...A New Home XECO/212 September 22, 2012 Jan Cohen A New Home When deciding to purchase a home my husband and I had to ask ourselves how the government bodies affect the housing market. The answer to that question is it the government body plays a big part. The strength of the economy at the time will make us feel comfortable or uncomfortable about the purchase of a new home. We realize a new home will be a large amount of money and time devoted, the stability of the economy is a big factor. The use of marginal benefits and costs will help us determine if it is the correct time to make the purchase. Marginal benefit gives us the satisfaction of our purchase, with the maximum amount we are willing to pay for it. For example if purchasing a three bedroom house costs much more than a two bedroom but we are happier with the three bedrooms then it is a marginal benefit. Marginal cost is the theory that the more houses being built at the time, the lower the cost will be. (Marginal Costs and Benefits, 2009) In times when it is called a buyers’ market shows us that the marginal benefit is better than the marginal cost. During economy hard times we are more concerned with marginal cost than marginal benefit. The government decides the interest rates and tax deductions for consumers when purchasing a home. The lower the interest rate, the bigger the tax deduction, will increase the probability that we will purchase a home. This affects the marginal cost and marginal demand by...
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...Axia College Material Appendix A Answer the following questions. 1. If the price of a good increases, what happens to demand? The demand decreases because people are not willing to buy as much when the price rises. 2. If the price of a good decreases, what happens to supply? The supply will increase because people are now willing to buy more at a lower price. 3. Does a change in price create curve shifts? Explain. Yes because a change in price results in a change in demand and we know that demand determines the price and vice versa. Complete the following matrix. An example is provided. |Event |Market affected by event |Shift in supply, demand, or |Change in equilibrium (P&Q) | | | |both. Explain your answer. | | |Frozen orange crops in California |Orange juice |Supply (left)—Not as many |Price will increase and | | | |available oranges to offer |quantity will decrease. | | | |consumers. | | |Hurricanes in the Gulf Coast |Gulf Coast tourism |Demand will decrease because no|Price will decrease and | | | |one wants to go...
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...Economic Decision to Purchase a House Our behaviors and decisions in our daily lives are affected by economics. When making decisions, we will use economic theories either consciously or subconscious to decide if we will make or reject that decision. The same can also be used to explain our actions and behaviors when making an economic decision to purchase a house. This paper will evaluate how economics affect one’s decision to purchase a new house. First, the decision to purchase a new house is considered a large and important decision by many. This is because the prices of houses are usually very high, and thus purchasing a new house will greatly deplete the savings of an individual. The demand of houses is highly price elastic. Economic theories state that the larger the proportion of income a certain purchase requires, the more price elastic the demand will be. In the case of the purchase of a new house, it will require the spending of a large proportion of an average person’s income, hence this will greatly lower the purchasing power of the individual when the decision is made to purchase the house. Furthermore, buying a new house will require people to shift from a familiar environment to a less familiar environment and this can be a life-changing experience which may be scary to some. Hence, these are all factors which make the purchase of a new house a very difficult decision to make. There are various principles of economics that can be applied to a decision to...
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...Xeco/212 Page 1 A New House: Readiness Xeco/212 Angela Rogers Due: Friday May 24, 2103 Pamela Hammock Xeco/212 Page 2 I feel that purchasing a new home is one of the biggest decisions a family can be faced with. I know that because of the person that I am the main principle I would use when purchasing a new home is the second one, which was the cost of something is what you give up to get it. However it would be safe to say that a decision this big over a period of time would at some point factor in all 10 of the principles. I feel this way because you never know what the future may hold and if you were to make any mistakes when making this decision it could create all kinds of financial problems. If I were making a decision like this I would have to take several things into consideration. One of the things I would consider is the timing. I would want to take baby steps or so to speak, like building smaller goals and going for those first until I reach the final goal of purchasing the home. I would have to weigh my options as whether to buy a house or renting a bigger apartment would be better than the small studio. Yes we would definitely need something bigger with a baby on the way. Another thing to consider is where you would want to send your child to school especially if you are purchasing a home. You would also have to consider the economy and how the real estate market is holding up. You would not want to buy a house and then the value decrease...
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...Money Train # 1 The Federal Reserve helps control “liquidly” in the free market. During the times that banks see decreases in the reserve, they introduce the monetary policies. They can affect several things like increase the money flow into the banking system. The higher reserve indicates decrease liquidity and a slower activity in the flow of the economy. The potentials here are to have the banks increase their profit in turn allowing the banks to be more generous in lending and other regions. This allows the economic community to lend more money and the community itself to spend more money. This helps to keep the money flow stabilized and allows smaller banks to gain benefits and customers. #2 the discount rate is a rate that is set in order to maintain the rate at which a bank can borrow. Just like in any application the lower the rate the better the outlook. This enables the banks to lend to higher rips people and business. This too also helps stimulate the economy the high rate will affect the lending rate in turn lowering the economic status and economy. The Fed set the rates in this area; they hold all the cards for the people and business to become more successful. According to Mankiw, N. G. Principles of economics 4th ed (2007)” The Fed uses discount lending not only to control the money supply but also to help financial institutions when they are in trouble”. Economic growth is very important because it provides the foundation for the future of society. Economic...
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...Checkpoint Week 6 June 6, 2013 XECO/212 Money acts as a unit of account. Unit of account is defined as a standard monetary unit of measurement of value/cost of goods, services, or assets. Unit of account is one of the three functions of money. It is the standard denomination that prices are measured with. When I go to work and get paid by the hour, it is me getting paid for the services that I provide. Money is always going to be worth something. The actual value may change but it is always going to be worth something. Medium of exchange is anything, usually money, which is used to make payments for goods, services, and assets. Medium of exchange (money) is used in trade to avoid going back to the pure barter system. Although usually it is money, it can be anything that people agree to be worth something. For instance, gold and silver are other examples of a medium of exchange. An example of a medium of exchange that I use is my debit and credit cards. They are not actual money but they are used the same. Money can also be used as a store of value. That is a way to accumulate value until it is needed. A lot of people do this for many different things. Paying a down payment on a house or car is one. Also smaller things like when I go shopping, I like to save up all of my extra money so that I can buy more at one time. Many people don’t like to store their money away. People say why save your money, you are not going to live forever...
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...Federal Reserve The federal reserve is the central banking system that regulate all of the banking institutions in the United States, and they also have control over how much money flows through the US economy. Each banking institution barrows money from the federal reserve to do business. The federal reserve charge each banking institution interest on the money they borrow. When the federal reserve charge high interest rate banks are force to borrow less money because it will be hard to sell affordable mortgages, construction loans, or business loans to their customers. When the federal reserve lowers the interest rate banks will borrow more money and they will be able to sell affordable loans to the consumers. Incentives Tax policies affect the real-estate market. For example last year the government gave people a $8,500 tax credit for new house purchase made before the program's expiration date. This policy helped stimulate the real-estate market. When tax credits are given to buyers or property taxes are reduced, that creates more real-estate sales, investors borrow more for new construction, and banks are able to lower their rate because of the Increased loan purchases. Pros an Cons Purchasing a home when interest rates are low is always a good option, that will lower your monthly payments, and give you to option of putting that extra money into the sale price of the home. Always try to take advantage of governmental incentive programs, for instance tax...
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...Running Head: CheckPoint International Trade Debate CheckPoint: International Trade Debate XECO/212 University of Phoenix International Trade Debate In the world today, we rely on international trade to get the goods and services we require and this has increased our interdependence. However, there are both supporters and opponents of international trade. In the case of supporters, they believe in the advantages of international trade such as an increase in choice of goods and services for consumers which will help to increase their level of satisfaction. On the other hand, opponents believe that international trade will bring about disadvantages such as increasing competition which will hurt domestic firms and also affect employment rates. International trade takes place because different countries are productive in producing different groups. Two economic concepts involved in international trade will be absolute advantage and comparative advantage. Absolute advantage refers to the ability to produce more goods than another competitor. Comparative advantage refers to the ability to produce a good at a lower opportunity cost than a competitor. Countries will only engage in international trade when they are able to benefit. Hence, countries of different comparative advantage will trade to enjoy more of certain goods. The United States must place high tariffs and use quotas to restrict trade with foreign countries. There are many advantages and disadvantages associated...
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...The Black Death was a bubonic plague that wiped out about one-third of the population in Europe in the 14th century. This event decreased one-third of the population in only a few short years. This event clearly shows the results and impact that it had on the supply and demand of labor in the market. With this smaller supply of population or workers, the marginal product of the labor rose. This effect can be looked at as diminishing marginal product working in reverse. The Black Death event caused wages to rise. Because land and labor were used together in production, a smaller supply of workers also affected the market for land, the other major factor of production in medieval Europe. With fewer workers available to farm the land, additional units of land produced less additional output. This basically caused the marginal product of land to fall. This event caused the rents to lower. During this period, wages approximately doubled, and rents declined 50 percent or more. This major event led to economic prosperity for the peasant classes and reduced incomes for the landed classes. (9780324832945, Principles of Economics, 4e, N. Gregory Mankiw - © Cengage Learning) If we look at this closely, before this event happened, likely, the landed class was doing well financially because their land was very valuable and there were an abundance of workers so they could in turn pay cheap labor to them. As the labor diminished, the wages of the workers increased, causing the lower class to...
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...Checkpoint: A New House – Readiness Leonard Sugue University of Phoenix XECO 212 Economic Theory Audra Sherwood February 17, 2011 A New House – Readiness Deciding to buy a house is a lifelong goal for many people. Imagine that you are renting a studio apartment and have just discovered you are having a baby. Your present apartment is small and far from schools and local services. You have decided to move. There are many factors that come into play when making such a large and weighty purchase. Examine the decision-making process from the perspective of an economist. In your Final Project, you use these principles and other factors to make a final decision whether to buy a house. Purchasing a home for the first time can be overwhelming. A house can be the largest investment someone makes. It can provide advantages, but it can present disadvantages as well. The following principles can be used when deciding to purchase your first home: People Face Trade-offs (Mankiw, 2007) The Cost of Something Is What You Give Up to Get It (Mankiw, 2007) When deciding to purchase a home, the principle “People Face Trade-offs” can be applied to help make a final decision. Making decisions requires trading off one goal against another (Mankiw, 2007). The buyer must sacrifice a little to gain a lot. First time home buyers must realize that it takes a lot of money to purchase a home. Buyers must sacrifice things such as vacations, movies, special occasions, and...
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...Week 5 – A New House – Risks & Benefits Kathleen Butcher XECO/212 – Principles of Economics 02/9/13 Tonya Wilhelm When purchasing a new home there are many things to consider. Reviewing the risks and benefits when thinking about making a life changing purchase of buying a home can help you determine when is the right time for you. There are multiple government departments that can impact the national fiscal policies but the one that has the potential for the biggest impact is the Federal Reserve. The Federal Reserve is the one that decides if the interest rates increase or decrease based on what the market is doing. There are multiple policies that can have an influence on the different parts to consider in buying a home, such as, mortgage rates, housing starts, and housing prices. The first thing to look at as a consumer is the lending rates. This rate helps lenders decide if they will borrow money from the Federal Reserve to have money to put into mortgages and housing starts. The higher the interest rates, the higher the cost of buying a home will be. If the interest rates get to be too high, the housing market will become stagnant and cause issues in the economy. The suggestion that I would give to someone looking at buying a home would be to analyze the risks and benefits of purchasing a home. There are so many considerations to take into account for first time buyers and people looking to refinance. When purchasing a home there are people who...
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...The Great Depression started in 1929 and lasted until 1939 and “was economic slump in North America, Europe, and other industrialized areas of the world” (“About the Great Depression n.d”). This is because of a chain of events that affected the economy of that time. In the United States billions of dollars were lost buy people and demands of goods and service dropped after the stock market crash. The affect that the market crash had on the economy was that it lowered the equilibrium which created an excess amount of service and commodities. In general this would have brought an increase in the demand of goods and more wealth for different individuals due to the price being lowered for service and goods. This had the opposite effect on the economy and many people became unemployed due to their services was not needed. During this period of time many people had lost their jobs and had very little or no money to spend. The economy was on a down word spiral and the shortage of jobs was affecting the economy. Even with the banks having money for one to borrow people were saving their money because they were afraid to borrow because they could not pay it back. Particularly in the United States, where, at its nadir in 1933, 25 percent of all workers and 37 percent of all non farmers were completely out of work” (Great Depression, n.d). It even came to a point during the depression that people starved, nonfarm workers where without a job, and homeless vagabonds sneaked on trains...
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...A New House – Decision University Of Phoenix XECO/212, Week 9, Final Project April 21, 2012 Catherine Higgins The decision to purchase a home is often the most important financial decision and individual or family will be faced with. The largest single financial purchase in an individual's lifetime is often the purchase of a house and one of the largest factors of personal wealth. All ten of the principles of economics are directly related to the decision to purchase a house on some level. These economic principles will have an impact on the purchasing decision and the long term financial aspects of home ownership so it is wise to incorporate these ten principles into the decision making process to ensure a sound financial decision is the outcome. When considering the purchase of a house, the ten principles of economics that need to be addressed can be broken down into three stages of the decision making process. The first step is to examine how the decision is made by incorporating the first four principles of economics which include, the trade off that comes with every financial decision, the real cost of any item or service is what is given up to get the item or service, rational people think at the margin, and people respond to incentives. Once it is clear how the decision is made, the next three principles of economics address how people interact with economics and include factors such as, trade is beneficial to everyone, markets are...
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...One of the issues in communication theory is the importance of purpose in communicating your ideas. In order to communicate effectively in English speaking culture you need to have purpose. This means that you need to be clear about your reason for communicating and organise the message to achieve your purpose. Usage of communication channels to the best advantage. For example are you communicating via email or more formal written channels, over the telephone, or face to face? And recognise that your non-verbal communication may be contradicting what you are actually saying, and finally give your receivers the opportunity to respond, so that you can see whether they have understood your message. Cross-cultural communication tries to bring together such a relatively unrelated areas and establishment area of communication. Its core is to establish and understand how people from different cultures communicate with each other. Its aim is to produce some guidelines with which people from different cultures can better communicate with each other. The key to effective cross-cultural communication is knowledge. It is essential that people understand the potential problems of cross-cultural communication and make a conscious effort to overcome these problems. And it is important to assume that one’s efforts will not always be successful, and adjust one’s behaviour appropriately. This essay will discuss the importance of the issues and problems concerning the effectiveness of cross-cultural...
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...Supply and Demand Name University of Phoenix Supply and Demand People who are planning to buy a new house should first be well informed about the status of their new locality’s real estate market. The housing market is strongly governed by certain economic conditions, and understanding the economic trend will allow interested buyers to wisely choose the best price for their new house. It is also an established fact that the business conditions can also influence the real estate market; however, the huge aspect that will truly affect housing prices is still the law of supply and demand. The principle of supply and demand is an economic principle that is applicable to all commodities whether material or immaterial. It is a principle that establishes the relationship between the price of the product to its availability and supply. So for example, if there is a high demand for a product that currently has low supply, the tendency is for the prices to be higher since there is the security of the market that can support the price imposed. On the other hand, if the demand for a certain product is low, but the supply is high, then its price will naturally decrease simply because of its high availability in the market (Mankiw, 2004). The homebuilding industry originally started out of the human needs to have stable and hardened shelters that can provide them with long term protection and comfort, especially when they are already starting to...
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