The state of the U.S. economy can impact your money and life. From economic growth and the national debt to unemployment and interest rates, learn what it means for you.

Frequently Asked Questions

  • What type of economy does the U.S. have?

    The U.S. economy is a mixed economy. The U.S. economic system is one in which some goods and services are privately owned and exchanged in a free market, while others are managed by the government.

  • How large is the U.S. economy?

    The U.S. economy is one of the largest in the world. It contributes trillions of dollars to the world’s gross domestic product (GDP) every year and is a leader in global trade. Because of this, the U.S. dollar is the most widely used currency in financial markets and is the world’s reserve currency.

  • How does a strong dollar impact the U.S. economy?

    A strong U.S. dollar makes U.S. exports of goods and services more expensive in other countries. On the other hand, a strong U.S. dollar also makes foreign goods and services relatively cheaper to those in the U.S. This means that exports may decrease while imports may increase.

  • How is the federal funds rate set?

    The federal funds rate is the interest rate that banks and depository institutions charge each other for overnight loans. It is calculated as a volume-weighted average of overnight federal funds transactions. The Federal Reserve sets a target range for the fed funds rate at its Federal Open Market Committee (FOMC) meetings, which means it can change throughout the year.

Key Terms

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