Predicting the Future of the United States Economy Essay -- economics

It is to my belief that no one can possibly predict the future of the economy. Because of this we are faced with many questions that cannot be easily answered. Will the economy recover drastically or simply continue to increase moderately? Or could the economy in turn go into a recession? â€Å"There's been plenty of good news about the U.S. economy†¦ employment is expanding (2.4 million new payroll jobs in the last year); inflation remains low (less than a 2 percent rate in the past quarter); the stock market is higher (up 11 percent on the Dow from its November low), and business investment is impressive (rising at a 14 percent rate in late 2004).† (1) It is my opinion that unless something drastic happens in the world today, positive or negative, the economy will continue to increase at a modest rate. Even though no one quite knows which way our economy is heading, there are many economic concepts designed to help measure positive and negative changes that can show us how well we are or are not doing. These concepts include examples such as gross domestic product (GDP), business cycle, and unemployment rate. It is only human nature to want economy growth because it will lead to higher incomes and higher living standards. In order to see which direction our economy is heading and measure our economic performance, a system was invented that measures the value of all final goods and services produced within a country during a specific period of time, usually a year. This system it called gross domestic product (GDP). These figures are closely watched by those in the business and financial communities to measure our economy’s growth. GDP is a measure of the economy’s output. It is measured by counting all final goods and services once and only once that are produced during a current period, within the country. GDP can be measured by totaling the expenditures on goods and services produced during a specific time frame. This is referred to as the expenditure approach. Conversely, GDP can be reached by adding the income payments to resources suppliers and the other costs of producing those goods and services. Production of goods and services can be costly because it requires resources that cannot be used else where. These expenses generate incomes for resource suppliers. Therefore, this method of calculating GDP is referred to as resource cost-income a... ... The rate of unemployment is an important measurement of the conditions in the total labor market. The rate of unemployment is the percentage of people in the labor force who are unemployed. It is equal to the number of people unemployed divided by the number of people in the labor force multiplied by 100. The department of Labor indicates five reasons why people may experience unemployment. These reasons included: new entrants, reentrants, job leavers, dismissed, on layoff. As the world changes, new products are introduced and new technologies are developed, some unemployment is inevitable. However, there can be a positive side to job searching because an individual can possibly find a better job. Even though no one can quite know which way our economy is heading, by closely observing our gross domestic product (GDP), business cycle, and unemployment rate we will have a better understanding. Because our world is so dynamic, there are so many variables that can change in an instant creating a peak or recession in our economy. The most important thing to remember, however, is neither a peak nor recession last forever so the only thing that remains constant is change.