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.

How the iPad Has Helped Us Learn

This is my second year using a school-issued iPad, and I have to say, I love it. Since I first started using an iPad for learning purposes, I've become familiar with many apps, including notability, schoology, educreations, flipboard, nearpod, flashcardlet, and many more. These apps have greatly enriched the curriculum for the classes they've been selected for. Notability, for example, is perfect for note taking, organizing, completing assignments, and even starting rough drafts for papers. What I love about an app like this is that it's like a huge folder that I can divide up into different subjects. I'm not the most organized person, so this really helps me out because I don't have to keep track of a million papers; they're all together on my iPad. Other apps, like schoology and flipboard, are helpful because you can observe things that other students and teachers post. We even access most our assignments on schoology. I consider apps such as educreations, nearpod, and flashcardlet excellent study/practice tools. I use flashcardlet to study my AP Bio terms every week, which is so convenient because I don't have to worry about carrying around a bunch of little notecards. Nearpod is often used to have interactive presentations in classes, where teachers design the slides to have questions on them and students can type and submit an answer. Educreations is also a great app to learn from because you can type, draw, insert pictures, and create an audio recording to go along with it all. It's like a much cooler and more improved version of a PowerPoint presentation. It helps me understand material so much better when I can write or draw it out and explain it in words with an app like that. Those are just a few of the amazing apps I regularly use on my iPad. They continue to prove very useful in my comprehension of material and ability to be prepared and organized for classes.

Open Market Operations

http://www.investopedia.com/ask/answers/06/openmarketoperations.asp
This article about open market operations is such a great connection to what we've learned in class. It goes into depth about each of the two open market operations, and clearly shows the connection between changes in aspects of the economy, like money supply, interest rates, investment, and inflation, due to the effects of these policies. Just like we discussed in class, the article pointed out that the Federal Reserve System (specifically the Federal Open Market Committee) is responsible for the control of money supply and, therefore, inflation, by putting these policies into action. The article distinguished between buying securities to increase the money supply (expansionary) and selling securities to decrease the money supply (contractionary) and even mentioned that the securities used in open market operations are Treasury bills, bonds, and notes, just as we learned. Something the article really helped my understanding of was the effect the policies have on the amount of lending money banks have. We had already covered that concept this chapter, but reading this article even furthered my comprehension of the topic. In my opinion, articles like this one are really useful studying tools because they reiterate the material we've learned in class and from reading the chapters in our textbooks, and sometimes they present ideas in ways that might be easier for us to understand. Plus, repetition of the concepts can never hurt.

Janet Yellen to be Next Chairwoman

President Obama has nominated Janet Yellen to become chairwoman of the Federal Reserve, replacing the current chairman, Ben Bernanke, as he retires. This decision has created a lot of controversy among U.S. citizens, but I happen to support it. First off, Yellen is very well-educated; she completed her undergraduate studies at Brown Univeristy and received her PhD from Yale University. She has worked hard to become qualified for this job, through being an economic advisor to Bill Clinton, being President of the Federal Reserve in San Fransisco, and currently working as vice chair of the United States Federal Reserve, alongside Ben Bernanke. Besides being qualified, I believe she would make a good chairwoman because she plans to continue with the Fed's current policies of improving employment rates while controlling inflation, which are low-interest-rate policies. These policies have definitely helped the economy already, and they would only continue to help by her enforcement of them. She also addresses possible issues in the economy, like future inflation or the continuation of monetary stimulus policies for too long, and devises plans to handle those situations. In my opinion, Janet Yellen has more than enough experience and wisdom to efficiently take on the title of chairwoman of the Federal Reserve, and will make helpful decisions concerning the future of our economy.

The Political Business Cycle

Everyone knows that politics is just about the most corrupt career field out there. Between the lying, taking bribes, cheating, and all the other dishonest behaviors they practice, it's hard to be more unethical than politicians. To add to everything they already do wrong, a lot of them are guilty of participating in the political business cycle. This means that they make inappropriate decisions for the stabilization of the government around election time in order to be more popular among the voters and increase their chances of winning the election. The political business cycle has proven to be a true problem in the history of politics. For example, before the election of 1940, President Franklin D. Roosevelt made a speech in which he promised America that he would keep all soldiers out of war and keep peace in the nation. Apparently, this wasn't the best decision at the time because once he was reelected, he broke his promise and sent the soldiers to war. He had only made that promise to the U.S. citizens because he knew that's what they wanted to hear and that's what would earn their votes. While this did ultimately help him win the election, it was clearly a very immoral thing to do. Politicians will most likely continue to take part in the political business cycle, among other wrongful things, forever, which will affect the economy negatively everytime it's practiced.