Top of Form Purpose of Assignment
To locate, retrieve, and evaluate the effects of macroeconomic indicators on your own decision making. Resources
o Influence of Economics on Household Decision Making Grading Guide o Tutorial help on Microsoft Exceland Word functions can be found on the MicrosoftOffice website. There are also additional tutorials via the web offering support for Office products. Assignment Steps
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. Developa minimum 1,050-word analysis of your decision-making process in which you include the following: Ø 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. Ø 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 website, the U.S. Department of Labor's Bureau of Labor Statistics (BLS) website, or other credible sources of your choice. Post these statistics in a single worksheet of an Excelworkbook and submit your Excelfile 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.
Ø 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.
Ø 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. Formatyour paper according to APA guidelines. Submit your assignment. Include your paper as well as the two required Excelfiles. Bottom of Form 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. | | | | | The analysis is a minimum of 1,050 words in length. | | | | | | | Total Available | Total Earned | | | | 85 | #/85 | | 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 | | | | 35 | #/35 | | Assignment Total | # | 120 | #/120 | | Additional comments:
Answered Same Day
Oct 14, 2021
Solution
Komalavalli answered on
Oct 19 2021
9
Influence of Economics on Household Decision Making
Report on Influence of Economics on Household Decision Making
Table of Contents
Introduction 3
Analysis on Real Gross Domestic Product and Personal Consumption Expenditure 3
Fig1: Real GDP 3
Fig1.1: Personal Consumption Expenditure (in billion dollars): 4
Fig 1.3 Real GDP V.s PCE 5
Analysis on the Effective Federal Funds Rate and on the Consumer Price Index 6
Fig 2: Effective Federal Fund rates( %) 6
Fig 2.1: Consumer Price Index: All Items Less Food and Energy by year for the last 30 years 7
Fig 2.3: Fed Fund rate VS Consumer price index 8
Conclusion 9
References 10
Introduction:
In a economy consumer expenditure or business investment always dependent on the country’s economic growth. The report is to study about how the household or business decision influenced by the economic indicators such as Real Gross Domestic Product, Personal consumption expenditure, Effective Federal Fund rates and Consumer Price Index: All Items Less Food and Energy
Analysis on Real Gross Domestic Product and Personal Consumption Expenditure:
Real Gross Domestic Product is the value of goods and services for a given year that are inflation adjusted.
Fig1: Real GDP
Ten years Real GDP seasonally adjusted data were obtained from Federal Reserve Bank of St. Louis. Fig1 indicates Annual Real GDP in $ billion from 2009-2018.In 2009 Real GDP was 14448.993 billion dollars increased over the periods to 20580.233 billion dollars in 2018.It revealed that there is a economic growth for the period of ten years based on the seasonally Adjusted Annual real GDP in $ billions.
Personal consumption expenditure (PCE) measures the consumer expenditure on all goods and services in the economy.
Fig1.1: Personal Consumption Expenditure (in billion dollars):
Annual Personal Consumption expenditure for the period of 2009-2019 (ten years) was obtained from Federal Reserve Bank of St. Louis. Fig 1.1 is the graph of personal consumption expenditure (in $ billions) against year. The result revealed that annual personal consumption expenditure was increased from 9842.191667 $ billions in 2009 to 1398.65 $ billions in 2018.It indicates that the consumer expenditure was increasing over the period of ten years.
Comparison between Real Gross Domestic Product and Personal Consumption Expenditure:
The comparison between the real gross domestic product and personal consumption expenditure for ten years (2009-2018) is indicates by the Fig 1.3.
Fig 1.3 Real GDP V.s PCE
From the above graph it was indicated that when Real GDP increased from 14448.993 billion dollars in 2009 to 20580.233 billion dollars in 2018 , the annual personal consumption expenditure was also increased from 9842.191667 $ billions in 2009 to 1398.65 $ billions in 2018. Therefore increasing trend of Real GDP positively influences the personal consumption expenditure of all goods and services over ten year periods.
Analysis on the Effective Federal Funds Rate and on the Consumer Price Index:
Effective Federal fund rate is the interest rate that charged on other banks for lending their money from the reserve balance of a bank by federal bank. This interest rate...
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