The American Economy—An Overview - Measuring The Economy, Defining The American Economy, The Main Components Of The American Economy, Regional And Local Economies

"The economy" is the term used to describe the system of making, distributing, and consuming material goods and services. The many facets of a country's economy include the spending habits of consumers, labor issues, employment patterns, the banking and financial industries, taxes, and the government regulation designed to help keep the economy running smoothly. There are two distinct branches of economics: macroeconomics and microeconomics. Macroeconomics is the study of the economic big picture, measuring broad trends in the economy, such as employment or inflation, as well as the way these trends interact. Microeconomics analyzes the economy on a smaller scale, focusing on individual consumers and companies.

The American economy depends on a combination of natural resources, labor, and technology to produce and distribute goods and services. It is the world's largest and, in many ways, most efficient economy: Americans make up just 5% of the world's population but produce more than 20% of its economic output. According to the World Bank in World Development Indicators (September 2004), the U.S. total GDP in 2003, at $10.9 trillion was more than double the nearest competitor, Japan, which had a GDP of $4.3 trillion. Other leading economies in 2003, according to the World Bank data, included Germany ($2.4 trillion), the United Kingdom ($1.8 trillion), and France ($1.7 trillion).