SS7E7a,b,c.d

1
SS7E7a,b,c.d

• The student will describe factors that influence
  economic growth and examine their presence or
  absence in Israel, Saudi Arabia, and Iran

2
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Gross Domestic Product the value of all goods
  and services produced in a nation in a given year
• Human capital the knowledge and skills that make
  it possible for workers to earn a living
  producing goods or services.
• More skills and education better able to work
  without mistakes and learn new skills as
  technology changes

3
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Companies that invest in training and education
  for their workers usually earn more profits.
• Also more satisfied workers.
• Good companies try to make working conditions
  safe and efficient so their workers can do their
  jobs without risk.

4
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Wealthy countries have a much higher per capita
  GDP than do developing or underdeveloped
  countries.
• Countries where training and education are more
  easily available often have higher production
  levels of goods and services (and higher GDPs)
  than countries that do not invest in human
  capital.

5
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Countries in SW Asia have widely different gross
  domestic product levels.
• Countries that make it possible for workers to
  receive training and education tend to be
  wealthier than those that do not.

6
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Israel has wide access to education and an
  economy that depends on technology industries to
  make up for the lack of natural resources.
• Many Israelis work in industries related to
  medical technology, agricultural technology,
  mining, and electronics.

7
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• They also have highly developed service
  industries ( businesses that supply the needs of
  the rest of the working population).
• Israels GDP is very high because they have
  invested heavily in their human capital.

8
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Saudi Arabias main industry is as an exporter of
  oil (petroleum) and petroleum products.
• The technology of the oil industry is complicated
  and requires a well-trained and educated work
  force.
• Saudi Arabia also has modern communications and
  transportation systems.

9
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• They also have enormous building projects.
• All of these require investments in human
  capital.
• Some Saudi citizens still practice traditional
  economic activities such as farming and herding
  animals.
• Due to the world demand for oil, Saudi Arabias
  GDP is high.

10
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Iran worlds 5th largest producer of oil.
• Oil wealth has led to the use of advanced
  technology that has required highly trained
  workers.
• Iran has always had highly regarded schools and
  universities that have meant educated workers
  were available for industry.

11
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• However, in recent years the Iranian government
  has not always done a good job of regulating the
  parts of the economy that are under government
  control.
• Iran- GDP 10,600 Lit. Rate 77
• Israel GDP 25,800 Lit. Rate 97.1
• Saudi Arabia GDP 23,200
• Lit. Rate 78.8

12
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Discuss Relate oil wealth, GDP, and literacy.
  Why if Iran is so oil wealthy does it have a
  lower GDP. How does the literacy rate affect the
  GDP? Israel? Saudi Arabia?
• Iran- GDP 10,600 Lit. Rate 77
• Israel GDP 25,800 Lit. Rate 97.1
• Saudi Arabia GDP 23,200
• Lit. Rate 78.8

13
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Questions
• What is meant by human capital?
• Why have the Israelis made a big investment in
  human capital?

14
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Questions
• Why would the Saudi oil industry need a large
  investment in human capital?

15
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Questions
• What is one of Irans biggest problems with their
  state-run oil industry?

16
a. Explain the relationship between investment in
human capital (education and training) and gross
domestic product (GDP)

• Questions
• If a country does not invest in its human
  capital, how can it affect the countrys gross
  domestic product?

17
b. Explain the relationship between investment in
capital (factories, machinery, and technology)
and gross domestic product (GDP)

• Capital goods are important to economic growth
• Use of advanced technologies increases production
  and makes that production more efficient.
• Producing more goods faster and more efficiently
  leads to economic growth and greater profits (and
  a greater GDP).

18
b. Explain the relationship between investment in
capital (factories, machinery, and technology)
and gross domestic product (GDP)

• Israel invested heavily in capital goods (needed
  for their technology and industrial production as
  well as for their advanced communication
  systems).
• Israel has also invested heavily in technology
  involved in the defense industry.

19
b. Explain the relationship between investment in
capital (factories, machinery, and technology)
and gross domestic product (GDP)

• Saudi Arabia invested heavily in capital goods,
  especially in technology related to oil
  production, transportation, and communication
• Iran invested greatly in capital goods related
  to oil production, technology and communication.
• Iran also spends a great deal on its defense
  industry.

20
b. Explain the relationship between investment in
capital (factories, machinery, and technology)
and gross domestic product (GDP)

• Questions
• What are capital goods?
• Name three things in which Israel has invested
  heavily.

21
c. Explain the role of oil in these countries
economies

• Natural resources are the raw materials a country
  has that make life and production of goods
  possible.
• Land, water, rich soil, and minerals are all
  types of natural resources.
• In SW Asia one important resource is oil.
• Some natural resources can be replaced when they
  are used like trees (renewable).

22
c. Explain the role of oil in these countries
economies

• Other resources like coal and oil cannot be
  replaced once they are used (nonrenewable)
• Oil and natural gas are fossil fuels.
• They were created when plants and animals that
  lived centuries ago decayed underground.
• Natural gas is also nonrenewable.
• Most of the industrial nations depend on oil.

23
c. Explain the role of oil in these countries
economies

• The U.S imports nearly half of all the oil it
  uses ( almost 18 million barrels a day)
• Other nations do the same.
• Some other sources of power are also used such
  as coal, wind power and nuclear power.
• Since so many countries rely on oil, countries in
  the Middle East with large reserves of oil have
  steady markets for all the oil and natural gas
  they can produce.

24
c. Explain the role of oil in these countries
economies

• Many of these countries have become very rich in
  the last 50 years as the worlds demand for oil
  and gas has increased.
• Saudi Arabia and Iran are two of the worlds
  largest producers of oil.
• Over half of the worlds known supplies of oil
  are found in countries in the Middle East.

25
c. Explain the role of oil in these countries
economies

• Israel has few natural resources and practically
  no oil at all.
• Israel has a highly developed industrial economy
  so the price of oil has a huge impact on the
  Israeli economy.
• Since they need oil for their industries and do
  not have any to speak of, Israel has had to find
  other natural resources to develop in order to
  help their economy grow.

26
c. Explain the role of oil in these countries
economies

• Minerals, including phosphates, are mined
  commercially in Israel.
• Salts are also taken from the Dead Sea.
• Israels economy depends in large part on
  technology rather than on the development of
  natural resources.
• This means that Israel always has to purchase oil
  to keep their industries going.

27
c. Explain the role of oil in these countries
economies

• Other than oil, Saudi Arabia has few natural
  resources.
• The production of oil and natural gas
  (petrochemicals) make up the majority of Saudi
  Arabias economic wealth.
• Saudi Arabia is very influential in the world
  economy and in OPEC due to its vast oil reserves.

28
c. Explain the role of oil in these countries
economies

• They have been able to modernize agriculture by
  spending billions of dollars on irrigation and
  desalination technology.
• Modern cities exist where there was once remote
  desert land.
• They have modernized roads, schools, airports,
  and communication systems.

29
c. Explain the role of oil in these countries
economies

• NOTE
• The oil wealth of Saudi Arabia technically
  belongs to the royal family, the al-Saudis.
• However they have spent enormous sums of money to
  improve the standard of living for their people.
• Saudi Arabia has gone from being a desert
  kingdom to a modern nation in less than 100
  years.

30
c. Explain the role of oil in these countries
economies

• Irans most valuable natural resource is oil.
• They also have rich farmland and access to water
  for irrigation and farming.
• Oil and petroleum products are the biggest
  contributors to Irans varied economy.
• 85 of the governments money comes from the sale
  of oil and petrochemicals on the world market.

31
c. Explain the role of oil in these countries
economies

• Many Iranians work in other industries as well
  with almost 1/3 engaged in agriculture.
• Political problems in recent years have led to
  economic difficulties in spite of their vast
  supply of oil.
• Iran is a member of OPEC and benefits from that
  organizations decision to keep the price of oil
  on the world market at high levels.

32
c. Explain the role of oil in these countries
economies

• Questions
• Why are oil and gas such valuable natural
  resources?

33
c. Explain the role of oil in these countries
economies

• Questions
• How much of the oil used by the U.S. has to be
  imported every day?

34
c. Explain the role of oil in these countries
economies

• Questions
• How has the Saudi government used its national
  wealth to change the country?

35
c. Explain the role of oil in these countries
economies

• Questions
• How do Iran and Saudi Arabia benefit from
  belonging to OPEC?

36
c. Explain the role of oil in these countries
economies

• Questions
• How has Israels lack of oil affected that
  countrys economy?

37
d. Describe the role of entrepreneurship

• Entrepreneurs are creative, original thinkers who
  are willing to rake risks to create new
  businesses and products.
• They think of new ways to combine productive
  resources (natural, human, and capital) to
  produce goods and services that they expect to
  sell for a price high enough to cover production
  costs.

38
d. Describe the role of entrepreneurship

• Entrepreneurs are willing to risk their own money
  to produce these new goods and services in the
  hope that they will earn a profit.
• Success is not guaranteed not all entrepreneurs
  will make a profit.
• Many are not successful.
• Only about 50 of new businesses are still
  operating 3 years after they begin.

39
d. Describe the role of entrepreneurship

• Question
• What is an entrepreneur?