Researching the US Economy
Gross domestic product (GDP) is the market value of all goods and services produced in a country for final use, intended for consumption and not for the production of other goods or services. Also, GDP can be calculated as the total income of citizens, companies, and the state for a certain period. Unemployment is a socio-economic phenomenon in which part of the labor force is not engaged in producing goods and services. Inflation is a decrease in the purchasing power of a given currency over time. A quantitative assessment of the rate of decline in purchasing power can be reflected in an increase in the average price level of a basket of individual goods and services in the economy over some time. The main components of the US national debt are the national debt, the debt of state governments, the debt of local authorities, and the debt of individuals.
The financial system in the United States is differentiated and diverse, and it includes state and federal authorities, financial and administrative departments, commercial banks, and corporations. Monetary or monetary policy is the sphere of activity of the Federal Reserve System, which is an independent government agency. This policy aims to protect the purchasing power of the US dollar, increase employment, reduce inflation, and rationalize the balance in transactions with other countries.
Supervision of commercial banks is carried out following several regulatory legal acts to ensure that banks fulfill their obligations and comply with the principles of the banking system. These rules are formed and implemented by federal and state bodies. When applying monetary policy and choosing its goals, it is necessary to consider the secondary effects caused by the mechanism of changes in the money supply in the economy. The central bank cannot fully control the money supply since commercial banks and the non-banking sector participate in its formation.
The main pattern of economic problems in the United States is manifested in a noticeable decrease in the share of the extractive industry and agriculture in the economy. At the same time, agriculture remains an important industry among the branches of the material sphere, which still provides a high level of technical development. The US economy is inherently problematic, which creates risks for the rest of the world’s economies (Kose et al., 2017). The US controls most of the world’s cash flows, so its influence on the global financial system is significant. The country is also still threatened by a deep economic crisis. This is because the financial sector’s stability is largely related to the global market, and its strength is not guaranteed.
The state of the economy of the United States of America at the present stage is the result of a long historical development. The USA is the largest producer of agricultural products. They produce about 12% of the world’s wheat, 1/3 of corn, 50% soybeans, 21% cotton, 18% oilseed, and 17% meat (Deleidi, Levrero, 2021). Economic superiority significantly impacts the world economy, directly affecting the cyclical nature of economic development in other countries and the structure of monetary exchange in the world economy. Despite the challenges at the domestic level and the rapidly changing global landscape, the US economy is still the largest and most important in the world. As the pandemic has led to the closure of many businesses and is forcing the stock market to experience unpleasant fluctuations, Americans’ confidence in the national economy has fallen. As a result of the coronavirus pandemic, millions of Americans have moved from a comfortable middle-class lifestyle to serious needs in just a few weeks.
In conclusion, the US economy is one of the most diversified national economies globally and holds leadership in the global economy. The general pattern of the ongoing sectoral shifts is a noticeable decrease in the share of raw materials industries and agriculture in the economy. Among the branches of the material sphere, the industry remains the most important; it still provides a high level of technical development for other spheres of the economy.
References
Deleidi, M., & Levrero, E. S. (2021). Monetary policy and long‐term interest rates: Evidence from the US economy. Metroeconomica, 72(1), 121-147. Web.
Kose, M. A., Lakatos, C., Ohnsorge, F., & Stocker, M. (2017). The global role of the US economy: Linkages, policies and spillovers. Web.