In order to fully discuss exchange systems and economics in the United States, it is important to fully understand what each factor represents and how they work together to influence monetary policies in a community. So here are a few definitions to get us started on the right path.
Exchange Systems in their simplest form are the different ways in which consumers connect with producers. These different ways may include barter, or the use of money as a purchasing tool to acquire items and in the United States, money serves as that means of exchange. While economics can simply be defined as the social science that describes the factors that determine the production, distribution and consumption of goods and services.
Therefore, this article will be providing some accurate facts on the exchange system and its effect on the economic and monetary policies in the US.
- Widespread use of the US Dollar: the United States reputation as the most influential nation on earth is also shared by its money as can be seen by the following statistics.
The US Dollar is the currency mostly used in international transactions and it also serves as the world’s primary reserve currency.
While the one dollar bill is the most circulated bill locally in the US. It makes up 48% of the paper bills printed by the US Bureau of Engraving and Printing.
- The US chosen exchange rate system is the floating rate exchange system. This means that the amount in which the Dollar trades for when compared to gold is set by market forces to a large extent.
The US started using the managed floating exchange rate system in 1973 after the Bretton Woods fixed rate system became untenable and harmful to the US economy.
- The United States trade partners: an economy is reliant on its imports and exports which in turn becomes a factor that determines the exchange rate of that country. So here are the US’s trade statistics:
A 2014 survey puts China at the top of the pyramid of countries the United States imports from. The US imports approximately 66 billion worth goods annually from China.
While Canada ranks at the top of the export list for the United States exports approximately 46 billion worth goods on a yearly basis to Canadians.
- The United States most traded commodities: in terms of importation, crude oil takes the lead as the most imported good coming into the US while domestic items are a close second.
In 2014, the US spent close to $300billion dollars on importing crude oil and it is important to note that a large percentage of these imports were from Canada.
Unsurprisingly, America’s biggest export quantifiable in dollars are also crude oil products which brings in approximately $130billion a year.
- America is a service based economy: the US tops the world in providing private services across diverse industry niches–finance, insurance, telecoms etc.–extensively.
Travel services nets the US approximately $50 billion yearly, royalty and licensing approximately $100billion while patents come after oil products at $100billion.
- The US debt profile: every nation has its debt due to international economics and the need to raise money for wars, domestic growth etc. and the US is no different.
Approximately 45 years ago in 1970, the total US debt both home and abroad including business debt, government debt and consumer debt was approximately $2trillion. Today, the total US debt is just over $20 trillion.
In 2011, the US paid $454 billion dollars on interest alone servicing its debts. This was the highest fee paid as of 2014.
- The United States Economy and the World: the US status as one of the most developed countries in the world means that fluctuation in its economy also affects world economics.
In 2001, the United States GDP accounted for 32% of all global economic activity which goes to show its influence. And despite the recession, in 2013, the US GDP still accounted for approximately 22% of all global activities.
- The Economy and the American household: everyone knows about the American dream of been able to comfortably take care of ones family in order to live happily ever after. But do the statistics back this dream?
In 2013, statistics showed that approximately 20% of households with breadwinners under the age of 35 lived in poverty.
40% of Americans live in a home were a member is dependent on one or more government programs for monetary support.
The US government runs 83 diverse welfare programs and approximately 33% of the US population participate in at least one of these programs.
- The Economy and US social security benefits: the number of people on social security benefits also plays its part in affecting the US economy due to their reliance on it.
2015 data shows approximately 58 million Americans dependent on social security and predictive analysis put the 2035 numbers at 91 million citizens.
Also, the social security system is expected to face a $130trillion shortfall over the next 3 years.
- The wealth demographic: the wealth spread among citizens in the US also plays a part in telling the story of the US economy.
The 20 wealthiest Americans are credited to have more wealth than the poorest 152 million US citizens.
Tired of all the guides and never-ending instructions?
The top 0.1 percent possess wealth which is more than the combined wealth of the bottom 90% of all Americans combined.
These are some of the interesting facts on the exchange system and economics in the US which you can put to use in your own essay concerning the economy. The facts places emphasis on the US currency, exchange system, trade partners and economic state of its local people. Make sure to also check our 20 topics on exchange systems and the US economy as well as a standalone guide on the genre of a presentation for this subject. Lastly, these facts are accurate and can be used as references.
Paul, K. (2003). The Concise Encyclopedia for Economics: Exchange Rates. http://www.econlib.org/library/Enc1/ExchangeRates.html
Dixit, Avinash. Hysteresis, Import Penetration, and Exchange-Rate Pass-Through. Quarterly Journal of Economics 104 (1989): 205-28.
Wikipedia: Economy of the United States. (2010). https://en.wikipedia.org/wiki/Economy_of_the_United_States
U.S. Department of Commerce, Census Bureau, Economic Indicators Division Journal. (2015). Top US Trade Partners 2015. http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_003364.pdf
Christopher, C. (2016). United State Government’s Debt 2016. http://www.usgovernmentdebt.us/
Social Security Administration: Fact Sheet. (2014). Fact Sheet. https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
Fast Facts and Figures about Social Security 2014. (2015) 32, 34. https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2014/fast_facts14.pdf