Influence of Economics on Household Decision Making

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Question Description

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.

Click the Assignment Files tab to submit your assignment. Be sure you submit your paper as well as the two required Excel® files.

Unformatted Attachment Preview

Influence of Economics on Household Decision Making Grading Guide ECO/561 Version 12 Economics Copyright Copyright © 2017 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Influence of Economics on Household Decision Making Grading Guide ECO/561 Version 12 Edited in accordance with University of Phoenix® editorial standards and practices. 2 Influence of Economics on Household Decision Making Grading Guide ECO/561 Version 12 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 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. Met Partially Met Not Met Comments: 3 Influence of Economics on Household Decision Making Grading Guide ECO/561 Version 12 Content Met Partially Met Not Met Total Available Total Earned 7 #/7 Partially Met Not Met Total Available Total Earned 3 #/3 10 #/10 Comments: Developed conclusions about the economy’s influence on personal and business decisionmaking 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. Writing Guidelines Met 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. Assignment Total Additional comments: # Comments: 4 ...
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Tutor Answer

Tutor_Booth
School: Cornell University

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FRED Graph Observations
Federal Reserve Economic Data
Link: https://fred.stlouisfed.org
Help: https://fred.stlouisfed.org/help-faq
Economic Research Division
Federal Reserve Bank of St. Louis
GDPC1

Real Gross Domestic Product, Billions of Chained 2012 Dollars, Quarterly, Seasonally Adjusted Annu

Frequency: Quarterly
observation_date
GDPC1
2008-04-01
2008-07-01
2008-10-01
2009-01-01
2009-04-01
2009-07-01
2009-10-01
2010-01-01
2010-04-01
2010-07-01
2010-10-01
2011-01-01
2011-04-01
2011-07-01
2011-10-01
2012-01-01
2012-04-01
2012-07-01
2012-10-01
2013-01-01
2013-04-01
2013-07-01
2013-10-01
2014-01-01
2014-04-01
2014-07-01
2014-10-01
2015-01-01
2015-04-01
2015-07-01
2015-10-01
2016-01-01
2016-04-01
2016-07-01
2016-10-01
2017-01-01
2017-04-01
2017-07-01
2017-10-01
2018-01-01

15752.308
15667.032
15328.027
15155.940
15134.117
15189.222
15356.058
15415.145
15557.277
15671.967
15750.625
15712.754
15825.096
15820.700
16004.107
16129.418
16198.807
16220.667
16239.138
16382.964
16403.180
16531.685
16663.649
16621.696
16830.111
17033.572
17113.945
17254.744
17397.029
17438.802
17456.225
17523.374
17622.486
17706.705
17784.185
17863.023
17995.150
18120.843
18223.758
18323.963

Quarterly, Seasonally Adjusted Annual Rate

FRED Graph Observations
Federal Reserve Economic Data
Link: https://fred.stlouisfed.org
Help: https://fred.stlouisfed.org/help-faq
Economic Research Division
Federal Reserve Bank of St. Louis
PCECC96

Real Personal Consumption Expenditures, Billions of Chained 2012 Dollars, Quarterl

Frequency: Quarterly
observation_date
2008-04-01
2008-07-01
2008-10-01
2009-01-01
2009-04-01
2009-07-01
2009-10-01
2010-01-01
2010-04-01
2010-07-01
2010-10-01
2011-01-01
2011-04-01
2011-07-01
2011-10-01
2012-01-01
2012-04-01
2012-07-01
2012-10-01
2013-01-01
2013-04-01
2013-07-01
2013-10-01
2014-01-01
2014-04-01
2014-07-01
2014-10-01
2015-01-01
2015-04-01
2015-07-01
2015-10-01
2016-01-01
2016-04-01
2016-07-01
2016-10-01
2017-01-01
2017-04-01
2017-07-01
2017-10-01
2018-01-01

PCECC96
10661.689
10581.856
10483.376
10459.698
10417.334
10489.202
10473.645
10525.432
10609.148
10683.342
10753.999
10799.741
10823.654
10866.036
10885.893
10973.303
10989.585
11007.517
11056.852
11114.186
11122.185
11167.422
11263.648
11307.262
11428.703
11554.226
11687.133
11788.364
11887.537
11971.952
12039.650
12111.776
12214.098
12294.303
12372.730
12427.647
12515.860
12584.906
12706.369
12722.839

ed 2012 Dollars, Quarterly, Seasonally Adjusted Annual Rate

GDP vs PCE
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0

Observable date

5/10/2016

12/27/2014

8/14/2013

4/1/2012

11/18/2010

7/6/2009

Real PCE
10661.69
10581.86
10483.38
10459.7
10417.33
10489.2
10473.65
10525.43
10609.15
10683.34
10754
10799.74
10823.65
10866.04
10885.89
10973.3
10989.59
11007.52
11056.85
11114.19
11122.19
11167.42
11263.65
11307.26
11428.7
11554.23
11687.13
11788.36
11887.54
11971.95
12039.65
12111.78
12214.1
12294.3
12372.73
12427.65
12515.86
12584.91
12706.37
12722.84

2/22/2008

Real GDP
15752.31
15667.03
15328.03
15155.94
15134.12
15189.22
15356.06
15415.15
15557.28
15671.97
15750.63
15712.75
15825.1
15820.7
16004.11
16129.42
16198.81
16220.67
16239.14
16382.96
16403.18
16531.69
16663.65
16621.7
16830.11
17033.57
17113.95
17254.74
17397.03
17438.8
17456.23
17523.37
17622.49
17706.71
17784.19
17863.02
17995.15
18120.84
18223.76
18323.96

10/10/2006

observation_date
4/1/2008
7/1/2008
10/1/2008
1/1/2009
4/1/2009
7/1/2009
10/1/2009
1/1/2010
4/1/2010
7/1/2010
10/1/2010
1/1/2011
4/1/2011
7/1/2011
10/1/2011
1/1/2012
4/1/2012
7/1/2012
10/1/2012
1/1/2013
4/1/2013
7/1/2013
10/1/2013
1/1/2014
4/1/2014
7/1/2014
10/1/2014
1/1/2015
4/1/2015
7/1/2015
10/1/2015
1/1/2016
4/1/2016
7/1/2016
10/1/2016
1/1/2017
4/1/2017
7/1/2017
10/1/2017
1/1/2018

vs PCE

Real GDP

Real PCE

2/4/2019
9/22/2017
5/10/2016


FRED Graph Observations
Federal Reserve Economic Data
Link: https://fred.stlouisfed.org
Help: https://fred.stlouisfed.org/help-faq
Economic Research Division
Federal Reserve Bank of St. Louis
FEDFUNDS

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41

Effective Federal Funds Rate, Percent, Monthly, Not Seasonally Adjusted

Frequency: Monthly
observation_date
Effective Federal Funds Rate
1988-07-01
7,75
1988-08-01
8,01
1988-09-01
8,19
1988-10-01
8,30
1988-11-01
8,35
1988-12-01
8,76
1989-01-01
9,12
1989-02-01
9,36
1989-03-01
9,85
1989-04-01
9,84
1989-05-01
9,81
1989-06-01
9,53
1989-07-01
9,24
1989-08-01
8,99
1989-09-01
9,02
1989-10-01
8,84
1989-11-01
8,55
1989-12-01
8,45
1990-01-01
8,23
1990-02-01
8,24
1990-03-01
8,28
1990-04-01
8,26
1990-05-01
8,18
1990-06-01
8,29
1990-07-01
8,15
1990-08-01
8,13
1990-09-01
8,20
1990-10-01
8,11
1990-11-01
7,81
1990-12-01
7,31
1991-01-01
6,91
1991-02-01
6,25
1991-03-01
6,12
1991-04-01
5,91
1991-05-01
5,78
1991-06-01
5,90
1991-07-01
5,82
1991-08-01
5,66
1991-09-01
5,45
1991-10-01
5,21
1991-11-01
4,81

12,00
10,00
8,00
6,00
4,00
2,00
0,00

42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93

1991-12-01
1992-01-01
1992-02-01
1992-03-01
1992-04-01
1992-05-01
1992-06-01
1992-07-01
1992-08-01
1992-09-01
1992-10-01
1992-11-01
1992-12-01
1993-01-01
1993-02-01
1993-03-01
1993-04-01
1993-05-01
1993-06-01
1993-07-01
1993-08-01
1993-09-01
1993-10-01
1993-11-01...

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Anonymous
Thanks, good work

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