Should Americans Spend or Save

In: Business and Management

Submitted By jkene
Words 934
Pages 4
Should Americans Spend or Save?

Money is the monitory exchange in transactions. How Americans spend and save is determined by our limited choices of resources. Consumers make rational and irrational choices. Our decisions are directed by our social, emotional, psychological factors and level of income also affects our decisions. The market gives us choices by the production of goods and services they produce. To produce the consumable goods businesses have to sell and buy raw materials, labor, plant & equipment. The market and government a force behind what is presented for consumption. The government is a direct force of these goods and services. Government tries to create a balance of economic determinates by imposing taxes to raise revenues and establishing rates at which the private sector can borrow money to consume. Government tries to create a stable economy where the amount produced equals the amount consumed. There are many parts of our economy and each plays an important role in economic efficiency. Consumer spending accounts for the biggest portion of our nations GDP at 70%. Businesses are 17% of GDP they are important because they create the jobs, good and services for the consumer. Governments roll in overall GDP is 19%. Net exports and imports create the remainder of our GDP. The GDP is the ratio by which we measure the total spending, total costs of goods sold that equals our total income. Spending is increased when the level of credit issued is increased. This increased credit increases production as more consumers are demanding more goods and services. Americans are high consumers compared to the other nations. Other nations governments encourages saving excess income. The United States credit card, banking and retail have encouraged high spending techniques through easily obtained money. The appreciation of homes…...

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