Personal Financial Plan Part II

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Running Head: PERSONAL FINANCIAL PLAN PART II 1 Personal Financial Plan Part II Zeinab Bazzi Baker College Personal Financial Plan Part II Daily economic activities have an important influence on personal financial planning. In our society, the forces of supply and demand play an important role in setting prices. Economics is the study of how wealth is created and distributed. By doing my research, I found that each economic situation would affect me at a personal level. During the financial crisis of 2008, there was a deflation in home prices and inflation in gas prices. The houses lost 31% of its value while the cost of gas head for $5 a gallon. Driving to work became even more expensive, and stressful, at a time when I was worried about even keeping my job. Inflation was the main reason behind my debt. I relied on my credit cards to purchase items I couldn’t afford at that time. The fact that my income didn’t increase made me fall behind on my credit card payments which led to late fee charges. Role of government The economy can be impacted by the U.S.government through two major types of economic policy. The first type is called fiscal policy, which is economic policy instigated by the President or by Congress. The fundamental tools at the disposal of these branches of government are taxation law and government spending. By changing tax laws, the government can effectively affect my personal finance by modifying the amount of disposable

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