Output Of Goods And Services

Almost two-thirds of the nation's total economic output consists of goods and services bought by individuals for personal use. The remaining one-third is bought by government and business. Because of this ratio, the nation is sometimes characterized as a "consumer economy."

It is evident, then, that the consumer will exert a measure of influence over the market economy. Naturally, most consumers look for good values when they buy, as well as product reliability and safety. If one automaker, domestic or foreign, produces a better car at a lower price, the market will begin to shift as that car attracts more sales than its competitors. In theory, this phenomenon rewards efficient producers who maintain high quality at low prices, and drives out those who cannot compete.

Providers of goods and services include owners, managers and workers. Owners and managers make decisions on what and how to produce, relying on what they think the public will buy and expecting to earn a profit from their business operations.

The gross national product (GNP) measures the total output of goods and services in a given year. A word of caution is in order when using GNP -- or a somewhat similar measurement known as gross domestic product (GDP) -- as an indicator of national well-being. Environmentalists and social commentators point out that neither GNP nor GDP is an adequate measure of the quality of life in a nation -- they only measure the market value of the goods and services. By contrast, economic growth can contribute to pollution and exacerbate the difficult problem of maintaining a clean and healthy environment.

The U.S. GNP has been growing steadily, rising from more than $3,400 thousand-million in 1983 to around the $5,500 thousand-million mark by 1990.