The Simulation Checkpoint Assignment in this course directly supports your success on the course project. You will play the simulation game, create the image file of your simulation report, and discuss learned concepts and experiences in your submission.
For this assignment, you will play the first run of the Macroeconomics Simulation: Econland from Harvard Business Review, in which you will act as policy adviser for the fictional country of Econland. Select the “Base Case” scenario for this practice run. You may play the simulation as many times as you like. This will directly support your success in your course project, due in Module Eight.
In your submission, remember to include the image of your simulation report. For help with this, see How to Submit an Image File of Your Report. Then, reflect on the decisions you made in the simulation and address the following government intervention options in your submission:
Macroeconomic Indicators: During the simulation, you made decisions concerning government spending. Discuss the impact of your decisions on key macroeconomic indicators such as real GDP growth and unemployment. Refer to the graphs “Real GDP Growth” and “Unemployment Rate” from your simulation results to illustrate the impact.
Interest Rates: Describe how your changes in interest rates impacted inflation and other key macroeconomic indicators used in the simulation. Refer to the “Inflation Rate” graph from your simulation results.
Guidelines for Submission
Submit your assignment as a 1- to 2-page Word document. Use the Introduction section of the Final Project Template.
ECO 202 Project Template
Economic Summary Report
[Throughout this template, replace the content in the bracketed text with your own responses, and delete any bracketed instructions, including these.]
[The Table of Contents and Introduction sections of your report are provided and should remain standard in all submissions.]
[The placeholders for your data visualizations (e.g., charts, graphs, and tables) should be replaced with the appropriate indicated images in each case. To create an isolated image from the simulation data, it is recommended that you use a snipping tool to copy and paste your data visualizations into this template. See How to Use the Snipping Tool (Beginner’s Guide) for more information if you use a PC. A captioned version of this video is available: How to Use the Snipping Tool (Beginner’s Guide) (CC). Or, see Is There a Snipping Tool for Mac?]
Table of Contents
2. Fiscal Policies: Taxation
3. Fiscal Policies: Government Expenditure
4. Monetary Policies
5. Global Context
For the benefit of the incoming administration, I submit this report to document, analyze, and interpret the macroeconomic policy decisions I made as the chief economic policy advisor of Econland. The purpose of this document is to further our national prosperity by deepening our understanding of the relationship between macroeconomic policies and their consequences for our citizens. The report includes a thorough accounting of the major fiscal and monetary policy decisions made over each of the seven years of my term, as well as an explanation of the underlying rationales for those decisions and the resulting impacts of those policies.
[Replace this area with Table 3 from your simulation report.]
The table above summarizes the macroeconomic climate of Econland over my term. [Add a two- to three-sentence summary specifying which underlying scenario you chose, as well as your overall performance and approval ratings as the chief economic policy advisor of Econland based on your simulation results.]
Fiscal Policy: Taxation
[Replace this area with an image of Table 1 from your simulation results.]
[Insert your responses to the following: Explain the intent of the taxation policy decisions you made of your seven-year term. What were the macroeconomic principles or models that influenced your decision making?]
[Identify the impact of your changes to the income and corporate tax rates. How were consumption and investment affected by your tax policy decisions? Explain these dynamics using specific macroeconomic principles from the course reading.]
[Compare and contrast the impact of your tax policy decisions with those of current or historical examples in the United States. What do these examples demonstrate about the validity of macroeconomic models? Be sure to cite your research appropriately.]
Fiscal Policy: Government Expenditure
[Replace this area with an image of the “Real GDP Growth” and “Unemployment Rates” graph from your simulation results.]
[Replace this area with an aggregate demand and aggregate supply (AD/AS) model taken from the course reading or a reputable online source.]
[Insert your responses to the following: Explain your decision making regarding government expenditure and how it changed based on the macroeconomic conditions. What was the intent of your fiscal policy decisions in response to the given economic climate?]
[Evaluate your fiscal policy decisions, including how they impacted key macroeconomics factors such as real GDP growth and unemployment. To what extent did your policies yield positive or negative outcomes?]
[Refer to the AD/AS model to support your analysis in this section of your report.]
[Replace this area with an image of the “Inflation Rate” graph from your simulation results.]
[Insert your responses to the following: Explain how you changed the interest rate levels and how these changes impacted other macroeconomic factors such as inflation, consumption, investments, GDP, and foreign trade. Provide specific examples to illustrate.]
[Compare and contrast the impact of your monetary policies with those of current or historical examples in the United States. What do these examples demonstrate about the validity of macroeconomic models? Be sure to cite your research appropriately.]
[Insert your responses to the following: Analyze the impacts of openness to trade in general. Why and how are the impacts of monetary and fiscal policies different in a closed economy versus an open economy? Support your claims with specific details from your course reading.]
[Insert your overall conclusions about the relevance and significance of macroeconomics. Assess the effectiveness of your economic policy decisions. Did your economic policy decisions produce the anticipated results? Did your macroeconomic principles and models behave in ways that you expected? Provide specific examples to illustrate.]
[Evaluate how consumer confidence might have impacted the outcomes of your policy decisions for the economy of Econland. Why is consumer confidence a relevant factor for making informed macroeconomic decisions?]
Mankiw, N. G. (2021). Principles of economics (9th ed.). Cengage Learning.
[Add other citations as needed in APA format].