-- 4 types of Economics
Command- government make all economics decisions. People have NO say.
ex. North Korea - leader decides prices what jobs people get what produce.
Market- people make all decisions without any government interference.
ex. Luxembourg/supply & demand control all decisions.
Capitalism- Do anything for a profit.
Mixed- mix of command & market. Where people make decision with government.
ex. USA you can start any business you want but government will regulate it.
Free - Inter-praise
Traditional- follow old customs & have no new technology.
ex. tribes,amish
-- Economic Basics
What is Economics ?
How we make decisions ?
What is scarcity ?
Not enough resource to make all the things we want.
Wants - the extra things that we would like to have but are not needed for survival.
Needs - The things we need to survive
Macro economics - Larger - all - country/world/big companies - cars
Micro economics - Small level - one company - chevy, Individual
What to produce ?
Fill a scarcity/ a product
How to produce ?
Skilled workers/ Unskilled workers
Quality V.S. Quantity
-- Import & Export
import - we buy from another country
export - we sell to other countries
Interdependence - all rely on each other
Trade Agreements
Goal - gain good/ products — selling our products to another/ foreign market - exports
Trade deficit - imports out number the exports (we lose money)
Trade surplus - exports out number imports we buy ( we gain money )
Balance of trade - we buy the same number of imports as the amount of exports we sold( we broke over )
1. You don't want to lose money
2. Maintain a good relationship with other countries
Trade Sanction — Turriff — tax in imports
Quota - only a certain amount can be sold here( cut off trade )
Trade embargo - other countries help cut off the target country
WorldTradeOrganization
WTO - watches trade agreement between 1st world & 3rd world sure it is a good trade
European - Organizes all the indecent european nations
Exchange Rate - give money a weight & tells people how much their money is worth.
N.A.F.T.A. - NorthAmericanFreeTradeAgreement
Lost of American Manufacturing(factory) jobs
gain - cheap products
Consumer sovereignty - conserver is the king — determine what gets produced & price
Competition - keep price in check — the best product for the best price.