Reviewing Key Terms

___ 1. an economy in which the government makes most of the economic decisions

___ 2. an economy in which consumers make most of the economic decisions

___ 3. the resources that an economic system needs to produce goods and services

___ 4. nations with little or no industry

___ 5. nations recently having significant or rapid industrial growth

C

I

A

F

B

Match the following terms with the descriptions below.

A. factors of production F. developing nationsB. newly developed nations G. trading blocC. command economy H. tariffsD. gross national product I. market economyE. comparative advantage J. quotas

Reviewing Key Terms

___ 6. the sum of a nation’s goods and services

___ 7. principle that each country should produce the goods it can make efficiently and trade for other goods

___ 8. taxes placed on imports to increase their price in the domestic market

___ 9. limits on the quantities of a product that may be imported

___ 10. a group of nations that trade without economic barriers

D

E

H

J

G

Match the following terms with the descriptions below.

A. factors of production F. developing nationsB. newly developed nations G. trading blocC. command economy H. tariffsD. gross national product I. market economyE. comparative advantage J. quotas

1. What are the four factors of production?

Recalling Facts

The four factors of production are land, labor, capital, and entrepreneurs.

2. What is the role of competition in the free enterprise system?

Competition is an essential ingredient for a free enterprise system. It helps ensure that the consumer will get products of good quality at low prices.

3. Where are most newly developed nations located?

Recalling Facts

Most newly developed nations are located in Eastern Europe, the Middle East, Asia, and South America.

4. How has China’s growing economy impacted the United States?

Trade with China is opening new American markets; U.S. investment in China is increasing; changes provide new sources of income for some American workers and professionals; some American industries are harmed because they cannot compete with low Chinese labor costs; China’s future relationship with the U.S. is uncertain.

5. What are the causes of a lack of national unity in some developing nations?

Recalling Facts

When colonial rulers left, fears and hatreds based on ethnic, regional, religious, racial, and language ties surfaced.

1. Free Enterprise How did Soviet agricultural policy differ from the policy practiced in the United States?

Understanding Concepts

Crops were sold at uncontrolled prices; team workers’ pay was based on how hard the workers worked and how much they produced.

2. Global Perspectives What are the differences between the traditional and the new economic goals to promote development in developing nations?

Understanding Concepts

Goals have shifted from increasing the GNP to improving people’s lives.

1. Making Comparisons Use a graphic organizer like the one below to compare land ownership in a capitalist system with that in a planned economy.

Critical Thinking

Capitalist system—land is privately owned with some government ownership to provide public services; Planned economy—all land is owned by the government

2. Drawing Conclusions Why might industrialized nations such as the United States exercise influence on developing nations to develop free market economies and democracy?

Critical Thinking

Answers will vary but may include that new free market, democratic nations might become good trading partners and provide markets for products.

1. What comparison is the cartoonist making?

Interpreting Political Cartoons Activity

Tensions between legislative and executive branches of government are apparent in both Russia and the United States.

2. Do you think the comparison is a valid one? Why or why not?

Interpreting Political Cartoons Activity

Answers will vary. However, the United States has balanced these powers during a long period of stable government.

3. This cartoon was published in 1993. Are the issues it raises still applicable today? Explain.

Interpreting Political Cartoons Activity

The issues it raises may always be applicable because as long as different branches of government exist, there will always be a struggle for power between them, especially if different groups control the two institutions.

4. How do you think the economic situation in a country affects its political climate?

Interpreting Political Cartoons Activity

The economic situation in a country may affect how citizens perceive the effectiveness of their government.

What is the formal name of the World Bank, and under whose authority does it operate? A United Nations agency, it is known formally as the International Bank for Reconstruction and Development.