Glendale Community College Macroeconomic Simulation Questions
1. Looking back at your work for assignment 5 with the Macroeconomic simulation, did you follow a more conservative, a more liberal or a more progressive approach to fiscal policy? Explain why with specific examples from your policy choices.
2. A friend is worried about her family’s budget. She points out that they must pay their rent, student loan, and health insurance and can only reduce spending for things like restaurant meals and new clothes. You remember that similar issues are true for the US federal budget. What are the similarities?
3. A politician makes the following statement about the US Federal budget. What is correct and what is incorrect in his statement? Explain why.
We can save a large portion of the budget by cutting back on Federal funds for the military, social security, education, space exploration, and aid to foreign countries.
4. If there is a reduction in the federal income tax, what will be the impact on each of these economic statistics. Explain why for each
Nominal GDP growth
Real GDP growth
Unemployment
Inflation
Federal deficit
5. If the US economy is in the following situation in 2022, what fiscal policies do you recommend (list at least two). Explain why for each policy.
Unemployment 6%; Inflation 3%
