Economy: Its Definition & Types, and System

By Tara Shwan

An economy is a system of organization and institution that either facilitate or play a role in the production and distribution of goods and services in the society.

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The Economy of United States of America

December 09, 2016

The Economy of United States of America:

The United States is the world's largest national economy and second largest in the purchasing power. And second largest according to purchasing power parity (PPP), representing 22% of nominal global GDP and 17% of gross world product (GWP). The United States' GDP was estimated to be $17.914 trillion as of Q2 2015.

The U.S. dollar is the currency most used in international transactions and is the world's foremost reserve currency, backed by its science and technology, and its military

The United States has a mixed economy. And has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment. The US has abundant natural resources, a well-developed infrastructure, and high productivity.

The U.S. is the world's largest producer of oil and natural gas. It is one of the largest trading nations in the world as well as the world's second largest manufacturer, representing a fifth of the global manufacturing output. The US not only has the largest internal market for goods, but also dominates the trade in services. Of the world's 500 largest companies, 128 are headquartered in the US. The consumer market of the US represents the largest in the world.

The United States has one of the world's largest and most influential financial markets. The New York Stock Exchange is by far the world's largest stock exchange by market capitalization. Foreign investments made in the US total almost $2.4 trillion, while American investments in foreign countries total over $3.3 trillion.

The economy of the U.S. leads in international ranking on venture capital. And Global Research and Development funding. Consumer spending comprises 71% of the US economy in 2013. The United States has the largest consumer market in the world, with household final consumption expenditure five times larger than Japan's. The labor market has attracted immigrants from all over the world and its net migration rate is among the highest in the world. The U.S. is one of the top-performing economies in studies such as the Ease of Doing Business Index.

U.S. Population: The current population of the United States of America is 324,808,107 as 2016, based on the latest United Nations estimates. The United States population is equivalent to 4.38% of the total world population. The U.S.A. ranks number 3 in the list of countries by population.

Currency: US$
GDP: $18.561 trillion (2016)
GDP rank: 1st (nominal); 2nd (PPP)
GDP per capita rank: 5th (nominal); 10th (PPP)
GDP by sector
Agriculture: 1.6%, Industry: 20.8%, Services: 77.6% (2015)
Population below poverty line: 13.66% (2015)

Labor force

159, 463 million (2016)
7,8 million Unemployed (2016)
Unemployment: 4.7% (May 2016)
Labor force by occupation
Farming, Forestry, and Fishing: 0.7%
Manufacturing, Extraction, Transportation, and Crafts: 12%
Managerial, Professional, and Technical: 38%
Sales and Office: 23%
Installation and Maintenance: 3.3%
Other Services: 23%

Main industries: Petroleum, steel, motor vehicles, aerospace, telecommunication, chemicals, arms industry, electronics, food processing, consumer goods, lumber, mining

Exports: $1.62 trillion (2014)
Export goods
machines, 33.9%
industrial supplies, 31.2%
consumer goods (except automotive), 12.3%
motor vehicles and components, 9.8%
food, feed, and beverages, 8.9%
other, 3.9%. (2014)

Main export partners

Canada 18.6%
Mexico 15.7%
China 7.7%
Japan 4.2%
Imports: $2.35 trillion (2014)

Import goods

Capital goods 25.2%, consumer goods (except automotive) 23.8%, industrial supplies (except crude oil) 17.8%, motor vehicles and components 14.0%, crude oil10.5%, food, feed, and beverages 5.4%, other 3.3%. (2015)

Main import partners

China 21.5%
Canada 13.2%
Mexico 13.2%
Japan 5.9%
Germany 5.5%

Revenues: $3.0 trillion (individual income tax, 46.2%; social insurance, 33.9%; corporate taxes, 10.6%; other, 9.3% 2014

Expenses: $3.5 trillion (Social Security, 24.3%; defense, 17.2%; Medicare, 14.6%; unemployment and other income security, 14.6%; Medicaid, 11.7%; interest, 6.5%; veterans, 4.3%; education and training, 2.6%; other, 4.2% – FY2014)

Main data source: CIA World Fact Book