Corporations must have financial resources to acquire the resources they need to produce goods or services. They raise the necessary capital largely by selling stock (ownership shares in their assets) or bonds (long-term loans of money) to insurance companies, banks , pension funds, individuals, and other investors. Some institutions, especially banks , also lend money directly to corporations or other business enterprises. Federal and state governments have developed detailed rules and regulations to ensure the safety and soundness of this financial system and to foster the free flow of information so investors can make well-informed decisions.
The gross domestic product measures the total output of goods and services in a given year. In the United States it has been growing steadily, rising from more than $3.4 trillion in 1983 to around $8.5 trillion by 1998. But while these figures help measure the economy's health, they do not gauge every aspect of national well-being. GDP shows the market value of the goods and services an economy produces, but it does not weigh a nation's quality of life. And some important variables -- personal happiness and security, for instance, or a clean environment and good health -- are entirely beyond its scope.
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Next Article: A Mixed Economy: The Role of the Market
This article is adapted from the book "Outline of the U.S. Economy" by Conte and Carr and has been adapted with permission from the U.S. Department of State.
