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Middle Eastern Economies

Middle Eastern Economies. See if you can tell which country or countries our government favors by the way each country is presented. GPS and E.Q.

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Middle Eastern Economies

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  1. Middle Eastern Economies

  2. See if you can tell which country or countries our government favors by the way each country is presented.

  3. GPS and E.Q. • GPS: SS7E5a. Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. • E.Q. How do traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce?

  4. Vocabulary • Tradition – something that has been passed down in a culture from one generation to the next. • Bartering – trading in goods and services • Economic Specialization – producing goods a country can make most efficiently so they can trade them for goods made by others that cannot be produced locally. • tariff: - tax on imports • Quota – limit on number or amount of imported goods • Embargo – government order halting trade with another country • Entrepreneur – someone who is willing to take a risk to start a new business or product

  5. Vocabulary • Human capital – education and training • Capital goods – factories, machinery, and technology • GDP – total value of all goods and services produced in a country in a year • GDP per capita – the GDP divided by a country’s population • Market economy – also called capitalism, free enterprise, and laissez-faire

  6. Vocabulary • Traditional – an economic system in which most economic decisions are based on custom and habit • Command – an economic system in which government planning groups make economic decisions • Market – an economic system in which economic decisions are made by individuals who decide what to produce and what to buy

  7. Economics Review • How many basic types of economic systems are there? • 3 • Name the economic systems: • Traditional, Command, Market • Which system are most countries in the world? • Mixed – not a system, but a blending of command and market.

  8. Traditional • Most economic decisions are based on custom and habit. • Found in rural areas where people depend on their extended families • Work is often subsistence farming, herding animals, or working in simple crafts and trades. • Little money ever changes hands in a traditional society. • Bartering is how people usually pay for goods and services. • No country today has a traditional economy – but some areas of SW Asia still practice it (Bedouin, for example)

  9. CRCT Test Prep page 107 313. In a traditional economy, how are economic decisions made? A. custom and habit B. government planners C. consumers and the market D. combination of consumers and government planners A. Custom and habit

  10. Command • More centralized economy – government planning groups make most basic economic decisions • Which goods & services should be produced • Prices for goods and wages paid to workers • What jobs workers do • How & where goods would be sold • No individuals can start their own businesses • Government owns the places where goods are made

  11. CRCT Test Prep page 107 314. In a command economy, how are economic decisions made? A. custom and habit B. government planners C. consumers and the market D. combination of consumers and government planners D. combination of consumers and government planners

  12. Market • Economic decisions are made by individuals who decide what to produce and what to buy • Also called capitalism, free enterprise, and laissez-faire (French – means “to allow them to do as they please”) • Many SW Asian countries use a market system.

  13. CRCT Test Prep page 108 316. In a market economy, how are economic decisions made? A. farmers B. custom and habit C. government planners D. consumers and the market D. Consumers and the market

  14. CRCT Test Prep page 108 317. Who takes on the financial risk in starting a new business in a market economy? A. consumers B. government planners C. individual business people D. combination of government planners and individual investors C. Individual business people

  15. GPS and E.Q. • GPS: SS7E5b.: Explain how most countries have a mixed economy located on a continuum between pure market and pure command. • E.Q. How do most countries have a mixed economy located on a continuum between pure market and pure command?

  16. Mixed • Blend of command and market economy characteristics • Most SW Asian countries have a mixed economy.

  17. Economic Systems Pure Command Mixed Economy Pure Market

  18. CRCT Test Prep page 108 318. Why are most modern economies referred to as mixed? A. Poverty is always highest in countries with market economies. B. Government planners do not know how to handle economic problems. C. Products made by traditional economies have no markets in the modern world. D. Most countries have aspects of all 3 economic types at work in their economies. D. Most countries have aspects of all 3 economic types at work in their economies.

  19. CRCT Test Prep page 109 319. Why do most countries today operate somewhere between a market economy and a command economy? A. Most consumers want government control of the economy. B. Government control makes a market economy more profitable. C. Government control of some aspects of the economy has never been successful in the modern world. D. Most economies have found they need a mix of free market and some government control to be successful and protect consumers. D. Most economies have found they need a mix of free market and some government control to be successful and protect consumers.

  20. GPS and E.Q. • GPS: SS7E5c.: Compare and contrast the economic systems in Israel, Saudi Arabia, and Turkey. • E.Q. How do the economic systems in Israel, Saudi Arabia, and Turkey compare?

  21. Israel • Small desert country along Mediterranean Sea • Lacks farmland and natural resources, so… • Economy is based on advanced technology

  22. Israel (1) What to produce? A large portion of Israel’s GDP comes from high tech manufacturing, financial services, and agriculture.

  23. (2) How to produce? Israel has a lot of government ownership of business, but is gradually allowing individuals to own companies.

  24. (3) For whom to produce? Israel’s private sector produces goods and services for domestic and international markets based on the market price system.

  25. Israel 67% Economic Systems U.S. 76% Place on the continuum: Israel would fall in the middle of the market side on the continuum. 0 100 Pure Market Pure Command

  26. Turkey • Northwestern part of the Middle East • Between Asia and Europe – has been a center of trade for 1000s of years • Has less economic freedom than Israel – government controls telephone and TV industries

  27. Turkey (1) What to produce? Turkey has an economy with many large service, manufacturing, and agricultural sectors.

  28. (2) How to produce? Since the late 1980s, Turkey has gradually moved from a government directed economy to more private enterprise.

  29. (3) For whom to produce? 1/5 of Turkey’s production is exported. The remainder is consumed by domestic consumers and the government.

  30. Economic Systems Turkey 63% Place on the continuum: Turkey would fall to the left of Israel on the market side of the continuum. 0 100 Pure Market Pure Command

  31. Saudi Arabia • Large desert country • Rich oil reserves allow Saudis to buy most of the goods they cannot produce themselves.

  32. Saudi Arabia (1) What to produce? Saudi Arabia is the world’s leading producer of oil. The Saudi government continues to invest in industrial production. It is a leader in petrochemicals, mining, and refining.

  33. (2) How to produce? • Over 95% of the oil industry in the country is operated by the government (the king). Most major industries are operated by the government. • 1/3 of Saudi Arabia’s workers come from other countries. • The government has used oil profits to invest intechnology development and services for the people.

  34. 3) For whom to produce? • 1/3 of Saudi Arabia’s GDP is based on exports to other countries (This is due to the economy’s reliance on the oil sector).

  35. Economic Systems Saudi Arabia 61% Place on the continuum: Saudi Arabia would fall to the left of Turkey on the continuum. 0 100 Pure Market Pure Command

  36. Economic Systems Turkey 63% 0 100 Pure Command http://www.heritage.org/index/ranking Mixed Economy Pure Market Saudi Arabia 61% Israel 67%

  37. CRCT Test Prep page 109 320. The economies of Israel, Saudi Arabia, Turkey, and Iran could best be described as A. Mixed B. Market C. Command D. Traditional A. Mixed

  38. CRCT Test Prep page 110 321. How have the Israelis made up for their lack of natural resources? A. They have put everyone to work and have no unemployment. B. They have relied primarily on farming to keep their country strong. C. They have developed strong technology companies in their economy. D. Israelis have refused to import oil, saving huge amounts of money each year. C. They have developed strong technology companies in their economy.

  39. CRCT Test Prep page 110 322. Which industry does the government of Saudi Arabia heavily control? A. oil B. agriculture C. technology D. textile manufacturing A. oil

  40. CRCT Test Prep page 110 323. How has the Saudi king used the profits from oil to help other areas in his kingdom? A. Money is distributed directly to all Saudi citizens. B. The king has ended unemployment in Saudi Arabia. C. Oil profits have paid for modern technology and services. D. The king has let the Saudi people decide how to invest oil profits. C. Oil profits have paid for modern technology and services.

  41. Specialization and Trade GPS: SS7E6a.: Explain how specialization encourages trade between countries. E.Q. : How does specialization encourage trade between countries?

  42. Specialization“Do what you do best; trade for the rest!” • Countries specialize in producing the goods and services they can make most efficiently so they can trade them for goods made by others that cannot be produced locally.

  43. Specialization • In SW Asia, some countries are very rich in oil and natural gas. • They do not have farmland; it is hard to produce enough food.

  44. Saudi Arabia Specializes in production of oil and gas and sells these products at great profit on the world market. They use the money to buy food and technology that will make their little bit of farming more efficient. Israel Does not have oil wealth They have become leaders in agricultural technology – even though (or because) they have a limited supply of arable land. They sell the technology to earn money to supplement the food they produce. Specialization

  45. CRCT Test Prep page 111 324. What is “economic specialization”? A. directly swapping goods from one country to another without having to use money B. trying to avoid investing in industry and technology because of the expense involved C. producing all goods and services needed for a country’s growth, so that trade with other countries is not needed D. producing goods a country can make most efficiently so they can trade them for goods made by others that cannot be produced locally. D. producing goods a country can make most efficiently so they can trade them for goods made by others that cannot be produced locally.

  46. CR T Test Prep page 111 325. Saudi Arabia specializes in the production of A. oil and gas. B. oil and sugar. C. olives and oranges. D. beef and chicken. A. Oil and gas

  47. CR T Test Prep page 111 326. Israel specializes in A. medical technologies. B. industrial technologies. C. scientific technologies. D. agricultural technologies. D. agricultural technologies.

  48. Trade Barriers GPS : SS7E6b.: Compare and contrast different types of trade barriers such as tariffs, quotas, and embargos.

  49. E.Q. • How do barriers limit trade?

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