Economics for Life Real World Financial Literacy Introduction

Introduction This book presents financial literacy in a context . Therefore , I admit that some of the information is biased , based on my own experience . My experience includes thirty years as an executive in business , of which fifteen were spent running my own company in commercial real estate development . I bring that , bias to the information presented in this book . I have also distilled many years of experience in teaching economics and financial literacy into the opinions I express . For example , I have found that college students want to know the best way to finance the purchase of a house or automobile and notjust a discussion of the various types of mortgages you can use to buy a house . This textbook is primarily written for a course in financial literacy for college undergraduates . However , they do not have to be business or economics majors . In my most recent class , using this book , there were Art History majors and Engineering majors who were quite comfortable with this textbook . The only math prerequisite is an understanding of high school algebra and ability to read graphs . Any formulae in the book are not complicated beyond elementary algebra . Admittedly , some of the information in this book may be already by the time you read it . This includes material such as current prices on the stock market , current interest rates , the fiscal and monetary responses of the federal government , and the status of the Pandemic Recession . In each case data , I have provided you with website links to view current data . For example , you can watch real time activity of the stock market and of individual stocks on . The economy performance in the Pandemic Recession , however , is a special case . As ofthe publication of this text , the Pandemic Recession is officially over , lasting only from February 2020 until April 2020 . Thus , I have been able to discuss it from beginning to end and examine in detail the partial recovery of the 22 million . Overall , the advice in this book is based on sound economic theory , which has certainly stood the test of time . While there are some disagreements among economists , they are generally not about the fundamental principles of economics . The major disagreement among economists is between those that are economists and those that are Free Market economists . This I

division is roughly the same as the split between Demand Side economists and Supply Side ( economists . Demand side economists ( believe that in a recession , the government needs to get money to the middle class to stimulate demand and to increase government spending to save jobs . Supply side economists believe the government should cut taxes on corporations and the rich who will invest in business and create jobs . As an economist , I am firmly in the camp , as I have seen in economic history very creation or economic trickle down from Supply Side policy . After thirty years of deregulation by the government , beginning with the presidency of Ronald Regan in 1981 , the income and wealth distribution in this country have dramatically worsened . Further , while the poverty rate has been slowly decreasing over the last decade , it still remains stubbornly high for a nation that is the wealthiest in the world Therefore , my policy discussions in this book are . The first two chapters will upend most of what you have been told about how to find a job . My thanks especially to Eric , retired Director of Human Resources for The World Bank ( and a Temple alumnus ) for guiding me in the discussion on how to find ajob . According to Ben , former Chair ofthe Federal Reserve Bank , the why of economics is to increase wellbeing for people . Therefore , Chapter , which discusses in the workplace and in your life , speaks to the heart of the purpose of economics . According to current psychological research , money is both a tool and an addictive drug . It is a tool in that we see money as the ability to fulfill our needs , wants and fantasies . It is a drug in that we are addicted to money . So , in Chapters and , we discuss what money is , and we use Behavioral Economics to discuss our attitudes toward money and how we make economic decisions . Chapters and will help you understand where you stand financially and how to become and stay financially healthy . Unfortunately , many through necessity or bad their paycheck in their bank account and spend it until they run out of money in the account . These chapters will help with simple actions that will enable you to save money for future needs , such as emergencies , home ownership , college tuition , or retirement . Consider these statistics about personal debt in America . More than 191 million Americans have credit cards . The average credit card holder has at least 27 cards . The average household credit card debt is . Total US . consumer debt is at trillion . That includes mortgages , auto loans , credit cards and

student loans . We need to reduce credit card and student loan debt , and we examine this in chapters and . In order to make good decisions about money , we need to understand it and earn how to deal with it rationally . We need to think like an economist . Very ew people have been taught that , even by their parents . Chapters and 10 will each you to think like an economist . Owning a home is the American Dream . However , a home is both a nest and an investment . Chapters 11 and 12 will examine how to buy a home , how to a home , and how to insure a home ( and your other physical assets ) Almost everyone dreams about becoming a millionaire in the stock market . This is actually a very easy thing to do . Chapters 13 , 14 , and 15 will teach you now to invest and how to avoid all the traps of the stock market and other investment markets . Finally , chapter 16 explains the range policy hat can be used ( and has been used ) to stimulate the economy when we are in a recession . Donald Department of Economics Temple University , PA