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The 5 best economies in the world

24/7 Wall St. Logo By Robert Serenbetz and Thomas C. Frohlich of 24/7 Wall St. | Slide 1 of 6: new caption

America makes progress

After sliding for four consecutive years, the United States moved up two places for the second year in a row in the World Economic Forum's competitiveness rankings, from fifth last year to third in 2014. A combination of factors, including improving business sophistication and institutional frameworks, helped the United States improve, despite perceptions of inefficient government and a weak macroeconomic environment.

The WEF's Global Competitiveness Report defines competitiveness as the "set of institutions, policies, and factors that determine the level of productivity of a country." In order to assess competitiveness, the WEF divided the 144 nations it surveyed into one of three classifications, depending on their stage of development.

A country's competitiveness and economic development is highly correlated with its Gross Domestic Product. All of the 10 most competitive countries had among the 25 highest GDPs per capita last year. Norway, Singapore and Hong Kong SAR are all among the five highest in terms of GDP per capita.

The least competitive countries, on the other hand, were unable to generate world-leading economic output. Three countries -- Mauritania, Burundi, and Sierra Leone -- had a GDP per capita of less than $10,000.

Every country except for the United States ranks in the top 25 for the provision of basic economic requirements, such as institutions, infrastructure, and education. The most competitive countries maintain a high level of quality for road networks and transportation infrastructure and primary education.

With only a few exceptions, the world's least competitive countries have relatively low debt levels. In these poorer nations, access to financing is often a challenge not just for businesses but also for governments.

Click ahead for the five best economies in the world.

© Martin Barraud/Getty Images

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