https://padlet.com/marieamber889/eqovnxjgmqh9dh1h Money Matters: Assignment Two en-us 2021-03-30 00:10:43 UTC 2021-03-30 02:47:08 UTC hello@padlet.com marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366134287 Greetings, This padlet is informative on the topic of interest; specifically, in respect to the factors that make such rates fluctuate up and down. I will elaborate on aspects in our market and economy that significantly correlate to  the interest rates that we endure on a daily basis. ]]> 2021-03-30 00:15:35 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366134287 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366150021 This brief video explains how interest rates and affected and determined.  
The determination of fluctuating interest is often caused directly by the federal reserve to keep the economy stable and generate income when it is low.
The federal reserve advertently lowers interest rates to encourage investors and consumers to spend money and stimulate the economy.
Opposingly, if inflation rates are rising causing prices to rise, the federal reserve will advertently slow down the economy by raising the interest rates to stabilize the economy. 
The rise and fall of interest rates, is a response of the federal reserves activities in keeping the inflation rates stabilized, creating more jobs, and keep the economy secure. ]]> 2021-03-30 00:22:10 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366150021 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366181662 This video is informative in respect to understanding inflation - directly correlated to our interest rates and why they tend to soar. 
This video describes inflation as a hidden tax on society. 
The bank reserves uses individuals funds and multiplies in on their books, in return increasing the supply of money in the economy. The value of money (dollar) is derived from goods and services provided in our society. When there are not enough goods and services to support the value of this dollar, the value decreases. Essentially when inflation increases the price of our good and services, our purchasing power is lowered. 
When inflation is high, our money supply is low and in turn the federal reserve lowers interest rates to encourage the supply of money. ]]> 2021-03-30 00:34:46 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366181662 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366182133 With the rapid increase in our GDP there has caused some inflation as a result of low interest rates caused by the pandemic. 
Due to the fact that our economy was halted, the government implemented monetary and fiscal policies by increasing government spending and money supply causing consumers to increase their purchasing power. As a result, inflation has occurred and to stabilize the economy, interest rates need to be adjusted (raised) in order to reduce consumer spending and reduce the inflation of our dollar. ]]> 2021-03-30 00:34:56 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366182133 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366190389 This website explains interest rates and its fluctuation in a very practical manner. It states that the ideal way to perceive interest rates is as the 'price of money'.  It goes on to state the the interest rates can fluctuate based on the factors of economic growth, monetary policy and fiscal policy. 
Economic growth refers to the supply of money that is available from lenders in comparison to the demand from borrowers.
The higher the demand = lower supply = higher interest rates. 
The lower the demand = higher supply = lower interest rates. 
Monetary and Fiscal policy can be seen in the next slide. ]]> 2021-03-30 00:38:10 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366190389 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366329656 This website is information on the Fiscal Policy adapted by the government. 
The policy focuses on government spending and taxation which directly correlates to our interest rates.  
The government increases its spending taxation to influence the economy depending on the situation at hand. 
With fiscal policy the government adjusts the rates of taxes, their extent on spending and degree of borrowing. Government spending, increases aggregate demand for goods and services. Ex. cutting taxes increases demand exactly how interest rates would. Essentially, giving purchasing power to the consumer. 
Government spending also means the creation of jobs to stimulate our economy, increasing the demand for goods and services, and increasing our interest rates overtime. ]]> 2021-03-30 01:34:26 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366329656 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366354640 Monetary Policy is the federal reserves procedure for stabilizing the economy. This is done by stabilizing inflation rates. When inflation rates are high = interest rates are low = high demand 
When inflation rates are low = interest rates are high = lower demand. 
The federal reserves goal is to maintain the value of our dollar, and this is done through adjusting the rates (interest) on loans given through local banks. ]]> 2021-03-30 01:44:10 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366354640 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366372360 This website goes on to explain the direct correlation between interest rates and inflation. When inflation rates are expected to rise, in order to preserve the value of the dollar, the federal reserve will increase interest rates to decrease spending. The more spending that occurs, the higher the inflation rates rises, and the more our dollar lowers. 
Higher interest rates lower inflation and cause an appreciation in exchange rates. 
When consumers earn enough purchasing power to start investing, utilizing goods and services, borrowing, the higher the interest rates rise. When interest rates rise, this increases the value of a currency. A stronger value in our dollar, makes other currencies less competitive, reducing the aggregate demand in an economy. ]]> 2021-03-30 01:51:02 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366372360 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366414185 This video explains that the idea of interest rates is the percentage charged on the total amount borrowed or saved. This video informs viewers of the examples of fluctuating interest rates in comparison to a mortgage payment and the amount that would be owed in respect to the interest it is borrowed at. It shows that even the smallest adjustments in interest rates can have the biggest impacts on long term investments more than short term. 
Higher interest rates essentially means higher payments from consumers, and in turn decreases the demand in economy. ]]> 2021-03-30 02:09:23 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366414185 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366442251 As you can see from this image, the lending rates for the Bank of Canada drastically increased in the beginning of 2019 due to the government implementing low interest rates to stimulate consumer spending. ]]> 2021-03-30 02:21:24 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366442251 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366452788 This image sums up the consumer spending on good and services. As you see there was a drastic decrease in consumer spending when the pandemic initially broke out. Individuals were not comfortable spending money when services were low and the stability of the economy could not be predicted. ]]> 2021-03-30 02:25:49 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366452788 marieamber889 https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366485171 1) What did you learn that surprised you the most: 
Majority of this information I was already aware of from my previous education and therefore there was nothing I had read that was new or surprised me. 
Provide a real-life example of how this topic is relevant:
This topic is relevant in our current society, where the government adjusted interest rates (low) to increase consumer spending in the beginning of the pandemic, but now that they have increased their spending by increasing the money supply, they have started to increase the interest rates through taxation, loans and goods in order to stabilize the value of the dollar. 
If you could pass on knowledge to a family member/friend what would be the most important thing to pass on: 
I would inform them to be knowledgeable of interest rates whenever they enter into a contract. To calculate the cost of the interest rate on the good or services they so wish to choose for, and to evaluate other options if the circumstances allow so. ]]> 2021-03-30 02:39:53 UTC https://padlet.com/marieamber889/eqovnxjgmqh9dh1h/wish/1366485171