?
• SAUDI ARABIA WOULD FALL TO THE COMMAND SIDE OF THE CENTER OF THE CONTINUUM
IRAN
WHAT TO PRODUCE?
IRANWHAT TO PRODUCE? LIKE SAUDI ARABIA IRAN HAS
GREAT OIL WEALTH.
IRAN
HOW TO PRODUCE?
IRAN HOW TO PRODUCE? IRAN
HAS MORE OF A MIXED ECONOMY THAN SAUDI ARABIA INSPITE OF THE
FACT THAT THE GOVERNMENT TRIES TO KEEP A TIGHT CONTROL
OVER THE ECONOMY.
IRAN
FOR WHOM TO PRODUCE?
IRAN –FOR WHOM TO PRODUCE? THE COMMAND SIDE OF IRAN’S ECONOMY IS
NOT VERY EFFICIENT. DESPITE THE GREAT WEALTH
CREATED BY THE OIL INDUSTRY NOT MANY
IRANIANS SHARE IN THAT WEALTH.
WHAT IS IRAN’S MOST IMPORTANT RESOURCE?
• OIL
IRAN’S ECONOMY HAS BECOME MORE OF A MIXED
ECONOMY IN SPITE OF IRAN’S GOVERNMENT
ATTEMPTING TO KEEP MORE CONTROL OF THE ECONOMY
HOWEVER
Economic SystemsIRAN
Pure
MarketPure
Command
TURKEY’S ECONOMY
HOW DOES TURKEY ANSWER THE QUESTION – WHAT TO
PRODUCE?
• TURKEY HAS A DIVERSIFIED ECONOMY WITH LARGE SERVICE, MANUFACTURING, AND AGRICULTURAL SECTORS.
HOW DOES TURKEY DECIDE – HOW TO PRODUCE?
• SINCE THE LATE 1980’S, TURKEY HAS GRADUALLY MOVED FROM A GOVERNMETN DIRECTED ECONOMY TO MORE PRIVATE ENTERPRISE
HOW DOES TURKEY DECIDE – FOR WHOM TO PRODUCE?
• ONE FIFTH OF TURKEY’S PRODUCTION IS EXPORTED. THE REMAINDER IS CONSUMED BY DOMESTIC CONSUMERS AND THE GOVERNMENT
WHERE WOULD YOU PLACE TURKEY ON THE
CONTINUUM?
Economic SystemsTURKEY
Pure
MarketPure
Command
WHERE WOULD YOU PLACE TURKEY ON THE
CONTINUUM?
• TURKEY WOULD FALL BETWEEN SAUDI ARABIA AND ISRAEL ON THE MARKET SIDE OF THE CONTINUUM
Economic
Systems
Pure
MarketPure
Command
Iran
45%
Saudi Arabia
64%
Israel
68%
EQ WHAT IS VOLUNTARY TRADE?
STANDARD SS7E6 – THE STUDENT WILL EXPLAIN
HOW VOLUNTARY TRADE BENEFITS BUYERS AND
SELLERS IN SOUTHWEST ASIA (MIDDLE EAST)
WHAT IS VOLUNTARY TRADE?
• MAY BE THE MOST BASIC OF ECONOMIC THEORY
• VT IS TRADE THAT OCCURS BECAUSE IT BENEFITS THE PARTIES THAT ARE INVOLVED
EQ – WHAT IS SPECIALIZATION AND HOW
DOES IT HELP TRADE?
A. EXPLAIN HOW SPECIALIZATION
ENCOURAGES TRADE BETWEEN COUNTRIES.
CRCT PREP 111
WHAT IS SPECIALIZATION?
• SPECIALIZATION OCCURS WHEN ONE NATION CAN PRODUCE A GOOD OR SERVICE AT A LOWER OPPORTUNITY COST THAN ANOTHER NATION.
• MIDDLE EAST-CAN PRODUCE OIL CHEAPER THAN THE U.S.
• THE U.S. CAN PRODUCE COAL CHEAPER THAN EUROPEAN NATIONS
WHAT ARE THE POTENTIAL PROBLEMS OF OVER-
SPECIALIZATION? FOR EXAMPLE ONE CROP? ONE PRODUCT?
• IF THAT CROP OR PRODUCT FAILS SO DOES THAT NATIONS ECONOMY
• THERE IS A RISK WHEN AN ECONOMY LACKS DIVERSIFICATION (MANY DIFFERENT INDUSTRIES AND CROPS)
WHAT IS GOING TO HAPPEN TO THE OIL PRODUCING COUNTRIES OF THE MIDDLE EAST WHEN AN
ALTERNATIVE FORM OF ENERGY IS DEVELOPED?
• IF THESE COUNTRIES DO NOT DIVERSIFY THEIR ECONOMIES – THESE COUNTRIES WILL FAIL
LOOK AT THE LAND USE AND RESOURCES MAP ON PAGE
77 AND 169. WHY MIGHT TRADE HAPPEN BETWEEN SAUDI ARABIA AND SOUTH
AFRICA?• SAUDI ARABIA MAY WANT GOLD AND
SOUTH AFRICA MAY NEED TO IMPORT OIL
WHY MIGHT THE UNITED STATES TRADE FOOD
GROWN IN THE U.S. TO SAUDI ARABIA?
• THE TRADE MAY BE FOOD FOR OIL
WHAT IS OPPORTUNITY COST?
• The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for.
WHY COUNTRIES ENGAGE IN TRADE?
• EACH COUNTRY SPECIALIZES IN SOMETHING THE OTHER COUNTRY NEEDS AND PRODUCES IT AT A LOWER OPPORTUNITY COST
SS7E7C. THE STUDENT WILL DESCRIBE FACTORS THAT
INFLUENCE ECONOMIC GROWTH AND EXAMINE
THEIR PRESENCE OR ABSENCE IN ISRAEL, SAUDI
ARABIA, AND IRAN.
SS7E7C – EXPLAIN THE ROLE OF OIL IN THESE
COUNTRIES. (ISRAEL, SAUDI ARABIA, AND IRAN)
CRCT PREP 117- 119
WHY ARE OIL AND GAS VALUABLE NATURAL
RESOURCES?
• THESE NATURAL RESOURCES ARE NECESSARY TO DRIVE THE WORLD’S INDUSTRIAL NATIONS
• STRATIGIC RESOURCES
WHAT PERCENTAGE OF THE OIL THAT THE U.S. USES IS
IMPORTED?
• 50%
HOW DOES IT BENEFIT SAUDI ARABIA AND IRAN TO
BELONG TO OPEC?
• OPEC MONITORS THE PRICE OF OIL AND KEEPS THAT PRICE HIGH
B. COMPARE AND CONTRAST DIFFERENT TYPES OF TRADE BARRIERS SUCH AS TARIFFS,
QUOTAS, AND EMBARGOS.
EQ - LIST AND EXPLAIN DIFFERERENT TYPES OF
TRADE BARRIERS?CRCT - 112
WHAT IS A TRADE BARRIER?
• A TRADE BARRIER IS ANY THING THAT HINDERS TRADE
• TRADE BARRIER CAN BE PHYSICAL, ECONOMIC, OR POLITICAL. ETC
NAME A PHYSICAL TRADE BARRIER?
• MOUNTAINS• DESERTS• RAINFORESTS ETC.
THESE LANDSCAPES MAKE IT DIFFICULT TO TRADE
LIST THE ECONOMIC OR FINANCIAL TRADE
BARRIERS.
• TARIFFS – TAX ON IMPORTS OR EXPORTS (SUVS)
• QUOTAS – LIMIT ON THE AMOUNT OR QUANTITY THAT CAN BE IMPORTED OR EXPORTED (LUMBER)
• EMBARGO – GOVERNMENT ORDER PROHIBITING TRADE WITH ANOTHER NATION – (IRAQ, CUBA)
THE UNITED STATES HAS BANNED IMPORTING
PRODUCTS MADE IN CUBA. THIS IS AN EXAMPLE OF WHAT
TYPE OF TRADE BARRIER?
• EMBARGO
IRAQ IGNORED THE UNITED NATIONS REQUEST TO ALLOW U.N. INSPECTORS TO SEARCH FOR WMD’S, THE UN STOPPED TRADE WITH IRAQ EXCEPT FOR FOOD AND MEDICINE. THIS IS
AN EXAMPLE OF AN …….
• EMBARGO
TO HELP DOMESTIC CAR MANUFACTURERS, THE
GOVERNMENT PUTS A TAX ON IMPORTED CARS, WHAT TYPE OF TRADE BARRIER IS
THIS?
• TARIFF
A GOVERNMENT HAS PUT A LIMIT ON THE AMOUNT OF
LUMBER THAT CAN BE SOLD TO FOREIGN NATIONS, WHAT TYPE OF TRADE
BARRIER IS THIS?
• QUOTA
IN 1973, OPEC NATIONS DECIDED TO PUNISH THE
UNITED STATES FOR THEIR SUPPORT OF ISRAEL, THEY
STOPPED SHIPPING OIL TO THE U.S., THIS IS AN EXAMPLE OF …
• EMBARGO
EQ – WHAT IS THE ROLE OF OPEC IN REGARD TO THE
WORLD’S OIL SUPPLY?
C. EXPLAIN THE PRIMARY FUNCTION OF THE ORGANIZATION OF
PETROLEUM EXPORTING COUNTRIES (OPEC)
CRCT PREP 113
OPEC CONTROLS THE PRICE OF OIL BY CONTROLING THE
AMOUNT (SUPPLY) OF OIL ON THE MARKET.
OPEC IS USING THE ECONOMIC PRINCIPLES OF SUPPLY AND DEMAND TO
CONTROL THE PRICE OF OIL.
D. EXPLAIN WHY INTERNATIONAL TRADE
REQUIRES A SYSTEM FOR EXCHANGING CURRENCIES
BETWEEN NATIONS.
CRCT 114
CURRENCY EXCHANGES PROVIDE A PROCEDURE FOR DETERMINING THE VALUE OF ONE COUNTRY’S CURRENCY
IN TERMS OF ANOTHER COUNTRY’S CURRENCY.
WITHOUT CURRENCY EXCHANGE INTERNATIONAL
TRADE WOULD BE DIFFICULT.
WHY IS IT IMPORTANT FOR NATIONS TO HAVE A
SYSTEM TO CONVERT FROM ONE CURRENCY TO
ANOTHER?• THIS PROCESS MAKES IF POSSIBLE TO
BUY AND SELL GOODS BETWEEN NATIONS WITH DIFFERENT TYPES OF MONEY.
AFTER THE PERSIAN GULF WAR, THE UNITED NATIONS IMPOSED AN EMBARGO ON IRAQ. WHAT WOULD BE THE REASON AN
EMBARGO WAS USED BY THE UNITED NATIONS?
• A. TO RESTRICT TRADE WITH IRAQ UNTIL THEY MET UN REQUIREMENTS
• B. TO INCREASE THE COST OF IRAQI PRODUCTS TO HELP IRAQ’S ECONOMY
• C. TO PROTECT IRAQ’S DOMESTIC INDUSTRY SO IT WOULD GROW AFTER THE WAR
• D. TO CONTROL THE IRAQI ECONOMY AFTER THE WAR
OIL IS THE MAJOR EXPORT OF SAUDI ARABIA TO MANY
DIFFERENT COUNTRIES. SAUDI ARABIA’S INTERNATIONAL
TRADE IN OIL IS MADE MUCH EASIER BY
• A. USE IF A WORLD WIDE CURRENCY• B. A SYSTEM TO EXCHANGE CURRENCY
BETWEEN COUNTRIES• C. TRADING ONLY WITH COUNTRIES THAT HAVE
THE SAME CURRENCY• D. TRADE OF OIL FOR OTHER NEEDED GOODS
SO CURRENCY IS NOT NEEDED.
WHAT IS A TRADE BARRIERS?
• A TRADE BARRIERS IS ANYTHING THAT RESTRICTS TRADE. TRADE BARRIERS CAN BE PHYSICAL, ECONOMIC, OR POLITICAL.
WHAT IS A PHYSICAL TRADE BARRIER.
• A PHYSICAL TRADE BARRIER IS A TYPE OF LANDFORM THAT MAKES TRADE DIFFICULT.
• MOUNTAINS, DESERTS, RAINFORESTS, ETC.
BESIDES THE PHYSICAL TRADE BARRIERS, WHAT
ARE THE DIFFERENT TYPES OF TRADE BARRIERS?
• TARIFFS
• QUOTAS
• EMBARGOS
WHAT IS A TARIFF?
• A TARIFF IS A TAX ON A GOOD BEING IMPORTED OR EXPORTED
• A PROTECTIVE TARIFF IS A TAX ON A GOOD THAT IS BEING IMPORTED BECAUSE THE GOVERNMENT WANTS TO PROTECT A DOMESTIC INDUSTRY FROM COMPETITION
• EX. TAX ON IMPORTED SUV’S
WHAT IS A QUOTA?
• A QUOTA IS A LIMIT ON THE AMOUNT OR QUANTITY OF GOOD THAT CAN BE IMPORTED OR EXPORTED.
THE UNITED STATES HAS QUOTA APPLIED TO
EXPORTED LUMBER. IF TRADE STARTS UP WITH
CUBA, THERE WILL PROBABLY BE A QUOTA PLACED ON IMPORTED
SUGAR.
WHAT IS AN EMBARGO?
• AN EMBARGO OCCURS WHEN A ORGANIZATION PROHIBITS TRADE WITH A COUNTRY.
• A government prohibition against the shipment of certain products to a particular country for economic or political reasons.
AFTER THE PERSIAN GULF, AGAINST WHAT COUNTRY
DID THE U.N. PLACE AN EMBARGO?
• A. KUWAIT
• B. IRAN
• C. IRAQ
C. EXPLAIN THE PRIMARY FUNCTION OF THE ORGANIZATION OF
PETROLEUM EXPORTING COUNTRIES (OPEC).
EQ – WHAT IS THE ROLE OF OPEC?
WHAT DOES O-P-E-C STAND FOR?
• ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES
WHAT ROLE DOES OPEC PLAY IN THE OIL MARKET?
• OPEC CONTROLS THE PRICE OF OIL BY CONTROLLING THE SUPPLY OF OIL ON THE MARKET
• SUPPLY AND DEMAND
QUIZ
GET PAPER OUT
PUT YOUR NAME AT THE TOP
ECONOMICS QUIZ
NAME ________________
1. ISRAEL PRODUCES ALL OF THE FOLLOWING EXCEPT?
• A. HIGH TECH MANUFACTURING
• B. FINANCIAL SERVICES
• C. AGRICULTURAL PRODUCTS
• D. PETROLEUM PRODUCTS
2. WHO OWNS THE BUSINESSES IN ISRAEL?
• A. ISRAEL HAS SUBSTANTIAL GOVERNMENT OWNERSHIP BUT IS GRADUALLY PRIVATIZING
• B. ALL BUSINESSES ARE OWNED PRIVATELY
3. SAUDI ARABIA IS THE WORLD’S LEADING
PRODUCER OF _____
4. WHAT PERCENTAGE OF THE OIL INDUSTRY IS
OPERATED BY THE SAUDI GOVERNMENT?
• A. 40%
• B. 50%
• C. 75%
• D. 95%
5. TURKEY’S ECONOMY IS MOVING FROM A GOVERNMENT DIRECTED ECONOMY TO MORE PRIVATE ENTERPRISES, THIS
MAKES TURKEY’S ECONOMY A … ECONOMY.
• A. COMMAND
• B. MIXED
• C MARKET
6. THIS OCCURS WHEN A NATION CAN PRODUCE A GOOD
OR SERVICE AT A LOWER OPPORTUNITY COST THAN
ANOTHER NATION.
A. SPECIALIZATION B. TRADE DEFICIT
C. VOLUNTARY TRADE
7. WHEN A COUNTRY HAS MANY DIFFERENT INDUSTRIES, THAT
COUNTRY IS SAID TO BE A. SPECIALIZEDB. DIVERSIFIED
C. INCORPORATED
8. WHEN A COUNTRY LIMITS THE AMOUNT OF A GOOD
THAT IS IMPORTED OR EXPORTED IT IS APPLYING A
A. EMBARGOB. QUOTAC. TARIFF
9. WHEN A COUNTRY APPLY A TAX TO AN IMPORT OR
EXPORT THIS IS CALLED A ..
• A. TRADE EMBARGO
• B. QUOTA
• C. TARIFF
10. FOR THE PAST 60+ YEARS, THE UNITED STATES
GOVERNMENT HAS PROHIBITED TRADE WITH CUBA, THIS IS AN
EXAMPLE OF A/AN ….
• A. TARIFF
• B. EMBARGO
• C. QUOTA
11. AFTER THE PERSIAN GULF WAR THE U.N. PROHIBITED TRADE WITH IRAQ. WHY?
• A. UNTIL IRAQ MET UN REQUIREMENTS
• B. TO INCREASE THE COST OF IRAQ’S PRODUCTS
• C. TO PROTECT IRAQ’S INDUSTRIES
• D. TO CONTROL IRAQ’S ECONOMY AFTER THE WAR
12. HOW DOES OPEC CONTROL THE PRICE OF OIL?
• A. BY CONTROLLING DEMAND
• B. BY CONTROLLING OIL TANKERS
• C. BY CONTROLLING THE SUPPLY OF OIL ON THE MARKET
13. ISRAEL SPECIALIZES IN
• A. MEDICAL TECHNOLOGIES
• B. INDUSTRIAL TECHNOLOGIES
• C. SCIENTIFIC TECHNOLOGIES
• D. AGRICULTURAL TECHNOLOGIES
14. WHAT HAPPENS TO THE PRICE OF GASOLINE WHEN
OPEC DECIDE TO LIMIT (CUT) PRODUCTION
• A. PRICES RISE
• B. PRICES DROP
• C. PRICES STAY THE SAME
• D. OIL STOPS BEING SOLD
15. WHY IS CURRENCY EXCHANGE IMPORTANT?
• A. CONVERTING TO DIFFERENT CURRENCIES MAKES GOODS COST LESS
• B. BANKS ARE NOT ABLE TO HANDLE DIFFERENT KINDS OF CURRENCIES
• C. THIS MAKES IT POSSIBLE TO BUY AND SELL GOODS BETWEEN NATIONS WITH DIFFERENT TYPES OF MONEY
CURRENCY EXCHANGES PROVIDE A PROCEDURE FOR DETERMINING THE VALUE OF ONE COUNTRY’S CURRENCY
IN TERMS OF ANOTHER COUNTRY’S CURRENCY.
WITHOUT CURRENCY EXCHANGE INTERNATIONAL
TRADE WOULD BE DIFFICULT.
WHY IS IT IMPORTANT FOR NATIONS TO HAVE A
SYSTEM TO CONVERT FROM ONE CURRENCY TO
ANOTHER?• THIS PROCESS MAKES IF POSSIBLE TO
BUY AND SELL GOODS BETWEEN NATIONS WITH DIFFERENT TYPES OF MONEY.
AFTER THE PERSIAN GULF WAR, THE UNITED NATIONS IMPOSED AN EMBARGO ON IRAQ. WHAT WOULD BE THE REASON AN
EMBARGO WAS USED BY THE UNITED NATIONS?
• A. TO RESTRICT TRADE WITH IRAQ UNTIL THEY MET UN REQUIREMENTS
• B. TO INCREASE THE COST OF IRAQI PRODUCTS TO HELP IRAQ’S ECONOMY
• C. TO PROTECT IRAQ’S DOMESTIC INDUSTRY SO IT WOULD GROW AFTER THE WAR
• D. TO CONTROL THE IRAQI ECONOMY AFTER THE WAR
OIL IS THE MAJOR EXPORT OF SAUDI ARABIA TO MANY
DIFFERENT COUNTRIES. SAUDI ARABIA’S INTERNATIONAL
TRADE IN OIL IS MADE MUCH EASIER BY
• A. USE IF A WORLD WIDE CURRENCY• B. A SYSTEM TO EXCHANGE CURRENCY
BETWEEN COUNTRIES• C. TRADING ONLY WITH COUNTRIES THAT HAVE
THE SAME CURRENCY• D. TRADE OF OIL FOR OTHER NEEDED GOODS
SO CURRENCY IS NOT NEEDED.
NEW QUIZ STARTS HERE
SS7E7 THE STUDENT WILL DESCRIBE FACTORS THAT
INFLUENCE ECONOMIC GROWTH AND EXAMINE
THEIR PRESENCE OR ABSENCE IN ISRAEL, SAUDI
ARABIA, AND IRAN.
CRCT – 109-110
SS7E7B. EXPLAIN THE RELATIONSHIP BETWEEN INVESTMENT IN CAPITAL
(FACTORIES, MACHINERY, AND TECHNOLOGY AND
GROSS DOMESTIC PRODUCT GDP.
CRCT PREP – 116-117
FACTORIES, MACHINERY, COMPUTERS ETC. ARE
EXAMPLES OF ….
• CAPITAL GOODS
SS7E7A – EXPLAIN THE RELATIONSHIP BETWEEN INVESTMENT IN HUMAN
CAPITAL (EDUCATION AND TRAINING) AND GROSS
DOMESTIC PRODUCT (GDP)
CRCT PREP – 115-116
THE SKILLS AND EDUCATION THAT WORKERS HAVE IS
CALLED ……
• HUMAN CAPITAL
WHAT IS DETERMINED WHEN WE CALCULATE THE TOTAL
VALUE OF GOODS AND SERVICES PRODUCED BY A
COUNTRY IN A SINGLE YEAR?
• GDP – GROSS DOMESTIC PRODUCT
WHEN WE CALCULATE THE TOTAL AMOUNT OF GOODS AND
SERVICES PRODUCED IN A COUNTRY AND DIVIDE THAT
NUMBER BY THE TOTAL POPULATION, WHAT DOES THAT
NUMBER REPRESENT?
• GDP PER CAPITA
ISRAELLIT. RATE 96.9%
REAL ECONOMIC GROWTH RATE IN 2007 WAS 4.8%
REAL ECONOMIC GROWTH RATE IS THE PERCENT THE GDP
INCREASED OVER THE PREVIOUS YEAR.
ISRAEL’S LIT. RATE UP 85% FROM 1980
SAUDI ARABIALITERACY RATE IS 78.8%
REAL ECONOMIC GROWTH RATE IN 2007 WAS 6.1%
SAUDI ARABIA’S LIT. RATE IS UP 48.5% FROM 1980
IRAN LIT. RATE 79%REAL ECONOMIC GROWTH
RATE 2007 WAS 6.2%
IRAN’S LITERACY RATE IS UP FROM 50% IN 1980
SS7E7B. EXPLAIN THE RELATIONSHIP BETWEEN INVESTMENT IN CAPITAL
(FACTORIES, MACHINERY, AND TECHNOLOGY) AND
GDP.
CRCT 116-117
INVESTMENT IN CAPITAL GOODS INCREASES
PRODUCTION AND OPENS EXPORTATION OF GOODS. INVESTMENT IN CAPITAL
GOODS TENDS TO INCREASE GDP.
WHAT IS GDP?
• GROSS DOMESTIC PRODUCT
• GDP is the market value of all final goods and services made within the borders of a nation in a year.
WHAT IS REAL GROWTH RATE GDP?
• economic growth rate - The pace at which economic growth increases during a given interval.
ISRAEL
CAPITAL INVESTMENT-18% OF GDP
REAL GROWTH RATE-4.8%
SAUDI ARABIA
CAPITAL INVESTMENT-19.5% OF GDP
REAL GROWTH RATE 6.1%
IRAN
CAPITAL INVESTMENT – 27.7% GDP
REAL GRWOTH RATE 6.2%
C. EXPLAIN THE ROLE OF OIL IN THESE COUNTRIES.
CRCT 117-119
THE IMPACT OF THE NATURAL RESOURCES OF
OIL INCREASE THE GDP OF A COUNTRY THAT POSSESSES
THAT OIL.
ISRAEL
GDP-$170 BILLION (2008)
OIL – NO SIGNIFICANT RESERVES
SAUDI ARABIA
GDP - $527 BILLION 2008
OIL – LARGEST PRODUCER AND EXPORTER OF OIL IN THE
WORLD. 90% OF GOVERNMENT REVENUES COME FROM THE
OIL INDUSTRY.
IRAN
GDP - $852.6 BILLION 2008
OIL THE ECONOMY RELIES PRIMARILY ON THE OIL
INDUSTRY. 80% OF EXPORTS ARE PETROLEUM AND
PETROLEUM PRODUCTS.
SS7E7D. DESCRIBE THE ROLE OF AN ENTREPRENEUR.
CRCT PREP - 119
EQ – WHAT IS THE IMPORTANCE OF AN
ENTREPRENEUR?
WHAT IS AN ENTREPRENEUR?
• An entrepreneur is a person who has possession of an enterprise, or venture, and assumes significant accountability for the inherent risks and the outcome.
A PERSON THAT IS WILLING TO RISK HIS MONEY, TIME, EFFORT ETC. TO START A
BUSINESS IS CALLED AN …• ENTREPRENEUR – RISK TAKER
• ENTREPRENEURSHIP IS ONE OF THE FOUR FACTORS OF PRODUCTION THE OTHER THREE FACTORS ARE LAND, LABOR, AND CAPITAL
ENTREPRENEURS ARE VITAL TO MAINTAINING AND
DEVELOPING ECONOMIES. (INNOVATIONS, IDEAS, ETC.)
ISRAEL AND ENTREPRENEURSHIP – ISRAEL IS MODERATELY OPEN TO
ENTRPRENEURSHIP. IT IS EASY TO START A BUSINESS, BUT IT TAKES
LONGER THAN THE WORLD AVERAGE. IN ISRAEL, PRIVATE
PROPERTY IS WELL PROTECTED BY LAW. FOREIGN INVESTMENT IS
ENCOURAGED BUT LIMITED IN SOME CIRCUMSTANCES.
SAUDI ARABIA HAS BECOME INCREASINGLY OPEN TO
ENTREPRENEURSHIP. STARTING A BUSINESS IS MADE EASY BY THE
GOVERNMENT, COMPARED TO THE WORLD AVERAGE. PRIVATE
PROPERTY IS PROTECTED VERY WELL. FOREIGN INVESTMENT IS ENCOURAGED ALTHOUGH SOME MUST HAVE SAUDI PARTNERS.
IRAN IS NOT VERY OPEN TO ENTREPRENEURSHIP. IRANS
ECONOMY IS CENTRALIZED AND REGULATIONS MAKE IT DIFFICULT
FOR INDIVIDUALS TO OPEN BUSINESSES. THERE IS LITTLE
PROTECTION OF PRIVATE PROPERTY RIGHTS, AND THE GOVERNMENT ALLOWS VERY LITTLE FOREIGN INVESTMENT.
SAUDI ARABIA’S LITERACY RATE INCREASED FROM APPROX. 48% in 1980 TO OVER 78% IN 2009. WHY IS THIS IMPORTANT FOR THE SAUDI
ARABIAN ECONOMY?• A. IT HAS HELPED INCREASE FOREIGN TRADE• B. IT CAUSED A DECREASE IN FOREIGN DEBT• C. IT HELPED TO INCREASE THE COUTRY’S
GDP• D. IT RESULTED IN FEWER JOBS FOR SAUDI
CITIZENS
IN IRAN THE ECON. IS HIGHLY CENTRALIZED AND REGULATIIONS
HINDER PRIVATE INDIVIDUALS FROM OPERATING BUSINESSES.
SAUDI ARABIA HAS MADE OWNING A BUSINESS EASY. WHAT IS THE
IMPACT OF ENTREPRENEURSHIP?• A. ENTRE. ARE NOT AFFECTED BY GOV. REGULATIONS• B. IT LIMITS THE ROLE OF ENTRE. IN BOTH COUNTRIES• C. ENTRE. WILL HELP IN SAUDI ARABIA BUT NOT IN IRAN• D. BOTH IRAN AND SAUDI ARABIA WILL BENEFIT FROM
THE EFFORTS OF ENTRE.