Economy of the United States: - Essay Example

The economic system of the United States can be described as a capitalist free market-oriented mixed economy, in which corporations and other private firms make the majority of microeconomic decisions and governments prefer to take smaller role in the domestic economy, although the United States' government's role is relatively large, at 38% of the GDP.1 The largest sector in regards to the United States' economy is service, which employs roughly three quarters of the work force; the economy is fueled by an abundance of natural resources, such as coal, petroleum and precious metals, however, the country still depends upon foreign nations for large amounts of resources, such as petroleum.

The economy of the United States is one of great discussion and significance, and in order to come to a clearer and more knowledgeable understanding on this subject matter, all elements and key factors in regards to the U.S. economy must be fully and thoroughly discussed. The aim of this paper is to do this, as well as investigate and moralize the factors in relation to this, in order to reach a more intellectual and critical point of view on the issue at hand. This is what will be dissertated in the following.

The United States is often described as a 'capitalist' economy, and although Americans often disagree about exactly where to draw the line between their beliefs in both free enterprise and government management, the mixed economy they have developed has been remarkably successful. The United States is rich in both mineral resources and fertile farm soil, and is also blessed with a moderate climate. As well on top of this, it has extensive coastlines on both the Atlantic and Pacific Oceans, as well as on the Gulf of Mexico.

A primary ingredient of the U.S. economy is that of labor, which converts natural resources into goods. The number of available workers and, more importantly, their productivity help determine the health of an economy.2 However, natural resources account for only part of the overall United States economic system. The traditional managerial structure in America is based on a top-down chain of command, and authority flows from the chief executive in the boardroom, who makes sure that the entire business runs smoothly and efficiently, through various lower levels of management responsible for coordinating different parts of the enterprise, down to the foreman on the shop floor.

The United States is said to have a mixed economy because of the fact that privately owned businesses and the government both play important roles. The US has the most powerful diverse and technologically advanced economy in the world with a per capita GDP of $30,200, the largest among major industrial nations. In this particularly market-oriented economy, private individuals and business firms make most of the decisions and government buys needed goods and services predominantly in the private marketplace.

For instance, US business firms enjoy considerably greater flexibility than that of their counterparts in places such as Western Europe and Japan in decisions to expand capital plant, lay off surplus workers and develop new products. Yet at the same time they face higher barriers to entry in their rivals' home markets than the barriers to entry of foreign firms in US markets. While consumers