US Gross National Product Essay
United States of America used GNP until the year 1992 when it adopted the use of GDP in its system. USA Gross National Product is the measure of output value that is generated by production through labor and property located within and outside the countries confinement. GNP helps in establishing whether the country is actually progressing or recessing by reflecting the level of aggregate output resulting from all it’s production systems (Michael, 2008).
The country being very rich in minerals, very fertile soils and highly skilled labor force, it is able to convert these raw materials into finished products as well as services that are highly valuable and thus competitive locally and on the global market. This paper explore the current status of the GNP in USA and the major factors affecting it. Michael (2008) argues that, though GNP for USA has been declining since July 2007 it has maintained a relatively stable trend since the year 2001.
Throughout the USA history, a steady growth in factors of production especially labor has helped a lot in fueling the continuous country’s economic expansion. USA is highly market oriented where private individuals as well as businesses make independent decisions and the government then, buys
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Though USA GNP have been influenced by many factors in the last decade making it to slow and accelerate at different instances, it has the largest influence in the world economy producing high level technology, products and services (Organization for Economic Co-operation, 2006). GNP is a key determinant of the rate and speed with which USA economy is growing or receding comparing it with the previous fiscal years. Also, it is used for comparison purposes by other countries as they take USA to be the standard gauge of their economic development.
Besides, it is also used to compare the sizes of the economies in the world and therefore determining the efficiency and production aspects in different countries (Moulton, 2000). Recent trends in USA GNP. According to Organization for Economic Co-operation (2006), the USA GNP is highly vulnerable to international forces of different factors as the US is a major force and a role model when dealing with various aspects of humanitarian issues and market forces. Most sources indicate that the USA GNP will grow at a slow but stable rate of about 2-3. 1% annually which indicate recession.
In the year 2003, the GNP grew at 2. 5% after regaining from the recession of the previous year. Then 3. 61% for the year 2005 and 3. 1% in the year 2005 following the impacts of the hurricane Katrina at the Gulf coast. Though policies are highly determinant of the GNP outcome, many aspects related to international crisis and external forces determine the surge it’s levels (Michael, 2008). International humanitarian crisis in different parts of the world either due to natural climatic influence or anthropogenic impacts has prompted USA to contribute greatly in aid of the less fortunate.
This has however not had a major impact in the GNP due to the sound policies regarding such involvement by the state being in place. To add to that, the country has had ethical leadership which is always concerned about the state’s development and therefore very careful in application of the local and foreign policies in relation to the state (Liebig 2004). The current goal of USA economy is growth coupled with low unemployment which the state tries to achieve by government manipulation in terms of monetary and different fiscal policies.
The real GNP for the year 2007 first quarter was 13,613 billion indicating slow growth with declining employment levels (Thomson & Peris, 2005). With the economy expanding, there is therefore expected excessive use of resources that are past full employment levels which therefore explain the current unemployment level of 4. 5%. This level is expected to fall to a low of 4% and then increase until it reaches a high of 6% as the maximum line. This cycle will result due to over use and under use of resources in expansion and recession respectively (Michael, 2008).