Real GDP Growth Unemployment Rate Approval Rating Feedback from Policy Advisor E High Low 10.0 - 307 8.0 - 40 - 6.0- 3.0 - 4.0 - 20- 40 - The economy is growing at a good h of labor force 2.0 LO - 20 - pace. See if you can identify the 0.0 policy decisions that have resulted in 0 2 3 7 6 T this level of economic growth. You have kept government Inflation Rate Budget Surplus (Deficit) Average Approval Rating expenditure constant in nominal terms. Remember that, if inflation is High e Low High positive, this amounts to a reduction in government expenditure in real 10.0 - 15.0 - terms (i.e. after adjusting for 8.0 - 11.0 - 74 inflation) 6.0- 7.0 Inflation is high. See what can be of GDP 4.0 - 3.0 - done to reduce inflationary 2.0 -10 pressures. points -5.0 7 0 2 3 6 7 The government is running a budget surplus. This means there is an opportunity to increase government spending or reduce taxes in order to boost economic growth.Table 1: Real GDP and Its Components O) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Consumption 55.0 66.3 76.7 89.4 91.5 104.9 117.8 131.5 Government Expenditure 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 Investment 15.0 16.5 17.1 20.0 22.0 23.8 25.1 27.3 Exports 25.0 26.0 27.0 28.2 29.7 31.0 32.8 34.5 Imports 25.0 29.7 33.9 38.6 38.2 42.7 45.9 49.8 Nominal GDP 100.0 109.0 116.9 129.1 135.0 147.0 159.8 173.4 Real GDP 100.0 105.4 107.6 113.6 113.9 120.1 125.7 129.2Table 2: Other Macroeconomic Data O Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Capital Stock US$ (in billions) 100.0 106.5 112.9 121.6 131.5 142.2 153.1 165.1 Productivity Growth % 0.0 4.5 4.3 5.4 5.7 5.7 5.4 5.5 Consumer Price Index 100.0 103.4 108.7 113.6 118.6 122.4 127.2 134.2 Exchange Rate Index 100.0 98.5 97.1 94.8 91.6 89.1 84.9 82.1 Trade Balance US$ (in billions) 0.0 -3.7 -6.9 -10.3 -8.5 -11.7 -13.1 -15.4 Income Tax Revenue US$ (in billions) 24.0 22.9 24.6 27.1 41.9 29.4 32.0 34.7 Corporate Tax Revenue USS (in billions) 3.0 2.4 4.1 2.1 2.2 3.5 3.8 4.2 Government Budget Surplus (Deficit) US$ (in billions) -3.0 -4.7 -1.4 -0.8 14.0 2.9 5.8 8.9 Government Debt US$ (in billions) 60.0 64.7 66.1 66.9 52.9 49.9 44.1 35.3 Government Debt as % of GDP 60.0 59.4 56.5 51.8 39.2 34.0 27.6 20.4Table 3: Economic Environment, Decisions, and Results () Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Global Economic Growth Forecast 2.4 2.4 2.6 2.2 2.0 1.7 1.9 2.2 Consumer Confidence Index 100.0 100.0 101.8 102.7 100.0 101.8 99.1 102.7 Interest Rate % 3.0 1.5 1.5 1.5 1.5 1.5 0.5 1.0 Income Tax Rate % 24.0 21.0 21.0 21.0 31.0 20.0 20.0 20.0 Corporate Tax Rate % 30.0 22.0 35.0 16.0 16.0 24.0 24.0 24.0 Government Expenditure USS (in billions) 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 Real GDP Growth % 2.5 5.4 20 5.6 0.2 5.5 4.6 2.8 Unemployment Rate % 5.0 3.8 4.0 3.9 4.7 4.7 3.0 4.0 Inflation Rate % 2.0 3.4 5.3 4.9 5.0 3.8 4.7 7.1 Budget Surplus (Deficit) as % of GDP -3.0 -4.3 -1.2 -0.6 10.4 2.0 3.6 5.1