Expected Gross Domestic Product Growth
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Expected Gross Domestic Product Growth
Erin Young
AIU Online
Abstract
This study examined the expected GDP growth in the U.S. Data was collected from many different reliable sources and analyzed to assist local chamber of commerce members with a projected idea of the future economic state, based on recent history and predicted conditions. In addition various topics will be identified such as: the process of how GDP is determined, GDP trends, forecasts and statistics, and the overall interpretation of GDP.
Expected Gross Domestic Product Growth
When talking about the expected GDP there are many factors that need to be considered, for starters to better understand our topic we need to answer these simple questions;
What exactly is GDP?
How is it determined?
What are the GDP trends?
How are GDP statistics?
What is in the forecast for GDP
Once answered, we can have a better idea of how the expected U.S. gross domestic product will affect our future and economy.
What exactly is GDP? Gross domestic product is one of the primary indicators used to gauge the health of a countrys economy. This economic indicator measures the total countrys output, including everything produced by all the people and all the companies in the country (Amadeo, K., 2013).
GDP can be determined in three ways, all of which should, in principle, give the same result. These three ways are the product (or output) approach, the income approach, and the expenditure approach. The product approach is the most direct of the three and sums the outputs of every class of enterprise to arrive at the total. It is also called Net Product or Value added method, which consists of three stages:
Estimating the Gross Value of domestic Output
Determining the intermediate consumption; the cost of material, supplies and services used to produce final goods or services;
Deducting intermediate consumption from Gross Value to obtain the Net Value of Domestic Output.
Net Value Added = Gross Value of output – Value of Intermediate Consumption
Value of Output = Value of the total sales of goods and services + Value of changes in the inventories.
The income approach measures GDP by adding incomes that firms pay households for factor of production they hire; wages for labor, interest for capital,