Economic Systems
In this type of economy, the government answers all three economic questions.
Command economy
Of the UK, Germany, and Russia, which economy is the most command-leaning?
Russia
A tax on imported goods.
Tariff
The common currency used by many European Union countries.
The Euro
The total value of all goods and services a country produces in one year.
GDP (gross domestic product)
Name the three basic economic questions every country must answer.
What to produce? How to produce it? For whom to produce it?
The United Kingdom's mixed economy leans toward which end of the continuum?
Market
A limit on how much of a good can be imported.
Quota
The EU removed these taxes between member countries so goods can move freely.
Tariffs
The knowledge and skills workers get through education and training.
Human capital
A group herds animals, moves with the seasons, and barters, just like their ancestors did. What type of economy is this?
Traditional economy
Put the UK, Germany, and Russia in order from MOST market-leaning to MOST command-leaning.
United Kingdom, Germany, Russia
A complete ban on trade with a country.
Embargo
Name one way a common currency like the euro helps people or businesses.
Any one: easier travel, workers can move for jobs, businesses don't pay to exchange money, shoppers can compare prices.
A factory's machine broke six times in three months. Should the owner invest in human capital or capital goods?
Capital goods
In a market economy, decisions are based on these two forces
Supply and demand
Germany encourages this MORE than Russia: people taking risks to start new businesses.
Entrepreneurship
When a country focuses on making what it makes best, then trades for the rest.
Specialization
Swapping one country's money for another country's money is called this.
Currency exchange
Russia's top exports are oil, natural gas, metals, and wood. What does Russia's economy rely heavily on?
Natural resources
Why are almost all countries today called mixed economies?
They combine market and command parts: people and businesses make choices, but the government also owns some industries or sets rules.
France makes it easy to start a business, but the government owns large shares of many companies. What type of economy does France have?
Mixed economy
Germany specializes in automobiles. What does that tell you about how Germany makes cars?
Germany can produce cars more efficiently than many other countries.
True or false: The EU promotes trade by banning trade with non-European countries. Explain.
False. A ban is an embargo, which blocks trade. The EU promotes trade by removing tariffs between members and creating the euro.
Why is the UK's 99% literacy rate good for its economy?
Educated workers are more efficient, so the workforce is more productive and GDP grows.