Economic Systems
What are the three basic economic questions every economy must answer?
What to produce, how to produce, and for whom to produce.
What is an Import?
Products coming into a country.
What is a tariff?
A tax imposed on imported goods.
How do literacy rates affect the standard of living?
Higher literacy rates lead to better job opportunities and higher incomes.
In a command economy, who decides what to produce?
The government.
What are exports?
Products leaving a country.
What is a quota?
A limit on the amount of a specific product that can be imported.
How do capital goods impact economic growth?
Investment in factories and technology increases production efficiency and output.
How does a traditional economy answer the question "what to produce"?
Based on customs and traditions.
What is voluntary trade?
Trade that occurs when both parties agree to exchange goods or services.
What is an embargo?
A government order that restricts trade with a specific country.
What role do natural resources play in an economy?
They can provide the raw materials needed for production and export.
Describe a mixed economy.
An economy that combines elements of both market and command systems.
How does specialization encourage trade?
It allows countries to focus on producing goods they can create most efficiently, leading to more trade.
Compare tariffs and quotas.
Tariffs increase the price of imports; quotas limit the quantity of imports.
How does entrepreneurship contribute to economic growth?
Entrepreneurs create jobs, innovate, and drive competition, boosting the economy.
Compare the economic systems of Mexico, Cuba, and Brazil.
Mexico: mainly market with some command.
Brazil: some market and some command.
Cuba: Mostly command with some market.
Give an example of how trade benefits Latin America.
Increased exports can lead to economic growth and job creation.
What impact do trade barriers generally have on consumers?
They can lead to higher prices and fewer choices.
What are the four factors of production?
Natural Resources
Capital Goods
Human Capital
Entrepreneurship