To keep the huge American economy on course, government economists follow macroeconomic trends. Macroeconomics is the study of the behavior and decision making of entire economies. By contrast, microeconomics is the study of economic behavior of individuals, families, and businesses. Macroeconomic progress is measured by calculating a nation’s gross domestic product (GDP). This is the total value of all final goods and services produced in a year. Measuring the change in GDP from one year to the next is one way of measuring growth or decline in an economy.

     Free enterprise systems are subject to sudden swings in business cycles, periods of macroeconomic growth followed by slowing or decline. To stabilize the economy and prevent wide swings, the government has three main goals: high employment, steady economic growth, and stable prices. Government policymakers use different policies and tools in their attempts to achieve these goals.

     One way Americans maintain their high standard of living is by constantly improving technology. Technology is the process used to produce a good or service. Progress in technology helps the economy to be more efficient and productive. For example, Thomas Edison’s invention of the light bulb in 1879 made possible a longer work day. To advance technological progress, government policies encourage innovation. Federal agencies fund research and development projects at universities and private companies. The government also provides patents and copyrights. This encourages inventors by protecting their ideas.