(EOA) Economy of Africa Module Overview

Economy of Africa

Image of economy in Africa Introduction 

The National Council on Economic Education has created a list of principles to guide students as they study economics. They call this list "The Guide to Economic Reasoning." We are going to use their list to guide us through our study of African economies.

Module Lessons Preview

 In this module, we will study the following topics:

Production, Distribution, & Consumption: Economic Systems

Africa is a diverse continent with diverse geography and climate. This impacts the economy of what to produce, how to produce, and for whom to produce. Today, Africa’s economy is transforming due to its vast natural resources.

Production, Distribution, & Consumption: Trade

With the vast number of natural resources, Africa is becoming economically sufficient. In a global economic world, not every country can produce all the goods and services it needs. Trade allows countries to prioritize what they produce to help increase profitability. Anything they cannot produce will be purchased from outside regions.

Production, Distribution, & Consumption: Economic Growth

Economic growth and prosperity allow a country to support its growing population. As countries become more economically stabilized, they begin to have a growth of literacy rates, education, and job opportunities.

Key Terms

  1. Tariffs - list of duties or taxes on imports or exports
  2. Quotas - the maximum amount a country is allowed to export or import from another country
  3. Embargo - any restriction put on commerce by law
  4. Exports- goods that are produced in one country but sent away to another country for sale
  5. Imports- goods that are produced in another country but brought into one's own country for sale
  6. Human Capital - Investment in the humans who make up a labor market through education and training
  7. Entrepreneur - a person who organizes or manages a business or industrial undertaking
  8. Agrarian Economy - an economy based on farming
  9. Subsistence Farming - a type of agriculture done when the farmer grows only enough food to live on
  10. Commercial Agriculture - the large-scale production of crops for sale, intended for widespread distribution to wholesalers or retail outlets
  11. Gross Domestic Product (GDP)- the monetary value of all the finished goods and services produced within a country's borders during a specific time; measures the health of a country's economy
  12. Gross National Product (GNP)- the market value of all the products and services produced in one year by labor and property supplied by the residents of a country; this figure will include GDP along with goods and services made outside of the country but owned by residents of that country
  13. Capital Investment - investing money in factories, machines, or technology; investing capital in the means of production
  14. Infrastructure - the basic physical and organizational structures and facilities (e.g., buildings, roads, and power supplies) needed for the operation of a society or enterprise
  15. Currency - money in actual use in a country
  16. Urbanization - the mass migration of a population away from rural areas and into cities
  17. Industrialization - the development of large industries in a country or economic system
  18. Traditional Economic System - an economic system where resources are allocated by inheritance; strong tie with subsistence farming
  19. Command Economy - an economic system where all major decisions related to production, distribution, and prices are made by the government or central authority
  20. Free Market or Market Economic System - an economic system where consumers and their buying decisions drive the economy; strong tie with the trends of supply and demand
  21. Mixed Economy -an economic system combining private and public enterprise (a mixture between free-market and command)
  22. African Economic Community - an organization of African Union states establishing grounds for mutual economic development among the majority of African nations
  23. World Bank - a United Nations international financial institution that provides loans to developing countries for capital programs
  24. Industrialized Nation- a nation having highly developed industries
  25. Production - the act of producing; manufacture; creating of products
  26. Distribution - a distributing of goods grown or made by producers
  27. Consumption - a using up; use

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