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ECO 561 Influence of Economics on Household Decision Making Paper

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Economics

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Influence of Economics on Household Decision Making
ECO/561
June 27, 2019
Mr. Steven Krohn

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Influence of Economics on Household Decision Making
The world is changing every day in the economy and technology field. We need to know
how the economy is doing before we make hard decisions in our lives when making major
purchases or getting a service. The numbers will go high or low based on the consumption,
distribution, and production of goods and services. It is beneficial to check the internet first
before spending your money, because most of the time going online is cheaper, and when in
doubt check with an economist. In this paper, I will compare the last 10 years of trends in the
Real Gross Domestic Product (GDP), Real Personal Consumption Expenditure (PCE), look at
the last 30 years of trends of the Effective Federal Funds Rate (EFFR) to compare with the
Consumer Price Index (CPI) and inflation (McConnell, Brue, & Flynn, 2015). Then there will be
a conclusion.
Real Gross Domestic Product and Real Personal Consumption Expenditures
The (GDP) is the inflation-adjusted measure that reflects the value of goods and services
produced by labor and property in the United States (Real Gross Domestic Product, 2018). This
measures the final goods and services at a given time in a country expressed in base year prices
also referred to as the constant price, and when the prices change it is referred to as inflation.
Normally the (GDP) is calculated annually, however; it can be calculated daily, monthly or
quarterly for analysis. Below is a graph that shows the last 10 years of trends in the (GDP) of the
United States.

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1 Influence of Economics on Household Decision Making ECO/561 June 27, 2019 Mr. Steven Krohn 2 Influence of Economics on Household Decision Making The world is changing every day in the economy and technology field. We need to know how the economy is doing before we make hard decisions in our lives when making major purchases or getting a service. The numbers will go high or low based on the consumption, distribution, and production of goods and services. It is beneficial to check the internet first before spending your money, because most of the time going online is cheaper, and when in doubt check with an economist. In this paper, I will compare the last 10 years of trends in the Real Gross Domestic Product (GDP), Real Personal Consumption Expenditure (PCE), look at the last 30 years of trends of the Effective Federal Funds Rate (EFFR) to compare with the Consumer Price Index (CPI) and inflation (McConnell, Brue, & Flynn, 2015). Then there will be a conclusion. Real Gross Domestic Product and Real Personal Consumption Expenditures The (GDP) is the inflation-adjusted measure that reflects the value of goods and services produced by labor and property in the United States (Real Gross Domestic Product, 2018). This measures the final goods and services at a given time in a country expressed in base year prices also referred to as the constant price, and when the prices change it is referred to as inflation. Normally the (GDP) is calculated annually, however; it can be calcu ...
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