Understanding the U.S. Business System
The U.S. has a mixed market economy that leans more on a market rather than a planned economy. A market economy operates based on the freedom of choice while a planned economy involves government intervention. As a predominantly market economy, the U.S. is mainly affected by supply and demand, private enterprise and competition. In the U.S., most government intervention usually involves controls and regulations that ensure healthy competition since it usually expands or restricts the flow or supply of goods and services to naturally or artificially influence demand. Through the years, the U.S. has been at the forefront of the world economy. Prominent U.S. citizens like Eli Whitney and Henry Ford have introduced and perfected mass production techniques transforming the U.S. from an agricultural into an industrial economy. Moreover, the global and internet economies can also be mainly attributed to the innovations of U.S. citizens like Bill Gates and Michael Dell.
Understanding the Environments of Business
Businesses operate on a micro and macro level. The micro-level usually pertains to the internal organization of an enterprise. Meanwhile, the macro-level pertains to external factors that affect a business such as the: a) economic; b) technological; c) political and legal; d) socio-cultural; and e) business environments. The economic usually consists of various cycles and degrees of activities. It is usually measured through the growth rate, GDP and other econometrics. The technological is a major key to wealth generation and improvement of the quality of life. Major economic transformations are usually brought about by technological advancements such as in the invention of electrical generators, machinery, computers and the Internet. Meanwhile, the political and legal environments restrict or expand business activity by way of government. The socio-cultural pertains to the social conditions by which buyers and sellers live. Finally, the business environment pertains to the rapidly changing conditions brought about by improvements in the way goods and services are produced, sold and bought.
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