Quarter 1 Bonus - Make A Meme Fiscal Policy Simulation: Part 1 Indicators Review the 4 indicators in the chart Determine if each has a positive or negative impact on the economy Imagine all 4...

Questions in the powerpoint



Quarter 1 Bonus - Make A Meme Fiscal Policy Simulation: Part 1 Indicators Review the 4 indicators in the chart Determine if each has a positive or negative impact on the economy Imagine all 4 indicators are occurring at the same time. List the business cycle’s location in the last box *Hint: Use Appendix Slide 1 (Business Cycle) to help IndicatorDescriptionImpact (+/-)Location Business InvestorNew housing permits increase+ BankerStock prices decrease- ConsumerAverage weekly claims for unemployment decrease- Business InvestorManufacturer’s new orders for consumer goods increases+ Fiscal Policy Simulation: Part 2 Recommendations 4. Based on the location of the business cycle (part 1), what do you recommend the government do with taxes and spending? A. List the tax(es) you want to change, then describe how you will change it B. List the spending you want to change, then describe how you want to change it *Hint: Make sure to include words like lower, raise, increase and decrease when describing taxes and spending *Hint: Use Appendix Slide 2-4 (taxes and spending) to help 5. Is your fiscal policy – expansionary or contractionary? (circle one) 6. Finally, write at least 2 sentences describing advantages and disadvantages for your fiscal policy. Type of TaxType of Spending Appendix Slide 1 Phases of the Business Cycle PhaseExpansionPeakContractionTrough Characteristics1. Rise in GDP 2. Lower Unemployment *Boom Time 1. GDP stops rising 2. Height of expansion1. Falling GDP 2. Higher Unemployment1.GDP stops falling 2. Lowest point of contraction *Economy ‘bottomed out’ *Recession *Depression Appendix Slide 2 Government Revenue Income Taxes – 50% Payroll Taxes – 36% Medicare Tax Social Security Tax Unemployment Tax Corporate Income Taxes – 7% Other Taxes – 8% Excise Tax Estate Tax Gift Tax Import Tax (Tariff) Appendix Slide 3 Mandatory Federal Spending Over the past decades, mandatory spending has increased, limiting money available for discretionary spending This is partially because the US has a large aging population that relies on Social Security Appendix Slide 4 Discretionary Federal Spending Spending on defense accounts for about half of the federal government’s discretionary spending. Defense spending pays military personnel salaries, buys military equipment, and covers operating costs of military bases.