Global Economy

To say the current economy is at its best point is very wrong. The economy as society knows it, is currently on a direct path to destruction. Economists have long warned about the effects of inflation and rising cost of goods and product around the world. They want to further identify areas where society has faults, market movement of each nation, and how each nation contributes to the economy downfall. Global economy is the exchange of goods and services between various countries, such as China, Great Britain, and U.S. economy that are interconnected with each other. This paper will examine the U.S., U.K. and Chinese economies, in order to determine the pros and cons of globalization, and the consequences of living in a borderless economy.

The U.S economy is based on the consumption of the value of goods and services bought by people is what the economy thrives on. The U.S economy is also based upon consumption statistics, sustainability, and consequences of reduced consumption. Before money, people used non-monetary items to survive, however now that money is involved, society needs money to grow the economy. Without increased consumption, the economy would falter (Vollmer, 2013). Without money being injected into the economy, society may witness inflation and high interest rates which can lead to a recession. “One of the major consumptions happen from consumers watching television commercials to entice consumers to purchase goods such as Christmas gifts that cover $80 billion dollars” (Vollmer, 2013). This statement brings such truth because in order for society to increase economic growth continue to spend money. Society is enticed by commercials showing pizza, iPhones, or computers. The federal government can help inject money into the economy. When a recession happens, the government will spend more on unemployment benefits and the government may use expansionary fiscal policy. The government uses these policies to increase government spending, lower taxes, and increase unemployment benefits. For example, in 2009 the US economy was experiencing a deep recession with high unemployment rate, falling GDP, and rise in government borrowing. Obama passed the American Recovery and Reinvestment Act of 2009 – which involved $831 billion of economic stimulus – including tax cuts, unemployment benefits and infrastructure spending (Pettinger, 2017). Despite the controversary, the recovery package boosted the economic growth and loosened up the monetary policy. So, in order for the economy to grow, society has to spend money in order for the economy to thrive and not fall into recession.

“The U.S. economy provides goods and services such as computers, electrical machinery, oil, aircraft, space craft, vehicles, optical, technical, medical apparatus, plastics, plastic articles, gems, precious metals, pharmaceuticals, and organic chemicals […] U.S. economy specialize in [certain products] that brings in 12.2% of gross domestic product” (Workman, 2018). Specialization brings in comparative advantage which leads the U.S economy to work on the products that they are strong in. Specialization leads to advantages for workers to become experts in a production such as the items listed above. Carpenters use many tools that commercial bakers use. Commercial bakers use bigger ovens than a local bakery that uses a smaller oven for pies. The advantages of specialization lead to large production facilities in the United States such as car manufacture. Automo