ECO 561 Wk 1 Individual: Influence of Economics on Household Decision Making
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ECO 561 Wk 1 Individual: Influence of Economics on Household
Decision Making
Purpose of Assignment
To locate, retrieve, and evaluate the effects of macroeconomic
indicators on your own decision making.
Assignment Steps
Resources: Tutorial help on
Excel® and Word functions can be found on the Microsoft® Office
website. There are also additional tutorials via the web offering support for
Office products.
Scenario: Consider your last big purchase
such as a car, appliances, home repairs, home purchase, computer equipment,
college tuition, or another “big-ticket” item, which are often purchased using
loans/financing (by borrowing money). Also consider your decision-making
process that led you to choose a particular make, model, or brand of the
product (or service) you purchased and whether it was the right time to make
the purchase given economic conditions at the time of your purchase. While
analyzing your decision, keep in mind everything from interest rates to the
prices of complementary and substitute goods are driven by human economic
behavior.
Develop a minimum 1,050-word analysis of your
decision-making process in which you include the following:
·
Retrieve statistics on Real Gross Domestic Product (GDP) and on
Real Personal Consumption Expenditures (PCE) by year for the last ten years.
You can retrieve those statistics from internet sources including, but not
limited to, the Federal Reserve of St. Louis’s FRED web site, the U.S.
Department of Commerce’s Bureau of Economic Analysis (BEA) web site, or another
credible source of your choice. Post these statistics in a single worksheet of
an Excel® workbook and submit your Excel® file with your report. In
your report, discuss the latest 10-year trends in both GDP and PCE. Also
discuss how the trends in GDP compare with trends in PCE. You are encouraged to
include graphs of these statistics in your report; you could create the graphs
in Excel® and copy them into your report.
·
Retrieve statistics on the Effective Federal Funds Rate and on
the Consumer Price Index: All Items Less Food and Energy by year for the last
30 years. You can retrieve those statistics from internet sources including,
but not limited to, the Federal Reserve of St. Louis’s FRED web site, the U.S.
Department of Labor’s Bureau of Labor Statistics (BLS) web site, or other
credible sources of your choice. Post these statistics in a single worksheet of
an Excel® workbook and submit your Excel® file with your report. In
your report, discuss how the trends in the Effective Federal Funds Rate compare
with trends in inflation. If you took out a loan to pay for your “big-ticket”
purchase, what was the interest rate on your loan? Were interest rates rising or
falling at that time? Were interest rates relatively high or low at that
time? You are also encouraged to include graphs of these statistics in your
report.
·
Discuss the influence of any Federal government or state
government programs, such as tax credits or tax deductions for
energy-saving/efficiency purchases, on your decision to make your last big
purchase; or if government incentives did not factor into your decision,
explain why not.
·
Develop conclusions about the economy’s influence on personal
and business decision-making relative to purchases of big-ticket items,
investments, or other major purchases.
Cite a minimum of three peer-reviewed
sources. Note:
The Federal Reserve of St. Louis, the Bureau of Economic Analysis, and the
Bureau of Labor Statistics can be cited to fulfill this requirement.
Format your paper consistent with APA
guidelines.
Submit your assignment. Be sure you submit your
paper as well as the two required Excel® files..
Resources
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