Lower division capstone IP 2 - Essay Example

The U.S. GDP growth rate is a significant gauge of the health of the United s economy. The high and low GDP growth can be projected by simply looking at the trends in the slopes of the yield curve, which also serves as a strong indicator of the economic potential of the country. GDP is being determined in three ways; nevertheless, they are expected to provide identical results. These approaches are the following: the production method, the income method, or the expenditure method (Coyle, 2014).

The first method uses the approximation of the gross output of every industry and then takes away the intermediate inputs coming from other industries in order to come up with the residual value-added (Wells & Krugman, 2009). The income approach calculates the income gained by the several factors of production (Wells & Krugman, 2009). The last method is called the expenditures approach, which displays what is going on in all different types of spending all over the economy. This method is normally done every year (Wells & Krugman, 2009).

While GDP can be determined in three different ways, the total value of the production, income and expenditure must be identical for all of these methods. In the case of the United States economy, the history of its GDP growth rate reveals erratic trends of highs and lows, particularly during the advent of the 2008 financial crisis and onwards. Based on the data gathered by Bureau of Economic Analysis (BEA), in 2011, the GDP growth rate has been observed to rise by 0.8% from its first two quarters of the year with a 2011 GDP of 2.5%. This data is an indicator of the growing potential of the United States despite the financial crisis in 2010 and the automobile industry crisis that cropped up recently.

Additionally, in 2013, the Bureau of Economic Analysis, the United States economy gained a GDP of 3.2% in the final quarter of 2013 (BEA, 2013). This expansion has been attributed to several aspects of its economy. The United States has one of the most varied and most technologically advanced economies in the world. It embraces the industries of banking and finance, real estate, healthcare automobile, education, social assistance among others, which contributes to more than 40 per cent of the United States’ GDP.

The retail and wholesale industries also contribute to the 12 percent of the country’s GDP. As a leading center for all these services, the United States GDP growth rate is expected to growth in the succeeding years. Comparatively, between 2008, in which the global economic crisis has blighted the economy, and 2014, the United States economy has shown significant recovery with highest GDP recorded in 2012 at 4.9%. But, looking at the trend since 2008, which has seen a GDP low of -8.3%, the United States economy is headed towards a very positive direction.

In the fourth quarter of 2013, the US Economy has expanded with 3.2% GDP. Although, there have been a lot of erratic trends in the growth rate, right now the GDP growth rate of the country has been observed to have stabilized because of the recovery of the many large-scale industries in America (Trading Economics, 2013). The GDP growth rate plays between 2.8% and 3.6%, and as long as the economy maintains this value, the economic growth of the United States is expected to grow quite exponentially in the future years.

One significant increase that has potentially helped the GDP growth rate of the country is the increasing exports of goods to 11.4% and an import of goods that lowered down to 0.9% from the previous 2.4%. Looking at the trends above, the GDP Growth Rate has a very good potential to rise in 2014. ReferencesBureau of Economic Analysis (2013). National GDP and personal income. Available at theBureau of Economic Analysis Website: http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1Coyle, Diane (2014).

GDP: A brief but affectionate history. Princeton, NJ: Princeton University Press.Trading Economics (2013). United States economy expands 3.2 % in Q4. Retrieved at: http://www.tradingeconomics.com/united-states/gdp-growthWells, R. & Krugman, P. (2009). Macroeconomics. 2nd ed. New York, NY: Worth Publishers.