Personal Economics

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Personal Economics
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Money vs. Currency

• Money something that people will accept in
  exchange for goods or services.
• Currency the part of the money supply
  consisting of coins and paper bills.
• Note Money and Currency is not the same thing.

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Money vs. Value

• Money works as a store of value. The only reason
  money is valuable to us is that it stores value
  that we intend to use later.

4
How do we store value?

• Currency
• Banks or other Economic Institutions
• Money that isnt Money
• Certificates of Deposit
• Stocks and Bonds
• Money Market Accounts

5
How do banks work?

• Savings Accounts
• Checking Accounts and Debit Cards
• Loans
• Reserve Requirements Banks are required to keep
  about 14 of the value they have in money on hand.

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How do we use our value?

• Savings and other future accounts
• Purchasing Capital
• DVD Players, Cars, Clothes
• Purchasing Services
• Cable, Cell Phones
• Using money to make money
• Stock Market and other investments

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Purchasing

• Economic Trade-Offs
• The choice between alternative uses for a given
  quantity of a resource.

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Why are economic trade-offs necessary in any
economic system?

• Because of limited resources an individual or a
  community cannot get everything it wants. They
  will need to choose what is more important to
  them.

9
Opportunity Costs

• The real economic cost of a good or service
  produced measured by the value of the sacrificed
  alternative.
• Example I can work at McDonalds over the summer
  or I can teach summer school. My opportunity
  cost for working at McDonalds is 9/hr. - 26/hr.
  The opportunity cost is -17 an hour.

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Economic Choices

• Every individual deals with limitations. We are
  forced to make decisions about what is important
  to us and how we want to use the resources we
  have.
• Do I want to study now or go shopping?
• Do I want to buy a pop now or save the money
  until later?
• Should I buy one really cool shirt or buy two
  average shirts?