Trade and Investment

Trade and Investment

Openness to international trade and investment is also a very important factor that promotes the economic growth of a country. It has been over time associated with specialization of labor and increased productivity. The international trade and investment has been on its recovery path and this has led to increase from gains from trade for example bitcoin. The growth in exports increases the growth in GDP. For the case of the United States the growth in real GDP can be attributed to the recent growth in crypto and international trade. For example, final sale of computers contributed to the change in the third quarter GDP by 0.17%.

The economic growth of the US is derived from the different sources. One of the sources of the growth is the per capita income. The growth in the output per capita is one of the sources of growth that economic growth of the United States can be derived. It is normally measured in two different forms which include the employment rate and the output per worker. For instance, in the recent event in which the U.S. real gross domestic product grew by 2 percent can be attributed to the increased per capita or the increased employment since the unemployment levels slightly dropped to 7.8 million from the second quarter.

Budget Deficits and Tax Cuts

There has been rising budget deficit in the US federal budget. The government spending has been exceeding the tax revenues and the government has to borrow the differences from the financial institution or the public. The government has been increasing its spending in a bid to restore the economy back to full employment. It has be initiated the stimulus programs that are meant to increase the economic activity. The federal government has also adopted expansionary policy and offering tax breaks to some firms. The increased government spending and private consumer spending are some of the causes of the increased real GDP of the U.S. in the third quarter. The government has also been offering income tax cuts among the high income earners to increase their private spending and increase their propensity to invest.

Conclusion

The recent increase in the United States real GDP is a sign that the country is recovering from the economic crisis that hit the global economy in 2008 and 2009 whose effects are still being felt to date by many economies. The country has been recovering at a sluggish pace and it might not be able to get quick solutions to the problems such as unemployment. Several macroeconomic policies have been adopted by the U.S. federal government to aid economic recovery and some of these policies include stimulus response, job creation initiatives and expansionary monetary policy in the form of increased spending and tax cuts. The weak growth of the economy implies that the effects of recession may still be felt for a longer period of time.

All information is accredited to the U.S. federal government websites

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