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31 terms

Chapter 3.3 Economic Systems of Latin America and Canada

STUDY
PLAY
resources
Things people use. Natural, human, and capital are three different kinds.
Economics
The study of how people, businesses, and countries use limited resources
three basic economic questions
What to produce? How to produce? For whom to produce?
traditional economy
People use just what they need to survive, and they inherit their position from their parents. Economic system of many native peoples.
command economy
The government owns the means of production and most of the land. The government answers the three basic economic questions.
market economies
Allow for private ownership of businesses and land. Also known as a capitalist economy.
profit
The amount of money a business makes after it pays for all expenses.
expenses
Money that has to be paid for materials, labor, or other bills.
market
Wherever buyers and sellers exchange money and goods.
mixed economies
Has characteristics of both command and market economies. Almost all modern economic systems are this kind.
Canada's economy
It is a mixed economy; however, it is mostly a market economy. The governments controls some areas like health care.
Cuba's economy
Is mostly a command economy. The government owns all large industries and most land.
Brazil's economy
A mixed economy that leans toward free markets. Its GDP is the second highest in the Americas.
International Trade
Occurs when nations choose to exchange goods with one another. It is necessary because no nation can produce everything it wants or needs.
specialization
When a country chooses to produce what it is best at. It forces countries to participate in international trade because countries cannot produce everything they want or need.
imports
Goods a country buys from another country.
exports
Goods a country sells to another country.
trade barriers
Obstacles to trade. They make trade between two countries harder.
natural trade barriers
They are barriers because they are hard to cross and make it difficult for people in different communities to trade. Examples are mountains, deserts, and rain forests.
political trade barriers
Rules passed by governemtns to regulate trade. They are often intended to help a country's own producers be more competitive in the market place. Examples are tariffs, quotas, and embargos.
tariff
Taxes on imported goods. They raise prices on foreign imported goods, making locally made goods cheaper; therefore, they help local businesses.
quotas
The limit the amount of foreign goods that may be imported in a given amount of time.
embargo
When one nation refuses to trade with another nation.
North American Free Trade Agreement (NAFTA)
An agreement between the United States, Canada, and Mexico to remove all tariffs to increase trade between the three countries.
currency
Something that is assigned value. It can be used to buy goods and services in a market. It is usually called money.
exchange rate
What the currency of one nation is worth in another nation.
economic growth
Rate at which a country develops economically.
physical capital
Goods used to produce things, such as factories, machinery, and technology.
human capital
Investment in the welfare and training of human workers.
gross domestic product (GDP)
The value of all the goods a nation produces in a year.
entrepreneurs
People who start and own private businesses.