Unit 6 Latin American Economy Study Guide
What are three economic questions that are asked when studying the similarities of traditional, command, and market economies?
What to produce, how to produce, and for whom to produce.
Who makes the decisions of what to produce, how to produce, and for whom to produce in a market economy?
Individuals.
What makes the decisions of what to produce, how to produce, and for whom to produce in a command economy?
The government.
What makes the decisions of what to produce, how to produce, and for whom to produce in a traditional economic system?
Tradition.
What types of governments would a command economic system be associated with?
Autocratic and oligarchic governments.
What government would a market economy be associated with?
Democracy.
Define the market economic system.
Companies produce goods of their choice and consumers decide whether to buy the goods.
In what economic system would the people not the government own land, factories, and businesses?
Market.
How would a person do business in a traditional economic system?
Barter with a seller.
What would be found in a market economy that would not be found in a command economic system?
Competition.
What economic system would have one authority decide what is produced?
Command.
What trade barrier discourages trade by placing a tax on foreign goods?
Tariff.
What trade barrier limits the amount of a product that can be imported ?
Quota.
What trade barrier is a ban or restriction of trade?
Embargo.
What would a country’s parliament be doing by increasing a tariff upon goods from another country?
A representative democracy restricting trade.
What is the purpose of a protective tariff?
Increase the prices of imported goods and protect a country’s own industries from foreign competition.
What pattern of behavior is NAFTA an example of among or between countries?
Forming trade agreements.
What way has NAFTA affected Canada?
Eliminated trade barriers with the U.S. and Mexico.
What is the purpose of trade agreements like NAFTA?
Increase trade by doing away with tariffs and other trade barriers.
Why does trade require a system of exchanging currencies?
Different nations have different currencies with varying values.
Why would countries with different currencies want to be more like the European Union that uses the Euro in most of its member countries?
Because banks charge a fee to exchange currencies.
What is a result of specialization within a country like Venezuela?
They export oil and import the goods they don’t do well.
What term stands for sending products out of a country?
Export.
What term stands for bringing products into a country?
Import.
What does specialization within countries require them to be?
Interdependent.
What term stands for doing certain economic activities well?
Specialization.