Personal Finance Assignment

Assignment 1

Instructions

Save the file in your course folder, and name it with Assignment, the section number, and your first initial and last name. For example, Jessie Robinson's assignment 1R for Section 1 would be named Assignment1JRobinson.

Type the answers to the assignment's questions. Use complete sentences unless the question says otherwise. You will have more than one day to complete an assignment. At the end of each day, be sure to save your progress.

Review Lesson 4 of the Course Overview for instructions about turning in your assignments.

Assignment 1: Economic Basics

(24.0 points)

1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)

A) Keep track of earning and spending. This is important to make sure you have money for everything you need. Whether it be bills or leisure. It helps make sure you don't spend more money than you have. If you spend more money than you truly have, you can easily get into financial trouble. It would be much easier to avoid the situation than try to fix it after it happens.

B) Plan for large purchases. This is important because almost everyone will have to buy a car at some point. This is a large expense that you will need to have money for, or good credit for. You need to be ready for when something like this comes up.

2. List two examples of goods you have purchased in the past or may purchase in the future. (Complete sentences are not necessary. 0.5 points)

Past- A) My Car. 1996 Chevy Blazer. B) Clothing.

Future- A) Motorcycle. B) Eventually a house. I would like to live under a roof that I can truly call my own.

3 List two examples of services you have purchased in the past or may purchase in the future. (Complete sentences are not necessary. 0.5 points)

Past- A) Oil change for my car. B) New tires put onto my car.

Future- A) Cleaning of my house. B) Tire rotation for my car.

4. One of the functions of money is as a store of value. How does inflation affect money's ability to store value? (3-6 sentences. 2.0 points)

Inflation is the general increase in prices and the decrease in purchasing value of money. This can easily affect store value because it changes the true value of money. So while the dollar value of goods or services increase, the value of the dollar decreases. This throws everything out of balance and the store value is no longer truly valid.

5. Imagine that you are considering moving to a new country and looking for a job there, but you first want to make sure the country has a strong economy. Describe at least three economic factors that you would want to research as evidence of the economy's strength or weakness, and explain how each factor would affect your decision to move there. (4-6 sentences. 3.0 points)

I would first check the countries GDP. This is a good measure for the “health” of it's economy. It represents the total dollar value of all it's goods and services produced over a specific area of time. So it's easy to gauge the health of an economy using GDP.

I would also check the unemployment rate. This helps me measure the economy by seeing how many people go without jobs. If the rate is high, chances are the economy is suffering, and that could mean that I may not get a job very easily.

Lastly I would check for any inflation. If the inflation rate is high, that could mean the economy is suffering. It may not be extremely bad, but it could mean that the economy is at risk for something much worse. This would influence my decision because I wouldn't want to go to some place that could be in economic danger.

6. Explain which economic system (market, planned, mixed, or traditional) you think is best for consumers. Describe at least one reason why you think this system is best for consumers. (4-7 sentences. 3.0 points)

I believe that mixed economy is the best. In the way that we have it set up in the U.S that is. I believe that competition for businesses is vital to consumers. It helps keep everything fair and consumers can take advantage of this economy much easier. Competition between businesses helps keep prices down and fair for consumers. It also gives

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