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The Economy: Who Cares

A background a hundred-dollar bills, with a black box in the middle, and white text in the box saying 'The Economy: Who Cares?'
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The economy matters to everyone including children like teens not in ways that you would expect the economy today that effects our everyday lives is usually inflation we have all head of it at this point but it is the rising of prices across the board, and it is usually what people talk about when discussing the economy, it is the reason prices go up and recently why everything seems more expensive.  This is a problem when prices go up but  incomes do not, leading to less money to spend on other things as you have to spend more income on things like food gas , electricity and rent you have less money to spend on things that you want to buy.


A white graph, with -5% to 25% on the left-hand side, and the dates Jan. 2021 to Jan. 2025, along the bottom. There are also three colored lines: orange, dark red, and purple, and the lines represent 'consumer price index,' 'average hourly earnings,' and 'average real hourly earning,' respectively.
A graph depicting average hourly earnings, the consumer price index, and average real hourly earnings

This is now an issue in America as prices has gone up but wages have not leading to the exact predicament described above for many people as seen in this graph by visual capitalist

 In this we can see that the growth of prices has out paced the growth of wages


And this is already having an effect. According to US news people are struggling to afford essential things like food, gas and utilities, but inflation is not some wild beast, it is managed by the Fed or Federal Reserve (well they try).


 This is where the fed (or federal reserve they are the same) come in. The Fed is the part of our government that deals with money in the economy, it is the agency that regulates financial institutions. It also sets the federal fund rate. They have two jobs. The first is to maximize employment, the second is to try and maintain a 2 percent interest rate. They can control the federal funds rate which is what is charged on Overnight loans. These are loans between banks to ensure they have enough cash to pay you when you go in for a withdrawal. By setting these rates the fed can affect the overall amount of interest you are charged for taking out loans allowing them to indirectly affect the economy as the fed put it “when interest rates go down, it becomes cheaper to borrow, so households are more willing to buy goods and services, and businesses are in a better position to purchase items to expand their businesses… which spurs them to hire more workers, influencing employment. And the stronger demand for goods and services may push wages and other costs higher, influencing inflation.” So the fed is quite important even to the stock markets which is the other part of the economy commonly discussed.


The stock market is where people buy and sell stocks (wow), there are two prominent ones in the united states The NYSE or New York Stock Exchange the largest stock exchange by volume in the world, and The NASDAQ  or the National Association of Dealers Automated Quotations (but most people call it the Nasdaq) which focuses on business which high values. These are just places where people trade stocks which are tiny slivers of companies as  Schwab put it “A stock represents partial ownership in a company, offering a claim on its earnings and assets”. And this is where people buy and sell stocks. These usually don't directly affect prices but they are talked about often in conversations about the economy so it is useful to know what they are as they are a part of daily life for many.

Works Cited

The federal Reserve System. “The Fed Explained.” Federal Reserve Board, https://www.federalreserve.gov/aboutthefed/the-fed-explained.htm. Accessed 27 February 2026.

Fidelity. “What is the Nasdaq? | Fidelity.” Fidelity Investments, 17 September 2025, https://www.fidelity.com/learning-center/smart-money/what-is-nasdaq. Accessed 27 February 2026.

Girginov, Boyan, and Niccolo Conte. “Charted: U.S. Wages vs. Inflation (2021-2025).” Visual Capitalist, 8 September 2025, https://www.visualcapitalist.com/cp/us-wages-vs-inflation/. Accessed 27 February 2026.

Goings, Russell L. “The History of NYSE.” NYSE, https://www.nyse.com/history-of-nyse. Accessed 27 February 2026.

Redfin. “What is an Economy? - 2025.” Robinhood, 21 March 2025, https://robinhood.com/us/en/learn/articles/7AZv8G0iOuuLsCK41LJblf/what-is-an-economy/. Accessed 27 February 2026.

UC Davis. “The Impact of Inflation and Recession on Poverty and Low-Income Households - Office of Research.” UC Davis Office of Research, 30 November 2022, https://research.ucdavis.edu/impact-of-inflation-and-recession-on-poverty-and-low-income-households/. Accessed 27 February 2026.


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