Transcript ASIA

ECONOMIC UNDERSTANDINGS
Four Basic Economic Systems
(India, China, Japan, North & South Korea)
STANDARD: SS7E8a.b
Standard: SS7E8 – The student will analyze
different economic systems.
a. Compare how Traditional,
Command, and Market economies answer
the three economic questions of (1) What
to produce, (2) How to produce, and (3)
for Whom to produce.
Agenda Message: After-school tutoring is today 4:00-5p. Deadline to
turn in late/missing assignments is next Thursday March 12th. CDAIV is Friday.
Standard: Analyze different economic systems by comparing how
Traditional, Command, and Market economies answer the three
basic economic questions.
Essential Question for Wednesday, March 4th; North Korea’s command
economy uses collective farms where over 300 families work
together, what has been the effect?
Warm-Up: Who takes the financial risk in starting a new business in a
market economy?
Today We Will:
1.
North Korea’s economy
2.
Entrepreneurship
E.Q. Answer for Tuesday March 4th:
Widespread starvation
Warm-Up Answer:
Individual business people known as
“entrepreneurs”.
Agenda Message: CDA-IV is TOMORROW! Deadline to turn
missing assignments or re-do failed assignments/quizzes is
next Thursday March 12th.
Standard: Analyze different economic systems by comparing
how Traditional, Command, and Market economies answer
the three basic economic questions.
Essential Question for Thursday, March 5th; What is the
source of nearly all of Japan’s GDP?
Warm-Up: Why do most countries in the world operate a
mixed-market economy?
Today We Will:
1. Japan’s economy
2. CDA Review
E.Q. Answer for Thursday March 5th:
Manufacturing industry & Service
Warm-Up:
Individual investors
Review
Every society must deal with providing goods and
services for its people.
Each society must also develop an economic
system that can decide how to use the limited
resources at its disposal in order to provide
goods and services for its people.
Three basic “Economic” questions must be
answered by all economies:
1. What goods and services will be produced?
2. How will goods and services be produced?
3. Who uses the goods and services that are
produced?
TRADITIONAL ECONOMY
In a Traditional Economy, most of the economic
decisions are made based on custom and habit, or
how such decisions were made in the past.
Goods and services are exchanged instead of using
money as a payment in a traditional economy. This
is also known as bartering.
“No country today can be described as having a
traditional economy.”
COMMAND ECONOMY
A Command Economy is one in which government
planning groups make “all” of the 3-basic economic
decisions for the workers.
“Command economies are associated with Communist
governments.”
The best example of a command economy in Southern
and Eastern Asia is North Korea.
In North Korea the communist government owns
nearly all the important industries, factories,
and businesses.
China is Changing
Communist China was set up along a command
economic system in the 1950’s after the
communist revolution, however since Deng
Xiaoping became Premier the country has
changed to become a Mixed Market economy.
MARKET ECONOMY
The next basic type of economic system is a
Market Economy. In a market economy,
economic decisions are made by individuals (the
consumers) who decide what to produce and
what to buy.
Other names for a market economy are capitalism,
free enterprise, or laissez-faire.
Entrepreneurs
In a market economy, individuals who want to start
a business may do so. They take economic risk
as they invest in their new business.
If the new businesses are successful, the people
who organized and funded it will be a success
and make a profit. If the businesses fail, the
investors will lose money.
Japan and South Korea have a market economy.
Standard: SS7E8 – The student will analyze
different economic systems.
b. Explain how most countries have a mixed
economy located on a continuum between
“pure” market and “pure” command.
A MIXED ECONOMY
Nearly all countries today have mixed economies.
In other words, they have characteristics of a
free market and free enterprise as well as some
government planning and control.
Most countries have found they need a mix of free
market and some government control to be
successful and protect consumers.
Economic Variety
There are a variety of economic systems in Asia.
Examples include China, North Korea, Japan, and
India.
China
China calls it’s economy a “socialist market
economy.” Basically, China is changing from a
command economy completely controlled by the
Chinese Communist government to a mixed
market economy overseen by the Chinese
government.
To improve its economic growth, China’s
government mixed in components of a market
economy during the last 25 years starting with
Premier Deng Xiaoping’s leadership.
Those reforms have led to excellent growth in the
Chinese economy.
China is gradually reducing government control and
allowing more foreign investment. Economist
predict that China may lead the world in economic
strength (GDP) within the next 20 years!
North Korea
North Korea has a command economy controlled
by its Communist government. Government
planning groups control all the resources and
decide what will be produced and how.
Farmers work on cooperatives where up to 300
families share the work.
Unfortunately, the North Korean economy has
serious problems and the government is making
some reforms and relaxing some of its controls.
Due to it’s poor performing economy, massive food
aid from other countries have been needed to
avoid widespread starvation in North Korea.
Japan
Japan has a mixed market economy which is one of
the strongest economies in the world! With few
natural resources and little farmland, Japan has
built its economic success around industry and
services.
Japan imports raw materials, uses them to
manufacture goods like ships, cars, and
electronics, and exports those goods around the
world.
The Japanese government owns few businesses
other than the country’s major TV network, but
does oversee many aspects of the economy like
banking and trade.
India
India has a mixed economy that is moving away
from a command system.
After independence in 1947, India’s government
set up a command economy where it controlled
industries and production.
In 1991, India began to lift some government
control and allow citizens more of a role in
running some of India’s industries.
Although these reforms have been good for India’s
economy, millions of India’s people still live in
extreme poverty.