ECO 202 Project Template Economic Summary Report Table of Contents 1.Introduction 2.Fiscal Policies: Taxation 3.Fiscal Policies: Government Expenditure 4.Monetary Policies 5.Global Context 6.Conclusions 7.References Introduction For the benefit of the incoming administration, I submit this report to document, analyze, and interpret the macroeconomic policy decisions I made as the chief economic policy advisor of Econland. The purpose of this document is to further our national prosperity by deepening our understanding of the relationship between macroeconomic policies and their consequences for our citizens. The report includes a thorough accounting of the major fiscal and monetary policy decisions made over each of the seven years of my term, as well as an explanation of the underlying rationales for those decisions and the resulting impacts of those policies.
Table 1.1 The table above summarizes the macroeconomic climate of Econland over my term. I chose the Rollercoaster simulation. I had an average approval rating of 69 out of 100. By the end of my seventh year my consumer confidence index was 102.1 and global economic growth was low at 1.6%. The higest it reached was 3.2% and that was in my second year. I was able to get my unemployment rate from 5.0 in year one down to 2.0 in year seven. Fiscal Policy: Taxation Table 2.1 My goal in adopting tax laws was to encourage economic expansion. Do not forget to account for things like economic output and free trade. There have been changes to company income and tax rates. After a 30% growth in year one, it dropped 20% in year two and then stayed the same in year four. By year's end, company tax rates dropped to 17%. Lower rates might have hurt wages and the creation of jobs because the deficit had gotten bigger. If growth is kept up at a regular pace, it can be done safely. By reducing the income tax the household can save part of its income and spend part of the household on consumer goods (Mankiw, 2021). I observed a sharp rise in consumption, going from 55.0 to about 140. I've been adjusting it continually since year 4 because of the fluctuations in the revenue tax rate. Consumption increased even after the present shift, but investment continued to decline. My investment climbed marginally from the beginning of my term to the fourth year when it remained the
same for one year (five); eventually, over the course of the entire period, the seventh year witnessed the largest gain in my investment. I increased taxes in year five, and the results of my investments indicate that taxing works best. "The overall decrease in sales taxes by 2010 was 8 percent compared to the 16 percent decrease in single revenue taxes and a complete 25 percent decrease in corporate revenue tax collected," Walczak (2020) of the post-Great Recession period. "The Great 2008/2009 Recession saw the greatest decrease in consumption year after year since 1945". Even if this isn't the finest example, tax rate reductions have increased consumption over the long run, but the degree of economic disruption made it impossible for changes to occur quickly. Fiscal Policy: Government Expenditure I was successful in achieving my aim of lowering the unemployment rate from 5.0 percent to 2.0 percent. Raise the household income concurrently. I was terrified of leaving the unemployment rate at 30 percent, as it should have been, because the corporate tax rate was already so high. Over the course of seven years, I maintained the same $30 billion in government spending. Spending by the government has not decreased in any manner. I left it at 30.0, and it remains there. The US government is spending more money in response to COVID-19 so that more funds can be distributed directly to people. People increase their investments and their consumption of products when they have more money to spend on them. The government is offering a record-low interest rate, which will make it easier for more individuals to borrow money to buy homes. In the meantime, taxes have been lowered to provide households more disposable income and government expenditure has been raised to lower the jobless rate. Additionally, this has led to an increase in consumption. Figure 3.1
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