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A study of USA economy


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A study of USA economy

  1. 1. A study of USA Economy Presented By: Fatima Mehwish Saima Yasmin Yusra Yousaf
  2. 2. United States of America: <ul><li>The U.S., the USA, or America is a federal Constitutional Republic. </li></ul><ul><li>Comprises of fifty states and a federal district. </li></ul><ul><li>With an area of 3.79 million square miles (9.83 million km²) and with about 305 Million people. </li></ul><ul><li>The United States is the third or fourth largest country by total area, and third largest by land area and by population. </li></ul><ul><li>The United States is one of the world's most ethnically diverse and multicultural nations. </li></ul>
  3. 3. History regarding.. <ul><li>This nation was founded by thirteen colonies of Great Britain located along the Atlantic seaboard. </li></ul><ul><li>Tensions between American colonials and the British during the revolutionary period of the 1760s and early 1770s led to the American Revolutionary War, fought from 1775 through 1781. </li></ul><ul><li>On June 14, 1775, the Continental Congress, convening in Philadelphia, established a Continental Army under the command of George Washington. </li></ul>INDEPENDENCE
  4. 4. <ul><li>The Congress adopted the Declaration of Independence, drafted largely by Thomas Jefferson, on July 4, 1776. which is now celebrated annually as AMERICA'S INDEPENDENCE DAY. </li></ul><ul><li>Later on Spanish–American War and World War I confirmed the country's status as a military power. </li></ul><ul><li>In 1945, the United States emerged from World War II as the first country with nuclear weapons. </li></ul>cont’d.. INDEPENDENCE
  5. 5. <ul><li>The United States is the world's oldest surviving federation. </li></ul><ul><li>It is a constitutional republic, where majority rule is tempered by minority rights protected by law. </li></ul><ul><li>It is fundamentally structured as a representative democracy, though U.S. citizens residing in the territories are excluded from voting for federal officials. </li></ul><ul><li>The government is regulated by a system of checks and balances defined by the U.S. Constitution. </li></ul>History regarding.. GOVERNMENT
  6. 6. <ul><li>The federal government is composed of three branches: </li></ul><ul><li>LEGISLATIVE: The bicameral Congress, made up of the Senate and the House of Representatives, makes federal law, declares war, approves treaties, has the power of the purse, and has the power of impeachment, by which it can remove sitting members of the government. </li></ul><ul><li>EXECUTIVE: The president is the commander-in-chief of the military, can veto legislative bills before they become law, and appoints the Cabinet and other officers, who administer and enforce federal laws and policies. </li></ul><ul><li>JUDICIAL: The Supreme Court and lower federal courts, whose judges are appointed by the president with Senate approval, appoints, interpret laws, and can overturn laws they deem unconstitutional. </li></ul>cont’d.. GOVERNMENT
  7. 7. <ul><li>The United States has operated under a two-party system for most of its history. </li></ul><ul><li>For elective offices at all levels, state-administered primary elections choose the major party nominees for subsequent general elections. </li></ul><ul><li>The major parties have been the Democratic Party, founded in 1824, and the Republican Party, founded in 1854. </li></ul><ul><li>The winner of the 2008 presidential election, Democrat Barack Obama, is the 44th U.S. president and the first of mixed European and African descent. All previous presidents had been men of European descent. </li></ul>History regarding.. POLITICS
  8. 8. Economy of USA <ul><li>The largest and the most important Market in the World </li></ul><ul><li>The United States of America’s economy is driven by consumers but is troubled by high debt levels. </li></ul><ul><li>US is referred to as a Free Market Economy, this is not entirely true, since there are government regulations protecting certain sectors, notably energy and agriculture. It can be more accurately described as a ‘Consumer Economy’. </li></ul>
  9. 10. GDP <ul><li>The U.S. GDP of $14.3 trillion constitutes 23% of the gross world product at market exchange rates and almost 21% of the gross world product at purchasing power parity (PPP), this is according to IMF. </li></ul><ul><li>The average annual growth rate of GDP of the country was 2.9% </li></ul><ul><li>According to the CIA World Factbook, 2008 GDP is believed to be $13.84 trillion </li></ul><ul><li>According to the rate of GDP economy is divided into three main sectors i.e. Ariculture, Industry & Services. </li></ul><ul><li>The GDP rate by sector of year 2008 is calculated as agriculture (0.9%), industry (20.6%), services (78.5%). </li></ul>
  10. 11. PER CAPITA INCOME <ul><li>The Per Capita is $45,850 in 2007. </li></ul><ul><li>The most common method for calculating with the PPP method is to use the USA as the base for comparing the price of a basket of goods and when this is done the USA's figures are the same for both PPP and Atlas. </li></ul><ul><li>The national Average Per Capita Income using PPP method of USA is $37500. </li></ul>
  11. 12. CONSUMER PRICES <ul><li>The U.S. Consumer Price is the price level of consumer goods and services. The Bureau of Labor Statistics, which started the statistic in 1919, publishes the CPI (Consumer Price Index) to measure the consumer prices on a monthly basis. </li></ul><ul><li>The CPI is calculated by observing price changes among a wide array of products in urban areas and weighing these price changes by the share of income consumers spend purchasing them. </li></ul>
  12. 13. UNEMPLOYMENT <ul><li>In January 2008 the unemployment rate for Young Men were 4.4%, Young women 4.2%, & 18% for teenagers </li></ul><ul><li>The unemployment rate rose to its highest level since 1994 in October 2008, reaching 6.5%. </li></ul>
  13. 14. INDUSTRIAL PRODUCTION: <ul><li>US economy is postindustrial, with the service sector contributing 67.8% of GDP. </li></ul><ul><li>The leading business field by gross business receipts is wholesale and retail trade; by net income it is finance and insurance. </li></ul><ul><li>United States remains an industrial power, with chemical products the leading manufacturing field. </li></ul><ul><li>The United States is the third largest producer of oil in the world, as well as its largest importer. </li></ul><ul><li>It is the world's number one producer of electrical and nuclear energy, as well as liquid natural gas, sulfur, phosphates, and salt. </li></ul><ul><li>United States is the world's top producer of corn and soybeans. </li></ul>
  14. 15. TOP TEN ORGANIZATIONS <ul><li>Following Private Sector organizations were enlisted among </li></ul><ul><li>the top ten Business Organizations of USA in rankings. </li></ul><ul><li>International Business Machines Corporation (IBM) </li></ul><ul><li>NEC Corporation </li></ul><ul><li>Canon Kabushiki Kaisha </li></ul><ul><li>Micron Technology, Inc. </li></ul><ul><li>Samsung Electronics Co., Ltd. </li></ul><ul><li>Matsushita Electrical Industrial Co., Ltd. </li></ul><ul><li>Sony Corporation </li></ul><ul><li>Hitachi, Ltd. </li></ul><ul><li>Mitsubishi. Denki Kabushiki Kaisha </li></ul><ul><li>Fujitsu Limited , McDonalds, KFC & Coca-Cola are also among the top US Business Organizations’ list </li></ul>
  15. 16. INDUSTRIES working as ENGINE TO ECONOMY <ul><li>It is one of the most important growth drivers in the current U.S. economy. </li></ul><ul><li>Contributing nearly 40% of the growth achieved by all U.S. Private Industry and nearly 60% of the growth of U.S. exportable products and services. </li></ul><ul><li>Also included among the largest and highest-paying employers in the country, representing 18 million workers who earn on average 40% more than all U.S. workers. </li></ul>1. INTELLECTUAL PROPERTY INDUSTRY
  16. 17. <ul><li>The industry fuels the world economy by keeping trade in motion, linking trading partners in 24 to 48 hours. </li></ul><ul><li>The FedEx is among these global air express networks which serve 95% of the world's GDP within 48 hours or less. </li></ul><ul><li>Domestic air cargo moves 8% of US GDP as product and another 2% as services, positioning 10% of US GDP to locations where the products become useful. </li></ul><ul><li>In the year 2000, the combined direct and indirect output generated by FedEx activities totaled nearly US$53bn throughout the US. </li></ul>cont’d.. 2. AIR EXPRESS
  17. 18. <ul><li>Eating-and-drinking places support far more jobs, both directly and indirectly, than most other industries. </li></ul><ul><li>This Industry is indirectly responsible for the employment of more than 366,000 people in related industries. </li></ul><ul><li>The restaurant industry ranks first among the engine drivers industries in U.S. </li></ul>cont’d.. 3. RESTAURANT INDUSTRY
  18. 19. EXPORTS of US <ul><li>USA is the top export market for almost 60 trading nations </li></ul><ul><li>worldwide. US Export goods includes: </li></ul><ul><li> ☻ Production machinery and equipment, 31.4%; </li></ul><ul><li> ☻ Industrial supplies, 27.5%; </li></ul><ul><li> ☻ Non-auto consumer goods, 12.7%; </li></ul><ul><li> ☻ Motor vehicles and parts, 10.5%; </li></ul><ul><li> ☻ Aircraft and parts, 7.6%; </li></ul><ul><li> ☻ Food, feed and beverages, 7.3%; </li></ul><ul><li> ☻ Other, 3.0%. </li></ul>
  19. 21. IMPORTS of US USA has led the world in imports while simultaneously remaining as one of the top three exporters of the world. US Import goods includes: ☻ Non-auto consumer goods 24.3%; ☻ Production machinery and equipment, 20.7%; ☻ Fuels, 19.0%; ☻ Non-fuel industrial supplies, 13.5%; ☻ Motor vehicles and parts, 13.2%; ☻ Food, feed and beverages, 4.1%; ☻ Aircraft and parts, 1.9%; ☻ Other 3.3%. (2007)
  20. 23. TRADING PARTNERS 55.48% 5.26% 77,236 GERMANY 55.79% 3.84% 31,381 GERMANY 50.22% 8.82% 129,595 JAPAN 43.31% 6.65% 54,400 JAPAN 41.40% 10.60% 155,843 MEXICO 36.66% 13.54% 110,775 MEXICO 30.80% 13.38% 196,699 CHINA 51.95% 4.24% 34,721 CHINA 17.41% 17.41% 255,928 CANADA 23.12% 23.12% 189,101 CANADA Cumulative Percentage Percentage Millions of dollars Nation Cumulative Percentage Percentage Millions of dollars Nation IMPORTS EXPORTS
  21. 24. US BUSINESS CYCLE <ul><li>The worst recession in recent decades, in terms of lost output, occurred in the 1973-75 period of oil shocks, when GDP fell by 3.1 percent, followed by the 1981-82 recession, when GDP dropped by 2.9 percent. Output fell by 1.3 percent in the 1990-91 downturn, and a tiny 0.3 percent in the 2001 recession. The 2001 downturn lasted just eight months. </li></ul><ul><li>After an expansion that lasted just over six years, the U.S. economy has been in recession since December 2007. </li></ul><ul><li>Nowadays there is Contractions (recessions) started at the peak of a business cycle and end at the trough . </li></ul>
  22. 25. Inflation Rate & Interest Rate <ul><li>In the United States, interest rates are decided by the Federal Reserve. The Federal Reserve meets eight times a year to set short-term interest rate targets </li></ul><ul><li>Interest rates directly affect the credit market (loans) because higher interest rates make borrowing more costly. </li></ul><ul><li>By changing interest rates, the Federal Reserve tries to achieve maximum employment, stable prices and a good level growth. As interest rates drop, consumer spending increases and this in turn stimulates economic growth. </li></ul>
  23. 26. <ul><li>During these meetings, the Consumer Price Index (CPI) which measures inflation at the retail level, and Producers Price Index (PPI) which measures inflation at the wholesale level and therefore may also predict future retail prices are significant factors in the Federal Reserve 's decision. </li></ul><ul><li>It's the Federal Reserve 's job to maintain that delicate balance. A tightening, or rate increase, attempts to head off future inflation. An easing, or rate decrease, aims to prompt on economic growth. </li></ul>cont’d.. Percent Changes in Inflation
  24. 27. MONETARY OR FISCAL POLICY <ul><li>The federal Government attempts to use both monetary policy (control of the money supply through mechanisms such as changes in interest rates) and fiscal policy (taxes and spending) to maintain low inflation, high economic growth, and low unemployment. </li></ul><ul><li>A relatively independent central bank, known as the Federal Reserve, was formed in 1913 to provide a stable currency and monetary policy. </li></ul>
  25. 28. WARS <ul><li>The wars in Iraq and Afghanistan have already cost taxpayers $314 billion, and the Congressional Budget Office projects additional expenses of perhaps $450 billion over the next 10 years. </li></ul><ul><li>That could make the combined campaigns, especially the war in Iraq, the most expensive military effort in the last 60 years, causing even some conservative experts to criticize the open-ended commitment to an elusive goal. </li></ul><ul><li>The Center for Strategic and Budgetary Assessments, a nonpartisan Washington think tank, has estimated that the Korean War cost about $430 billion and the Vietnam War cost about $600 billion, in current dollars. According to the latest estimates, the cost of the war in Iraq could exceed $700 billion. </li></ul><ul><li>Just for the current fiscal year, the administration has received $107 billion in special appropriations, about $87 billion of which is directly related to military operations, according to the Center for Strategic and Budgetary Assessments. </li></ul>