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Section 2

• A pure market economic system operates on the basis of price, profits, and private property.

• Under a command system, there is little private property and the government owns virtually all the factors of production.

Section 3

• Countries changing from command economies to market-based systems face severe challenges.

• Developing nations receive financing through foreign aid and technical and economic assistance.



Using Your Foldables Study Organizer

Pair up with a classmate and use your completed foldables to take turns asking each other to define a chapter term correctly without looking under the tab.

Reviewing Key Terms

Write the key term that matches each definition below.

1. a tax placed on an imported product

2. a system in which economic activity is the result of habit or custom

3. an economy that is neither pure market nor pure command

4. a country with a relatively low per capita GDP

5. goods sold to other countries

6. total GDP divided by the country1 s population

7. a system in which the government controls the factors of production

8. goods bought from other countries for domestic use

9. a system in which individuals own factors of production and make economic decisions

10. a legal limit on the number of units of a foreign-produced good that can enter a country

Reviewing Main Ideas

11. How do nations gain from importing products?

12. How can nations restrict imports?

13. Why do nations restrict imports?

14. Identify two major countries that are making the transition to a market economy.

15. What is the exchange rate?

16. How is per capita GDP calculated?

17. What does the World Bank do?

Critical flunking

IS. Making Comparisons State-run factories in the former Soviet Union could make products of extremely low quality and yet continue to exist. What do you think would happen to such a firm in the United States?

19. Making Inferences Is an abundance of natural resources required in order for a country to have economic growth and development? Explain your answer.

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Section 1

• The United States is heavily involved in international trade.

• Nations trade according to the theory of comparative advantage.

20. Cause and Effect Create a chart like the one below to explain how exchange rates affect the balance of trade.



Self-Check Quiz Visit the Civics Today Web site at :orr and click on Self-Check Quizzes— Chapter 26 to preparo tor the chapter tost.

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of Trade

Weak Currency

Strong Cur-ency

Study the chart on page 579; then answer the following questions.

21. What is the literacy rate? What nations have a literacy rate below 60 percent?

22. Define infant mortality. Which nation has the lowest infant mortality rate?

Practicing Skills

23. Building a Database Research and build a database that organizes information about U.S. trade with countries in South America. Explain why the database is organized the way it is and how it might be used in class.

^¿J Economics Activity

24. Suppose the United States buys 1 million cars from Japan in the year 2010. If the dollar appreciates relative to the yen in 2011. will Americans buy more or fewer than 1 million cars from Japan? Explain your answer.


25. Divide into at least five groups. Each group will study one part or region of the world, such as northern Africa, Central Africa, Southeast Asia, Centra) America, or western Europe. The goal of each group is to determine the percentage of the economy devoted to agriculture and the percentage devoted to industry. Each member of each group will obtain the relevant information for one or more countries in his or her chosen region. Compare the information obtained, selecting one person to prepare summary statistics for your group's region.

KHI Technology Activity

Use the internet to find out more about international trade. Type "international trade" into your search engine. From the list of Web sites that appears on the monitor, select at least three to read. Answer each question below; then summarize your findings in a brief essay.

26. What types of Web sites did you find on your initial search?

27. List at least three trade organizations.

28. Select a country. What are three products that the United States trades with this country?

Test Practice

Directions: Choose the best answer to the following question.

If the value of a nation's exports is $100 and the value of its imports is $200, what does the balance of trade equal? F a surplus of $100 <3 a deficit of $100 H a deficit of S200 J a surplus of $200

Test-Taking Tip

As you read the multiple-choice question, try to anticipate the answet-before you look at the choices.

1 ANCIENT GREECE (c. 500 B.C.) The agora, or marketplace, was Lhe cenLer of economic and political life in Athens. Citizens of Athens generally spent most of Lheir day aL Lhe agora.

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