The standard textbook definition is the best: “Economics is the study of the allocation of scarce resources among competing ends to satisfy unlimited human wants.”
2. What types economics do we use in the U.S?
All kinds of approaches to economics are used in the U.S. As a professional economist I use a pragmatic approach, by selecting those analytical tools that have the greatest predictive power. In other words, I use the economic tools that are best at explaining what will happen if various microeconomic and macroeconomic decisions are made. Economic ideas and theories that fail to produce predictable outcomes are thrown away (for example, the nineteenth century labor theory of value has been abandoned by at almost all economists).
3. How does the U.S economy function?
Books have been written about that and that is what is learned when a student earns a degree in economics. So the question can’t be answered fully here. That said, on the spending side, the largest component is consumer transactions (about 70%). Business, federal, state and local government and the foreign trade sector account for the remaining 30% of spending. The economic model that we have chosen in the U.S. is capitalism with a pro-capitalist government that promotes private enterprise and also regulates it to a limited extent.
4. What makes the U.S economy so powerful?
Productivity (labor productivity, technological productivity, capital productivity, raw materials resource productivity)
Rule of law. An important clause in our Constitution is that “no person shall be deprived of life, liberty or property without due process of law.” That means that interest rates in the U.S. can be lower because expropriation of capitalists would be unconstitutional.
A strong central government under the Constitution that subsumes states’ rights to the national interest (Common market, common currency, common monetary system, federal power to tax and regulate the value of money, uniform law of transactions and commerce, no government-imposed internal trade barriers….”
(After 1913) a strong central bank (The Federal Reserve) with the power to regulate money supply and to engage in counter-cyclical monetary policy.
(After the Full Employment Act of 1946) a federal government with the clear power to use fiscal policy to promote lower unemployment, increased growth and lower inflation.
Under the Constitution, federal, state and local governments empowered to construct vast infrastructure that encourages and subsidizes private enterprise. If you had a lot of time, a good book on some of the “secrets” of American economic success is: “Inside the Black Box: Technology and Economics” by Nathan Rosenberg.
5. how are people part of the economy and involved with it functioning?
I’m not sure what you mean here. People are the reason for having an economy and human effort is one of the primary “factors of production” in an economic system. People serve as both consumers and producers. A business manager who decides to hire another 12 workers is a job-creator. A family that decides to go out to eat at a restaurant twice a week instead of once a week is also a job-creator. Consumer spending accounts for 70% of expenditures in the economy.
6. How does politics influence economics in the U.S?
Badly. The worst economics (defined as what is offered as “economics” that does not predict well) is proposed by people who first make up their minds about political ideology, and then shape what they think about economic policy to conform to their political ideology. There are all kinds of economic “think tanks” that have been financially endowed to promote a particular political spin on economic policy. The economists who work for what I label “advocacy tanks” are paid for their conclusions and not for the quality of their analysis or for their ability to predict accurately the consequences of changes in economic policy.
What I try to do as a professional economist is to study economic problems and policies from a scientific point of view. I make a verifiable hypothesis, gather the data or design an experiment to test it and then I draw my conclusions from the degree to which the observed outcomes match my predictions. Politics and ideology would corrupt the process that produces the best economic reasoning and study.
7.Who decides how economics works in the U.S?
Nobody and everybody. It’s a free country and everyone has an opinion. However, when businesses hire financial and economic analysts, by paying out money, they are deciding that the economics the analysts are using works. So too is a decision being made on the efficacy of economics, when the Bureau of Economic Analysis (BEA), the U.S. Dept. of Labor (BLS), or the Federal Reserve (FED) hires economists to write statistical and policy reports on the state of the economy and on the consequences of economic policy changes and on new economic phenomena.
8.How can people make a difference in shaping the U.S economy?
Everyone who makes money or spends it, shapes the economy. People can do more by becoming informed, by learning some economics, and by directing their spending and voting to reflect their enlightened economic preferences.
9. How does economics affect everyone? (micro economics)
Everyone who makes a decision about what to consume, how to spend their time, and what to produce is engaging in economics whether they know it or not.
10. based on prediction what future do you see in the U.S economy? (good/bad/same)
If Congress smartens up about economics, our future looks bright. Congress needs to stop threatening to not pay the bills on expenditures it has already authorized. Alexander Hamilton (our first great Treasury Secretary and the source of the many features in the U.S. Constitution that have nurtured the great American economic success story) would “turn over in his grave.” Threatening sequestration, government shut-downs, and refusal to raise the debt limit to finance the paying of bills already accrued has been proven to weaken an economy. Why they keep doing it is a mystery to me and it reflects some pretty poor economics.
11. do you know any websites that can help me do this project-
I would recommend that you explore some of the following sites (Google the phrases to find):
Federal Reserve Philadelphia Federal Reserve Cleveland Bureau of Economic Analysis (BEA) Bureau of Labor Statistics (BLS) Council of Economic Advisors (CEA)
Information about the economy, What is the current state of the economy, What are some of the factors that influence the economy, Aren't controls put in place to keep the economy in balance, What happened to the controls that were put in place to ...
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