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ECONOMICS AND AFRICASS7E1,5, and 8a Comparing traditional, market and command economies and how they answer the economic questionsEconomyWhat to ProduceHow to ProduceFor Whom to ProduceTraditionalWhat people need to surviveFarming, hunting, gatheringMake their own productsCommandWhatever the government decideshowever the government decidesClass reward system waiting in lineMarketWhat people want to buy and sellSupply and demandDetermined by how much a person wants to pay for itSS7E1b Explain how countries have a mixed economy located on a continuum between pure market and pure commandSS7E1c Compare and contrast the economic systems found in Nigeria and South Africa CountryType of EconomyGrowing or strugglingWhat the government controlsSouth AfricaWealth is divided between whites/ blacks most whites have good incomes, blacks live in poverty- Working to fix thisMixed (transitioning from command to marketGrowing, strongest economy in sub-Saharan Africa, gone from mostly mining, fishing agriculture to manufacturing and service industriesOil, gas, postal some of the telecommunicationsNigeria was wealthy from oil in the 70’s (top 50 wealthiest country) economy collapsed in the 70’s when oil prices fell. (government neglected agriculture sector)Mixed (moving to market economy)Struggling most Nigerians are poor, most are in agriculture, public schools crumblingPost office, schools, 2 of 3 TV stationsSS7E2a Explain how specialization encourages trade between countries. Compare and contrast different types of trade barriers such as tariffs, quotas and embargos. TRADE!Specialization countries specialize in what they do best. It is an efficient way to work and costs less to produce items. A country gets what it needs at the lowest cost when produced by someone who specializes in that itemVoluntary trade-both parties expect to gain from the tradeMost of Africa’s trade is with countries outside of Africa.Tariffs- high tariffs between African countries because they have many of the same products. Tariffs keep competition out.Quotas-limit put on number of cheap Chinese textiles imported to South Africa. This was to give South African clothing businesses a chance to compete.Embargo on Liberia against diamonds because money from the diamonds was used to fund wars in Africa Known as conflict diamonds (AkA Blood Diamonds). Be able to identify examples!SS7E2b Explain why international trade requires a system for exchanging currencies between nations.Exchanging Money-International trade requires a system of exchanging currencies between nations. Money from one country must be converted to the currency of another to pay for goods in that country. Exchange rate-How much is one currency worth in terms of the other. S.A – rand, Nigeria-nairaA little practice:Examples- ONE DOLLAR= 8 South African rands or 120 Nigerian nairaTaylor has $10.00. She wants to buy a CD in South Africa that costs 80 rands. Once she exchanges her American money for rands will she have enough money to buy the CD?________________________Michael wants to buy a soccer ball that costs 1300 in Nigerian naira. He has $15.00 After he makes the currency exchange, will he have enough to buy the ball?______________________________Oba has $25.00. She wants to buy a shirt in Nigeria that costs 2500 naira. Does she have enough money to buy it once she makes the currency exchange?_________________________________SS7E3 Describe factors that influence economic growth and examine their presence in Nigeria and South Africa Factors that influence Economic growth:Human capital-people who perform laborCapital-factories or machineryNatural resources-things that come from nature like minerals or treesEntrepreneurship a person with an idea or product who takes a risk to start a business GDP (Gross Domestic Product) - total market value of goods and services produced by an economy during a period of time.SS7E3 a. explain investment in human capital and GDPA country needs to invest in HUMAN CAPITAL. Investing in education and skills training will help to increase the country’s GDP. A smarter more productive workforce leads to economic growth.South Africa invests a lot in education. They realized they needed to improve their workforce. This is paying off! SA GDP has been growing yearly.Nigeria has very little in their budget for education so human capital growth is difficult. They relied so much on oil that they ignored education and training in other areas. The oil wealth belongs to a small group of people.SS7E3. explain investment in capital and GDPSouth Africa has also invested in capital growth. Electrical output, to help the transportation of goods-they invested in railways and ports. HOWEVER-50% still lives below the poverty line.The Nigerian government has not spent money wisely. It has little money to invest in capital resources.UNEVEN DISTRIBUTION OF WEALTHSS7E3 explain how the distribution of gold diamonds uranium and oil affects the economic development of AfricaShould a country rich in natural resources be wealthy? You would think the answer should be yes. However, government instability plays a part in this! (AGAIN!)Half of the world’s diamonds are found in Africa. Botswana has used this wealth towards its economy to build infrastructure. BUT rebels in other unstable countries have stolen diamonds and used the money to support their wars.South Africa has half of the world’s gold. It is the basis for its strong economy. But other countries that have gold are not as strong.OIL828040676910FIRST CAUSENigeria is rich in oil0FIRST CAUSENigeria is rich in oil3933190695960SECOND CAUSEDifferent countries want that oil0SECOND CAUSEDifferent countries want that oilNigeria- it has caused serious pollution problems .oil money goes directly to corrupt politicians. Most Nigerians are very poor. They rely on foreign investment to help with infrastructure and China sends workers that take Nigerian jobs along with its investment money. They also import cheap Chinese goods that wipe out local competition.38481007747022098001822450037147587630EFFECTSCountries become involved in Nigeria’s economy.International energy companies spend money for hospitals and schoolsChina aids economy, but Chinese workers take jobs from Africans.Cheap Chinese goods wipe out competition and cause unemployment.00EFFECTSCountries become involved in Nigeria’s economy.International energy companies spend money for hospitals and schoolsChina aids economy, but Chinese workers take jobs from Africans.Cheap Chinese goods wipe out competition and cause unemployment.URANIUMThis is a radioactive element used to produce nuclear power and make weapons. Many African countries have uranium. It is easy to mine as it is close to the surface. This is bringing in jobs as well as money. This holds a lot of promise for African nations as the world turns to alternative resources of power.SS7E3d describe the role of entrepreneurshipENTREPRENEURSHIPNigeria could use some good new ideas but banks won’t lend money. International companies are trying to invest so they help the entrepreneurs. South Africa has many small businesses. 98% of the firms in the country are small. Colleges are investing in teaching people how to run a business. ................
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