Change in Currency

Lately in class, we've been learning about foreign exchange of currency. I was lucky enough to visit Europe this past summer. My family and I went to France, Italy, and spent a day in Germany on our way home. We had such an amazing time, but there was one hassle. When we arrived in Europe, we had to convert all our American dollars into euros. This represented an increase in our demand for foreign currency. To be honest, my dad took care of the money situation, but I can imagine it wasn't easy. I'm not really sure exactly what the conversion ratio was, but I know it took more than one dollar to get a euro. It was definitely harder to find reasonable prices for meals, clothes, etc. in Europe because what may have been reasonable to them was not reasonable to us, due to the fact that we had to pay more to get equal to one euro. My dad was constantly stopping at ATMs to deposit his cash and get more euros. He actually got an excess of euros so we wouldn't run out. When we arrived back in the United States, we had extra euros that we obviously couldn't use anymore. So, he went back to the bank near our house and traded the extra euros for the equivalent amount of American dollars. This left our American bank with an increase in their supply of euros. Maybe next time the United States wants to import something from Europe, they'll use that extra supply of euros my dad gave the bank.

Being a Keynesian

Although it's hard to completely identify with just one of the economic views we've recently learned about, I've come to the conclusion that I'm probably more of a Keynesian. I agree with the Keynesian view that aggregate demand is unstable, even without changes in the money supply. They say this is due to changes in investment spending, as illustrated in the equation C+I+X+G=GDP. To me, it only makes sense that aggregate demand would be determined by the spending of the consumers, the ones who create demand in the first place. Changes in aggregate demand, according to Keynesian economists, affects output and unemployment. I agree with this view because as demand increases, productivity and, therefore, output would logically increase. Along with the increase in output would come a rise in employment because more workers would be needed to meet the new output levels. Keynesians also believe that significant increases and declines in investment spending are the causes of demand-pull inflation and recessions and require government monetary and fiscal policies to correct them. I definitely think that we do need assistance from the government in stabilizing the economy and that it doesn't just self-correct. Finally, I agree with the idea that consumers aren't always rational when making purchases, as described by the term "animal spirits". Overall, I tend to side more with the Keynesian (and mainstream) view of economics.

The Marginal Benefits of Taking a Sick Day

Tomorrow, Thursday, December 5th, 2013, I will not be at school. I have a scheduled visit to the University of Illinois at Urbana-Champaign. Typically, when a student knows in advance that he/she is missing school to go on a college visit, he/she gets a pre-excusal so they're not counted as absent. Each student is given two college visit days per year as upperclassmen, which won't be counted as a missed day of school as long as they fill out and turn in the appropriate paperwork. I, however, have made the economic decision not to get a pre-excusal and to instead just call in sick and be counted absent tomorrow. My reason for this is that second semester, seniors can't miss more than five days of school, otherwise they have to take finals. The way I look at it, I'll already be missing one day for senior ditch day, and there's a chance I could either be sick or have a family emergency or something else that could cause me to miss school. I also have dance competitions second semester, and if I have to compete on a Friday, I'll likely have to miss school. (Or if I'm really tired on a Monday after a competition and I didn't have time for my homework over the weekend, I most likely won't want to attend school that day.) There's no way I'm taking finals next semester; I will do everything possible to make sure I don't have to. But I want to have as many possible days off as I can, just in case I need them. So, I have decided to save these college visit days for second semester, although I might use them for other reasons besides actually visiting colleges. For this reason, the marginal benefits of saving my pre-excused college visit days for next semester outweigh the marginal costs of being counted absent tomorrow.