Introduction America’s economy is a huge economy. Computers and other technologies predict whether economies will shrink or expand.
Tracking Business Cycle Macroeconomics is the study of the behavior and decision making of entire economies. Microeconomics is the study of the economic behavior and decision making of small units( individuals, families and business). Business cycle is a period of macroeconomic expansion followed by a period of contraction.
Business Cycle Free enterprise systems are determined by economic decisions. Factors such as prices, production and consumption are made by individuals and business acting in their own self- behavior. Determines our economic lives every day.
Promoting Economic Strength Government creates public policies that aim to stabilize the economy. Pursue 3 main outcomes to stabilize the economy : high employment, steady growth & stable prices. 1 aim of federal policy is to provide jobs for everyone who is able to work. 4 to 6 % unemployment is the ideal unemployment rate.
Growth & Stability GDP is the measure of economic growth. Stability gives the consumers, producers and investors confidence in the economy. Sign of economic stability is a nations bank health. The govt monitors and regulates banks. Govt regulations protect depositors deposits.
Technology & Productivity America has the highest GDP in the world. Increasing productivity increases GDP. Technology is the process used to produce a good or service. Improvements in technology allows more output using the same or less resources.
Governments Role Provides incentive for innovations. Federal agencies fund research. Granting patents and copyright laws allow inventors to make money in the free market. Patents are good for 20 years.