With a per capita GDP of $46,000, the United States has the world’s largest and most technologically advanced economy. In this market-oriented economy, private individuals and business firms make the majority of decisions, and the federal and state governments primarily purchase needed goods and services in the private marketplace.
Decisions to expand capital plant, lay off surplus workers, and develop new products in the United States are more flexible than in Western Europe and Japan. At the same time, they face higher barriers to entry into their competitors’ home markets than foreign firms do into US markets.