Specialization & Interdependence Ms. Ramos Alta Loma High School

Specialization & Interdependenc

eMs. Ramos

Alta Loma High School

How does specialization

lead to Economic Interdependence

?Ms. Ramos

How did people live 200 years ago?

Ms. Ramos

•They grew their own food, built their house, made their own tools & clothing, and performed many other tasks themselves.

Ms. Ramos

Specialization Improves Productivity

•Smith wrote about advantages of specialization–Division of labor

•As productivity increases, more G&S are available & standard of living increases

Ms. Ramos

•Need lg society to sustain

Ms. Ramos

Specialization Encourages Trade

• Don’t produce everything- need to trade

• “We trade with others because it frees up time and resources to do things that we are better at”

- Charles Wheelan

• Are we able to be self sufficient today?

Ms. Ramos

•Trade is a VOLUNTARY EXCHANGE

•Traditional economies- Barter•Market economies- money

Ms. Ramos

•Money is …–Useful when value generally accepted

–Easy to carry –Convenient for transactions

Ms. Ramos

Trade creates Economic Interdependence

•depend on others/ other countries

Ms. Ramos

http://www.shutterstock.com/pic-23004469/stock-photo-a-typical-american-hearty-breakfast.html

dullmensclub.com

http://www.shutterstock.com/pic-23004469/stock-photo-a-typical-american-hearty-breakfast.html

dullmensclub.com

Columbian Coffee

Florida Orange Juice

Idaho Potatoes

Iowa Eggs

Nebraska Pork

Kansas Wheat

•Smith & the Founders believed trade & econ interdependence were key to nation’s growth–Prob when states est trade barriers w/one another

–Difficult to develop national economy

Ms. Ramos

madmen.wikia.com

peoplequiz.com

Ms. Ramos

Not to worry!!!…. Commerce Clause Art. I, sec. 8 to the rescue“Congress shall have the Power…To regulate Commerce with foreign Nations, and among the several states”

Ms. Ramos