# SIMULATION 2

SIMULATION 1

Every time I go to the store, the price of everything’s going higher. I just got a nice raise at work, but everything’s so expensive now, it’s like I got a pay cut.

I’m retired and living off my savings. Seems like lately my medicines, my groceries, and my utility bill are going up and up, but my savings account doesn’t pay diddly-squat! My money hasn’t grown at all for years!

Numbers out tonight show GDP grew by 9.1% last year, one of the highest growth rates on record, and unemployment is down to just 2.5%. President Sally Jenkins said the huge tax cut she pushed through Congress last year is why growth is so strong, although she said nothing about the 13% jump in the CPI.

President Jenkins also boasted about her administration’s halftrillion dollar increase in defense spending, accusing her critics of “whining too much” about the federal deficits that have soared since she took office. Fed Chairman Hal Kubrick promised to help Americans all he could by keeping interest rates near zero.

1. In one word, the problem facing this economy is:

2. We know this because of the 3 following pieces of economic data:

3. The monetary policy this economy needs is:

4. The fiscal policies this economy needs are:

5. Explain one way that your recommended policies would help either Susan or Dale.

6. What does President Jenkins fail to understand that is hurting the economy?

7. What mistake is Fed Chairman Hal Kubrick making that is hurting the economy?

SIMULATION 2

We used to work for a construction company, but we’ve both been laid off for months. All we’ve had to live on is what we had in the bank – which is nearly gone. But even when we were working it seemed like taxes ate up almost everything we made. We could never get ahead!

This pizzeria has been in my family for generations, but we’ve had to shut down! The

last 9 months or so all our customers stopped coming. I tried to get a small business loan, but 15% interest? No way!

The Bureau of Economic Analysis reported tonight that GDP contracted by 7.3% in the first quarter of this year, the sixth consecutive quarter of declining GDP out of the last nine.

Almost 700,000 Americans applied for unemployment benefits last week, and the BEA estimated the unemployment rate will top 10% by the time next month’s official report is released.

President Sally Jenkins took the grim economic news in stride, insisting that now was the time to keep the government’s budget balanced. Fed Chairman Hal Kubrick added that he

would continue to keep interest rates at levels that would prevent inflation.

1. In one word, the problem facing this economy is:

2. We know this because of the 3 following pieces of economic data:

3. The monetary policy this economy needs is:

4. The fiscal policies this economy needs are:

5. Explain one way that your recommended policies would help either Cindi & James or Papa Len.

6. What does President Jenkins fail to understand that is hurting the economy?

7. What mistake is Fed Chairman Hal Kubrick making that is hurting the economy?

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