Importance of GDP in USA

1. CONCEPTS

GDP:  The abbreviation for ‘gross domestic product’ (the total value of all the goods and services produced by a country in one year) (Oxford dictionary, 2010)

ECONOMIC INDICATOR: "A statistic used to gauge future trends in a nation's economy". (Oxford dictionary, 2010)

2. WHY USA IS THE COUNTRY WITH HIGHER GDP IN THE WORLD AND WHY IS IMPORTANT FOR IB?

USA is a very productive and competitive country, therefore, its products are highly demanded by other countries, making it in one of the countries with higher exports in the world.

Around two-thirds of the total production of the country is driven by personal consumption which allow increase the demand and then the supply.

GDP es very important for USA, because what GDP represents has a large impact on nearly everyone whitin that economy.

It's very important in International Business, because GDP is an economic indicator of how is the economic growth and development in a country, and the economy is increasingly influenced by the dynamic economies of other countries. It therefore faces internal and external challenges. Although it is an important tool in international business, it also has problems as many experts have said: "Economic theorists still find flaws and problems with it as an economic tool. Among these problems are, the inability of GDP per capita to provide information about income distribution. Some income derived from the black market, or those which were not reported to the government were not accounted for. Likewise, GDP does not count volunteer work and services provided by social workers and charity institutions. It also do not account for reconstruction work and services done due to national disasters and calamities. Additionally, GDP as a statistical account is subject to fraud especially from those who are engaged in tax evasion processes. Some companies do not foreclose their true gross domestic transactions to lessen their tax payments." (Madsen, 2006).

3. POINT OF VIEW

For countries like United states is very important this information, but I think that the importance of GDP is not the data, I think the most important thing is to know how to use that kind of information. As Hebert E. says: "To keep from drowning in information we must learn to use it properly, which means figuring out what the information is telling us. After all, it isn't the information itself we use to make decisions; it's the knowledge within the information that we use. This is why we must learn how to analyze information - how to determine just what information we need to make the decisions we face, how to get that information, and then - this is the most crucial step of all -- how to reach inside this information to grasp the knowledge it contains." (Meyer, 2007)

Although USA has the largest economy in the world, needs to network with other countries by negociating agreements, allowing it to obtain a stronger economy and a higher production growth and to overcome economic crisis caused by posible faults.

GDP is a usefull tool in international business, because it gives information about the economic growth of a country, consequently we can know which countries are attractive to establish agreements and negociations. It's important to clarify that it is not the only mechanism to invest or negociate in a country, there are many economical, political, social and cultural variables that influence this kind decisions.

CYBERGRAPHY

Oxford dictionary. 2010. (online). Available at: http://www.oxfordadvancedlearnersdictionary.com/dictionary/gdp

Oxford dictionary. 2010. (online). Available at:
http://oxforddictionaries.com/view/entry/m_en_us1262599#m_en_us1262599

Madsen, C. (2006) The Importance Of GDP Per Capita. [online]:  http://www.nationmaster.com/article/The-Importance-of-GDP-Per-Capita

Meyer, E . (2006) How to Analyze Information: A Step-by-Step Guide to Life's Most Vital Skill. [online]: http://www.howtoanalyzeinformation.com/

Economy watch. (2010). US Economic Profile. [online]: http://www.economywatch.com/world_economy/usa/

Image: US Flag. Gettyimages. (online).Available at:

http://www.gettyimages.com/detail/102518378/Photographers-Choice-RF