Economic Systems (SS6E1)
Which type of economy is based on customs, traditions, and beliefs?
Traditional Economy
What is a tariff?
A tax on imports
What are capital goods?
Factories, machines, and technology used to make products
What is a quota?
A limit on how much of a product can be imported
Which country has the most government control over its economy?
Cuba
In a command economy, who decides what to produce, how to produce it, and for whom?
The government
What is an embargo?
➡️ A ban on trade with another country
What is entrepreneurship and why is it important?
It’s starting new businesses and creating jobs; it drives economic growth
What does a currency exchange allow countries to do?
➡️ Trade using their own types of money
Which country is part of the USMCA and has a mixed economy?
Mexico
How are decisions made in a market economy?
By individuals and businesses based on supply and demand
Why is voluntary trade beneficial to both buyers and sellers?
Both sides get something they want
How do natural resources affect a country's economy?
Countries can use them to produce goods and trade
Which type of trade barrier adds extra cost to imported goods?
Tariff
Which country has rich natural resources and is known for coffee exports?
Brazil
Where do most countries fall on the economic system continuum?
➡️ In the middle — they have mixed economies
What is specialization and why does it help countries?
Focusing on producing certain goods makes trade easier and more efficient
How does investing in education (human capital) help the economy?
Increases GDP per capita by creating a skilled workforce
Why might a country put an embargo on another country?
To punish them economically.
Which country has struggled the most with low standard of living and low GDP?
Cuba
Compare the economies of Mexico, Cuba, and Brazil in terms of economic system.
➡️ Cuba = command economy
Mexico and Brazil = mixed market economies leaning more toward market
Why do countries need a system for exchanging currencies?
➡️ So they can buy and sell goods using their own money systems
How does a higher literacy rate affect a country's standard of living?
Increases it — people can get better jobs
How do tariffs and quotas affect trade?
They reduce or slow down trade
Which two countries have invested more in capital goods and human capital?
Mexico and Brazil