9 3 a1 macro economics exemplar 3

ompare and contrast wo economical ountries United States of America and China

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Table of Contents 1. Introduction to the Compare and Contrast Report 2. An economic overview of the U.S.A 2.1 What elements of a free market or command economy has the U.S.A implemented? 2.2 How does the American government deal with key economic questions? 2.3 Key economic components of the U.S.A 2.4 Main export and import countries and products 2.5 Income inequality 2.6 Taxation system in the United States 2.7 How does large debt effect the economy? 3. An economic overview of China 3.1 What elements of a free market or command economy has China implemented 3.2 How does the Chinese government deal with key economic questions? 3.3 Key economic components of China 4. Compare and contrast 4.1 Similarities and differences 4.2 Total exports – GDP comparison 4.3 Population growth between the two nations 4.4 Human development between the two nations 4.5 Income inequality between the United States and China 4.6 China and the United States in numbers 5. Which system is better? 6. Works Cited

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Introduction By Student A 1. This purpose of this report is to compare and contrast the two economic systems (The U.S.A and China). This report will cover how societies, governments, business, households and individuals allocate their scarce resources, as well as how the government deals with key economic questions.

2. An economic overview of the United States of America

The USA, formally known as the United States of America, is a constitutional federal republic composed of 50 2 states. With an area of 9.8 million km , it ranks as the third largest country by total area. With a population of 320 million people, it is surrounded by its neighboring countries: Canada, Mexico and Alaska. The U.S follows a mixed economy, having the largest economy in the world, representing 20% of the total global output. The United states is also the second largest in purchasing power parity (compares different countries' currencies through a market). The economy in the United States is widely dominated by services-orientated companies such as technology, financial services, healthcare and retail. The services sector is the main engine of the U.S economy, but it also has an important manufacturing base, representing 15% of output. The U.S is the second largest manufacturer in the world and ranks first in higher-value industries. 2.1 What elements of a free market or command economy has the U.S.A implemented?

A free market is an economic system in which the government does not interfere with business in anyway. The prices for goods and services are determined by the demand of product and consumers. A command economy is an economic system in which the government determines the goods and services which are being produced, the quantity of the goods and services and the price which is offered for sale. The U.S follows a mixed economy, where the government controls many goods and services, for example education, roads, hospital and utilities. A mixed economy, is most commonly referred to as a " free enterprise system ". The American free enterprise system emphasizes private ownership. Private businesses produce most goods and services, almost two-thirds of the nations total economic output goes to individuals for personal use, the remaining one-third is bought by the government and business.

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2.2 How does the American government deal with key economic questions?

The U.S is a mixed economy, the government partially intervenes with the system, by controlling goods and services such as, education, courts, roads, hospital care and postal delivery. The government also provides money for agricultural producers, oil companies, financial companies and utilities. Most forms of economic exchange and nearly every type of business is affected by the government in the U.S. Private business are required to register with government agencies and can only operate with licenses approved by the government. Some of these businesses include auctioneers, funeral attendants, private investigators, makeup artists, hairstylists, real estate agents and financial advisers. 2.3 Key components of the U.S.A that make up their GDP

The four components that make up the gross domestic product (GDP) are personal consumption, business investment, government spending and total exports. The gross domestic product is the total economic output yearly, which is equivalent to what is being spent in the economy.

Components that make up the GDP

GDP

1.1% 19.4% 79.5% 16.77 trillion USD (2013)

GDP per capita GNI per capita (USD) Population

53,750 PPP dollars (2014) 11/185 ranking 53,960 318.9 million (2014)

Years of schooling (Primary to tertiary) HDI Unemployment rate

17 years of schooling 0.915 4.7% (2016 est.)

Life expectancy Household income

80 years $50,000 (2010 statistics)

Ethnic groups

white 79.96%, black 12.85%, Asian 4.43%, Amerindian and Alaska native 0.97%, native Hawaiian and other Pacific islander 0.18%, two or more races 1.61% (July 2007 estimate) 86% can read, 21% of adults in the U.S. read below a 5th grade level Canada 18.6%, Mexico 15.7%, China 7.7%, Japan 4.2% (2015)

Agriculture Industry Services

Adult Literacy levels (to what level) Export (partners)

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Important (partners)

China 21.5%, Canada 13.2%, Mexico 13.2%, Japan 5.9%, Germany 5.5% (2015) 4.8% (2017) constitutional federal republic The Canada–United States border to the north of the Contiguous United States and to the east of Alaska. The Mexico– United States border to the south. $17.91 trillion (31 March 2016 est.)

Unemployment rate Government Neighbouring countries

Debt

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The United states is the world’s thirdlargest exporter after China and the European Union. The top five export destinations are as follows: Canada, Mexico, China, Japan and Germany. The nd U.S is the 2  largest exporter in the world, exporting $1.45T in 2014. The exports of the United states have increased at an annual rate of 8.5% in the last five years, from $967B in 2009 to $1.45T in 2014. The most recent exports are refined petroleum which represents 7.11% of the total exports of the U.S.A, followed by cars which represent 4.18% of the U.S.A total exports. 13% of exported goods are consumer goods (pharmaceuticals, cell phones, gem diamonds etc.) which have an export value of $194 billion. One third of the exported goods are capital goods.

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