Basic Ingredients of the U.S.
Economy
The first ingredient is natural resources.
The U.S. is rich in natural resources. We have good farm soil,
minerals, a moderate climate, and vast coastlines and rivers that allow
movements of goods.
The second ingredient is labor.
Labor converts natural resources into goods. The quality of labor is
measured by the number of workers and the quality and productivity of that labor
force.
In order for labor and natural resources to come together effectively to
produce goods, there needs to be some organization and direction.
Business managers provide this organization and direction.
These business managers form business ventures, and raise funding for the
ventures. Funds can be raised by borrowing from financial institutions,
individuals, or stockholders. Stockholders are individuals or businesses that
buy corporate businesses stock thereby becoming part owners and financers of the
business.
Federal and state government get into
the picture by having rules and regulations these businesses must follow.
The effects of these rules and regulations will be explained in the "How the
U.S. Works" section.
The goods and services these businesses product in one year is called
the gross domestic product. GDP does not include measuring things like personal
quality of life, happiness, security, and health.
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