Economics (Unites States)
What is the relationship between the economic system and the availability of natural resources?
United States is one of the most economically diverse economies in the world. Being the leading and largest economy in terms of both production and consumption, it relies on many natural resources and production of consumer goods. In addition, it is also one of the largest service providers. Its economy is not reliant on just natural resources. However, almost a century ago, natural resources were the main cause of its economic development. Some of the natural resources that led to its growth include oil, natural gases, and coal and iron ores. These resources are responsible for the major part of its development. Oil powered machines; coal heat up homes and produced electricity, natural gases provided fuel. Availability of fertile lands for agriculture has also played an important role in the economy of this country. Although today is boasts of a diversified economy, ready availability of resources has been the major driver for the United States economy since the 19th century (EconomyWatch 2010).
Are the scarce factors of production (land, labor and capital), ad what has the government done about it?
It would be hard to say that United States faces any scarcity in factors of productions considering it produces between a quarter and a third of world’s total production. In terms of land, it has enough for agriculture and other purposes including providing natural resources. When it comes to labor, it has the biggest number of skilled workers. in terms of entrepreneurs, it has many considering it is a leader in innovative businesses. For capital, it has the biggest compared to other countries. However, this does not mean that it has enough capital for producing as much as it can. Currently, many of the skilled people are going without jobs, meaning there is a scarce factor. This factor is capital, which is the finance, tools and assets that people require to produce. There is a low capital labor ratio where the volume of worker surpasses resources; hence, people are unemployment. This has largely been contributed by off shoring of jobs in order to cut on costs. Therefore, the high cost of production in the country makes it unfavorable for some of the production especially manufacturing (InfoUSA n.d).
Are there issues of infrastructure and how can those issues be solved?
Although united states is the most developed and mature economy, it also faces some infrastructure issues. in united states, every four years civil engineers offer a comprehensive assessment of the country’s infrastructure. It is graded from A to F in terms of condition, safety, future need, capacity, maintenance and operations. Currently, the infrastructure has averaged D, which means it is quite low. This has been due to delayed maintenance and poor funding. The government can correct this by providing more funds and resources for maintenance of the infrastructure. The government can also encourage private investment as the 2013 report card indicates its potential to improve infrastructure such as it did in the railway category (American Society of Civil Engineers, 2013).
Is there a sector in the economy that is overrepresented?
The United States economy is the most diverse in terms of sectors. It is hard to say that one sector is overrepresented. However, it is important to note that the service sector of united states contributes 67.8% toward the total gross domestic product. Although this is an overrepresentation, it contains many parts within it. Some of these parts include retail industry, information, technical and professional services. Out of all the services provided, wholesale and retail are the leading sectors. This means that united states does not rely on one specific sector considering wholesale and retail encompass all services and products rendered to clients (Timini 2011).
What is the productivity performance of this country?
United states has the biggest GDP in the world standing at $16.24 trillion in 2012. The GDP per capita the same year was at $45,336. after it was adjusted by the purchasing power parity, it was equivalent of 2006% of the world’s average. This means its production performance is quite high compared to other countries. Between 1980 and 2012, the GDP per capita was at an average of $36,571, with the lowest being $25,748 in 1982 while the highest was $45,431 in 2007. It is growing at a rate of between 2 and 3 percent (Trading Economics 2014).
Is the economic system used in the country appropriate?
For two centuries, the united states economy has continued to grow to its current position. It has remained quite stable considering it overtook those countries that were developed before it was such as England and France. The federal reserve bank has continued to regulate the economy using the appropriate regulatory policies. it is a capitalist economy, largely driven by spending. this ensures it can survive even during economic crisis. One of its worst economic crises was the great depression, which did not stop it from emerging as the world’s strongest economy. To a larger part, the united states economy is market driven where individual producers and consumers determine the products and services produced, as well as the prices at which to buy them (The USA online.com 2014). In addition, the government acts as a consumer just like other individuals and private institutions from where it purchases its products. more so, the individuals and private institutions make the investments, savings and spending that drives its market economy.
Are there any elements of traditional economy present?
The united states economy has some traditional economic systems even today. One of them is fishing, where some families rely on it as the primary source of income and livelihood. Another traditional element found in the united states economy is nepotism, where people with big businesses will favor their relatives over other people. although this may not be legal, the law does not always have a way of preventing it (Ashbrook 2014). This results to rich people getting richer since one can always find a better job if he or she has connections with prominent people.
How does your country’s economy compare to neighboring countries?
United states is bordered mainly by Canada and Mexico. Comparing to these two countries, united states’ economy is quite strong. In terms of GDP, it has surpassed both of these countries combined with quite a big margin (Wallstats.com 2009). Being the leading economy in the world, it also has the highest GDP per capita compared to its neighbors. Its production capacity surpasses its neighbors by multiple times. In terms of growth rate, Mexico is leading, followed by united states and then Canada. Overall, the united states economy is very strong against its neighbors.
What are the challenges facing this country’s economy
One of the main economic problems facing the united states is that it no longer produced much of what it requires. Over the last two decades, united states corporations have sought to reduce costs of production by outsourcing manufacturing to other countries such as China and Thailand where labor and other costs are cheaper. This has resulted in higher unemployment rates as people lose their jobs to foreign countries. This further means the country imports more than it exports, meaning it has a trading deficit. The other challenge facing the united states economy is tax reforms. Over the last two decades, many countries have continued to reduce their taxes, which leave the united states with one of the biggest corporate taxes. This has discouraged investment within the country’s borders. Another problem facing the country is the escalating healthcare costs. Currently, the united states healthcare is almost at 3 trillion dollars, which is about 17% of the nation’s GDP. It is still going higher, meaning it could become unsustainable in the future (Barfield 2014).
What are the key drivers of this country’s economy?
Any country’s economic growth is
indicated by the GDP. A growth rate in GDP indicates that the country is
growing. However, the main question here is what drives the united states GDP.
The first driver of the American economy is consumption. United states is the biggest market
because of its consumption. Compared to other countries, united states citizens are the
biggest spenders. The other driver is business investments. This determines the
level of production. When investments are higher, it means the country can
produce more. The third driver is government spending. when a government
spends, it offers the private sectors more money by buying their products. in
turn, this money is redistributed to the people, leading to growth in GDP
through consumption. Finally, the net exports drive the economy as well. net
exports means the amount of products it sells in other countries less those it
buys. These four factors drive the American economy (Hubbard and Navarro 2010).
American Society of Civil Engineers. 2013 Report Card for America’s Infrastructure. infrastructurereportcard.org, 2013/ Web. May 28, 2014.
Ashbrook, Tom. The Power of Elite and Nepotism in America. onpoint.wbur.org, March 6, 2014. Web. May 28, 2014.
Barfield Claude. Opinion: Five Challenges Facing the American Economy in 2014. newsday.com, January 23, 2014. Web. May 28, 2014.
EconomyWatch. Natural Resources. economywatch.com, October 13, 2010. Web. May 28, 2014.
Hubbard R. Glenn and Peter Navarro. America’s our Growth Drivers Stall and Our Economy Stagnates. ftpress.com, 2010. Web. May 28, 2014.
InfoUSA. How the Economy Works. ait.org.tw, n.d. Web. May 28, 2014.
Timini Keith. Different Sectors of the US Economy. economywatch.com, May 5, 2011. Web. May 28, 2014.
Trading Economics. United States GDP per capita PPP. 2014. Web. May 28, 2014.
The USA online.com. Economy: U.S. Economic System. theusaonline.com, 2014. Web. May 28, 2014.
Wallstats.com. Canada and Mexico vs. the US: A Visual Comparison. mint.com, June 9, 2009. Web. May 28, 2014.