Economic Concepts Worksheet
Review your Week 1 Learning Activities, specially Ch. 1 of Focus on Single Finance,
Khan Academy Resources and Video Reflection, and
Investopedia Resources located in the “Additional Reading and Video Resources” amalgamate on your method page.
Respond to each of the forthcoming questions in your own expression. Each confutation should be at mediumest 50 expression.
1. A ostensible cause rate is defined as “the opening absorb of employment or using coin.” Clear-up what you conceive this limitation to medium.
2. When the rule is in a recession, the Federal Reserve usually cuts cause rates. Why would the federal legislation do this?
3. How does your slow and spending line substitute depending on the set-forth of the rule, i.e., whether the rule is in a recession versus disquisition? Do cause rates reproduce-exhibit a role in your decisions? Why or why not?
4. If cause rates are at a roll of 1% and expected inflation is 2%, would you advance slow or spending your coin? Justify your reply.
Behavioral Economics Concepts
Review your Week 1 Learning Activities, specially the Investopedia Resources on Behavioral Finance: Anchoring, Mental Accounting, Herd Behavior, and Prospect Theory located in the “Additional Reading and Video Resources” amalgamate on your method page.
Choose two of the forthcoming concepts discussed in this week’s materials.
· Mental accounting
· Herd behavior
· Prospect theory
Define each in your own expression and clear-up how each could dedicate to your single financial and trustworthiness decisions. Your undiminished confutation should be at mediumest 100 expression.