“Fiscal and Monetary Policy”

A. For inflation scenario, choose “Fiscal and Monetary Policy”
Run the simulation again until you are satisfied with the results remembering that you will face trade-offs.
What were the main problems in the economy when you started? How well did you resolve those problems?
What problems remain? Why did those new problems occur (explain using economic theory)?
For the first and last year in the simulation, describe your thought process in choosing each of the fiscal and
monetary policy numbers. If some numbers are larger than others, or some positive and some negative,
explain why. If you left a policy at zero, explain why.
Then choose another year in which your fiscal and monetary policies were different from the policies described
in question B. Explain each of the fiscal and monetary policy choices in this year.
B. Choose a new scenario (not depression or inflation). Then choose “Fiscal and Monetary Policy with random
shocks”
Run this scenario twice with different policy choices. Print out both results.
What were the main problems in the economy when you started? How well did you resolve those problems?
What problems remain? Why did those new problems occur (explain using economic theory)?
Choose one year from each run of the scenario. Describe your thought process in choosing each of the fiscal
and monetary 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.
What question I am most likely to ask about your choice of policy in each of the runs? Specify the question I
would ask and then answer it.