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Economic factors affect financial planning

A.                Consumer prices

1.                  Changes in the value of the dollar

2.                  Consumers confident

B.                 Inflation

1.                  Rising prices for goods and services and lower buying power of the dollar (Practical Money Skills, 2015).

2.                  Increases in business expenses

C.                 Interest Rates

1.                  The cost of borrowing money. 

a)                  Lower interest rates encourage consumer spending

b)                  Higher rates encourage saving and less borrowing.

D.                Unemployment Rate

1.                  The number of unemployed people who are willing to work, which affects consumer spending and job opportunities

2.                  Technological advances, corporate values, seasonal fluctuation can affect unemployment rate