The American Economy—An Overview - The Role Of The Individual In The Economy

Almost every aspect of American life is influenced by, and further influences, the economy. Whether you drive or fly on your next vacation, how you will pay for college and save for your retirement, what advertisements you see, what movies you watch, and what magazines you read all involve making economic decisions, which then impact the way the economy functions. If you work or plan to work, you are a small but important part of the economy. Likewise, every time you buy goods, or save money, you are participating in economic activity.

Economists maintain that the better off the economy is, the better its participants will be. In a healthy economy people tend to have more job security, earn more money, and are able to increase opportunities for themselves and their families—thus lifting their overall quality of life. But in an unstable, bad economy—such as in the United States during the Great Depression (1929–early 1940s) and during the recessions of the early 1990s and the first years of the twenty-first century—people are less certain of the future, face increasing pressures at work and may lose their jobs, and have less flexibility in being able to pay for goods and services, which in turn impacts trends in employment, interest rates, the cost of living, the money supply, and all other aspects of the economy, on both the macro and micro levels.