Reciew Exam #4 - REVIEW EXAM#4 CHAPTER 14 THE ECONOMY 1 How...

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REVIEW EXAM #4 C HAPTER 14: T HE E CONOMY 1. How have the world economies transformed from past to present? How have the mediums of exchange transformed as a result? Discuss in the context of preindustrial, industrial, postindustrial, and biotech societies. What are the implications of these changes on one’s life? Economy – a system of producing and distributing goods and services In early societies (Hunting and gathering), small groups lived off the land and produced little or no surplus. Economic systems grew more complex as people discovered how to domesticate animals and grow plants (Pastoral and horticultural), farm (Agricultural societies), and manufacture (industrial societies). As people produced a surplus, trade developed. Trade, in turn, brought social inequality as some people accumulated more than others. Service industries dominate the postindustrial societies. If a biotech society is emerging, it is too early to know its consequences. Hunting and gathering – bartering Pastoral and horticultural – bartering Agricultural – money (gold and silver coins) Industrial – money (paper currency and coins), checks, credit cards Postindustrial and biotech – money (what about the penny?), debit cards, credit cards, checks, and e-cash 2. Compare and contrast the following concepts by knowing the definitions and examples: a. Capitalism vs. socialism vs. communism Capitalism Socialism Communism Individuals own means of production Government owns means of production Government owns means of production Market competition set by owners No competition because a central planning committee sets prices No competition because government sets prices Pursuit of individual profits No profit motive No profit motive Capitalists view socialists as violating the basic human right of free will Socialists view capitalists as exploiting workers by not giving profits to the workers Which one do you prefer? a. See video “How to Fix Capitalism” (Bill Gates discusses creative capitalism) Convergence theory – capitalism and socialism resembling one another
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Example: China is becoming more competitive but yet still maintains a communist government Has the U.S. exhibited any socialist elements? b. Mechanical solidarity vs. organic solidarity Global division of labor (Emile Durkheim): Mechanical solidarity – sense of unity that comes from doing similar activities o Examples: College professors, retail workers Organic solidarity – people depending on one another to fulfill their job duties o Examples: Restaurant workers, car manufacturers 3. Discuss the impact of the globalization of capitalism. Capitalism originated in European Protestant countries, such as England, but is now spreading all over the world o Examples: food, music, entertainment, business What changes have occurred during this transition as a result of the globalization of capitalism?
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