Macro Policy Simulation

Description

Question 1:

Go to following website to play the Macro Policy Simulation. You may work in teams of two if you like. However, the answers to the questions below should be completed individually.

http://www-01.glendale.edu/mmaier/macropolicy/ (Links to an external site.)( it will ask you to put a name on the website, please use “Allen Issa”)

Choose “Fiscal Policy Only” and the “Depression” scenario. (For assignment 6 you will be able to experiment with the other options).

First run the simulation to make certain you know how to make decisions and how to see the results of your decisions.

Then, run the simulation again (probably several times). When you have satisfactory results, save the last page with the results after all 10 years.

1. What were the main problems in the economy when you started? How well did you resolve those problems in each result? What problems remain in each result? Why did those new problems occur (explain using economic theory)?
2. For the first and last year in each simulation, describe your thought process in choosing each of the fiscal policy numbers. If you changed your numbers, explain why you did so. If some numbers are larger than others, or some positive and some negative, explain why. If you left a policy at zero, explain why.
3. Then choose another year in each simulation in which your fiscal policies were different from the policies described in question 2. Explain each of the fiscal policy choices in this year.

Question 2: Look over the newly proposed Federal budget in this module (see the two links in this module)

Which two items in the budget would you want to change, one increasing it, and one decreasing it? Please explain your reason for making these changes using concepts we have studied in the course.