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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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The law of diminishing returns states

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What is t he law of diminishing returns ? The law of diminishing returns states that as additional units of a variable input are added to fixed inputs, the marginal product of the variable input declines after a certain point. This observation was first made by the British economist David Ricardo in the context of agriculture in nineteenth-century England, where successive doses of labor and capital yielded smaller increases in crop output.  Diminishing returns also apply to manufacturing when a firm starts to exceed the capacity of its existing plant. Example of crop yield for  t he law of diminishing Let's say a farmer has a fixed amount of land, let's say one acre, and they want to grow corn. They start by planting 100 seeds, and with the help of a fixed amount of fertilizer and water, they get a yield of 100 bushels of corn. If the farmer decides to increase the number of seeds planted to 200, they might see a corresponding increase in yield to, say, 180 bushels. However, ...
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