TRADE OFFS
>> Considering Tradeoffs You Make Every Day>
> Let’s talk about two tradeoffs we face every day: how we spend our time and
> money.
>
> We can only do two things with income: spend it or save it. Time is the
> ultimate resource. We can choose to spend time working to earn an income or
> we can do other things, broadly classified as leisure. Reply to these
> prompts to start your discussion:
>
> – How does a change in interest rate affect *your* decision to spend or
> save? How would a change in the interest rate affect a *firm’s* decision
> to invest or save?
> – How might an increase in the wage rate affect what you do with your
> time?
> – Now describe a tradeoff you’ve made in terms of time or income
>
> a chapter attached to help answer this question
>
> BOOK: *book* The Little Book of Economics
> money.
>
> We can only do two things with income: spend it or save it. Time is the
> ultimate resource. We can choose to spend time working to earn an income or
> we can do other things, broadly classified as leisure. Reply to these
> prompts to start your discussion:
>
> – How does a change in interest rate affect *your* decision to spend or
> save? How would a change in the interest rate affect a *firm’s* decision
> to invest or save?
> – How might an increase in the wage rate affect what you do with your
> time?
> – Now describe a tradeoff you’ve made in terms of time or income
>
> a chapter attached to help answer this question
>
> BOOK: *book* The Little Book of Economics
Answer previewOne can choose to have or do one thing in exchange for another depending with the gain one gets. Hence, individuals making decisions needs tradeoff of one thing in return for another that benefits them. Increased interest rates moderate the economic growth raising the cost of money borrowing but lessens the disposable income and limits consumer spending. The increased cost of borrowing improves the returns in savings (Ip, 2013). Therefore, I will save money and reduce expenditure on the effect of increased interest rates. Reduced interest rates lower the cost of living which stimulates…(300 words)