Economics SS 2 Curriculum Guides – Types and Features of Economic Systems | Types of Financial Institutions and Their Functions

 

THEME – ECONOMIC SYSTEM 

TOPIC 1 – TYPES AND FEATURES OF ECONOMIC SYSTEMS

 

INSTRUCTIONAL MATERIALS

Political map of the world

 

 

LEARNING OBJECTIVES

By the end of the lesson, students should be able to:

1. describe different economic systems (free enterprise, centrally planned and mixed economy) and how they solve their economic problems.

2. distinguish among the systems.

 

 

CONTENTS OF THE LESSON

FOCUS LESSONS 

Meaning of Economic System 

Economic system can be defined as how whom owns the resources of a country, organizes and manages the production and distribution of goods and services.

Individual, cooperate and government can owned resources, organized and managed them.

 

Basic Features of Economic Systems

There are three main types of economic systems,

1. Capitalism (Market Economy)

2. Socialism (Command Economy)

3. Mixed Economy

 

CAPITALISM (MARKET ECONOMY) 

Capitalism is an economic system where private individuals managed and controlled production and distribution of goods and services for the purpose of maximizing profits by minimizing costs.

 

CHARACTERISTICS OF CAPITALISM

1. It is private ownership and control of property and economic resources.

2. It is free enterprise.

3. It is competition among businesses.

4. It gives for freedom of choice.

5. It makes workers more productive than other any economic systems.

6. It is profits oriented.

 

ADVANTAGES OF CAPITALISM

1. It gives people an incentive to work hard.

2. It allows people to accumulate wealth

3. It lowers tax rates.

4. It encourages healthy competition.

5. It gives room for maximization market efficiency.

6. It create good environment for local and international investors.

7. It encourages technological progress.

8. It increases standard of living.

9. It increases the national GDP.

10. It reduces prices.

11. It increases the product qualities.

 

DISADVANTAGES OF CAPITALISM

1. It increases income and wealth gap between people.

2. It may leads to monopoly.

3. It may encourage workers exploitation.

4. It may lead to unemployment rates during economic downturns.

5. It increases environmental degradation.

6. It increases social tensions in our society.

 

SOCIALISM

Socialism is an economic system where government managed and controlled production and distribution of goods and services for the purpose providing its citizens essential social amenities.

The fact that socialism is not for profits making doesn’t mean it is running at lot.

 

CHARACTERISTICS OF SOCIALISM 

1. It is public ownership.

2. It is planned economy.

3. The state is responsible for the people basic needs.

4. It provides equal opportunities.

5. It controls the price mechanism.

 

ADVANTAGES OF SOCIALISM

1. It ensures redistribution of income and wealth.

2. It closes the gap between the poor and the rich.

3. It improves social stability.

4. It ensures workers minimum wages.

5. It ensures access to medical facilities and free healthcare.

 

DISADVANTAGES OF SOCIALISM

1. It doesn’t give room variety or alternative choice.

2. It reduces individual initiative since the citizens depend on the government for everything.

3.It gives room for laziness.

4. It slows down economic growth and development.

5. It gives no room for specialisation.

6. It does not encourage division of labour.

8. No competition.

9. It leads to state monopoly.

 

MIXED ECONOMY

Mixed economy is an economic system where government and private individuals managed and controlled production and distribution of goods and services.

 

CHARACTERISTICS OF MIXED ECONOMY 

1. It enables the government controls large industries, while private individuals control small businesses.

2. It enables the government to taxed the citizens heavily to provide the basic amenities.

3. It enables the government and private individuals to controlled property.

4. It makes workers less productive.

5. It gives the consumers variety of choices.

 

ADVANTAGES OF MIXED ECONOMY 

1. It encourages private participation.

2. It creates freedom of choice.

3. It footer economy growth and development.

4. It creates healthy competition.

5. It prevents government and private monopoly.

6. It allows division of labour which leads to specialization.

7. It reduces economic inequalities.

8. It improves social welfare of the citizens.

9. Resources are fully utilized.

 

DISADVANTAGES OF MIXED ECONOMY 

1. It is highly taxed economy.

2. It vu… the private or individual initiative.

3. It is less efficient that the private economy.

4. The private threaten existence of government enterprise.

5. Most of the products are fake, substandard or inferior.

 

 

LESSON PRESENTATION

TEACHER’S ACTIVITIES

The teacher explains features of the various economic systems drawing examples from defunct USSR, United States and Nigeria.

 

 

STUDENT’S ACTIVITIES

The students state features of the Nigerian economy and type of economic system being operated.

 

 

LESSON EVALUATION

Teacher asks students to,

1. discuss the different economic systems

2. distinguish among the systems.

 

 

THEME – FINANCIAL INSTITUTIONS AND REGULATORY AGENCIES

TOPIC 2 – TYPES OF FINANCIAL INSTITUTIONS AND THEIR FUNCTIONS

 

INSTRUCTIONAL MATERIALS

1. Cheque books, pass books, teller, etc.

2. Quarterly, annual and periodical publications of the Central Bank, NDIC, Stock Exchange Commission, etc.

 

 

LEARNING OBJECTIVES

By the end of the lesson, students should be able to:

1. define Money and Capital markets.

2. identify the types and functions of the institutions.

3. explain the types and features of securities.

4. explain the process of and requirements for accessing the capital market.

5. list the benefits of the capital market.

6. demonstrate the understanding of the meaning, transaction and trading methods in the secondary market.

 

 

CONTENTS OF THE LESSON

FOCUS LESSONS 

MONEY MARKET 

Money market is an financial market where trading of money or lending and borrowing of money are on a short-term basis.

For example – banks, financial institutions, money dealers, and brokers trade in financial instruments quickly usually within a yearly.

 

FUNCTIONS OF MONEY MARKET INSTITUTIONS 

1. It promotes economic growth and development.

2. It provides financial assistance to traders and industry.

3. It helps to implement financial policy.

4. It helps to raise fund in case of emergency.

5. It helps support business in time challenges.

6. It makes fund available anytime when the needs arising.

 

CAPITAL MARKET 

Capital market is an financial market where trading of money or lending and borrowing of money are more than a year.

For example – financial products like stocks, bonds, debentures are traded for a long time.

 

TYPES OF CAPITAL MARKET 

1. Primary market

2. Secondary market

 

PRIMARY MARKET

Primary market is the market for new shares or securities are sold or bought for the first time.

Primary market exist between a government or company and investors

It comes in form of government bonds or shares in company.

 

SECONDARY MARKET 

Secondary market is the where existing shares are sold or bought.

This market only exist between the investors.

Secondary market enables an investor to resell his/her shares.

 

FUNCTIONS OF CAPITAL MARKET INSTITUTIONS 

1. It boosts economic growth and development.

2. It facilities trading of securities.

3. It supports large production of goods and services.

4. It makes fund available at all time.

 

HOW THE STOCK EXCHANGE OPERATES 

Stock exchange is a security exchange where stockbrokers facilitate the buying and selling of securities such as stocks, shares, etc.

A stock is a prove of ownership certificate in a particular company. While a share is the stock certificate issued by a particular company.

Stocks and shares cannot be bought and sold like other commodities.

A share ownership can only sell his/her share through a registered and approved agents called a stockbroker or broker. Likewise, the potential buyer can only buy shares through a broker.

A stockbroker is a financial expert who executes orders in the market on behalf of clients. 

 

OTHER AGENCIES THAT CAN ACCESS THE CAPITAL MARKET 

1. Access Bank PLC as receiving banker, FMDQ OTC dealer

2. ACL Capital Partners LTD as Corporate Investment Adviser

3. Adonai Stockbrokers LTD as Broker/Dealer

4. Aegis Financial Services and Link LTD as Cooperate Investment Adviser

5. Africa Prudential Registrater LTD as Registrar

6. Africa Alliance Stockbrokers LTD as Broker/Dealer

7. Afrinvest Asset Management LTD as Fund Manager

8. Afrinvest Securities LTD as Broker/Dealer

9. Afrinvest West Africa LTD as Issuing House

10. Agusto & CO. as Rating Agency

For more agencies, visit Sec Nigeria

 

 

LESSON PRESENTATION

TEACHER’S ACTIVITIES

The teacher,

1. emphasizes the importance of Ajo/Essu/Asusu and similar arrangements as examples of traditional financial institutions.

2. explains peculiar problems of each type of financial institution.

 

 

STUDENT’S ACTIVITIES

The students go on excursion to the Central Bank/Commercial bank/development bank, Stock Exchange where possible.

 

 

LESSON EVALUATION

Teacher asks students to,

1. define Money and Capital markets.

2. identify three types and functions of the institutions.

3. explain teo types and features of securities.

4. explain the process of and requirements for accessing the capital market.

5. list 5 benefits of the capital market.

6. demonstrate the understanding of the meaning, transaction and trading methods in the secondary market.