Economics is a term that not everyone understands but experiences in their daily lives. It affects every decision we make, for the most part. You won’t know it, but it’s already affecting you in obvious and subtle ways. And learning all about economics will make you realize that even the minor decisions you make are already affected by economics. So if you want to become well-versed in economics, Click here to sign up for economics tuition in Bishan. Furthermore, let’s learn how economics can show up in our lives every day through simple examples.
Understanding What Opportunity Costs Are
For those who don’t know what Opportunity Costs mean, it simply refers to what must be given to obtain something else. It’s straightforward, and most of us experience this daily. For instance, you’re grocery shopping and only have $50 with you. Your total should only be around $45. So you know that you have enough to give to obtain the items you’re about to buy. The minor things we do every day are already a part of economics. How much more if you study it and understand it more?
How Macroeconomics Can Change Our Daily Lives
Macroeconomics is when we look at the economy as a whole. So this pertains to inflation, economic growth, and employment prospects. Moreover, we don’t always look at the leading economic indicators when making decisions. But we’ll always be influenced by the perceptions of the economy. For instance, those aware of the economic situation may understand the depth of the recession. Therefore, there will be a lower interest rate for various assets. So you can easily apply for a car loan, mortgage payments will be cheaper, and so on. Furthermore, the bad state of the economy will encourage students to study more and learn valuable skills than jumping straight to the job market.
Inflation is a part of macroeconomics, which we experience yearly. Sometimes, every day. However, a period of high inflation will truly devastate most of the working-class citizens. First, the value of our savings will decline. Most necessities will be more expensive, while the value of money is still low. Therefore, it’s highly advised to take out indexed-link savings. These savings accounts and bonds give an interest rate related to the inflation rate. If not, you can try to invest in other assets and commodities that can protect their value better than a savings account.