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Understanding the American Mixed Economy

   

Added on  2020-05-28

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Running head: INTRODUCTION TO BUSINESSIntroduction to BusinessName of the StudentName of the UniversityAuthor Note
Understanding the American Mixed Economy_1

1INTRODUCTION TO BUSINESSAnswer 1The Americans have always disliked Communism and the ideologies associated with thetenets of Communism thus the state sponsoring the methods of Capitalism was a far-fetchedidea. The devastating economic scenario created by Great Depression lead to the creation ofmixed economy. The growths of labor unions also lead to addition in the business regulatorylaws. The Americans believes that the government should be kept in check so that it does notbecome tyrannical. To escape the feudal framework mixed economy was encouraged. All thepoints mentioned above resulted American Business to develop into a mixed economy.Answer 2In the case of market economy, it is possible for an individual to have a voice inanswering the basic four economic questions. To a company the opinion of a consumer mattersthe most as consumer behavior determines the popularity of a company. Thus to appease theconsumers the organizations produce accordingly. This means that the individuals influence“what to produce” and “for whom to produce” indirectlyi. In the similar manner, the companiesor organizations who control the factors of production they decide “how to produce” and “whatresources to use” and both the decisions depend on the demands of the individual consumers. Answer 3Gross Domestic Product (GDP) is the measurement of the market value of all the finalproducts or goods produced in a country in a year. Through GDP it is possible to measure thesize of an economy but it does not reflect in any way on the financial status of the people of anation or the buying capacity of the populace ii. GDP is not a reliable indicator of a nation’seconomic health, as it cannot determine the purchasing power of the buyers in an economy. The
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