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Guns vs. Butter

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rachele windau

on 8 April 2014

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Transcript of Guns vs. Butter

Guns vs. Butter
Presented By: Dominique Pelz, Rachele Windau, Allison Fullam, and Zach Schock
Definition
A nations choice to invest in military goods (guns) or civilian goods (butter)
The Russians chose
guns
over
butter
This means that the Russians chose to use their economic resources to fund military equipment rather than use those resources to improve the social well - being of their citizens
Possibility Curve
The dark blue line on the graph is the Possibility Curve. The purpose of the Possibility Curve is to show all of the possible choices of production for the economy. The point is that every choice has an opportunity cost. You can receive more of a product only by giving up another product. It is impossible to produce more goods than the economy will allow unless you increase your productivity.
United States
In the Guns vs. Butter graph the United States has balanced military and consumer products. This is why the blue line (representing the U.S.) is in the middle of the two sides. The U.S. has incorporated both military and consumer goods since the 1920's.
Soviet Union
However, the Soviet Union (represented by the pink line), chose to produce around 5 times more military goods than civilian goods! This usually means that the civilians were the ones producing these military products, and they were barely getting anything in return.
How do they relate to us today?
The guns and butter theory affects everyone in the world, even if we don't realize it. Guns and butter don't have to represent actual military goods and consumer goods. Some "guns" can include stocks, real estate, or anything that goes up in value or collects income. "Butter" means any material item such as clothing, electronics, or anything that we buy for our own personal entertainment. In, life our big decision is are we going to invest in the guns, or in the butter.
Choice
Guns vs. Butter Graph
1930 - 1950
2010 - 2014
Full transcript