GDP forecast and investment Rate
The U.S. economy has experienced a positive growth due to the balance of trade items. The GDP of the country has increased by 0.8% in 2016 which is more than the estimated 0.5% rise. The fundamental reason for the increase is due to the rising demand for products and services in the market and the increased of home spending by the citizens. The level of investment in the country reduced in 2016 compared to other years. This can be attributed to the expected election in the country since investors tend to shy away during the election period. The individual consumption level in the U.S. increased by 1.29% compared to 2015, which means that the consumers were willing to spend their income to purchase more products. For the past five years, the level of Personal Consumption Expenditure has been constantly changing (Hodgson, 2016). This can be attributed to the level of unemployment five years ago and the income level. In the next five years the GDP percentage will increase hence improving consumers’ purchasing power if all variables are constant (Magas, 2004). However, the decrease in investment level may affect GDP level in the future since it may affect the level of employment in the country. …show more content…
since the consumer purchasing power is high. Additionally, the saving rate is lower compared to the level of spending making it possible to market its products to encourage purchase. The countries policies favor local businesses, hence the company needs to relocate to U.S. to benefit from the policies set. Exports are also encouraged in the country to be lowering customs duties to balance the trade deficit (Magas, 2004). This change will enable the enterprise to sell its products at a low price. Additionally, the market for foreign-exchange currency for the dollar is high, which will enable the firm to increase its
The U.S. economy has experienced a positive growth due to the balance of trade items. The GDP of the country has increased by 0.8% in 2016 which is more than the estimated 0.5% rise. The fundamental reason for the increase is due to the rising demand for products and services in the market and the increased of home spending by the citizens. The level of investment in the country reduced in 2016 compared to other years. This can be attributed to the expected election in the country since investors tend to shy away during the election period. The individual consumption level in the U.S. increased by 1.29% compared to 2015, which means that the consumers were willing to spend their income to purchase more products. For the past five years, the level of Personal Consumption Expenditure has been constantly changing (Hodgson, 2016). This can be attributed to the level of unemployment five years ago and the income level. In the next five years the GDP percentage will increase hence improving consumers’ purchasing power if all variables are constant (Magas, 2004). However, the decrease in investment level may affect GDP level in the future since it may affect the level of employment in the country. …show more content…
since the consumer purchasing power is high. Additionally, the saving rate is lower compared to the level of spending making it possible to market its products to encourage purchase. The countries policies favor local businesses, hence the company needs to relocate to U.S. to benefit from the policies set. Exports are also encouraged in the country to be lowering customs duties to balance the trade deficit (Magas, 2004). This change will enable the enterprise to sell its products at a low price. Additionally, the market for foreign-exchange currency for the dollar is high, which will enable the firm to increase its