Economics 100 Simulation on Depression

Essay by thankyouA+, February 2004

download word file, 10 pages 4.0

Downloaded 167 times

June 5, 2001, the Department of Education reports that over 60% of all high school graduates in the U.S., will go to college. The average age of entry into the labor force has risen to 23 years old, a 6 years difference from the previous year. Furthermore, in July 2001 Congress created a $250 billion additional spending for shelter, food and clothing for everyone. The events for the fiscal year of 2001 did not have a direct impact on our policy changes. Because this year we allowed for access government spending and decreased the income tax rate in order to boost the economy.

The following year was a continuation of the same aggressive policy changes. This would further stimulate the economy and with improved results. Additionally, in August when the South African government allowed native-born whites to return to Pretoria, caused for more job openings that assisted with the decrease in the unemployment rate.

While the unemployment rate decreased by four percent the inflation rate only increased by one percent.

The third year in office proved to be just as challenging. The impact of the trucker's strike that immobilized the nations transportation system for two months ensured us that the policy changes made must to be assertive. Although this was an inopportune time for a strike to transpire and with a continuous government spending and a rigorous decrease in the income tax rate, it will have little impact on the economy as a whole.

Results:

GNP 1687

Unemployment (%) 16

Interest (%) 6

Inflation (%) 3

Budget Balance (Billions) -47

Policy Changes for 2004:

Excise Taxes + 10.00 Income Tax Rate - 10.00

Government Spending + 10.00

Investment Tax Credits + 10.00

Open Market Operations + 10.00

Discount Rate - 10.00

Reserve Requirements + 10.00

Results:

GNP 1979

Unemployment (%)...