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An open economy is an international market where universal trade occurs. This is where countries trade with each other. Open economies differ from closed economies since countries opens their markets to other countries. Such economies grant trade benefits which enhance certain goals such as economic achievement and social goals. An open economy allows the import and export of products and exports. Imports allow a country to enjoy or to benefit from products and services provided for by another country or countries. Exports enable a country to market its products and services in other countries. An open economy is of great benefit to companies, shareholders and citizens. Open economies, however, have a disadvantage. The main disadvantage comes in when a country that is the largest trading partner goes through an economic downfall. The global market gets affected as a result which leads to global economic crisis. An open economy ensures that the consumers in a country get to enjoy the benefit of choosing goods from a wide range of choices. An open economy also boosts the prospects of undeviating foreign venture. An open economy allows interaction between the citizens of different nations; this ensures that it is able to fiddle with different changes that may occur in the economic world (Michael, 1993).
United States of America Economic situation
The United States of America is the major super power in the world. It is among the largest global market traders and its influence on the global economy is notable. It is also one of the largest exporters in the global market. The United States is one of the biggest influencers of the global market. It has an open economy. The United States has thus in years benefited from the open economy. This is because it is able to export its products and services in almost all the nations in the world. It is also able to import from the same countries. The economical downfall of the United States largely contributed to the global economic crisis or recession. The global market suffered with many countries having to suffer from financial crisis. The open economy has thus being of great benefit to the United States as it is able to export and import its products and services. The United States, for example, has over the years enjoyed the benefits of exporting its products and services to other countries especially those in the third world. It has also suffered as a result of the open market. This is attributed to the major global recession that hit most countries. It has also suffered due to the emergence of other competing countries like China who were not affected by the global recession. The emergence of countries such as China, Brazil and India for example has ensured that the United States is not the largest trader in the open economy, hence its influence has gone down (Asjorn, 2000).
The United States has, hence, benefited and suffered at the same time from the open economy. It, however, continues to be among the most beneficiaries of the open market and economic influencer. The emergence of other world economies such as China, Russia, and Brazil e.t.c. has brought lots of competition to the United States (Michael, 1993).