United States Economy

United States Economy

Mark Biatreh

Dr. Dolore Bushati

Nassau Community College

Econ 207

The United States of America is a federal constitutional republic comprising of fifty states and a federal district. The great nation of America also known as the United States of America was not united at the birth of our country. It evolved and came together as a 50 state nation as the years progressed. It all started when Britain's American colonies broke with the mother country in 1776 and were recognized as the new nation of the United States of America. During the 19th and 20th centuries, many more states were added on to the original 13 states; making it the nation that it is now consistent of 50 states. The U.S is mainly located in central North America for the exceptions of Alaska and Hawaii. Alaska is located next to Russia on the east end, and Hawaii is located in the mid-pacific as a group of islands. The United States consists of 308 million people living on a 3.79 million square miles. It is currently the fourth largest country by land and population, and the most diverse and multicultural nation ever to exist due to a large immigrants from all around the world migrating to our country. The United States also has a capitalist mixed economy, which is fueled by abundant natural resources, developed infrastructure and high productivity. It has the biggest economy in the world.

Economic indicators are ways to check on how well an economy is doing, such as GDP. The gross domestic product or GDP is the total market value of all final goods and services produced by factors of production located with in a nation's border. GDP is calculated by adding all consumptions, government expenditures, investments and net exports will give you real GDP. The United States current GDP is 14256 billion dollars or 22.99% of the world's economy, according to the World Bank. It has increased of 1.8%, even though it has increased it isn't increasing at the annual average rate of 3.3%. According to the advance estimate released by the Bureau of Economic Analysis the real GDP is expected to rise up to 3.1% by the fourth quarter of 2011. The increase in real GDP in the first quarter is due to contributions from personal consumption expenditures, private inventory investment, exports, and nonresidential fixed investment that were decreased by contributions from federal, state and local government spending as well as an increase in imports. This decreases the total amount of net export from the United States.

Unemployment rate is the number of adults that are sixteen years of age and older, willing and able to work, and are actively looking for work but haven't found a job. That unemployment percentage is calculated by dividing the number of unemployed by the total amount of people in the labor force, multiplied by a hundred. An average unemployment rate is anywhere from five to six percent. Full employment is impossible due to frictional unemployment, which is employment due to the fact that workers must search for an appropriate job offers; this takes time so they remain temporarily unemployed. Towards the middle of 2008 the United States went into a recession due to mortgage crisis, investment bank failures, failing home prices, and granting wrong people credit, which made the United States undergo a recession. This recession was the second largest recession after the great depression, because of this recession the unemployment rate had sky rocketed from a low of 5.6% at July 2008 to a high of 10% at July 2010, and as of march 2011 it is 8.8%. As you can see the unemployment rate is decreasing which means the economy is doing better than it was before.

Another economic indicator is the rate of inflation, which is the average increase prices and decrease in the purchasing value of money. Inflation rate can be measured by the consumer price index. The consumer price index is a weighted average of a specified set of goods and services purchased by consumers. It's computed by dividing the cost of today's market basket by the cost of that