Fiscal Policy Simulation

Fiscal Policy Simulation

Maintenance of the economy for an entire country is a difficult task. Balancing unemployment with inflation and government spending is not an easy thing to do. Making changes to the economy of the country of Erehwon gives the user the sense of constantly being in a push or pull situation. Making a change on one side of the equation has a distinct effect on the other side, but this is not always the desired effect. Increasing the complexity are multiple categories of spending combined with attempting to remain popular among the very people who voted you into office. The simulation for maintaining a country economy is very complex and very challenging with a wide range of potential outcomes.

The simulation presents the user with various problems that affect countries all across the globe today. Changes must be made in fiscal policy to reduce unemployment, increase government spending, reduce taxation of individuals and attempt to keep inflation down. These tasks are daunting when viewed on their own merits, but now the economists in the government have to make changes that entangle all these attributes together into one fiscal policy. This was very challenging. Government spending was the area I found to be most challenging. While I did make the correct fiscal policy changes and increase government spending, I did not increase it enough in the right area in one portion of the simulation. I increased government spending too much on the education side of the economy which did not have the same type of monetary return to the country’s economy and was therefore, not the right area to increase government spending. These types of dilemmas are very challenging to get right.

As with our previous simulation, the class is provided an opportunity to take lessons learned in the classroom and in our reading and apply it to a real life situation (ok, maybe not real life, but as close as you get in an online environment). The user is forced to increase government spending on projects such as roadways and airports in an attempt to lower the number of unemployed citizens in the country. Taxes must be raised or lowered to combat the deficit and inflation statistics that are key indicators of the county’s performance. Fiscal Policy and the broad changes