Geography and

History
3º ESO

Unit 1
Economy and
economic
activity
 Index
In this unit you will learn…

 What is the economy?

 Elements and sectors of economic activity.
 Economic agents and factors of production.
 Economic systems.
 Economic liberalism and the transformation of
the world. Keynes.
 Economic globalization and its repercussions.
 1. What is the economy?
• The economy studies how is carried out the production
and distribution of the goods and services necessary to
satisfy human needs.
• The economy of a country is formed by the set of
economic activities that take place in it.
• Goods are physical objects: pants, cars, furniture,
housing, etc.
• Services are not material objects, but actions that meet a
need. For example: hairdressers, doctors, carriers...
2. Phases in the economic activities

-Activities that
1º Production produce goods and
services

Phases - Activities related

with distribution
2º and sale of goods
Commercialisation and services

The buying of
3º Consumption goods and
services
 3. Factors that affect in the production

Those provided by
Natural resources nature: water,
minerals, wood

That’s the physical and

Labour intelectual activity needed
to produce
FACTORS OF
THE
PRODUCTION That’s the money that can come
Capital from the public or private
companies

It consists on the aplication of

knowledge and new
Technology technologies in the economic
activities
4. Economic agents
 Activities
1. Classify according to whether they are goods or services.
 Book/air travel/shirt/TV legal help from a lawyer/teaching from
a teacher/going to the hairdresser
2. Identify the economic process to which these actions are related:
1. A person buys a bouquet of flowers.
2. A farmer cultivates the flowers.
3. A florist sells flowers.
3. What economic agent performs these actions?
a. A dressmaker who makes alterations to clothing.
b. A sportswear store that sells sneakers.
c. The Administration of an autonomous community that
finances the construction of an airport.
5. Economic sectors
 The Secondary sector
• The secundary sector includes economic activities
that transform raw materials into other products to
meet human needs.
• These economic activities are:

- Industry
- Energy production
- Construction
- Mining
 Tertiary sector
• This activities do not produce goods but offer services to
the citizens.
• Example:
• Transportation: goods that are produced in the
primary or secondary sector are tranported by trucks
or trains.
• Communication: talking to others on telephone.
• Banking: borrowing money from the Banks.
 6. The economic sectors in the world

• In less developed countries, the primary

sector predominates, and therefore, the
population is fundamentally dedicated to
agricultural activities.
• On the other hand, in the more developed
countries, secondary activities (companies and
industries) and mainly tertiary activities are
constantly growing.
6.The economic sectors in the world
 Activity:
Look at both maps and answer:
1. In which continents predominate agriculture?
2. In which continents and countries does the population
dedicated to the service sector predominate?
3. In view of the results, what conclusions do you draw
regarding the economy?
 7. THE
ECONOMIC
SYSTEMS
 7. Economic systems
Subsistence
system
Economic
systems

Capitalist system

The planned
economy system

Alternative
economies
 The economic systems
Traditional or Capitalist or market Communist or Mixed economies
subsistence economy centrlly planned
economy economy
Families produce There is no state The state controls Intermedian system
almost everything they intervention in all aspects of the
need. economic activity. economy.
They sell their It is based on private The State is the It integrates aspects of
surplus in the local ownership of the owner of the the market economy.
market or exchanged means of production, companies, and There is free
for other products. the search for profit, decides what to competition although
the law of supply and produce and in what the State regulates
demand, and free quantity, sets the certain aspects.
competition. prices. Example: prices,
taxes, working
conditions

This system is It was the prevailing in This system is not It is the system of
common in less England and USA in widespread today. most developed
developed countries. the XIX century. Example: North countries
Corea
Sistema económico capitalista. Se basa en la
libertad absoluta del mercado.
Identify the economic system
 Activities:
1. There are times of the year, such as the summer sales, when the
law of supply and demand is clearly seen. Give an example.
2. What happens to what has been sold less due to lack of demand?
Do you think that the price of a product with high demand is
lowered?
3. Imagine that you go to the supermarket to buy an orange juice.
a. How many brands can you choose from?
b. What is the name of the economic system in which any
company can compete for the sale of a product?
c. In what kind of economy would there be only one brand of
orange juice in the supermarket?
 ACTIVITY

 Take notes while you watch the video.

 Afterwards, elaborate a brief
commentary on the video and relate it to
what was seen in class on economic
systems.
https://www.youtube.com/watch?v=W7M612e-WOQ
https://www.youtube.com/watch?v=co5ut5cfquk
 8. THE
ECONOMIC
SYSTEMS
AND ITS
DOCTRINES
 8. The economic systems and its economic doctrines

Liberalism
• Author: Adam Smith (18th century), UK
• Work: "The Riches of Nations“
• Economic system that is based on his doctrine: Market or
capitalist economy.
• Doctrine:
• The free market works like an “invisible hand”: without clear
guidelines. The market itself regulates prices and the quantity
of products offered.
• LAISSEZ FAIRE (Let do). The State must reduce its
intervention to a minimum and leave the market free since it is
much more efficient.
https://www.youtube.com/watch?v=NdUa2zrJL0g
 8. The economic systems and its economic doctrines

Marxism
• Author: Karl Marx (19th century), Germany.
• Work: “The Capital“.
• Economic system that is based on his doctrine: Planned economy
or communism.
• Doctrine:
• Critique of capitalism: the free market leaves out those with
fewer resources and exploits workers.
• Defends: the absolute control of the State in the economy and
public ownership of the means of production.
https://www.youtube.com/watch?v=TMmDebW_OBI
 8. The economic systems and its economic doctrines

Keynesianism
• Author: John Maynard Keynes (XX century), UK
• Work: "General theory of interest, employment and money “.
• Economic system that is based on his doctrine: Mix economy.
• Doctrine:
• Defends: the free market but with State intervention, both
fiscal and monetary.
• It became popular after the crash of 1929.
https://www.youtube.com/watch?v=vhZ405LsWeA
 9. What is globalization?
• Currently, a global economy predominates in which the world
exchange goods, information and capital.
• Globalization is the process by which the relations between the
different parts of the world become closer, and the markets of the
countries are more interdependent, that is, they depend on each
other.
9. What is globalization?
The process of globalization is carried out in economic, social, cultural and political aspects:
• Globalization of technology, which has revolutionized transportation and
communications. It facilitates the transport of goods and people on a global scale.
• Globalization of communications and knowledge. Today immediate communication in
long distant places is possible thanks to the new technologies, and this has made possible
the exchange of ideas, opinions and knowledge.
• The Internet allows you to buy without traveling, take online courses, work from home...
• Globalization of human rights. The idea has spread throughout the world that basic
human rights must be preserved, all people are equally without discrimination based on
sex, ideas, religion, origin, skin color, etc. Although in practice there are many places
where they are not respected.
• Economic globalization.
• Free movement of industries, companies, capital and products.
• Consumers can access a greater number of products and at a lower price.
 Activities:
1. What aspect of globalization do you like the
most? Why?
2. Which do you think is more important in your
life? Why?
3. What aspects of globalization do you like the
least? Why?
 Negative factors of globalization
• The increase in communications increases the risk of contracting
certain diseases such as AIDS or Covid-19.
• There is no globalization of labor rights. There are countries where
labor rights are not respected. Their workers are paid very low wages,
work many more days and many more hours.
• In many countries, social services (education, health, pensions, etc.)
are not free and universal because the taxes paid are very low and the
State cannot cover these expenses.
• In addition, there are countries where you can take your money to
avoid paying taxes. They are called tax havens. This hurts people
who live in the country with normal taxes, as money leaks to those
countries and they have less money to maintain social services.
• There is no free movement of people. A company from another
country can settle in yours (multinational) to earn money and then
take that money to their country, but you cannot go to that country
that receives the benefits that it has earned in your land.
 Globalization and anti-globalization:
 The neoliberals (they call themselves liberals), consider that the globalization
is achieved by liberalizing only the movements of capital, companies and
products, since they are against labor and social rights. The most important
right that the State must guarantee is the right to private property.
 Those who defend a complete globalization that includes social, fiscal and
labor rights globalization are called alter-globalists. The alter-globalists
consider that there are other rights that are just as relevant as that of private
property, so the State must seek a balance between all of them.
 On the other hand, the alternative people are anti-globalizers. They are against
the globalization that neoliberals defend. It is a set of social movements made
up of activists from different political ideas around the planet. This movement
accuses the current process of globalization of benefiting the large
multinationals and the richest countries, increasing the precariousness of work,
and consolidating an unfair and unsustainable economic development model.