US & World Economies

    The health of the U.S. and world economies impact global markets, trade, and more. Learn how different economies and their growth or contraction can impact one another.

    Frequently Asked Questions

    • What is the largest economy in the world?

      When measuring world economies by gross domestic product (GDP) in current, unadjusted prices, the U.S. is the largest economy in the world. However, if you considered purchasing power parity (PPP), China would be seen as the world’s largest economy.

    • Where does the U.S. rank in the world economy?

      The U.S. ranks first or second in the world economy, depending on how you measure it. Based on current, unadjusted gross domestic product (GDP), the U.S. ranks No. 1. If you take purchasing power parity (PPP) into account, China ranks No. 1, and the U.S. ranks No. 2.

    • How does the U.S. affect the world economy?

      The U.S. is one of the largest economies in the world. The U.S. contributes a good portion to the world’s gross domestic product (GDP). The process of opening world markets and expanding trade began in the U.S. and the nation is now a leading global trader. Significant growth in the U.S. could directly boost the world economy, while a contraction could also negatively impact global financial markets.

    • What is a market economy?

      A market economy is an economic system that is based on free enterprise. That means that you as a consumer are free to choose which products or services you want to buy. You can also start or expand a business, or you can be a worker who chooses which job and employer you want to work for. Throughout it all, the government collects tax revenue from sales, income, payroll, and more.

    Key Terms

    Couple hugging in bank
    How the Rate Banks Charge Each Other Warns of Crisis
    Map of the World in coins
    Will the Amero Replace the Dollar?
    A family walks in the front door of a home.
    House Price Index (HPI)
    Worried young couple with financial bills review their options
    Need Mortgage Assistance? Government Programs May Help
    A man works at a computer in a warehouse.
    Trade Policy
    A person looks at jewelry in a display case.
    Crack-Up Boom in Economics
    Richard Cordray, first CFPB director, testifies at Congressional committee
    Consumer Financial Protection Bureau
    Two workers discuss a package in a restaurant.
    Woman with booklet in her hand shakes hands with another woman.
    A farmer inspects crops.
    Producer Price Index
    A woman with a laptop holds a credit card.
    Consumer Financial Protection Act
    Bars of Gold
    What is the Bretton Woods System?
    Woman with sleeve rolled up gets a vaccination from a nurse
    Can COVID-19 Vaccines Fix the Economy?
    upreme Court Justice Ruth Bader Ginsburg delivers remarks at the Georgetown Law Center on September 12, 2019, in Washington, DC.
    Ruth Bader Ginsburg’s Milestones and Their Impact on Financial Equality
    Happy female doctor and nurse discussing with male patient in clinic
    FDR signing Glass Steagall
    This 1933 Law Would Have Prevented the Financial Crisis
    how the nasdaq works: All trades are done electronically through dealers known as market makers. A company must meet listing requirements for a stock or security to be listed on the Nasdaq’s electronic exchange. Based on listing requirements, a company’s stock will be listed in one of the three market tiers: global select market, global market, or capital market.
    boat yard during world war II
    US Inflation Rate by Year: 1929-2023
    President Bill Clinton giving a speech in front of an American flag, 1995
    Which President Created the Most Jobs?
    A sign for Wall Street and American flags in New York, U.S.
    The Secrets of Wall Street: How It Works, Its History, and Its Crashes
    USA, New York, Manhattan streets. Skyscrapers and crowded streets, cars and busy people walking downtown in a spring sunny day
    What Is Income Per Capita?
    which part is better for the economy? democrats republicans
    Democrat or Republican: Which Political Party Has Grown the Economy More?
    Presidents’ Salaries During and After Office: While in office, the U.S. president receives a salary of $400,000 a year and a $50,000 expense account as of 2001.Jimmy Carter: $200,000 per year in office / $437,000 received after term Bill Clinton $200,000 per year in office $1,063,000 received in 2018 George W. Bush $400,000 per year in office $1,140,000 received in 2018 Barack Obama $400,000 per year in office $1,153,000 received in 2018
    US Presidents' Salaries During and After Office
    What is a government shutdown? a government shutdown is when non-essential discretionary federal programs close. The government will reopen once a budget is passed.
    Why the Government Shut Down and What Happens Next
    Air Force Jet
    Why U.S. Military Spending Is More Than You Think It Is
    Bureau of labor statistics meeting
    Bureau of Labor Statistics: What It Does and Its Impact
    Trump vs. Obama on Economic Policies
    Was Trump or Obama Best for the Economy?
    What to know about the Green New Deal: A plan to fight climate change and cut greenhouse emissions in half by 2030 Proposed by Representative Alexandria Ocasio-Cortez (D-N.Y.) and Representative John Markey (D-Mass.), though other versions exist Goals include upgrading buildings for energy efficiency and shift of national power generation to renewable sources Outlines plans to combat climate change while creating profitable competitive advantage with new, green jobs, like solar panel installation Also advocates for universal health care, education, and income
    The Green New Deal and How It Boosts the Economy
    Supermarket cashier in medical protective mask working at checkout
    What Exactly Is the U.S. Economy?
    A business woman shakes hands with a banker across a desk after receiving a prime interest rate loan.
    The Prime Interest Rate and How It Affects You
    Two male employees of Christie's auction house maneuver the Lehman Brothers corporate logo in preparation for the liquidation of the firm’s assets.
    How the 2008 Lehman Brothers Collapse Affects You Today
    What is retailing
    The US Economy and How It Works
    major effects of the great depression
    How the Great Depression Still Affects You Today
    Cartoon representing the drop in the stock market during the subprime mortgage crisis.
    The Causes of the Subprime Mortgage Crisis
    seated woman looks through charts and graphs
    How the Fed Influences Interest Rates
    A person kneels, comparing two products in the grocery store.
    What Is Shrinkflation?
    An accountant pores over an economics book.
    6 Trends That Affect the U.S. Economy
    Sarbanes Oxley
    4 Ways Sarbanes-Oxley Stops Corporate Fraud
    U.S treasury bonds
    Why Treasury Yields Fall When Demand Rises
    A store owner looks over his sales numbers from the previous quarter.
    U.S. Economic Outlook for 2022 and Beyond
    A woman uses her credit card at a card reader reader to buy coffee at a convenience store.
    Consumer Spending Increases 0.2% in May
    Child with doctor
    Preventive Care: How It Lowers Healthcare Costs in America
    Man Entering WaMu
    How WaMu Went Bankrupt
    Federal government revenue
    Who Really Pays Uncle Sam's Bills?
    president biden getting a covid-19 vaccination from a doctor
    Here’s How President Biden Plans to respond to COVID-19.
    Boehner and Obama agree on TPA
    Why Did Obama Extend the Bush Tax Cuts in 2010?
    Mother working with a paper notebook on living floor, infant beside her
    U.S. Poverty Rate by Demographics and State
    A young woman checks her phone while talking with a hotel concierge.
    Jobs Report and the Monthly Employment Growth Statistics
    Woman reading an economics book
    The 9 Best Economics Books of 2022
    Rear view of students sitting at graduation ceremony
    Education Ranking by State
    what you need to know about income inequality in america
    The Cause of Income Inequality in America
    why us federal spending is increasing: spending grew to a record 24.4% of GDP during the Great Recession, Congress enacted sequestration to curb government spending, beginning in 2013. Despite sequestration, deficit spending has wildly increased because of the government's effort to continually boost economic growth
    Current U.S. Federal Government Spending
    Jet emitting CO2
    How a Carbon Tax Can Solve Climate Change
    A person looks at a laptop
    Black Thursday news coverage
    The First Day of the Worst Stock Market Crash in U.S. History
    A banker looks over mortgage-backed security data.
    Mortgage-Backed Securities
    A person looks at a phone in a cafe.
    Truth In Lending Act (TILA)
    Close-up of man's hands counting a stack of money into another man's hand
    How Companies Show Revenue on the Balance Sheet
    Staff calculating restaurant bill
    How COVID-19 Has Affected the U.S. Economy
    What was Obamas Stimulus Package
    Did Obama's Stimulus Plan Work?

    Page Sources

    1. International Monetary Fund. "GDP, Current Prices." Accessed Oct. 20, 2021.