Amos- Economics
Chapter 19
THE AMERICAN ECONOMY

BELL RINGER

You are a contractor building a house. Using the 4 factors of production, outline the building of this house. Use necessary factors of production to create this house.

BELL RINGER

Page 526 #1-2

GROSS DOMESTIC PRODUCT (GDP)

Total value of all final goods and services produced in a country

GROSS DOMESTIC PRODUCT

GDP used to measure standard of living

Per Capita GDP= Output per person in a country

GDP measures quantity not quality

ECONOMICS SECTORS/ CIRCULAR FLOW

Market economics flow in a circular model

Market economics are divided into sectors:
1.
2.
3.
4.
A.
Consumer Sector- Income Earned
Factor Markets- Productive Resources are bought and sold
A.
Business Sector- Income Spent
Product Markets- Goods and services are sold
Government Sector- Expenditures and Revenue
Foreign Sector- less the 4% of GDP

CIRCULAR FLOW CHART

Independent Practice: Complete the circular flow chart given to you by the teacher.

ECONOMIC GROWTH




Productivity- Amount of output produced by input over a given period
Specialization- Produce goods better than someone else
Division of Labor-
Breaking down jobs
Human Capital- People’s skills, abilities, and motivation

Economic
Interdependence-
Relationship between producers and consumers to fulfill needs and wants

GIVE ADAM SMITH A HAND

Economist

Wrote: The Wealth of
Nations

Laissez- faire
Economics“To be left alone”

Invisible hand theory with limited government interference

WHAT MAKES CAPITALISM WORK?

Markets

Economic Freedom

Private Property Rights

Competition

The Profit Motive

Voluntary Exchange

Create a six fingered hand to include:

Adam Smith’s Bio in the palm

Six factors that make capitalism work along the fingers

Page 531

JOHN MAYNARD KEYNES
Keynesian Theory

More government influence in market economies

Tools: Taxes, Deficits, and Spending

Revamped previous knowledge on free market economies

Communism
• Wrote: Communist
Manifesto
• Became the ruling economic system in
Russia after WWI

• The Communists do not form a separate party opposed to other working-class parties. They have no interests separate and apart from those of the proletariat as a whole. They do not set up any special principles of their own, by which to shape and mould the proletarian movement. The Communists are distinguished from the other working-class parties by this only: 1. In the national struggles of the proletarians of the different countries, they point out and bring to the front the common interests of the entire proletariat, independently of all nationality. 2. In the various stages of development which the struggle of the working class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.

• Command, Market, Mixed- Chapter 26-2
• Traditional- page 724