US Economy And Business Flashcards
What is GPD and why is it important
The United States economy can be explained as an plethora of different things for example the GDP or the gross domestic product which is the form of measurement used to quantify everything produced in the US
The GDP explains the:
Nominal GDP: This is an annual figure showing a country’s production level using current prices without compensating for inflation.
Real GDP: this does the same thing but it removes the effects of inflation
GDP growth rate: this ratio uses real GDP to Calculate the growth rate compared to the previous quarter or year.
Consumer spending : this component equals about 68%of the total amount
Business investment : this component includes manufacturing, real estate construction, and intellectual properties.
Government spending : this includes federal,state, and local expenditures
Net Exports : this includes exports that add to the nation’s productivity and imports that subtract from it.
Describe the United States economy
The US economy is classified as an free market which is an free enterprise system that allows citizens to own and keep businesses opposed to the government.
What are subsidies
Type 1. An tax insensitive which allows businesses to deduct some expenses from their annual taxes (less taxes).
Type 2. Credit allows businesses to borrow money from the government at a low interest rate (saves money)
Type 3. Service provides businesses with information for example may provide businesses with information from an census(gives resources)
Type 4. Government give businesses money. Given to businesses that produce goods or an service that is important for the public well being
How and why the government can set regulations for businesses.
That exact power was given to the federal government in the constitution
Businesses started evolving into corporations which turned into monopolies so the government stepped in to regulate prices so citizens wouldn’t be paying unfair prices for goods Thus creating the FTC ( federal trade commission) Also food safety creating FDA ( Food and drug Administration ) and consumer product safety commission (CPSC)
