Influence of Economics on Household DecisionMaking Grading GuideECO/561 Version 12EconomicsPurpose of AssignmentTo locate, retrieve, and evaluate the effects of macroeconomic indicators on your own decision making.Assignment StepsResources:Tutorial help on Excel®and Word functions can be found on the Microsoft®Office website. Thereare 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 usingloans/financing (by borrowing money). Also consider your decision-making process that led you to choose aparticular make, model, or brand of the product (or service) you purchased and whether it was the right timeto 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 byhuman economic behavior.Developa 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 ConsumptionExpenditures (PCE) by year for the last ten years. You can retrieve those statistics from internetsources 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 sourceof your choice. Post these statistics in a single worksheet of an Excel®workbook and submit yourExcel®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 includegraphs of these statistics in your report; you could create the graphs in Excel®and copy them into yourreport.Retrieve statistics on the Effective Federal Funds Rate and on the Consumer Price Index: All ItemsLess Food and Energy by year for the last 30 years. You can retrieve those statistics from internetsources 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 yourchoice. Post these statistics in a single worksheet of an Excel®workbook and submit your Excel®filewith your report. In your report, discuss how the trends in the Effective Federal Funds Rate comparewith trends in inflation. If you took out a loan to pay for your “big-ticket” purchase, what was theinterest rate on your loan? Were interest rates rising or falling at that time? Were interest ratesrelatively high or low at that time? You are also encouraged to include graphs of these statistics inyour report.Discuss the influence of any Federal government or state government programs, such as tax creditsor tax deductions for energy-saving/efficiency purchases, on your decision to make your last bigpurchase; 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-makingrelative to purchases of big-ticket items, investments, or other major purchases.
Answer & Explanation