1 5 Introduction The economy of the United States is the world’s largest national economy in nominal terms and the second in terms of purchasing power parity globally. The economy’s currency the US dollar is used to settle most international transactions. The US economy is a mixed one. Its major trading partners are United Kingdom, Canada, Mexico, South Korea and Japan. The United States’ economy is one of the high industrialized and diversified economies in the world. Its major industries include; energy, transport, healthcare, and agriculture. It is a leading exporter of innovation goods, arms, petroleum products, and electronics. The Unites states is a consumption economy where most of the goods and services are consumed locally rather than for export promotion. Although the US is one world’s largest exporters of technology goods it imports heavily from Asian economies like China. Its main export markets are the European Union, Canada, China, and Mexico. The US economy is still recovering from the 2008 global financial crisis. It is also grappling with plummeting oil prices and is greatly concerned about China growing exports into the economy (Potomac, 2010). Lastly, the economy is in a transition because of regime change. Production output performance analysis Real GDP The real GDP is an inflation-adjusted macroeconomic measure of the value of all goods and services that are produced in an economy in a given year. In simple terms, it measures everything that a country produces in a particular year. It is usually expressed in constant prices which enable it to capture economic growth more accurately as compared to the nominal GDP (Feldstein, 1988). From the graph, we can deduce that the GDP of the US was initially rising from the year 2006 up to the year 2008. During this phase the economy was experiencing a boom and was healthy, employment rates were high and consumption was high. However, the economy slides into a recession in the year 2008. During this period the 2008 global financial crises happened. This led to a decline in US GDP, where it hit its lowest point in the last decade. This scenario persisted up to the year 2010. From 2010 the US economy is seen to be in a recovery where the GDP is increasing significantly over the years. Real GDP Growth Rate The real GDP growth rate is a measure of economic expansion in relation to real GDP from one financial year to another. It measures how fast the country’s economy is growing. It is largely driven by net exports, personal consumption, and government expenditure and business investment (Feldstein, 1988). From the graphical representation of the real GDP growth rate of US, we are starting with a positive figure which indicates that the economy is expanding healthy. If the economy is growing then by implication so is employment, personal incomes, and business. During the 2008-2009 global financial the economy went into recession and it can be seen that the real GDP growth ra ...

1. 1
5
Introduction
The economy of the United States is the world’s largest
national economy in nominal terms and the second in terms of
purchasing power parity globally. The economy’s currency the
US dollar is used to settle most international transactions. The
US economy is a mixed one. Its major trading partners are
United Kingdom, Canada, Mexico, South Korea and Japan.
The United States’ economy is one of the high
industrialized and diversified economies in the world. Its major
industries include; energy, transport, healthcare, and
agriculture. It is a leading exporter of innovation goods, arms,
petroleum products, and electronics.
The Unites states is a consumption economy where most
of the goods and services are consumed locally rather than for
export promotion. Although the US is one world’s largest
exporters of technology goods it imports heavily from Asian
economies like China. Its main export markets are the European
Union, Canada, China, and Mexico.
The US economy is still recovering from the 2008 global
financial crisis. It is also grappling with plummeting oil prices
and is greatly concerned about China growing exports into the
economy (Potomac, 2010). Lastly, the economy is in a transition
because of regime change.
Production output performance analysis
Real GDP
The real GDP is an inflation-adjusted macroeconomic
measure of the value of all goods and services that are produced
in an economy in a given year. In simple terms, it measures

2. everything that a country produces in a particular year. It is
usually expressed in constant prices which enable it to capture
economic growth more accurately as compared to the nominal
GDP (Feldstein, 1988). From the graph, we can deduce that the
GDP of the US was initially rising from the year 2006 up to the
year 2008. During this phase the economy was experiencing a
boom and was healthy, employment rates were high and
consumption was high. However, the economy slides into a
recession in the year 2008. During this period the 2008 global
financial crises happened. This led to a decline in US GDP,
where it hit its lowest point in the last decade. This scenario
persisted up to the year 2010. From 2010 the US economy is
seen to be in a recovery where the GDP is increasing
significantly over the years.
Real GDP Growth Rate
The real GDP growth rate is a measure of economic
expansion in relation to real GDP from one financial year to
another. It measures how fast the country’s economy is
growing. It is largely driven by net exports, personal
consumption, and government expenditure and business
investment (Feldstein, 1988). From the graphical representation
of the real GDP growth rate of US, we are starting with a
positive figure which indicates that the economy is expanding
healthy. If the economy is growing then by implication so is
employment, personal incomes, and business. During the 2008-
2009 global financial the economy went into recession and it
can be seen that the real GDP growth rate is negative. In this
Contraction phase business reduced their capital investments
and hiring employees waiting for the economy to pick up. The
economy is depressed further and consumption rate declines. By
the year 2010, the economy seems to stabilize. Negative real
GDP growth rates seem to follow economic recession as per the
History of Recession.
Real GDP per Capita Analysis of US

3. This is a measure of the total economic output of a country
which is inflation –adjusted divided by the number of her
people. It is majorly used to compare the living standards of
citizens between countries and over time (Feldstein, 1988). The
US GDP per capita increased initially from 2006 to 2007. This
means that the standards of living of the citizens were
increasing. This took a negative trend in 2008 when the US
stock market crashed. The Federal Reserve Bank of New York
began quantitative easing and lowered interest rates to zero.
This phase is during the 2008 financial crisis. In 2009 Obama
became the president and the Stimulus Act ended the recession.
In the following year, Obamacare was passed in 2012 during
which a fiscal cliff was experienced. In 2014 the economy was
growing slowly but still healthy. In 2015 exports were hit the
hard strong dollar. Generally, the real GDP growth rate is
increasing from 2009 up to 2016 despite the various events that
occurred in the economy.
Government measures adopted to achieve the production output
performance
The US economy can use the production possibility
frontier (PPF) to find the best way of combining various
factors of production such as capital, labor, and technology to
ascertain the best mix to be used in production to ensure
efficiency. A PPF also referred to transformation curve that
shows all the maximum output possibilities for goods from the
factors of production. The PPF can shift upwards leading to
greater when one factor of both becomes, for example, use of
new innovates in manufacturing sector expands production.
The economy has leveraged on it technological
advancement to promote the mass production of capital goods
and consumption to cater for the domestic needs as well as for
exports as surplus. Better use of economic factors of production
by improvement, for instance, training of labor increases its
supply and productivity.
Labour Market Analysis

4. Unemployment trend in the US
Unemployment is defined as the number of people who are
will to work at the prevailing market wage rate but are unable to
get jobs. It includes those who have been laid off but are
waiting to be recalled. Unemployment in the United States has
been dropping to the current rate of 4.9 %.The number of the
unemployed has remained relatively stable at 7.9 million
people. At the same time, the current labor market participation
is at 62.8%. According to data from U.S Bureau of Labor
Statistics, the number of unemployed people in the US around
2006 was at a value below 5%. Unemployment remained
steadily low during the period between 2006 and 2008. The rate
rose sharply to about 10% in the aftermath of the 2008 financial
crises. During this period the economy was in recession, real
GDP dropped significantly and many workers were laid off
adding to the unemployment rate ("United States Unemployment
Rate", 2016). At the beginning of the year 2010 normalcy
returned to the economy and unemployment is seen to decline
gradually to the current rate.
Types of unemployment in an economy
Unemployment is defined as the number of people who are
will to work at the prevailing market wage rate but are unable to
get jobs. The three typical types of unemployment in any
economy are; frictional, structural and cyclical.
Frictional unemployment
This is the most common type of unemployment. It results
from temporary transitions made by employees and employers
or employees or employers have incomplete and inconsistent
information. This kind of employment depends on the dynamics
of the economy. It mainly results from unemployed workers
who do not take up their first job offers because the wages
offered and the requisite skills required. It also arises from poor
job performance, collapsing firms and possession of obsolete
skills.
Structural unemployment

5. This is the type of unemployment associated a mismatch of
jobs and workers due to the deficiency of appropriate skills
demanded by the employers. It depends on the dynamics of the
economy coupled with its social needs. For instance, when
technological advances happen in the market, it may turn many
skills obsolete something which in effect increases the rate of
unemployment. In order to get new job offers in their previous
areas, the laid off workers need to acquire new skills.
Cyclical unemployment
This is the type of unemployment that results from economic
contraction whereby the economy has the capacity to create
only jobs that increase its growth. It type of unemployment is
usually associated with business cycles. During recessions, the
level of cyclical unemployment is high unlike times of
economic boom.
Types of unemployment in the US
The above-mentioned types of unemployment are present
in the United States. The cyclical type of unemployment is the
most common followed by structural and lastly frictional
unemployment.
Government measures to achieve full employment.
Full employment is a state employment levels where
cyclical unemployment has been eliminated. For any
government to achieve full employment it can pursue any of
these policies (Gangl, 2003). First, it can instruct its Federal
Reserve to target a full employment with a wage matching
productivity. Second, the government can initiate targeted
employment programs to benefit a majority of their unemployed
people. Third, it may start public investments and infrastructure
which have the potential of creating jobs and create growth.
Lastly, the government may cut taxes and raise interest rates in
a bid to make businesses more profitable so as to increase their
employment rates.
Price Level Analysis
Inflation Trend in the US

6. Inflation is the persistent increase in general prices of
goods and services in an economy. The inflation of US economy
has hit a 2- year high mark of 1.6% this year 2016. This
happens to be the highest since 2014. This rise in inflation is
consistent with US macroeconomic expectations due to
increasing pump prices and a high cost of housing coupled with
decreasing food prices. Inflation was highest in 2008 during the
financial crisis were it above 5% points. During this time the
cost of credit was very high which pushed prices upwards. After
the crisis, rates were lowered to zero so as to rescue the
economy. This accounted for the zero inflation in the year 2009
("United States Inflation Rate", 2016). In 2010 inflation
increased this after Bush tax cuts ended.
Typical causes of inflation
The main causes of inflation are either excess aggregate
demand or cost-push factors; and the two types of inflation are
namely demand pull inflation and cost push inflation.
Demand-pull inflation
When the economy is close or at full employment, an
increase in aggregate demand leads to an increase in inflation.
Cost-push inflation
When there is an increase in production costs of the firm,
then it passes such an increase to the customers in form of
higher prices. Cost push inflation is caused by several factors
like rising wages, highly priced imports and raw materials,
higher taxes and declining productivity of firms.
Causes of inflation in the US
One of the main causes of inflation in the US is whereby
wage prices increases more than the cost of living leading to
wage inflation. Trade unions have a higher bargaining power a
fact that has lead to increasing wages recently. Another cause of
inflation in the US is the asset bubble or asset inflation which
occurs in a single class of asset like housing or oil when
overlooked which has a negative effect on the economy. A good
example is subprime mortgage bubble and the follow global

7. financial crisis. The third main cause of inflation in the US is
increasing food prices coupled with the high importation of
horticultural products. A money supply that surpasses the rate
of economic growth is another major cause of inflation. Lastly,
high national debt in the US is another cause of inflation, this is
because repayment will call the government to increase taxes or
print more money. Increased taxes will force businesses to raise
prices so as to offset the effect of higher corporate taxes while
printing more money will increase money supply leading to
devaluation of currency and increased prices.
Government measures to achieve stable price in the US
The US government uses the Federal Reserve Bank in its
bid to ensure price stability in the economy. Price stability
happens to be the ultimate goal of any Central Bank worldwide
which is achieved through the measures it takes to reduce
inflation. The Federal Reserve Bank does reduce inflation by
reducing the amount of money supply. Alternatively, it can raise
interest rates to offset the rate at which prices of goods and
services are rising.
Conclusion
The economy of the United States is the backbone of the
global economy. Its currency the US dollar is used to settle
most of the international transactions. Any negative effect
arising from the world’s largest economy affects a sizeable
number of other world economies. If the US economy
experiences a financial crisis, it spreads to the rest of the world
just like the 2008 global financial crisis. For the economy to
stay afloat it has to do business with the rest of the world while
ensuring that it enjoys a favorable balance of payment. It has
been formulating policies to counter the increasing amount of
Chinese exports which have been a threat to the US
manufacturing sector.
US economy has been in the forefront in checking all its
aspects of the economy including production, employment, and
price stability. It macroeconomic indicators have been rated as
the world’s best. It has managed to keep inflation low,

8. relatively stable prices and reduced level of unemployment.
For the US economy to stay robust it should embrace
policies that promote international trade and enhances financial
prudence (Stansberry & Paul, 2016). It should also ensure that
its exports are globally competitive in order to reign over others
in the international market a move that will eventually reduce
the balance of payment deficit.
References
America 2020: The Survival Blueprint: Porter Stansberry, Ron
Paul: 9780990947233: Amazon.com: Books. (2016).
Amazon.com. Retrieved 24 November 2016, from Amazon.com:
Books", 2016)
Feldstein, M. S., & National Bureau of Economic Research.
(1988). The United States in the world economy. Chicago:
University of Chicago Press.
Gangl, M. (2003). Unemployment Dynamics in the United
States and West Germany: Economic Restructuring, Institutions
and Labor Market Processes. Heidelberg: Physica-Verlag H
United States Inflation Rate | 1914-2016 | Data | Chart |
Calendar. (2016). Tradingeconomics.com. Retrieved 26
November 2016, from
http://www.tradingeconomics.com/united-states/inflation-cpi
United States Unemployment Rate | 1948-2016 | Data | Chart |

9. Calendar. (2016)Tradingeconomics.com. Retrieved 25
November 2016, from
http://www.tradingeconomics.com/united-states/unemploy
United States. (2010). the world factbook 2010. Washington,
D.C: Potomac
Discussion Forum on ACSI Scores
Think about the restaurants that you are most satisfied with.
Visit the ACSI on the web. Explore the site and locate the
satisfaction scores for your restaurants. Do you agree with the
scores reported by the ACSI? Why or why not?
http://www.theacsi.org/the-american-customer-satisfaction-
index#homelogo