The U.S., officially known as the United States of America is the third largest country, considering both its population (324,118 million) and area (9.834 million km²), which is made up of 50 states.
What Economic system does the U.S. have?
The United States is a mixed economy, due to there being both private businesses but also some where the government is involved in. One of such is the Fiscal Policy, which is when, as stated by Reem Heakal
on Investopedia, “a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy”. Another scenario where the government intervenes in the economy is the monetary policy, which is when a central bank or any other regulatory committee has an influence on the nation’s money supplies growth rate, which also affects the interest rates. Both of these policies are used to reach a countries economic goal, which is why the U.S. has implemented them through the government.
How does the government deal with answering the key economic questions?
The government of the United States deals with answering all of the key economic questions by interfering when a problem or the pace of its economy has decreased. Even though the United States is a free market economy, this aspect of the government helping makes it a mixed economy, which is very beneficial for the country. An example of when the government steps in to help, is when the resources are being allocated but at an inefficient rate. Their interference stops the trade and the entire market flow.
What goods and services will be produced?
Today, the vast majority of products used in the United States are imported and produced in countries such as Canada, China, Mexico and Europe. Though the U.S. still produces important products, which we use in our daily life. Some of these include, Electrical equipment, fabricated and primary metal products, medical equipment, petroleum and coal products, computer and electronic products, machinery, chemicals and transportation equipment. The United States of America has also and abundant resource of agricultural products including, wheat, corn, fruits, vegetables, cotton, beef and pork, dairy products, fish and forest products. It is also one of the largest coal productions globally, which is used to produce energy and other necessities. Another natural resource, which can create aluminium, iron, copper and nickel, is bauxite. Gold and silver both have a very high value, which means they are able to be sold for a higher value of money. Luckily, in the western part of the U.S. there are mines, finding these two resources, making a big fortune. Due to the United States of America being located in an area, full of natural resources, the country is able to benefit greatly from it.
How will the goods and services be produced?
Goods are mainly produced using machinery, which will be needed to produce the vast majority of products manufactured in the United States. Machines are therefore essential to the production of products otherwise businesses wouldn’t be able to keep up with the demands of their customers. The 2008 financial crisis had a huge impact on the manufacturing industry and its employers. Over 2 million jobs were lost, which were all replaced by machines. This didn’t have an impact on the industry but rather the employees, that didn’t have a job as a result.
For whom will the goods and services be produced?
Trading partners with the United States that both import and export products are Canada, China, Japan, Mexico and the United Kingdom. Other countries that mainly export products to the U.S. are India, Italy, France, Germany and South Korea. China is the biggest exporter, sending $502 billion dollars’ worth of products, the majority being computers and other electronic devices. 13% of the product being brought into the United States are from Canada, who export oil, machinery and vehicles at a total price of $302 billion dollars. Below is a more detailed table on 11 countries that the United States exports to.
Who makes the decisions?
Who makes the decisions depends on the business, due to the United States being a mixed economy. If it is private, the decisions would be made by the owner as that falls under the category of the free market economy. However, the decisions could also be made by the government and as mentioned previously this depends on whether or not the economy is going well, if yes it is a free market if not then the government steps in to help out.