Transcript Economic Systems of Nigeria and South Africa

UNIT 2C: AFRICA’S
ECONOMICS
Study Guide Review
SS7E1
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Compare how traditional, command, and market
economies answer the basic economic questions:
WHAT TO PRODUCE, HOW TO PRODUCE, & FOR
WHOM TO PRODUCE.
WE HAVE HAD THIS STANDARD ALREADY…IT IS
REVIEW!!!!
Number 1: The Chart
Traditional
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Decisions made from
customs and traditions
Goods are usually
produced for personal use
Subsistence Farmers
BARTERING & TRADING IS
THE STANDARD PRACTICE
Command
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EVERYTHING is planned
by the government
NO PRIVATE BUSINESS
NO ENTREPRENEURS
Number 1: The Chart
Market
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The “market” makes the
decisions
Buyers are the market
Sellers are the market
Entrepreneurs are the
market
Individuals experience
profits and losses
#2: Why are most countries MIXED?
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All countries have some amount of
government control.
All countries have some amount of
private ownership
#3: What is an ECONOMIC CONTINUUM?
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A scale that SHOWS where a country’s
economic system lies between PURE MARKET &
PURE COMMAND
#4: Compare & Contrast the economic
systems of Nigeria & South Africa.
South Africa
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Some government control
Strong economy
Goods: platinum, diamonds,
gold
Exports: gold, diamonds,
minerals
GDP/capita: $10,700
Unemployment: 23.4%
Economic Freedom Index: 70MODERATELY FREE
Nigeria
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Poorly organized
Some private ownership
Goods: Oil & Petrochemicals
Exports- Oil & Petrochemicals
GDP/capita:$2,400
Unemployment: 21%
Economic Freedom Index:
116- MOSTLY UNFREE
#5. What type of economic system do
both countries have?
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Mixed
#6. What is S. Africa’s main economic
problem?
 Unemployment- almost ¼ of the
population is not working
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#7. Where are they on the continuum?
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Another continuum
#7. Why put them there?
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South Africa- has more private ownership
and less government control
Nigeria- just beginning to allow private
ownership
 Problems with government corruption- Oil
industry
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SS7E2: TRADE
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#8. 3 TYPES OF TRADE BARRIERS: TARIFF, QUOTA, &
EMBARGO
#9. How are they different? They all limit trade but in
different ways
#10. Importance of specialization in international tradeNO country is COMPLETELY self-sufficient; they can’t
produce ALL goods and services they need so they have
to TRADE with each other
SS7E2: TRADE
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#11. Voluntary Trade- It promotes SPECIALIZATION
which usually leads to better production and more
profits; this increases the GDP
#12. Tariffs helping the economy- Tariffs discourage
people/businesses from buying imported goods b/c
the prices will be higher from tariffs. Tariffs, therefore,
encourage buying domestic goods for lower prices
SS7E2: TRADE
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#13. Embargoes against South Africa- The United
Nation’s members STOPPED trade with South Africa
until they ENDED APARTHEID.
SS7E2b
#14. CURRENCY- is money
#15. EXCHANGING CURRENCIES- is needed to make
sure that the money has a dependable value and the
trade is fair
SS7E3a Human Capital
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#16. Investing in HUMAN CAPITAL- by training and
educating the workers
#17. Effects of investing in human capital on GDP- the
more countries invest in training and skills of workers,
the higher the profits; the higher the profits, the more
valuable to goods and services; this INCREASES the
GDP.
#18. South Africa invests in HUMAN CAPITAL- by
making sure the mine and electronics workers are well
trained.
SS7E3a
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#19. Why SHOULD Nigeria have a strong
economy? b/c they have a lot of oil and a system
of education so the GDP/capita should be higher
#20. Not investing in Human Capital- if workers
are unskilled they will not make a good income
and will not spend money on buying goods and
services~ which puts money into the economy
SS7E3b: Capital Goods
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#21. South Africa’s investment in capital goodsspending money on new technology and equipment for
mining and the auto industry
#22. Nigeria’s investment in capital goods- they have
spent SO MUCH money for new technology for oil
production that they have not spent $ on agriculture.
70% of the people work in agriculture and live on less
than $1/day
Capital Goods
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#23. Importance of investing in capital goods- good
technology increases production; more production
increases profits; higher profits increase the GDP
#24. Nigeria’s investment in capital goods- has left
no $ for MOST of the people; poor food supply and
housing
SS7E3c
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#25. Uses of Uranium- nuclear weapons, nuclear
energy, photographic chemicals
#26. The World’s Uranium Supply- 20% is in Africa
#27. Negative Effects of Nigeria’s economic
development- Oil has not strengthened the economy
#28. Why?- most of Nigeria’s money goes into the oil
industry. 80% of the people are not in the oil business
Africa’s Resources
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#29. Africa’s most valuable resources- Diamonds
and gold
#30. Why haven’t S. Africa’s diamonds been ‘bad’?
Strict regulation of the diamond business- no ‘blood
diamonds’ from S. Africa
#31. Effects of Conflict Diamonds- Conflict diamonds
are sold illegally to provide weapons for rebel
groups / conflicts/ wars; supports chaos and killing
RESOURCES
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#32. South Africa’s gold- 40% of the world’s gold
is found there
#33. Effects of S. Africa’s gold- They have been
able to use the $ to provide some resources for
people but not enough for AIDS/HIV
#34. Entrepreneurs- takes financial risks to have
new business; THEY reap profits & losses of the
risks
#35. Influence of entrepreneurs influence economic
growth- they create new jobs which increases the
GDP, unless the business fails