Chapter 7-1
The Economy
Economic Activities
- Main Idea
o The US and Canada both have market
economies
 Based on services and high tech
industry
 Also important are manufacturing
and agriculture
Essential Question
What kind of jobs do the people of our
community have?
Market Economies
- Economic system allowing people to own,
operate and profit from their own
businesses.
- Allows businesses to hire employees and pay
them what they want to (minimum wage)
- Laws also protect property rights,
employment opportunities and health and
safety of the workers.
US and Canada shift from agricultural
economies to mostly industrialized countries.
- Both countries develop postindustrial
economies
o Less emphasis on heavy industry and
traditional manufacturing
o More emphasis on service and high tech
businesses
Postindustrial Economies
- 75% of the US and Canada economies are
employed in the service industries.
o Government
o Education
o Health care
o Banking
- Central business district
o Located in urban areas of high
concentration of office buildings and
retail shops
 Easily accessible from the industrial
business and commercial center
 Referred to as ‘downtown’
o Best reflected in high tech industries
 Less dependent on location
 Location is influenced by weather,
proximity to work and access to
recreational facilities
 ie – Silicon Valley
o California
o Holds 20% of the world’s 100
largest high tech companies
Manufacturing
- Accounts for about 20% of US and Canadian
economies
- Advanced technologies have transformed
manufacturing in the region
o Robotics
o Computerized automation
 Factories now produce greater
quantities with fewer workers
- Manufacturing Belt
o Area around and east of the Great Lakes
o 1990s
o Lost their economic bases
o Became known as the ‘Rust Belt’
o Many need to ‘retool’ and convert their
old factories to more modern industries
- Sun Belt
o Area where many companies moved to
o South Western states
Transportation equipment and machinery
account for large amounts of the regions
manufacturing and resulting export activities
Aircraft and aerospace equipment are
produced in California and Washington
Factories in the Midwest assemble most of the
country’s automobiles – Detroit Mich
Food processing is an activity in both California
and the Northeast
Canada, (Quebec) manufactures and exports
wood based products drawn from its timber
resources
Agriculture
- Farming in the US and Canada is commercial
o Ag commodities (goods) produced for
sale
o Commercial farming = 5% of farm
ownership
o Most farms are still family owned
- 1 billion acres of land in the US used for
farming
- 167 million in Canada used for farming
- Farm numbers are down but farm sizes are
up
- Reason for decline in number of farms
o High cost of farming
o Unpredictable consumer demand
o Risk of natural disaster
o Time and hard work need to run a farm
- Key Agricultural Products
o Cattle Ranchers
 Western, southern and midwestern
US and Canada’s Prairie Provinces
o Wheat Belt
 Great Plains of US and Canada
o Corn Belt
 Ohio to Nebraska
 Also grown in Quebec, Ontario
and Manitoba
- Agricultural Technology
o In the past geographic factors limited
where certain types of agriculture could
be carried out.
 Ranching
 Wide open grasslands of the
Great Plains
 Dairy farming
 Wisconsin
 Upper New York
 Minnesota
o America’s Dairyland
o Cooler summers
 Native grasses for feed
o Development of new breeds allowed for
grazing to expand further south
o Dairy industry is now found in every state
in the union.
Main Idea
- People of the US and Canada depend on
reliable and continually improving
transportation and communication systems
- Essential Question
o What kind of transportation do you use
to get to school?
 Development of a reliable
transportation system in the US and
Canada is essential because of
 the large land are of both
countries
 The countries population
distribution
 The need to move goods and
services
The Automobile
- Since WWII the most popular means of
transportation
- Extensive reliance on autos
o Requires heavy investment
 Highways
 Bridges
 Roads
 Needed to transport goods
 Population density on the east
and west coasts call for many
roads
 Also needed especially along the
Mississippi and Ohio River valleys.
 Canada’s population is smaller
 Smaller network of roads
 Mostly located in southern
Canada
 Trans-Canada Highway
o 4,860 miles
o Victoria BC to St. John’s
Newfoundland
- Reliance on automobiles creates pollution
- Governments are working with auto makers
to lessen use of autos in urban areas with
public transit and more efficient vehicles
- Montreal and New York
o Use subway systems to reduce auto use
o Los Angeles uses subways and elevated
tram ways
o Seattle and Dallas use monorail systems
o Buses and commuter trains are also used
to ease congestion
o
Other Means of Transportation
- Long distance
o Airports
 Atlanta – Hartsfield
 Chicago – O’Hare
 Nashville Tennessee
 Toronto – Pearson Internatonal
o Passenger railroads
 AmTrac
o Long distance buses account for only a
small portion of the region’s travel
o Railroads also move goods
 35% of the nation’s freight
o Waterways
 15% of the nation’s freight
 Great Lakes and St. Lawrence Seaway
system – used by both US/Canada
 Mississippi river system
 Barges
 Haul grain and petroleum
o Long haul truckers
 20% of freight
o Airplanes
 Smallest portion of commercial
freight
 Mostly overnight deliveries
o Gas and Oil Pipelines
Communications
- Success of economy also reliant on effective
communication services
o Cell phones
o Digital messaging
 Email
 Text messaging
 Business transactions
 Personal communication
- Television-radio- newspapers-magazines
o Owned by the government in Canada
o Owned by private corporations in US
 US Government regulates the
industry
 Ensure there are no monopolies
o Total control of an industry by
one person or company
Essential Question
- What are the primary methods of moving
goods throughout the US and Canada?
Trade and Interdependence
Main Idea
- The US and Canada are connected to other
countries through trade and in facing the
challenges of global terrorism and building a
more peaceful world.
Essential Question
- Do you know where your shoes are made?
- Was it in another country?
Global Economy
- The merging of economies in which countries
are interconnected and become dependent
on one another for goods and services
- US and Canada play a pivotal role in the new
world global economy
-
Exports and Imports
- Trade deficit
o The US spends more on imports than it
earns from exports
o Hundreds of billions of dollars
o Results from our country’s large
consumer population and growing
industries that require costly energy
purchases (oil)
- Tariffs
o Taxes on imports
o Raises the price of US products
 Reduces their sales abroad
- Trade surplus
o Canada earns more from its exports than
it spends for imports
o Canada’s smaller population makes its
energy needs less costly
 Tar Sands of Alberta provide more
petroleum than they use
FTA
- 1989
- US and Canada remove trade restrictions on
each other
NAFTA
- North American Free Trade Agreement
o 1994
o Added Mexico to the trade agreement
o Increased economic activity among the
three countries
o Strengthened their political and
economic positions in the global
economy
- Outsourcing
o US companies seeking to lower
production costs by setting up plants,
services industries and other businesses
abroad to produce parts and products for
domestic use or sale.
Although NAFTA does not allow the free flow of
labor from one country to another, it does
allow US companies to set up assembly plants
in Mexico where labor costs are much lower
United Against Terrorism
- Technology, communication and improved
travel along with worldwide trading and
financial systems have become more
integrated.
o Terrorist organizations can easily collect
and move funds, assets, and people
around the world
o Post 9/11
 US and Canada created Smart Border
 Plan to enhance border security
 Focus on monitoring the flow of
people and goods, securing
infrastructure and sharing info
o FAST
 Free and Secure Trade
 Establishes complete and reliable
records for all cargo
 Tunnels, bridges and other
infrastructure in the border region
are watched by both countries
 X-ray machines are used to screen
people and cargo
 Intelligence sharing and
coordination between the US and
Canadian law enforcement
agencies have increased greatly
Essential Question
How are the US and Canada connected to
other nations?