Unit 2 Economics Video

[Virtual Presenter] Welcome to our presentation! We are going to discuss different economic systems and how they affect a country's economy. We will discuss the different types of economics, the different economic systems, and the factors of economic growth and natural resources that can impact a country's standard of living, literacy rate, and Gross Domestic Product. We look forward to exploring this important topic with you..

[Audio] Economics is a wide-ranging field, from pricing goods and services to the government's decisions about intervention in the economy. It examines resource distribution and allocation among economies, as well as the effect of individual choices on the economy in general. It looks into supply and demand, and how producers, consumers, and market dynamics shape economic development and expansion. It also studies the role of governments in creating economic policies and providing direction and stability to the economy..

[Audio] Production in a traditional economy is based on customs that have been passed down from generation to generation, and is mainly focused on subsistence production and a lack of economic development. There is usually little to no government involvement in the nation's economic activities. This type of economy can usually be found in rural areas, where people have to rely on subsistence agriculture and hunting to survive..

[Audio] Government makes all economic decisions in a command economy, with no private businesses. Production, pricing and distribution of goods and services are all determined by the government, leaving no role for private enterprise. This system is often adopted in countries with scarce resources or requiring strict regulation, and usually relies heavily on centralized control..

[Audio] The decision-making in a market economy lies with producers and consumers. They decide based on what is economically viable and beneficial for them. Prices are set by what people are willing to pay, creating incentives for businesses to produce goods and services more efficiently. This economic system encourages innovation and competition resulting in consumer benefit. Overall, a market economy provides greater economic freedom and efficiency..

[Audio] The mixed economy is a blend of market and command economics. It's seen around the world, with some countries leaning closer to market economics and others to command economics. It's a mix of private companies and government-controlled industries. This unique blend allows individuals and government to work together in managing resources and providing services to the public..

[Audio] In this slide, we can see the Line of Economic Continuum. It's a useful tool to understand how much of an economy's decision-making is based on centralised control versus market forces. This line shows us the percentage of command leaning or market leaning for an economy. For instance, if an economy has a score of 73.82%, that means it leans 73.82% towards market forces, and 22% towards command..

[Audio] When it comes to our standard of living, we all want to provide ourselves with the best level of wealth, comfort and material resources we can. But the challenge is that, while we can strive to achieve the highest standard of living, factors like rising costs of essential goods, taxes, and even changes in the global economy can have a profound effect on how we manage our finances. And that is why it is important to plan ahead and be mindful of our financial resources..

[Audio] The literacy rate of a country has a major effect on the standard of living of its citizens. Higher literacy rates mean more citizens can participate in the job market and have access to better educational and employment opportunities. On the other hand, lower literacy rates can cause citizens to struggle to obtain better standards of living since they lack the fundamental reading and writing skills to secure stable employment. Ultimately, a country's literacy rate has a direct connection to its citizens' standard of living..

[Audio] Gross Domestic Product (GDP) is an important measurement of the financial well-being of a nation, providing an indication of the value of all goods and services produced in the country over the course of one year. This number is useful in monitoring the country's economic activity and can be used for the purpose of forecasting long-term trends..

[Audio] Israel's Gross Domestic Product is 488.5 billion US Dollars, a figure that is significantly lower than those of Saudi Arabia and Turkey, which stand at 833.5 billion and 819 billion respectively. All three countries have varied economic structures, with service, industrial, and agricultural sectors comprising a major portion of their respective GDPs..

[Audio] The three factors which can contribute to economic growth are work, entrepreneurship, and human capital. Work provides an opportunity for people to earn money and boost the economy. Entrepreneurship brings innovation and new ideas to the market. Human capital, consisting of education and skills, helps individuals make meaningful contributions to the economy..

[Audio] Natural resources of a country can have a significant influence on its economy. From oil, fruits, vegetables, coal to metals, these resources can create large amounts of wealth. It is thus essential for countries to manage and preserve their natural resources efficiently for future generations..

[Audio] Human capital is an important factor in economic prosperity. It refers to the skills and expertise acquired by individuals through experience and education. These capabilities can make a sizeable difference to a nation's economy and gross domestic product, as people with high levels of human capital are often more effective and productive..

[Audio] Investing in capital goods – such as machines, buildings, technology, tools and vehicles – is important for boosting an economy as it can improve productivity, enhance efficiency and help to create jobs. This in turn can contribute to increased economic output, resulting in a better Gross Domestic Product..

[Audio] Entrepreneurs have an important role to play in influencing a country's Gross Domestic Product (GDP). Starting a business from scratch with limited resources requires taking risks and can involve creating new products, services, and job opportunities. This also encourages innovation, providing new insights and approaches to tackle existing problems, all of which leads to a thriving economy and a more prosperous society..

[Audio] Specialization is a core concept in economics. It is the process of becoming an expert in a certain area or skill. Specializing can boost productivity by allowing us to concentrate our efforts on our strong points. It influences how we use resources, enabling us to produce more with less, thereby stimulating economic progress..

[Audio] Discussing Trade and its effects on buyers and sellers is paramount. Trade gives buyers access to products from sellers globally, while providing an important source of income for sellers to expand their businesses. It is essential to comprehend the workings of Trade to ensure economic success..

[Audio] Trade barriers are regulations set by governments on the import and export of goods and services. These include tariffs, which are taxes on foreign goods; quotas, which limit the amount of a foreign product imported into the country; and embargoes, which are complete bans and restrictions on all trade with a particular country..

[Audio] OPEC has four central goals: to coordinate and unify the policies of its member nations concerning petroleum production and regulation; to secure fair and stable prices for producers; to provide an efficient, economic, and regular supply of petroleum to consumers; and to make a fair return on capital for those investing in the industry..

[Audio] An economics cartel is an association of producers or sellers that collaborate to control the market, frequently aiming to preserve high prices and restrict competition. This can be achieved by narrowing the supply of a precise product, or by a collective agreement to not participate in the same market or to provide discounts. Cartels can be profitable for members by offering stability and higher earnings, but ultimately harm the consumer by rising prices and lessening the amount of choice available..

[Audio] The value of currency has a great impact on the global economy. This slide illustrates the exchange rate of one US dollar to other currencies - three point seven five Saudi Riyals, two point eight seven one Turkish Liras, and three point seven four Israeli Shekels. Comparing the currencies can be useful to identify the spending power of people from different countries. For example, one Saudi Riyal is equal to one Israeli shekel and seven point sixty five Turkish Liras, and one Turkish Lira is equal to point thirteen Saudi Riyal and point thirteen Israeli Shekels. Finally, one Israeli Shekel is equal to seven point sixty seven Turkish Liras and one Saudi Riyal..

[Audio] Israel is a mixed economy that uses both capitalism and socialism to maintain a strong and growing economy. Its economic freedom index is 68.9%, placing it amongst the more free economies. Furthermore, Israel has excelled in advanced technology, becoming a leader in many fields..

[Audio] Turkey is classified as a mixed economy, combining a free market economy and state intervention. World’s Freedom Index ranks Turkey's freedom score as 56.9, putting it at 104th place in the list of most free countries. These insights provide a look into the economic environment of Turkey..

[Audio] We looked into the economy of Saudi Arabia and found that it is a mixed economy, its freedom score stands at 58.3, and it has the largest economy in the Middle East. We hope you have gained a better understanding on the matter and can now make informed decisions on the country's economy. Thank you for taking the time to listen to the presentation..