Economic trends and events in the world have real impacts on your daily life. This could take
Question:
Economic trends and events in the world have real impacts on your daily life. This could take the form of a new technology that increases the demand for workers in a certain field, the amount of economic growth for a country that affects the ability (or willingness) of employers to increase wages, or even trade decisions between two countries that cause prices of some everyday goods to fluctuate.
Economic impacts require you to make decisions on how to allocate resources and effectively budget. They also require you to use critical thinking strategies to help you navigate the world of finance and economics. Throughout the previous weeks of this course, you have learned foundational economic concepts, personal finance considerations, and problem-solving strategies.
You'll apply all these to help your friends Charles and Ebony understand the economic trends affecting their financial situation and offer them advice on how to make well-informed decisions so they can effectively plan for their financial future.
Your goal for this assignment is to build your problem-solving skill by articulating how economics has real impacts on families and their budgets. You'll apply decision-making and critical thinking strategies to explain how economics impacts your friends' budget decisions.
The specific course learning outcome associated with this assignment is:
Articulate how economics impacts all aspects of life including jobs, income levels, consumer prices, and trade.
Impact of Economics on Daily Living
Describe Budget Changes
There was no difference in the change of their income. They made the same amount of money for both years. The only difference was that they decreased their Personal spending, entertainment, and Savings. There was an increase in housing and food because their rent went up and food went up. They also got a loan for ebony to pay for classes.
Describe an Economic Trend
Charles and Ebony are affected by rising cost of living. "To save Charles had to car pool as a trade off decision ." Charles and ebony used compound growth.
Apply Economic Concepts
Scarcity, Tradeoff Decisions, or Opportunity Costs
Charles carpooled to give up driving his car. Charles and Ebony are forced to make difficult choices about their spending due to the fundamental problem of scarcity. Chales is going back to school, and he will have to pay tuition but he pay will grow in the long run.
Supply and Demand
The price of food will go up so they didn't by as much. ebony plans to get a job once she finishes school. Charles will cut his hours to go back to school to earn more wages in the long run. They moved closer to family to cut paying for childcare but the rent will increase.
Compound Growth
Charles and Ebony could leverage the economic concept of compound growth to grow their savings over time. their interest rate on their saving is low so its had to save.
Offer Advice
Charles and Ebony should find ways to increase income and reduce spending. To increase their income Charles and Ebony should invest their savings instead of putting it into a savings account. They could also invest some money from their personal spending budget. Another way they could increase their income is by starting a scalable side hustle to bring in extra cash. To cut down on expense they could reduce spending on anything that isn't a necessity. Any money Charles and Ebony save should be used to make more money.
Reflect on How Economics Affects You
Changes in interest rates could impact the budget line item for debt payments, such as credit card or loan payments. Demand for labor or unemployment could impact the budget line item for income, either increasing or decreasing the amount of money available for spending. Progress toward financial goals could be affected if these economic trends result in higher expenses or lower income than anticipated.
One of the economic trends is the rise of unemployment. Individuals who are unemployed, tend to spend less. They might experience frustration and deprivation due to their incapability of spending too much to buy their needs and necessities. Being unemployed for two years due to that economic trend is almost a suicide. Having no income must not mean no consumption.
Expert Answer:
Answer Its clear that Charles and Ebony are facing significant challenges due to economic trends impacting their financial situation Lets break down t... View the full answer
