Unit 1.2 The Economy

The economy is a system that creates wealth. Economic systems exist at a number of levels the main function is to organise productive resources to satisfy wants and needs.

Transcript

2. The Economy
3. Learning Objectives   Explain what is meant by an economy List the main sectors of the economy
4. The economy as a system. • • • The economy is a system that creates wealth. Economic systems exist at a number of levels. We can refer to for example the: global economy, or the Caribbean economy or, at a local level, to the economy of Saint Kitts and Nevis.
5. • • Organizes resources for the production of goods and services Satisfy the wants and needs of people who are part of the system. an economic system
6. 1. 2. 3. What goods and services should be produced (Consumption)? How are they to be to produce and in what quantities (production)? Who should receive the goods (Distribution)? The economic system helps Society to answer the three economic questions:
7. The main sectors of the economy • • • There are three main sectors in an Economy. Firms Households Government
8. Firms In the Caribbean there are many small companies, for example the clothing industry and in the Assembly of electronic products. there are also farms and retail outlet. Firms employs labor and pay taxes to the government.
9. Household Households play an important part in the economy. They provide the labor for firms And households consume the products made by firms.
10. The Government • • • The Government also plays an important part in the economy. Today the government provided job in public administration, education, police and other services. They provide important services such as education and Health Services. They will seek to ensure that the economy grows over time. Firms and households pay taxes to the government.
11. The economic relationship between government, holds and firms
12. Key Points • • • The economy organizes resources for the production of goods and services. The economy is a mechanism for satisfying society's wants and needs The main sectors of the economy are government household and firms.
13. Summary Questions 1. 2. a. b. c. • What are the three sectors of the economy Which sector Creates jobs Purchases goods for enjoyment Taxis Which sectors of the economy pay taxes to the government