Question: I had to run simulations and I need help in answering the following questions. I have included my simulation reports for review. Any help would

I had to run simulations and I need help in answering the following questions. I have included my simulation reports for review. Any help would be greatly appreciated.

  • Macroeconomic Indicators: During the simulation, you made decisions concerning government spending. Discuss the impact of your decisions on key macroeconomic indicators such as real GDP growth and unemployment. Refer to the graphs "Real GDP Growth" and "Unemployment Rate" from your simulation results to illustrate the impact.
  • Interest Rates: Describe how your changes in interest rates impacted inflation and other key macroeconomic indicators used in the simulation. Refer to the "Inflation Rate" graph from your simulation results.

Year 7 Results

Table 1: Real GDP and Its Components

This table shows the various components of Gross Domestic Product

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Consumption 55.0 59.1 65.0 77.3 86.6 93.9 105.6 109.9
Government Expenditure 30.0 30.0 30.0 30.0 30.0 40.0 42.0 42.0
Investment 15.0 15.2 16.3 14.7 12.9 12.8 11.0 13.7
Exports 25.0 25.6 26.6 26.4 27.7 29.7 29.9 33.2
Imports 25.0 26.9 29.3 35.7 38.7 39.3 44.5 42.1
Nominal GDP 100.0 103.0 108.7 112.7 118.5 137.1 144.0 156.7
Real GDP 100.0 101.0 105.0 109.9 113.8 127.0 129.4 131.4

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Table 2: Other Macroeconomic Data

This table shows economic variables that are impacted by your decisions and help to explain the results

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Capital Stock US$ (in billions) 100.0 105.2 111.0 114.6 116.0 117.2 116.4 118.5
Productivity Growth % 0.0 3.6 3.9 2.3 0.9 0.7 -0.5 1.2
Consumer Price Index 100.0 102.0 103.5 102.6 104.2 108.0 111.2 119.2
Exchange Rate Index 100.0 100.0 99.0 101.5 98.2 92.1 92.8 83.7
Trade Balance US$ (in billions) 0.0 -1.3 -2.7 -9.2 -10.9 -9.6 -14.6 -8.9
Income Tax Revenue US$ (in billions) 24.0 24.7 25.0 13.5 14.2 26.1 18.7 40.7
Corporate Tax Revenue US$ (in billions) 3.0 3.1 3.2 4.6 4.9 4.4 5.5 3.9
Government Budget Surplus (Deficit) US$ (in billions) -3.0 -2.2 -1.9 -11.8 -10.9 -9.6 -17.8 2.7
Government Debt US$ (in billions) 60.0 62.2 64.0 75.9 86.8 96.4 114.2 111.5
Government Debt as % of GDP 60.0 60.4 58.9 67.3 73.2 70.3 79.3 71.2

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Table 3: Economic Environment, Decisions, and Results

This table summarises the Decisions and Results of your game.

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Global Economic Growth Forecast 2.4 2.4 2.8 2.0 1.6 1.0 1.3 2.0
Consumer Confidence Index 100.0 100.0 102.3 100.5 100.0 100.3 99.8 105.8
Interest Rate % 3.0 3.0 2.5 6.0 6.0 3.5 7.0 2.0
Income Tax Rate % 24.0 24.0 23.0 12.0 12.0 19.0 13.0 26.0
Corporate Tax Rate % 30.0 30.0 29.0 41.0 41.0 32.0 38.0 25.0
Government Expenditure US$ (in billions) 30.0 30.0 30.0 30.0 30.0 40.0 42.0 42.0
Real GDP Growth % 2.5 1.0 3.9 4.7 3.6 11.6 1.9 1.5
Unemployment Rate % 5.0 5.6 5.0 3.6 3.7 2.0 2.0 5.6
Inflation Rate % 2.0 2.0 1.5 -0.9 1.6 3.9 3.2 8.0
Budget Surplus (Deficit) as % of GDP -3.0 -2.1 -1.7 -10.5 -9.2 -7.0 -12.4 1.7

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