More About Personal Finance

  This week in Personal Finance we learned about credit. First, we learned there are many methods of financing a purchase. One method is an installment plan, where the buyer get possession of the merchandise by a payment of deposit and complete the purchase by paying a series of regular installments. Another method is layaway. This is a system of paying a deposit to secure an item for later purchase. Also there is secured and unsecured loans. The banks gives you money so you can offered to buy what you want or need. Unsecured loans are only supported by your credit score. Some sources of financing are retail stores, banks and credit unions, finance companies, pawn shops, payday loans, title loans, and private lenders. But remember payday loans and title loans are bad! You also need to know the types of credit: open-end credit, closed-end credit, service credit, revolving credit, secured loans, and unsecured loans. When buying a credit card look out for things like APR, annual fees, compound interest, ect. Learning this will be very helpful to us in the future. We now know how to finance a purchase that we may not be able to afford. Also it is important to know the types of credit and what to look out for when getting a credit card.

Economic Trends that the Fed Can't Fix

   In the article published by CNN, "2 Trends Janet Yellen Calls 'Disturbing'" by Annalyn Kurtz she talks about economic trends that the Fed can't control. Kurtz writes that one "very disturbing trend" is about 3.5 million Americans have been out of a job for at least six months. This amount of people is 35% of all unemployed. The other disturbing trend is income inequality. Not only is there inequality in income but also in wealth. But the Fed can't fix either of these problems. This is because they can not single out specific regions or industries that need the most assistance. Kurtz says The Fed can try and trigger economy by making it cheaper for businesses and consumers to take out loans by lowering interest rates and buying bonds. Yellen and the rest of the Fed hope that this will lead to job creation in many industries. In my opinion, the actions that the Fed is taking will be helpful. They can not do anything to completely solve the problem but they are taking the right step and aren't ignoring the problem. Unemployment and income inequality is affecting society everyday but hopefully the action taken will improve the financial state for many Americans.

http://money.cnn.com/2014/05/08/investing/yellen-inequality-unemployment/index.html?iid=Lead

Money and Banking

    This week in class we did a lot of exciting, new things! We received our first paychecks, opened our banks account, and deposited our checks! We also had to pay our first electric bill and learn to right a check, which was very informative. Before we did all this we learned about all aspects of money and banking. Money is any good that is widely accepted for the exchange and in the repayment of debts. There are three aspects of money. First, it's a medium of exchange. Second, it is a standard of value. Third, it's a store of value. There are many characteristics of money as well and its has to be: stable in value, scarce,  accepted, divisible, portable, durable, and difficult to counterfeit. What we have to hold all this money are banks. Banks make money by charging interest. Banks consist of the Fed: 12 district banks that regulate activities of member banks. There are 6 functions of the Fed: clearing checks, distributes money to banks, supervises banks, regulating money supply, setting the reserve, and supplying the paper currency. Something important to remember is that Janet Yellen is the Chairman of the Fed. Learning about money and banking is really important to learn about. I finally felt like I was learning something in school that I will actually use in the future!

What Happened This Week

   This week in class we learned about measuring economics. First we learned about GDP (Gross Domestic Product), which is the market value of all final goods and services. Economists calculate GDP by adding consumption, investments, government spending, and the difference between what we import and export. GDP is important because it indicates how well an economy is doing. We also learned about standard of living, unemployment rate, inflation, consumer price index, and national debt. To show the difference in these categories between different countries we filled out a chart. The chart showed major difference in the countries I chose but they all had one thing in common, a large amount of debt. In my opinion, countries spend too much on things that are unnecessary and that is contributing to debt. But the lack of peace in countries and mostly between countries is a huge cause of debt. Countries have to spend billions of dollars to provide military and equipment. Debt will eventually affect countries in a big way if they do not figure out a way to fix it.

Competition

    Recently, in Personal Finance and Economics we learned about the different forms of competition. Perfect Competition has numerous buyers and sellers, standardized products, freedom to enter and exit the market, independent buyers and sellers, and well-informed buyers and sellers. Monopoly has only one seller, a restricted a regulated market, and a control on prices. There is four types of monopolies: natural, geographical, technological, and governmental. Next, is monopolistic competition, which has many sellers and many buyers, similar but differentiated products, limited control of price, and freedom to enter or exit the market. Lastly, there's oligopoly, which has few sellers and many buyers, standardized or differentiated products, more control of prices, and little freedom to enter or exit market. These forms of competition have many differences as well as similarities.
In my opinion, monopolistic competition could be most successful. Not only does it have many sellers and buyers but is has similar but differentiated products and freedom to enter and exit the market, giving more options for the consumer. I went back and forth between perfect competition and monopolistic competition because they are so similar. But perfect competition offers only standardized products and has independent buyers and seller, not allowing control of prices. Which ever type of competition is used it will have a great impact on buyers, sellers, and the economy as a whole.

March Madness

     In the article, "College Basketball's Real Billion-Dollar Winners" written March 20, 2014 by Chris Isidore, he talks about the money involved in March Madness. Isidore says that it is not likely that someone will win the Warren Buffet-backed $1 billion dollar prize. But there will still be "big-dollar" winners. Men's college basketball produces $1.4 billion in revenue and the winners will be the ones splitting this money. For example, the University of Louisville has the richest basketball program in the country. This men's team alone had a revenue of $42.4 million, which produces a $26.7 million profit. The largest part of the revenue comes from the 14 year broadcast contract between NCAA and CBS. Out of all this profit made college athletes are wondering why they aren't being payed. 

     It doesn't surprise me that colleges make this much money off of sports like basketball and football. But most college players are offered scholarships to play sports, so I don't think it's necessary to pay them. I agree, that is a lot of money but it can be used to provide scholarships for future athletes. March Madness helps many colleges make more money and it increases ticket sales. 

    

http://money.cnn.com/2014/03/20/news/companies/ncaa-dollars/index.html?iid=SF_BN_Lead

Toughest Job Market for Teens

     In the article on CNN, "Teens Face Toughest Job Market on Record" by Annalyn Kurtz written on March 14 she discusses how employment has lowered for teens and people in their early 20's. Kurtz says, only 26% of teens from ages 16-19 had a job in 2011 and this is down from 45% in 2000. This is the lowest rate since after World War II era. In some areas fewer than 1 of 6 teens are employed. In the top 100 metro areas 1.8 million teens are looking for a job or want a job but aren't looking. In my opinion, it is not only underemployment that is an issue but teens are either too busy with school and sports or are too lazy to get a job. So many teenagers today rely on their parents, so they think getting a job is not necessary. These situations could be a huge contributions to low employment. But businesses are also struggling and not hiring as many people. This will most likely effect future job opportunities for this generation.  

http://money.cnn.com/2014/03/14/news/economy/youth-employment/index.html?iid=SF_E_Lead