Albany State University Impact of Economics on Daily Living Paper

Assignment 1: Impact of Economics on Daily Living

Due: Week 4
Points: 105

Skill(s) Being Assessed: Problem Solving

Criteria for Success: In this assignment, you will:

• Summarize how expenditures between budgets changed or did not change and explain why expenditures changed.
• Identify an economic trend that created the need for a change in expenditures and explain how the trend influenced those expenditures.
• Describe three economic concepts and explain how they apply to the scenario.
• Provide advice that demonstrates an understanding of economic concepts and trends as well as personal finance best practices.
• Identify an economic trend and reflect on the current and future impact it has on one’s personal life and finances.

What to submit/deliverables: Word document downloaded from the webtext and submitted in Week 4 using the Assignment 1 link in Blackboard.

What is the value of doing this assignment? Economic trends and events in the world have real impacts on your daily life. This could take the form of a new technology that increases the demand for workers in a certain field, the amount of economic growth for a country that affects the ability (or willingness) of employers to increase wages, or even trade decisions between two countries that cause prices of some everyday goods to fluctuate.

Economic impacts require you to make decisions on how to allocate resources and effectively budget. They also require you to use critical thinking strategies to help you navigate the world of finance and economics. Throughout the previous weeks of this course, you have learned foundational economic concepts, personal finance considerations, and problem solving strategies. In this assignment, you’ll apply all of these to help your friends understand the economic trends affecting their financial situation and offer them advice on how to make well-informed decisions so they can effectively plan for their financial future.

Your goal for this assignment is to: Build your problem solving skill by articulating how economics has real impacts on families and their budgets. You’ll apply decision making and critical thinking strategies to explain how economics impacts your friends’ budget decisions.

Steps to complete: Follow these steps to complete your assignment. In Week 4, you’ll submit your assignment in Blackboard.

STEP 1:  Read the scenario.

Scenario
Your close friends Charles and Ebony know that you are learning about economics and personal finance, so they have come to you for advice about their family budget. They want to know what you think about how their budget has changed from the previous year.
Charles and Ebony are life partners who share their finances. They have a 4-year-old son, Marcel. Charles has a full-time job at the local hospital, and Ebony is enrolled in college part-time and is the primary caregiver for Marcel. There’s very strong demand for medical office workers in the area, and Ebony is studying to be a medical office assistant. After Ebony graduates at the end of the year, she plans to get a job at the hospital, and Charles plans to reduce his hours at work so he can go back to school to learn new skills and earn more income in the future.
Housing
Charles and Ebony rent an apartment in the neighborhood near where they grew up. This allows them to live close to their families, who help out with childcare. When rentals become available, they’re snapped up right away. In January, their landlord notified them that their rent would be increasing when they renewed their lease. The climate in the area is hot in the summer and cold in the winter, and to keep it comfortable in their apartment, they use their air conditioning and heat.
Food
Food prices have been going up, and Charles and Ebony have made changes by cutting back on specialty foods and fast food and buying more generic foods, but they still feel like they need to devote more money in their budget to food until they can figure out other ways to reduce their food costs.Transportation
Increases in the cost of gas have made it more expensive for Charles to commute to work every day in the car they own. To save money on transportation expenses, Charles has joined a carpool. By carpooling three days a week, Charles has been able to save money on transportation expenses and keep their transportation budget from rising despite the increasing cost of gas.Healthcare
Charles, Ebony, and Marcel are in excellent health, and Charles’s employer provides their health insurance. So far, they’ve been able to keep their healthcare costs low.Other Spending
Charles and Ebony each have a cell phone, and they also have a personal hotspot for Internet access. Ebony needs the Internet access because her classes are online.Savings and Debt
Saving money for emergencies and for the future is very important to Charles and Ebony. They always try to set aside money for savings even when money is tight. However, the interest rate on their savings account is very low, so they are considering other options.Charles and Ebony don’t have any debt, though they’re considering taking out a small loan to pay for Ebony to attend classes during the summer. If they do that, she will be able to complete her studies sooner and start earning an income sooner.

STEP 2:  Using the assignment templates in Chapter 1 of the webtext, you will examine your friends’ budget and compare last year’s actual spending to this year’s planned spending. 

STEP 3:  In Chapter 2 of the webtext, you will use assignment templates to explain how an economic trend is affecting your friends’ budget and also share with them how economic concepts apply to their situation. 

STEP 4:  To complete your draft of Assignment 1, you will use the assignment templates in Chapter 3 of the webtext to offer your friends advice, feedback, and budgeting strategies, drawing on what you’ve learned about economics and personal finance. You will also reflect on how a recent economic trend is impacting your personal life and finances now and in the future. 

STEP 5:  In Chapter 4 of the webtext, you will revise your draft responses and then download your Word document and upload it to Assignment 1 in Week 4 of Blackboard.