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. 
 
Economics, Ch. 27: Business Cycles, Unemployment, and Inflation
Read pages 592-594 of Economics.
Consider the following as you read:

  • What are primary phases of the business cycle?
  • How does inflation affect the economy’s level of real output?

Economics, Ch. 28: Basic Macroeconomic Relationships
Read pages 615-622 and 628-634 of Economics.
Consider the following as you read:

  • How do changes in income affect consumption (and saving)?
  • What are factors other than income that can affect consumption?

Economics, Ch. 29: The Aggregate Expenditures Model
Read pages 638-643 and 646-658 of Economics.
Consider the following as you read:

  • How can changes in real GDP equilibrium occur in the aggregate expenditures model and how do these changes relate to the multiplier?
  • How do economists integrate the public sector (government expenditures and taxes) into the aggregate expenditures model?

Economics, Ch. 30: Aggregate Demand and Aggregate Supply
Read pages 661-664 and 670-680 of Economics.
Consider the following as you read:

  • What is aggregate demand (AD) and why is its downward slope the result of the real-balances effect, the interest-rate effect, and the foreign purchases effect?
  • What is aggregate supply (AS) and why does it differ in the immediate short-run, the short-run, and the long-run?

 
Influence of Economics on Household Decision Making Grading Guide
 
ECO/561 Version 12
Economics
 
 
 

Individual Assignment: 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.
 

Resources Required

 
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.

Grading Guide

 

Content Met Partially Met Not Met Comments:
Retrieved statistics on Real Gross Domestic Product (GDP) and on Real Personal Consumption Expenditures (PCE) by year for the last ten years.  Posted these statistics in a single worksheet of an Excel® workbook and submitted Excel® file with student’s report.  Discussed the latest 10-year trends in both GDP and PCE.  Also discussed how the trends in GDP compare with trends in PCE.        
Retrieved 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. Posted these statistics in a single worksheet of an Excel® workbook and submitted your Excel® file with student’s report.  Discussed how the trends in the Effective Federal Funds Rate compare with trends in inflation.  Answered these questions:
·         If student took out a loan to pay for their “big-ticket” purchase what was the interest rate on their loan?
·         Were interest rates rising or falling at that time?
·         Were interest rates relatively high or low at that time?
       
Discussed the influence of any Federal government or state government programs, such as tax credits or tax deductions for energy-saving/efficiency purchases, on student’s decision to make last big purchase; or if government incentives did not factor into decision, explained why not.
 
       
Developed conclusions about the economy’s influence on personal and business decision-making relative to purchases of big-ticket items, investments, or other major purchases.        
Cited 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.        
The analysis is a minimum of 1,050 words in length.        
 
 
 
  Total Available Total Earned  
    7 #/7  

 
 

Writing Guidelines Met Partially Met Not Met Comments:
The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements.        
Intellectual property is recognized with in-text citations and a reference page.        
Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper.        
Sentences are complete, clear, and concise.        
Rules of grammar and usage are followed including spelling and punctuation.        
    Total Available Total Earned  
    3 #/3  

 
 

Assignment Total # 10 #/10  
Additional comments:
 
 
 

 
 
 
 

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