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Information

about
Americas Economic
System
INFORMATION WILL BE COMPARED AND CONTRASTED TO
THE ECONOMIC SYSTEM OF VENEZUELA

By Student A

United States of America

USA is located in North America, right under Canada. Made up


of 50 states, it has a total population of almost 320 million
people and is considered one of the most multicultural
nations in the world.

Short Introduction to Americas Economy

Americas economy is the largest in the world, with about


22% of the nominal GDP and 17% of the global GDP. The U.S
dollar is the most used currency in the world for international
transactions. USA has a mixed economy and has a stable GDP
growth rate, a moderate unemployment rate and high levels
of research and capital investment.

What Economic System Does USA Have?

America has a mixed economy meaning they have both a free and controlled market economy. A free
market economy is where the prices of any products are set by private businesses with no
interference from the government. A controlled market economy is pretty much the same as a free
market economy only its the government controlling everything.

Key Economic Questions

The following questions are the main questions that every countrys government needs to answer:
-What theyre going to produce and for who?
-How they are going to produce it?
-Who makes the decisions?

What theyre going to produce and for who?


Even though the majority of all products and goods in the market right now are imported from and
produced by countries abroad such as China, Mexico, Canada and Europe, America still supplies some
of the most important businesses in the world. For example, Boeing is an American company and
supplies most international airlines with planes. In this example, they are producing planes and they
are producing them for pretty much the whole world. Boeing makes billions of dollars every year
meaning they are doing well economically. This means they are able to keep up with the demand of
customers. This is one of the many companies in America that are economically and financially doing
well. As a whole, Americas manufacturing business is still one of the best industries out of all of the
present ones.

America is also in a place of abundance when it comes to natural resources. America is one of the
biggest producer of coal which can be used for making energy etc., bauxite is also an abundant
resource in America which can be used to make aluminium, copper and iron can be used in
construction and nickel can be used to make steel. In the western part of America, gold and silver
mines are present and as we all know, these are minerals of high value meaning they could make a lot
of money out of these resources. Oil reserves are also present in some parts of America but at the
moment, oil isnt worth very much. Since America is placed in such a natural resource-enriched
region, the country benefits a lot from these advantages.
How are they going to produce it?
To produce all of the goods and products, they will need to use machinery. In their factories,
machinery is essential to keeping up with the demand of customers. Ever since the 2008 financial
crisis, over 2 million jobs in the manufacturing industry have been lost. Those places have been taken
up by these machines meaning the loss of jobs hasnt affected much of the manufacturing industry.
The people who lost their jobs were the ones being affected.

Who makes the decisions?


Depending on which side of the market these decisions are on, it will either be private businesses
(free market economy) or the government (controlled market economy). For example, the free
market economy can make minor decisions such as decisions for small companies

Trading Partners and Import and Export

Americas main trading partners are the European Union in general, Canada, China and Mexico. Trade
with the European Union is counted as the trade with all of the countries in the EU. If the trade with
these countries were to be individually counted, the numbers wouldnt be so great since its the
whole of the EU put together rather than each of the countries separately. With Canada, America
imports around 76.8% of Canadas goods whereas they export 54.5% to Canada. China exports only
16.9% of their goods to America. America doesnt export a very large number of goods to China.
Mexico is also a pretty large trading partner with USA. 80.2% of Mexicos exports go to America and
48.8% of Americas exports go to Mexico.
Export and Import with Venezuela
Export: 34.6%
Import: 24.2%

Sanctions

America has sanctions and trade


agreements with quite a few countries
around the world. Some sanctions
enforced by the government include that
guns or weaponry etc. arent to be
traded with the listed countries, they
have certain rules on economic aid from
the sanctioned countries, the
government shouldnt loan any money
from the World Bank or any other
This map shows the countries with which
financial institutions and that the government
they have or do not have sanctions with
has the power to restrict residents living in
America to make transactions with countries in which they have sanctions against. These are only a
few of the sanction that the U.S government has implied.


Key Statistics

GDP: US$16.77 trillion and has a current growth rate of about 1% annually.
The key components of Americas GDP are real estate, renting and leasing properties which takes up
13% of Americas total GDP, for the state and local governments it takes up 9% of its GDP, finance and
insurance takes up 8% and health and social care takes up 8% as well.

GDP per capita: US$53,041


The GDP per capita is the money that a person with an average income makes per year. Per month
this is about $4,420. This isnt very much and its a pretty low income. Looking at Americas
progressive taxation system, this income would fall under the third tax bracket out of the seven in
total. This is just below the middle income earner. Although this is enough to get by, it is still pretty
low for a country with such high standards.

Population:
320 million people
Employment rate:
95.1%
Unemployment rate:
4.9%
Inflation rate:
1.4%

Response to the 2008 Economic Crisis

The 2008 economic crisis broadly affected the whole of America. Employment rates went down by a
staggering 10% meaning 10% of Americans lost their jobs and the average working hours per week
decreased to around 33 hours which is the lowest ever recorded data. The rate of goods and services
went down by 6% per year.

From 2007 until 2009, the GDP of America had decreased by 5.1% which was the worst drop since the
era after the Second World War. The GDP per capita also dipped in 2009. There was an approximate
$1,400 decrease from 2008 until 2009. When comparing it to the GDP per capita at the moment, it is
about $6.000 higher right now than in 2009. When looking at the inflation rate, it was only at 0.1% in
2008.

Since America was so badly affected by the 2008 economic crisis, a lot of their trading partners were
affected as well since a lot of countries relied on America for imports of goods and products.


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