Economic Analysis of The U.S. 2001-2003
Economics have many indicators to describe how it runs. The indicators can show if the economy has improved or declined. The economic indicators that will be focused on in this analysis of the United States economy from 2001 – 2003 will be the consumer price index, the imports and exports, the unemployment rate, and finally the gross domestic product. Now while most may know the meanings of the previously stated indicators, for those who don’t, they remain useless unless defined. To begin with, these indicators will have to be defined in full to aid in understanding the analysis in more detail. It will be after that that the actual analysis of the economy of the United States from 2001 – 2003 will begin.
The first indicator to be discussed will be the consumer price index. The consumer price index can be described as “a price index that measures the cost of a fixed basket of goods chosen to represent the consumption pattern of individuals” . This is mainly used by the government and private sector to measure the changes of the prices that consumers deal with . Also the reference to basket refers to a collection of items representing a purchasing pattern of a typical consumer. The consumer price index has many components itself such as medical, transportation, household services, rent, durables, non-durables, apparels, food and beverage, and other services . This is relevant to show how much prices have increased from a base year .
Imports and exports weigh heavily on how well an economy could be. Imports are defined as “a good produced in a foreign country and purchased by residents of the “home” country” . For example an import would be as if in the United States were to get some kind of certain product from another country. Exports are defined as “a good produced in the “home” country and sold in another country” . An example of this is if the United States were to sell a product to another country. Ideally speaking, imports should be less then total exports. If the total exports are more then the total imports, that means more money is being received in the homeland, if there is more importing than exporting, that means that the country will be not be gaining from the exports. The United States has a poor import to export ratio, for example, importing way more than the export.
The unemployment rate is as well a very important economic indicator. Obviously unemployed rate is defined as “the fraction of the labor force that is unemployed” . To define the unemployed is important as well, because it refers to those that have no job, but are actively looking for work, not to those who are not working and are uninterested in searching or getting a job . The reason that unemployment is so important in determining the economy’s success is because it is intertwined with the gross domestic...