OVER VIEW; of the United States Economy
An economy is the system by which a group of people uses their resources. These
resources might include natural resources like water or trees, or other resources such as
workers or computers.
In every economic system businesspeople bring together natural resources, labor, and
technology to produce and distribute goods and services. But the way these different
elements are organized and used is different in many countries. A country’s economic
system usually depends a lot on the country’s politics and culture.
The United States has a form of an economic system
called capitalism. Capitalism is a system based around
capital. Capital is money or goods that have value (such
as equipment or other resources). The business or people
with the most capital are the best off and make most of
the key decisions. With a lot of capital comes a lot of
power. These leading businesspeople also often hire
many workers while they are also often trying to
maximize their own profits.
In capitalism, businesses are owned and run by citizens,
not by the government. The economy works based on the
balance among owners, workers, and consumers (also
known as customers). Businesses within each industry
pay their workers and compete with each other for
consumer dollars. For example, McDonald’s and Burger
King are two businesses in the fast food industry and
they compete with each other for customers.
America does not have pure capitalism though. The government is involved in the
economy in a number of ways: the government sets up certain rules and regulations for
businesses, the government sets taxes on businesses and controls some aspects of trade.
The government also redistributes some of the wealth through programs like
unemployment benefits, social security, food stamps, Medicare, and Medicaid. Because
of these practices, capitalism in America is often called Welfare Capitalism and people
often say that America has a Mixed Economy that combines some elements of capitalism
and some elements of socialism.
In America, the economy depends on the interactions among the government, businesses,
banks, workers, and consumers. Banks are especially important because they loan people
and businesses money to use for creating or improving a business. Meanwhile, the
government overseas the banks to make sure that they are not making too many mistakes
with their loans or taking advantage of the people.
Capitalism is one of the things that everybody wished the