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Non Specific topics - Essay Example

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This is because buying of houses indicates investment. If there is an increase in the sale of new houses, then more people are able and willing to invest. This indicates that economic growth. Secondly, increase in…
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Non Specific topics

Download file to see previous pages... The U.S national economy is different from those of other nations in various ways. Firstly, the US has a liberalized economy. In this economy, the government has minimal control over the economy. Private investors own most of the country’s infrastructure and businesses. Besides having a liberalized, the US has the most formal economy in the world. The US has a functional revenue collection system that provides the required finances. Lastly, the country has market-based economy. In this type of economy, individual/consumers make market decisions.
Testing microeconomic theories is a difficult undertaking. This is because an economic phenomenon depends on many valuables. Some of these variables cannot be tested, hence the difficulty in testing microeconomic theories. Moreover, change in dependent variables after each change in independent variable takes a long time or is difficult to establish. In such case, it is difficult or impossible to study the underlying economic situation (Bade, & Michael, 2001). For example, improvement of people’s purchasing power because of infrastructural development might take decades. The Keynesian theory predicts that government’s intervention on an economy results in economic growth. It would be difficult or impossible to test such theory since economic changes takes a long time.
The great depression had significant impacts on the US economy. Following these economic extremes, the US government had to restructure its policymaking process. Initially, the US had a rigid economy that was mainly controlled by the government. In addition, the government was the sole developer of economic policies. However, following the depression, the government started involving the private sector in the development of economic policies (McEachern, 2012). The US economy was also based on short-term policies developed by the government. However, following the ...Download file to see next pagesRead More
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