Week One Economic Journal

The economy of United States expanded in the second quarter of the year 2015 owing to stronger consumer spending and construction causing a significant rise in the Gross Domestic Product. It is a clear indication that the economy of America is strengthening with a cooler pace still expected and more consumer spending. The supply and demand in the market system is sustaining the higher purchasing power of the consumers. The supply and demand is actually driving the market system with the producers getting more pressed to supply much than before as the consumers flex their financial muscles to take in more than before too. This transforms and maps a greater increase and growth of the economy constituting to more economic stability of the United States (Farnham, 2015).

However, there is still that element of scarcity for the limited supply to meet the unlimited demand. This constitutes to making choices and considering opportunity cost as consumers go for first things first. Investors and producers are also left to supply those things that have the priority of consumers as they look to opportunistically capitalize on the ‘fast-moving-goods’ that will bring them fast cash and returns. This has constituted to stronger after tax profits. The factors of production have also eased the hustle for producers. For instance, the lowering prices of fuel, in specific gasoline, have made the costs of production go down. Consequently, producers can produce more products at lesser investment cost and therefore make more profits mapping more economic inventory and constituting much growth and stability on the economy of the United States. Generally, the second quarter of 2015 saw significant growth and stabilization of the economy of the United States with demand and supply controlling the market system with some profitable equilibrium (Farnham, 2015).

 

Reference

Paul G. Farnham, (2015), Economics for Managers, Pearson Education Limited.

 

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