UNITED STATES ECONOMY- ITS GDP
The United States is the third largest country in population with 300 million people, but it has the largest economy in the world. In 2008 alone, it produced roughly $15 trillion worth of goods and services, whereas China—which has the largest population in the world—produced about $12 trillion. However, the easiest way to understand the U.S. economy is to look at its GDP. GDP stands for Gross Domestic Product, which is the statistic used to measure the economy. GDP is one the primary indicators used to determine the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period.
The calculation used to measure GDP is the following: GDP= C + I + GS + (X-M). “C” stands for consumption, “I” stands for investments, “GS” stands for government spending, “X” stands for exports and “M” stands for imports. Usually, GDP is expressed as a comparison of the previous quarter or year. To make sure that GDP can be most accurately compared year-to-year, the Bureau of Economic Analysis (BEA) usually reports real GDP. GDP is measured by the BEA quarterly. The BEA revises estimates as it receives better data throughout the next quarter. Each quarterly GDP report gets released three times. The first one is the Advance report which comes out a month after the quarter ends. This report is not very accurate due to all the trade and inventory data that is not reported at that time. The Second report, formerly called the Preliminary Report, comes out two months after the end of the quarter and it said to be pretty realistic. The last report, called the Third Report formerly known as the Final Report, comes out three months after the end of the quarter and has minor changes compared to the previous one.
Growth in the economy does not happen automatically. For an economy to grow, it has to create the right conditions for growth. The sources of growth are natural resources, capital,...