Systems
In a traditional economy, who answers the three economic questions?
Traditions and customs
What is the major specialization in Saudi Arabia?
Oil
True or False: All OPEC member countries are located in the Middle East.
False - there are countries in Africa and South America
Raw materials a country has available that support life and the production of goods and services.
Natural Resources
Despite its autocratic government, this Middle Eastern Country has a market-leaning economy.
Saudi Arabia
How are economic questions answered in a pure command economy?
The government makes all the decisions
If a country cannot grow cotton, but they produce a lot of corn. How can this country meet the needs for cotton?
Specializing in corn and trading that for cotton or buying the cotton from a country that produces it.
What is the purpose of OPEC?
To regulate oil supply and prices amongst member countries
Something we use in the economy to buy and sell goods. We have an international exchange system since it is different based on where you live.
Currency
Turkey has a higher literacy rate than Iraq. Because of this Iraq has a lower ________________.
GDP or standard of living
In a market economy, what answers the economic questions?
When would it be unwise to specialize in a product?
If it can't be produced efficiently.
Why would a country use an embargo?
To ban trade with a country because we do not agree with their political activities
Factories, machines, and technology used to produce more goods and services.
Capital Goods
Israel has few mineral resources and agriculture is difficult due to a lack of water. How can Israel maintain its standard of living?
Specializing in technology and diamonds to trade for what they need.
Paula lives in a small village in the rain forest. Her people do not use money; instead, they trade materials and goods for things they want or need. What is this called?
Bartering
What is the primary specialization in Israel?
Diamonds or technology
Country A feels that the sale of domestic vehicles has fallen and the companies are suffering. What is one way Country A can influence consumers to buy domestic cars?
Using a tariff on imports or a quota on imports so they are more expensive
Value of all goods and services a country produces in a year
Gross Domestic Product (GDP)
Why is Saudi Arabia's economy at risk despite its heavy production of oil?
Oil is nonrenewable and eventually will run out. Oil dominates the economy.
Why are most economic systems in the world mixed?
Because some government intervention is best, but it has to be balanced with supply and demand to meet all the needs.
How does specialization influence international trade?
Helps to create more productive trading relationships and increase the availability of products
What will happen to the supply and price of oil if an OPEC member country goes to war?
The supply will fall and price will go up.
Creative, original thinkers who take risks to create businesses and new products.
Entrepreneurs
How does Saudi Arabia's government influence entrepreneurs?
Government influence creates more barriers to new small businesses.