Math 1030 Week 6 Discussion Financial Literacy

MATH 1030: COLLEGE MATHWeek 6 Discussion: Financial LiteracyIn a country’s economy several variables determines spending habits and purchasing power. In overall, the ability of a person to purchase is not only tagged to the amount of money they have but also the willingness of the seller to sell the item at that price. This raises the issue of inflation which is the amount or volume of money in circulation. Considering the economy as a closed loop. In such a case, the purchasing power diminishes as the amount of money in circulation increases. This is because; the value of money is also ruled by the law of demand and supply. Thus when there is excess of money in circulation, then the lower its value. On the other hand, there needs to be sufficient money in an economy otherwise people will hold on to currency leading to an economic collapse. The idea of money and money manipulations by movements has been there since time immemorial. The notion of creating new money from thin air has been around for long. The governments are able to create money for themselves by creating more money or thus lowering the currency value. The effect is absorbed