Chapter IV: The World of Economies

© Mason Carpenter 2011, published by Flat World Knowledge

 Learning Objectives

• Identify the world economies: classification

• Understand the developed world
• Understand the emerging markets

© Mason Carpenter 2011, published by Flat World Knowledge

4.1 Classification of Economies
 Statistics Used in Classification

• Gross national product (GNP) is an estimate of the total

value of all the final products and services turned out in
a given period by the means of production owned by a
country's residents.
• Gross domestic product (GDP): The value of all the
goods and services produced by a country in a single
year.

© Mason Carpenter 2011, published by Flat World Knowledge

4.2 The Developed World
 The Developed World

• Developed economies:
• Also known as advanced economies, these countries are
characterized as postindustrial with high per capita incomes,
competitive industries, transparent legal and regulatory
environments, and well-developed commercial infrastructures.

© Mason Carpenter 2011, published by Flat World Knowledge

 The United States

• The United States is the world’s largest single-country economy

and accounts for nearly 25 percent of the global gross domestic
product (GDP)
• The strength of the U.S. economy is due in large part to its
diversity
• The United States has a service-based economy. In 2009, industry
accounted for 21.9 percent of the GDP

© Mason Carpenter 2011, published by Flat World Knowledge

 Germany

• It is the largest and strongest economy in Europe

• Services drive the economy, representing 72.3 percent
(in 2009) of the total GDP
• Industry accounts for 26.8 percent of the economy, and
agriculture represents 0.9 percent

© Mason Carpenter 2011, published by Flat World Knowledge

 Japan

• Japan has very few mineral and energy resources and relies
heavily on imports to bring in almost all of its oil, iron ore, lead,
wool, and cotton.
• It is the world’s largest importer of numerous raw materials.
• As with other developed nations, services lead the economy,
representing 76.5 percent of the national GDP, while industry
accounts for 21.9 percent of the country’s output

© Mason Carpenter 2011, published by Flat World Knowledge

4.3 Emerging Market
 Emerging Market

• Emerging market
• An evolving definition that is currently viewed as a country that can be
defined as a society transitioning from a centrally managed economy to a
free market-oriented-economy, with increasing economic freedom.

• The seven largest emerging market economies– China, Russia,

India, Brazil, Turkey, Mexico, and Indonesia– constitute about 80
percent of total emerging market output.

© Mason Carpenter 2011, published by Flat World Knowledge

 Thank You!
© Mason Carpenter 2011, published by Flat World Knowledge