Evaluating the Economic Implications of Current Events

Instructor: Brianna Whiting
Important things happen all around us. When those important things have an impact on the economy, many of us are affected. In this lesson we will learn about one of those things that directly affects the economy: current events.

Effects of Events

Meet Tommy! Tommy owns a fruit company where he and his two sons grow apples. Each year they plant the fruit, water it, and harvest it. The family usually makes a great living, and they love the fact that they can all work together. But what if the government suddenly banned apples in the United States? What would happen to the family business? How would they survive?

In this lesson, we will learn all about how one thing can be affected by a seemingly distant issue. Specifically, we will look at how the economy is affected by current events.

Foundation Definitions

Before we go any further, let's define some key terms first. When we talk about implications here, we mean the eventual effects that events might have on someone or something. For example, if the government bans apples, what implications will it have for Tommy and his business? Or, what effects will occur in the future as a result of that ban? Well, if the government banned apples Tommy and his family couldn't sell them, which means they would no longer be able to make enough money to survive, the business would have to close, and they would have to find new employment.

Because this lesson centers on economic implications as a result of current events, let's also define current events. Current events are those events that are important and are happening around us right now. They might be something that's happening to a single person or a whole country, or any other newsworthy story that is happening in the world. Something like banning apples in the United States would certainly be newsworthy, and would be a very important event.

So we now know that banning apples is a current event that would have economic implications, not only for Tommy's business, but for everyone who grows apples. It would impose financial hardship, loss of business, and many more related problems. Thus we can see how banning apples would be an example of a current event that would have economic implications.

Real World Examples

Now let's apply what we have learned to some actual, real life examples. Think about the oil industry. Everyone has probably noticed that they've been paying cheaper prices for fuel in the U.S. lately. That is because the price of oil has dropped significantly. So what implications have the price of oil had for the economy? Well, these implications are different depending on who you are. For us consumers, the reduction in oil prices has been positive: it has lessened our financial burden, opening up more available cash to spend on something else. However, for those in the oil industry, the implications have been the opposite. When oil prices drop, not only do oil companies lose money, so do gas stations and everyone else who earns money in the oil industry. A loss of money can mean lower wages or possibly even laying off workers.

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