Economy Essay

997 Words4 Pages
* International trade and investment flows have grown dramatically and consistently during the past half century. * International trade is a field in economics that applies microeconomic models to help understand the international economy. * International finance focuses on the interrelationships among aggregate economic variables such as GDP, unemployment, inflation, trade balances, exchange rates, and so on. II * GDP and GDP per capita are two of the most widely tracked indicators of both the size of national economies and an economy’s capacity to provide for its citizens. * In general, we consider an economy more successful if its GDP per capita is high, unemployment rate is low (3–5 percent), inflation rate is low and nonnegative (0–6 percent), government budget deficit is low (less than 5 percent of GDP) or in surplus, and its national debt is low (less than 25 percent). * The United States, as the largest national economy in the world, is a good reference point for comparing macroeconomic data. * The U.S. GDP in 2008 stood at just over $14 trillion while per capita GDP stood at $47,000. U.S. GDP made up just over 20 percent of world GDP in 2008. * The U.S. unemployment rate was unusually high at 10 percent in November 2009 while its inflation rate was very low at 1.8 percent. * The U.S. government budget deficit was at an unusually high level of 11.9 percent of GDP in 2009 while its international indebtedness made it a debtor nation in the amount of 37 percent of its GDP. * Several noteworthy statistics are presented in this section: * Average world GDP per person stands at around $10,000 per person. * The GDP in the U.S. and most developed countries rises as high as $50,000 per person. * The GDP in the poorest countries like Kenya, Ghana, and Burundi is less than $2,000 per person per year.

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