Econ #5 and #6

  1. How big is the U.S. economy?
    • World’s largest economy
    • Produces about 25% of world GDP with less than 5% of world population
    • Highest of near-highest per capita income
  2. Why are U.S. companies globalizing? 
    • Search for profits- companies looking for cheaper production costs and want to be close to their customers.  Most of world’s population lives outside of US
    • Technology improvement has meant decreasing transportation and communication costs
    • More free trade treaties- most negotiations are US initiated and lead
  3. What else has caused manufacturing jobs to decrease, besides globalization?
    • Globalization- the movement to developing countries of some labor-intensive industries
    • Productivity increases from automation- don't need many workers to produce same output
  4. Why does America create so many service jobs? 
    • Income growth
    • Hard to automate
    • Few regulations
    • Service companies have pursued global opportunities
    • Competition among service businesses is intense
  5. What are some explanations for growing income
    • Production technology vs. US education system (most important reason)
    • Globalization (secondary cause)
    • Change in social and political environment 
Card Set
Econ #5 and #6
Econ #5 and #6