The term economy is probably one of the most misunderstood terms in business. Most people seem to have different definitions for what it means, making it difficult to use the word effectively. Many believe that having an economic crisis means going into bankruptcy or shutting down certain businesses, which are only parts of the definition.
The true meaning of the word comes from the Greek words oikonomia, which means household management or house keeping, and economis, which refers to the control or possession of something. When you own everything within your home, then you can say that you have controlled or possessed all aspects of your house.
Similarly, when you possess all of the things needed to survive, you can say that you have controlled or owned part of your self and your family has survived because you had money to eat next week. That example is not very inspiring, but it does show how important money is to our daily lives.
This article will go more in depth about the importance of understanding the word economy and how it relates to personal success. It will also talk about some theories behind this concept so that you may apply them to your life.
How is the U.S. economy different from other countries?
The key to understanding how our economy differs from those of other wealthy nations is to understand why their economies work better for them than ours does.
Many developing nations struggle with an emerging market that is made up mostly of young people who are willing to risk capital in opportunities that can fail. This lack of stability creates problems when investing in businesses or buying homes, as people do not have enough money set aside to withstand losses.
In these situations, individuals are forced to take more risky approaches to spending, which often times is what keeps the economy moving forward.
But here in America we enjoy a very stable environment where individuals have enough confidence in themselves and the system that they don’t need to gamble away large sums of money.
As such, investors tend to keep things relatively safe, offering little opportunity for big gains just because they aren’t needed.
The state of the U.S. economy since 2008
Since the Great Recession, the American economic landscape has been in constant transformation. We have experienced significant growth and downturn, which can make it hard to know what is happening around you.
Most people are familiar with the terms ‘recession’ and 'growth.' A recession is when there is a drop in GDP, while growth means we are expanding at a steady rate.
Since the great recession ended in 2009-10, we have seen two periods of slow growth called the "Great Moderation" and then "The New Normal."
During this time period, GDP rose steadily but not dramatically. In fact, according to the St. Louis Federal Reserve, average annual growth was only 2.2%! This is considered sluggish growth.
But although growth may be slower than before, we must remember that we are still growing. We are producing more goods and services each year compared to years past.
This is why many call this stage of our economy's development stable or even expansion.
Economic sectors of the U.S. economy
Almost every area of our society is influenced by the health of our economic sector, including education, employment opportunities, business growth, and more. The healthcare industry is one such example – it depends heavily upon strong economies in other areas for success.
The medical field is very dependent on the overall strength of the economy because diagnostic equipment and pharmaceuticals are expensive!
If the market for these products is shrinking due to recessionary conditions, then hospitals and clinics will be forced to cut back on their inventory and patients will be left without access to needed medicine or tests.
Recessions can also have an effect on how much employees get paid and thus, whether they choose to keep their current job or look for another.
Determining the health of the economy
The best way to determine if the economy is in good or poor shape depends on what you use as a marker for the economy. If consumers are spending money, then the economy is healthy.
If companies are investing heavily in new equipment and technology, then the economy is strong.
When there are wide spread job openings, that indicates employers have more money to spend and thus the economy is doing well.
When people talk about the economy being stronger or weaker than it was one month ago, this also suggests that things are going well.
While all of these indicators are important, no single indicator tells the whole story. It is the combination of them that gives us a clearer picture of how the economy is performing. - Source: Forbes / Harvard Business School
The term “healthy” can be used to describe several different states of affairs. Having a large amount of cash at hand is always a good thing, but it is not necessarily indicative of an improved economic state of play.
In fact, having lots of cash may indicate that someone has run out of other ways to invest their money.
Conversely, running short of cash is sometimes a prelude to making big purchases or investments. Either way, a high level of liquidity is never a bad thing.
As mentioned earlier, none of these alone tell the full story of whether the economy is improving or deteriorating.
Ways to improve the economy
The term 'economy' actually refers to two different things depending upon how you use it. When people talk about the economy, they may be referring to what economists call the productive sector of our society, which includes businesses that produce new products and services or enhance existing ones.
They are influenced by economic conditions so when the market for their product or service is bad, they must cut back production and/or reduce the number of customers they have. This can lead to layoffs, reduced income, and sometimes even shutdowns if and when they reach the tipping point where there's just not enough money coming in to keep the business afloat.
The other part of the economy is the consumer sector, which consists of individuals who spending money to enjoy life. They spend money buying goods and services from the productive sectors to fulfill their desires.
When people remain at home because they cannot afford to go out, the productive sectors also feel the effects of the slowdown. Businesses lose out as orders drop and employees are kept at work less hours than normal, reducing productivity.
We all depend on each other for the economy to function properly, so let us take time this week to think about something we could do to boost the economy. Maybe it's going into another line of work that uses resources more efficiently, investing in some educational materials, or supporting a local business.
Ways the economy is improving
One of the biggest reasons the American economy is in such good shape is because it has been growing consistently for the past few years. Since the Great Recession, our economy has only slowed down – it has never stopped expanding!
We have seen substantial growth since 2010 when the market began to recover and companies started investing back into their production facilities and staff. This includes hiring more people at restaurants and corporations, keeping up with monthly payments on mortgage or rent, buying new equipment, etc.
These are all components of what we refer to as economic activity. People spending money on things, businesses producing goods and services, and us taking care of each other by helping out friends and family who may be struggling can strengthen the economy.
This increase in activity helps create jobs. When people spend money they often do so at stores and restaurants that need employees to keep them open. And people help out relatives and neighbors by paying bills or giving them cash to make purchases.
Ways to lose your job
Even with an improving economy, employers are still looking for people to work for them. Therefore, there is always someone more qualified than you that gets the job over you. This can make you feel bad about yourself and even motivate you to prove yourself so that doesn’t happen again.
That's why it is so important to prepare for the worst even when the world seems perfect. You never know what will happen next!
Having enough money saved up is one of the most important things you can do in case of unemployment or under-employment. Having this backup plan makes sure you don't have to spend all of your savings trying to survive.
Also, understanding how the workplace works gives you a leg up on other candidates who may be more experienced but could not demonstrate their skills during interviews.
Ways to get a better job
Being employed is one of the most important things in life for anyone. If you are looking to improve your career, then there are several ways to do it. This article will talk about some easy steps that can help you gain employment anywhere!
The first way to increase employment opportunities is to make yourself known to people. People who already have jobs may not know what kind of work you would be interested in doing. By talking to them and showing an interest in their business or department, they might offer you a position.
This could be through meeting them outside of work or asking questions about the company during lunch or break times.
Another way to achieve this is by attending community events such as free movies or lectures. Some companies hold promotional events to draw attention to themselves, so why not join in?
Getting involved in different clubs and organizations can also help you find new positions.