Name: Marketing: Chapter 3 – Political and Economic Analysis Date: Economy - the __________ way a nation provides for its people Economic Resources - all things used in producing goods and services (economists call this __________ of Production) Land - includes everything contained in the ______ or sea (coal, trees, fish, wheat) Labor - refers to all ______ who work Capital - includes all money, _________, computers and tools needed in a business ___________________ - skills of people who are willing to invest their time and money to run a business traditional economy - An economic system in which habits, ___________, and rituals answer the basic questions of what, how, and for whom. What? How? Whom? command economy - A system in which a country’s ______________ makes all economic decisions regarding what, how, and for whom. What? How? Whom? market economy - An economic system in which there is ___ government involvement in economic decisions. What? How? Whom? Mixed Economy every economy has influences that make it at least somewhat ________ the United States has primarily a __________economy, but what are some examples of command and traditional economies? Political and Economic Philosophies Capitalism: Characteristics: Examples: Communism: Characteristics: Examples: Socialism: Characteristics: Examples: Economies in Transition Privatization - process of governments _______ government-owned businesses to private individuals or business (_________, Great Britain, Russia - Mikhail Prokhorov) Nationalization - the government __________ a privately-held company (______, Venezuela) Goals for a Healthy Economy: Increased ____________; Decrease Unemployment; Maintain Stable _________ Economic Measurements: Productivity - output ______________ hour that measure over a period of time How can businesses increase its productivity? (Invest in new _____________; training; financial incentives - FED EX) Gross domestic product (_____) - output of goods and services produced by labor and property located within a country Gross national product (_____) - total dollar value of goods and services produced by a nation, including goods an services produced _________by U.S. citizens and companies If you buy a Toyota Sienna manufactured in Gibson Co., would it be included in GNP?_______ If you buy a Nike shoe manufacturer in Vietnam, would it be included in GNP? _______ Standard of Living - ____________________of the amount and quality of goods and services that a nation's people have GDP / Population High levels of __________________ (education) and durable goods (washing machine) mean that a country has a high standard of living Inflation Rate - refers to ______prices A low inflation rate (______%) is good because it shows the economy is stable When inflation is high - money ______value Consumer Price Index (CPI) - measures the changes in price over a period of time of ____ specific retail goods and services used by average ________________ Producer Price Index (PPI) - measures _____________ price levels in the economy Unemployment Rate - jobless rate the lower the unemployment rate, the greater the chances are of an economic _____________ Business cycle - ___________ changes in economic activity. Expansion - A time when the economy is _____________. Recession - A period of economic ______________that lasts for at least two quarters, or six months. Recovery - The term that signifies a period of renewed economic _________ following a recession or depression ___________ - A period of prolonged recession. How do the following influence the business cycle? Business: Consumers: Government: How can business, consumers, and government affect the business cycle?