Economic Geography Economic Systems All economic systems must

Economic Geography Economic Systems • All economic systems must make three basic economic decisions: what goods and services should be produced, how they should be produced, and who gets the goods and services that are produced. • The U. S. economy is a mixed economy in which the government supports and regulates the free market. • There are three types of economies: traditional economy: habit and custom determine economic rules; market economy: individuals and private groups decide what to produce; and command economy: the government owns or directs the means of production.

Economic Geography Economic Development • Geographers and economists classify economic activities into four types. • Primary economic activities involve taking or using natural resources directly from Earth. • Secondary economic activities use raw materials to make a product that is new and more valuable. • Tertiary economic activities provide services to people and businesses. • Quaternary economic activities process, manage, and distribute information.

Economic Geography Economies and World Trade • World trade is the exchange of capital, labor, goods, and services between countries. • Countries export their specialized products, trading them to other countries that cannot produce those goods. • International trade is typically more costly than domestic trade due to tariffs, time costs, and expenses associated with different languages, legal systems, or other cultural barriers.