Globalization Lesson

By the end of this lesson you will be able to define globalization, describe the causes of globalization and explain the effects of cultural diffusion and globalization on societies.

• An economic system describes how a country’s economy is organized. because of the problem of scarcity, every country needs a system to determine how to use its productive resources.

• An economic system must answer three (3) basic questions…

• WHAT TO PRODUCE?  What kinds of goods and services should be produced?

• HOW TO PRODUCE?  What productive resources are used to produce goods and services?

• FOR WHOM TO PRODUCE?  Who gets to have the goods and services?

• 1. Traditional Economy

• 2. Command Economy

• 3. Market Economy

• 4. Mixed Economy (Market + Command)

• an economic system in which economic decisions are based on customs and beliefs.

• People will make what they always have made and will do the same work their parents did.

• exchange of goods is done through bartering (trading without using money)

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• government makes all economic decisions & owns most of the property.

• governmental planning groups determine such things as the prices of goods/services & the wages of workers

• This system has not been very successful & more and more countries are abandoning it.

  
  

• an economic system in which economic decisions are guided by the changes in prices that occur as individual buyers and sellers interact in the market place.

• most of the resources are owned by private citizens.

• economic decisions are based on free enterprise (competition between companies.)

• Market + Command = Mixed There are no pure command or market economies.

• To some degree, all modern economies exhibit characteristics of both systems and are often referred to as mixed economies.

• Most economies are closer to one type of economic system than another.

Nature oriented, very little human effort. 

Examples- agriculture, fishing.

• Engaged in transforming raw material into finished products.

• with the help of machine and manpower. 

•  E.g. Car manufacturing Industry.

• Tertiary industries are those that provide a service.

• E.g. Hotels,  Retail, Air hostess etc