For decades, the United States economy has been on an upward trend, growing at a rate faster than any other comparable country. The U.S. economy, however, faces two major threats from within its own borders: political instability and increasing debt. As measured by gross domestic product (GDP), the U.S. economy ranks fifth among all of the world’s economies. The largest contributor to this economic measure is the service industry, which includes banking, real estate, transportation, information technology, and professional and business services. The U.S. economy continues to lag behind most other developed nations in terms of technological development and overall economic performance.
Inflation, joblessness, trade gaps, and income disparities continue to threaten the stability of the American economy. Economic policy makers have tried many strategies to fight these forces, including trying to stimulate economic growth through governmental spending and regulation of financial institutions. The most recent attempts to stimulate economic growth include raising interest rates, creating regulatory barriers, reworking trade agreements, or even encouraging immigration by workers who are currently in other countries.
While the U.S. economy can deal with these problems with some effort, its growth potential will ultimately be limited by the same forces that pose an immediate threat. The first term is unemployment. The unemployment rate indicates the percentage of the population that is either working or not working, making it one of the more important indicators of economic growth. The unemployment rate, together with the gross domestic product, determines the health of an economy. If the unemployment rate is above 7%, then it is time for the government to start creating jobs.
The second term, economic growth, pertains to how advanced a country’s economy is. While the U.S. has consistently had a high average level of economic growth, other nations have struggled with maintaining consistent levels of economic growth. South Korea and Japan, for example, had experienced economic growth crises in the past decade, with South Korea experiencing a severe economic crisis in the early 1990s, due to collapse of the construction market.
The third term, a mixed economy, refers to the United States and several other developed countries that are primarily located in what is commonly known as the North American Region. Canada, Mexico, and several parts of Europe are often considered to be part of this region. These economies tend to experience periods of economic expansion that are similar to the expansions seen in the United States, but some differ from the United States due to factors such as differences in tax structures, cultural differences, transportation infrastructure, and different exchange rates between the countries. While Canada and Mexico tend to be a part of a North American economy, they are not identical to the United States’ regional economy. This is a significant difference because the North American market economy is much more dynamic than the regional economies. It is this dynamic nature of the market economy that allows it to attract a large number of foreign investors and makes it one of the most important components of the U.S. economy.
The fourth most important economic term is Gross Domestic Product, or GDP. The size of a country’s economy, measured per capita, is an economic measurement used to compare a country’s economic performance to the size of the overall world economy. The key indicator used to determine the size of a country’s economy is gross domestic product, or GDP. While the name may imply, G DP does not equal GDP. Rather, it refers to the total value of all the products a country produces within a stipulated time frame.
As implied by the name, the third largest economy in the world is Canada. Despite ongoing political problems in this country, Canada’s economy continues to grow. As a result, Canadian exports and imports, which make up over 50% of the country’s GDP, continue to improve. One of the reasons for this improvement is the fact that Canada has a free trade agreement with the European Union. This agreement provides for a significant increase in Canada’s GDP through increased access to various markets. The other reason for this increase in GDP is that Canada has a low-key “soft” economy, which has helped it avoid a great recession.
These are the three largest economies in the world according to the statistical data used by the World Economy Report. Now it is your turn to determine the economies that will help make this list. Your goal is to find the three economies with the highest amount of potential for growth in each year. These economies should all be in close agreement when it comes to both inflation and nominal GDP per capita in current dollars. Also, you must ensure that the three economies have enough room to expand their current borders, which will provide for even greater potential for GDP growth in each year until it reaches its full potential.