Economics help!!!?

Question

Explain the American economic system as it exists in the United States. Highlight five specific charactersitics of our economy that stand out from other nations. Each characteristic has to be fully explained to reveal how our economic system works in the United States and what makes it unique.

Answer 1

The economy anywhere in the world is based on 2

fundamentals: DEMAND and SUPPLY.

Now, if you are asking why US has done so well compared

to all other countries in the world is because it is the only

nation which can support itself, in terms of DEMAND and

SUPPLY. Although, it Imports a lot of things and the

economy is slightly dependent on Exports, but in whole - if

the world goes back to stone-age - only US is an economy

that can support itself.

Now, five special (specific) charactersitics of US Economy

is:

1) Man Power - Availability of Quality HR

     This is very important for any economy. Like India and

China - the US has very good availabilty of quality and

diverse man power. With a considerable population and

great education records - it can be easily put on top. US

today does not need to import people from other countries

except in the field of IT and Communications - which needs

a lot of man-power to sustain its expansion.

2) Retail

     The gross spending culture in the US supports its

economy and is going to stay as it has stayed since last 500

years.

3) Industry & Agriculture

    This is because of the Great American Revolution. US is

the second largest exporter (after CN) and followed by

Germany. Lots of economy are dependent on the US. Let

me give an example, Hugo Chavez always shouts that it will

stop oil supplies to the US but he cannot because only US

has capable industries to process its oil. So if they dont sell

to the US they starve. As far as Agriculture is concerned the US is a net exporter of food - its a major industry.

4) Natural Resources and Commodities / Energy

     Almost all world commodities, are avaiable in the US.

Certain commodities like Cement - is produced in US in

such a wide scale that it does not need to import it anymore.

But as far as Natural resources are concerned from Oil,

Coal to Copper - the US has it. Another example could be that the US produces 3.979 trillion kWh electricity and consumes only 3.717 trillion kWh - it exports 22.9 billion kWh electricity.

5) Finance & Insurance

    Spot-on financial products and accountability brings financial stability to the US economy. You might ask then why US$ is being washed out off its value, but there is no other currency compared to US$ that is as widely accepted around the world. Around 93% of world trade is carried out in US$ and US$ is a major export of the country. That is why London pays $8 per gallon when US was paying $3.50 per galon for petrol / gas.

Other few data - I could fetch from Wikipedia are as below:

Electricity:

production: 3.979 trillion kWh (2004)

consumption: 3.717 trillion kWh (2004)

exports: 22.9 billion kWh (2004)

imports: 34.21 billion kWh (2004)

Electricity - production by source:

fossil fuel: 71.6%

hydro: 5.6%

nuclear: 20.6%

other: 2.3% (2001)

Oil:

production: 7.61 million barrel/day (2005 est.)

consumption: 20.03 million barrel/day (2003 est.)

exports: 1.048 million barrel/day (2004 est.)

imports: 13.15 million barrel/day (2004 est.)

net imports: 12.097 million barrel/day (2004 est.)

proved reserves: 22.45 billion barrel (1 January 2002)

Natural gas:

production: 531.1 billion cu m (2004 est.)

consumption: 635.1 billion cu m (2004 est.)

exports: 24.18 billion cu m (2004 est.)

imports: 120.6 billion cu m (2004 est.)

proved reserves: 5.451 trillion cu m (1 January 2005 est.)

Agriculture - products: wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy products; forest products; fish

Exports - commodities: capital goods, automobiles, industrial supplies and raw materials, consumer goods, agricultural products

Imports - commodities: crude oil and refined petroleum products, machinery, automobiles, consumer goods, industrial raw materials, food and beverages

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All above creates more and more confidence in the economy and when all of these are added to the American "Can-do" attitude - it makes the US economy very unique and top of the world.

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China can never go ahead of US as it will cripple if the US stops buying from it. But the US will still be there if CHINA doesn't sell its products to the US.

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Madhav