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Showing posts with the label Demystifying National Income: Understanding Methods of Calculation

U.S. Economic Growth Slows Amid Tariff Pressures: A 2025 Outlook

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📉 U.S. Economic Growth Slows Amid Tariff Pressures: A 2025 Outlook As 2025 unfolds, the U.S. economy is showing signs of strain amid a global slowdown and heightened trade barriers. Here's a detailed look at the latest forecasts and implications based on insights from the OECD, Federal Reserve, and key market indicators . 📊 1. U.S. Growth Forecast Downgraded by OECD The Organisation for Economic Co-operation and Development (OECD) has revised the U.S. GDP growth forecast for 2025 to 1.6% , down from 2.8% in 2024 . The forecast for 2026 remains muted at 1.5% , reflecting persistent uncertainty driven by: Elevated trade barriers Reduced consumer spending power Sluggish business investment 💸 2. Tariffs Fueling Inflation & Trade Costs The average U.S. tariff rate has climbed to 15.4% , the highest level since 1938 . These tariffs have raised import costs, which are now being passed on to consumers: Projected consumer price inflation is expected to rise to...
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Demystifying National Income: Understanding Methods of Calculation

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  National income serves as a vital measure of a country's economic performance, reflecting the total value of goods and services produced within its borders over a specified period. But how exactly is national income calculated? In this post, we'll unveil the methods used to measure national income and explore the intricacies of this essential economic indicator. The Value Added Approach One method of calculating national income is the value-added approach, also known as the product method. This approach measures national income by summing up the value added at each stage of production in the economy. Here's how it works: Calculating Gross Value Added (GVA): GVA represents the value of output produced by each sector of the economy, excluding the value of intermediate inputs. It is calculated by subtracting the value of intermediate consumption from total output in each sector. Summing Up GVA Across Sectors: Once GVA is calculated for each sector, it is aggregated across ...
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