Explain how you changed the interest rate levels and how these changes impacted other macroeconomic factors such as inflation, consumption, investments, GDP, and foreign trade. Provide specific examples to illustrate.

Compare and contrast the impact of your monetary policies with those of current or historical examples in the United States. What do these examples demonstrate about the validity of macroeconomic models? Be sure to cite your research appropriately.

Real GDP Growth Approval Rating Feedback from Policy Advisor Unemployment Rate O Low High 230.0 - 20.0 100 1700- 16.0 110.0 - 120 - % 500 - 8 $ 8 8 ya of libor force 8.0 - -10.0 - 4.0 - 0.0 -70.0 T 0 1 2 3 07 0 T 1 T 3 T 4 2 T 5 6 4 5 6 7 7 Inflation Rate Budget Surplus (Deficit) Average Approval Rating Low High 60 High 116 40.0 - 6.6 20.0 - 56 1.6 0.0 - % % of GDP -3.4 -20.0- -8.4 - -40.0 - points -13.4 -600 Your approval rating is low and your population is dissatisfied with the state of the economy. Review the game instructions and the Macroeconomics materials to see how your economic policy making can be improved. The economy is growing at a good pace. See if you can identify the policy decisions that have resulted in this level of economic growth. You have kept government expenditure constant in nominal terms. Remember that, if inflation is positive, this amounts to a reduction in government expenditure in real terms (i.e. after adjusting for inflation). Inflation is high. See what can be done to reduce inflationary pressures. The budget deficit is large. Consider what can be done to bring government spending in line with revenues. This can be done by raising taxes or keeping government spending under control. However, remember that cutting spending too much might lead to a recession. 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7 Real GDP Growth Approval Rating Feedback from Policy Advisor Unemployment Rate O Low High 230.0 - 20.0 100 1700- 16.0 110.0 - 120 - % 500 - 8 $ 8 8 ya of libor force 8.0 - -10.0 - 4.0 - 0.0 -70.0 T 0 1 2 3 07 0 T 1 T 3 T 4 2 T 5 6 4 5 6 7 7 Inflation Rate Budget Surplus (Deficit) Average Approval Rating Low High 60 High 116 40.0 - 6.6 20.0 - 56 1.6 0.0 - % % of GDP -3.4 -20.0- -8.4 - -40.0 - points -13.4 -600 Your approval rating is low and your population is dissatisfied with the state of the economy. Review the game instructions and the Macroeconomics materials to see how your economic policy making can be improved. The economy is growing at a good pace. See if you can identify the policy decisions that have resulted in this level of economic growth. You have kept government expenditure constant in nominal terms. Remember that, if inflation is positive, this amounts to a reduction in government expenditure in real terms (i.e. after adjusting for inflation). Inflation is high. See what can be done to reduce inflationary pressures. The budget deficit is large. Consider what can be done to bring government spending in line with revenues. This can be done by raising taxes or keeping government spending under control. However, remember that cutting spending too much might lead to a recession. 0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7