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Home >> World Economy >> US Economic Structure

US Economic Structure

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STRUCUTURE OF THE ECONOMY

Services have the highest contribution to the US
GDP, followed by Industry. Being an industrialized nation agriculture accounts for a very marginal share in the total national income.

Among the other human development indicators, while there is a very small number living below the poverty line, all the people in America enjoy access to an improved water source. Literacy rate over the age 15 is 100% and so is the gross primary enrollment rate, with an equitable distribution between the two sexes of the population.

Growth Rate of GDP and GDP per capita


Despite the generally prosperous American economy as a whole, concerns about inequality continue. The black population is the most vulnerable group as global competition has threatened workers in many traditional manufacturing industries, and their wages have stagnated. During the 1980s, the federal government edged away from tax policies that sought to favour lower-income families at the expense of wealthier ones, and it also cut spending on a number of domestic social programs intended to help the disadvantaged. Meanwhile, wealthier families reaped most of the gains from the booming stock market. In the late 1990s, there were some signs these patterns were reversing, as wage gains accelerated -- especially among poorer workers. But it is still too early to determine whether this trend would continue in the 21st century.

ROLE OF MARKET VS GOVERNMENT

US is a market-oriented economy, where private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy considerably greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, lay off surplus workers, and develop new products. 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.

The American belief in "free enterprise" has not barred a major role for government, however. People in the US rely on government to address matters the private economy overlooks, from education to protecting the environment. And despite their advocacy of market principles, they have used

government at times to nurture new industries, and at times even to protect American companies from competition. This is visible from the highly subsidized agriculture in the US. This has been a contentious issue among the trade gurus in the developing countries and they have been demanding that US slash these subsidies.

US firms are at or near the vanguard in technological advances, especially in computers and in medical, aerospace, and military equipment, although their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. x
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