United States GDP
Introduction
GDP is the gross domestic product is a primary indicator used to rate the strength of a nations economy. It usually represents the sum dollar price of all services and goods produced in a specific period. The gross domestic product is compared using the previous growth. Gross domestic product is difficult to measure because not all people are economist and therefore their calculation is done using the income and expenditure approach which must have the same sum.
GDP is important to every person because it determine how the country is growing. When we have a good economy, the nation is likely to increase in wages and decrease in unemployment as well as the demand on business increases. In bad economy a nation is likely to experience decrease in stock prices through the profits made in the organization.
United state GDP growth rate
The economy of the U.S. has continued to expand in the 1st quarter this year. It is said to expand at slow rate as the commerce released the report this year. The GDP has expanded by 1.8 %in the first quarter of the year 201 as compared to the previous quarter. The gross domestic product of the U.S. has been 3.30% since 1947 until 2010. In 1950 it had a 17.20% high growth and (10.40%) at low growth rate. The United States has the largest economy in the world compared to the other nations. The people and the most of businesses organizations makes the decisions in the United States because is an oriented market economy.
The slow down is being responsible on advanced petrol prices critical down into consumer expenditure, bad weather has lead to the delay of the constructions projects and the economists and the officials are agreeing on the performance signal a deeper problem for the united state economy. Ben Bernanke the Federal Reserve the chairman has believe on the setback is a temporary slowdown. There is an agreement that the petrol values will stabilizes the growth of economy by 3 percent yearly in each of the coming three quarters.
The markets is said to dig the surprise raise concerning the new claims on unemployment benefits which has rose up to 25,000 in seasonally 429,000 adjustments. In U.S the claims are expected to decrease by many economists and have left the nation core interest rates on grip to help to support the economic growth, the inflation rate will remain at risk in the short term.
The gross domestic product is determined by use of figures. When the figures decreases it indicates that the economy is not improving thus the dollar has no strength and it may trigger. The other measure is on the interests rates that may lead to high inflation rate which affect most of the consumers when trading. An expanding nation economy requires an increase in the interest rates to keep inflation balanced. It also leads to inflation pressure which causes the monetary policy to tighten.
The GDP is calculated as; GDP = C + I + G (EX – IM). The equation has the consumption (private) which is added to investment (private) add the government expenses by getting the difference between the exports and the imports. Gross domestic product in United States uses the statistic measures of the growth of the economy. GDP is crucial in U.S because it helps to compare the growth (relative) rate of economy in the world. It also compares the sizes of economy in the world.
References
Mankiw G.N. (2008). Principles of macroeconomics: U.S gross domestic product – cengageBrain. Com
Dietz J.L and Cypher J.M. (2008). The process of economic development: GDP determinants – Francis and Taylor
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