factors of production & latin american economies
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Economics of Latin America
Mrs. Sample6th Grade Social Studies
Factors that Influence Economic Growth
0Productive resources used to produce goods and services. 0Include: 0Human Capital0Capital0Natural Resources0Entrepreneurship
Human Capital
0People who perform labor0Example: 0Teacher0Cashier0Police Officer0 Telemarketer
Capital0Factories or machinery0Example0Copy Machine0Tractor0Coca Cola
Natural Resource
0Things that come from the land like minerals or trees. 0Examples0Tree0Diamonds0Water
Entrepreneurship0Ideas, innovations, and risks involved in
starting a business. 0Example0Bill Gates0Steve Jobs0Donald Trump0Jay-Z
GDP0Economists measure a nation’s economic
performance by this standard. 0GDP- Gross Domestic Product0Value of goods and services produced by a country
during a specific year. 0Economists use the GDP to determine if a country
is growing. 0Brazil and Mexico have the highest GDP. 0Haiti and Bolivia have struggling economies and
low GDP
0Investment in Human Capital- Giving training to employees or sending them to safety classes. 0Investing in Human Capital = Higher
GDP0Creates a smarter and more productive
workforce, which leads to economic growth.
How to Make your Economy GROW
Economies in Latin America0Still have widespread poverty0Many children work instead of attending
schools0Governments and Social Systems have
started to take steps to improve the education of workers. 0Mexico- President called for a change in
education system to better educate the children and in turn boost the economy.
Investment in Capital0Clear relationship between investment in capital
and growing GDP. 0Meaning: You buy new machines or computers and
software = more productive workers0Then, increase in GDP! 0Brazil has the highest investment in Capital
equipment0In contrast- Haiti does not invest in capital for
agriculture
Natural Resources0Natural Resources are the fuel for industry and a
source of income when exported to other countries. 0Brazil has rich mineral resource like iron ore (used
to make steel), fertile soil, lots of trees, and rivers. 0Mexico and Venezuela have oil deposits0Since these countries have valuable natural
resources, countries have specialized in industries to process these resources for use.
Entrepreneurs
0They come up with new ideas and use human, capital, and natural resources to bring ideas to life – and to the marketplace to sell! 0They are willing to take a risk, and share the
risk by borrowing money from a bank or investor to start their business. 0They help economies by creating new goods
or services.
Entrepreneurs in Latin America
0Unemployment rate is high among young adults. 0Countries are setting up courses and funding
college classes to help develop entrepreneurs. 0Governments and taxes make creating goods and
services hard. 0Example- it takes four months to get a business
started in Venezuela. 0Starting a business is a way to escape poverty in
many countries.
Specialization0An efficient way to work, and the cost of the
item is lower. 0Specialization increases trade because a
country can get what it needs at the lowest cost.
Opportunity Cost0Value of what is given up when a choice is made. 0Example: Country A makes cars and chocolate.
Country B only makes chocolate. Country A decides to only make cars because they are more profitable. Now they buy chocolate from Country B. Country A’s opportunity cost is the money they could have made from making chocolate. Country A decides it was better for them to specialize in cars than make both items.
Economic Systems Review0Traditional: Found in agricultural societies where
people live the same way their parents and grandparents did.
0Traditional economies are found in some places in Africa, Asia, and South America.
0These people produce only enough to survive by farming, hunting, and gathering.
0They make everything they need or barter for other necessities of live.
Economic Systems Review0Command: The government controls
what is produced and how it is produced. 0The government owns all resources and
decides who gets the products. 0This decision can be based on class, a
reward system, or waiting in line. 0An example is North Korea
Economic Systems Review0Market: A market system is when the people
make the economic decisions of what to buy and sell. 0People can own their own businesses and
produce what they want. 0In a market system, supply and demand for a
good or service determines what to produce and how to produce it. 0An example is the United States
Economic Systems Review0Mixed: Almost all countries fall between
a command and market economy. 0Government will own some resources
and the people will control other resources. 0For example, in the U.S. the government
controls schools, public colleges, postal service, and some power plants.
Brazil’s Economy0Government controls some and so do the citizens0Strong agricultural, mining,
manufacturing, and service industry. 0Brazil has the strongest economy of all
South American countries0The government controls some areas
such as healthcare and postal service
Cuba’s Economy0The government controls all aspects of
resources. 0The government owns all property and
decides what and how much to produce.0Cuba’s economy has struggled since the
break up of the Soviet Union in the 1990s. 0The Soviet Union was Cuba’s main trading
partner.
The End
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