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Business, 23.05.2021 19:00 hixcatt05

• 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. • Please answer the questions above based on the results below: • • Your approval rating is low and your population is dissatisfied with the state of the economy. Review the game instructions and the Macroeconomics materials to see how your economic policy making can be improved. • The economy is growing at a good pace. See if you can identify the policy decisions that have resulted in this level of economic growth. • Consumption is falling. Remember that consumption is the largest component of GDP in an economy. • The inflation rate is negative, meaning that there is deflation. Falling prices can be dangerous for an economy as consumers postpone their purchases as they wait for prices to fall further and the economy can go into a downward spiral. • The budget deficit is large. Consider what can be done to bring government spending in line with revenues. This can be done by raising taxes or keeping government spending under control. However, remember that cutting spending too much might lead to a recession.

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