Africa Economic Systems#16

Africa

3 Types of Economies…

▪Traditional

▪Command

▪Market

How do these economies answer these questions?

▪ What to produce?

▪ How to produce?

▪ For whom to produce?

4 Types of Economies

Traditional Economy

▪Based on what has been done in the past▪Traditions, Rituals, Habits, and Customs are maintained▪Shaped by customs and religion ▪Found in rural areas with hunter/gather societies.

Mbuti in Central Africa

Traditional Economy

▪ Elders and ancestors decide who produces what and when.

▪ Sharing goods

▪ Farming, hunting and gathering done traditionally

▪ Economic activities are centered around the family or ethnic unit

▪ Men and women are given different roles and tasks

Mbuti in Central Africa

Command Economy

▪ The government or central authority makes decisions and determines how resources will be used

▪ There is little individual freedom

▪ There is no competition

▪ Businesses are not run to create a profit

▪ Consumers have few choices in the market place

Until 2011 Libya was considered a command economy

Command Economy

▪ The government dictates the job in which you work

▪ The government sets the prices of goods and services

▪Only one command economy left – North Korea

▪All others have mixed in market economy with their command structure (China and Cuba)

Market Economy

▪Also called a Free Market Economy or Free Enterprise Economy

▪Businesses and consumers decide what they will produce and purchase and in what quantities

▪ Supply and demand of goods and services determine what is produced and the price that will be charged.

Mall in Nairobi, Kenya

What is a Mixed Economy?

▪ Combination of a market and a command economy

▪ Government takes care of people’s needs; Marketplace takes care of people’s wants.

▪ Most nations have a mixed economy

▪ Advantage— balance of needs and wants met by government and in marketplace

▪ Disadvantage— citizens have to pay taxes

Vocabulary

GDP per capita

• Gross Domestic Product (GDP) per capita (per person). It’s the division of total GDP ( total value of everything produced by a country) by the population

Literacy Rates

• People over the age of 15 with the ability to read and write.

School Life Expectancy

• How many years of education a child will receive during their lifetime.

Use your tablets to go to

https://www.heritage.org/index/

Continuum

▪ All developed countries in the world with mixed economies fall on this continuum.

0Pure Command

100Pure Market

50

Hong Kong = North Korea =The Gambia = Kenya = Nigeria = United States = South Africa =