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Economic and Political Systems
• Muhammed Yunnus– Professor of economics– Met Sufiya Khatun
• Made stools
– Started Bank loan small amounts to poor
• Join group of 5 others who lend
– Grameen Bank- “Village Bank”• 1,000 offices• Now it’s owned by those who borrow
Economic Systems• Economy
– System for producing , distributing and consuming goods and services.
• Owners and workers are producers
• Product made is called goods or services performed for others
• Consumers buy and use the goods and services
Economic Systems
• Types of Business– Basic Business
• Essential for a nation to function– Transportation, communication
and electricity
– Non-Basic Business• “Nice” but not necessary
– DVD, sports equipment,
– Services can be both• Hospitals are basic, nails are
non-basic
Different Economic Systems
• Vary based on Cultures– Capitalism, Socialism, and
Communism• Capitalism
– Most basic and non-basic businesses privately owned
– US, South Africa and Japan
Economic Systems
• Socialism– Government owns most basic industries– Runs them for the good of society…no profit– Government dictates workers pay and how
much to charge– Uses profits to pay for health care and
education– Non-basic follow same model
• Privately owned– Spain, Portugal, and Italy
Economic Systems
• Communism– Central government owns all property
• All farms, factories
– Controls all aspect of citizens life• Prices of goods/services, how much product made,
and workers pay
– Cuba, China, and North Korea
Political Systems
• Government- system that sets up and enforces a society’s laws and institution.– Some controlled by few/ some by many
Direct Democracy
• Early government = simple
• Direct Democracy is where everyone participates in running the day-to-day affairs– Chiefs/elders– Based on the culture’s customs and beliefs
Monarchy• Most common form of government until
100 years ago• Monarchy- king or queen rules the
government– Ruler inherits throne by birth
• Monarchies exist today– Sweden, Denmark, UK, Spain, Swaziland
• Not the same power as their ancestors• They are constitutional monarchs
– Constitutions• Sets of laws that define and limit the government’s
power• King or queen is really just a symbol
Representative Democracy
• Citizen’s elect representatives to run country’s affairs– Constitutional monarchy follow this
• Democracy (greek)= demos- common people• The common people hold power to govern and
rule• Elect reps who create laws• Not re-elect if don’t like• Power is shared
– USA, Canada, and Israel
Dictatorship
• Government leader has total control
• Dictator decides what happens– Make laws– Decide if their will be elections
• Usually sound good at the start– More often they end up harsh