Contemporary Economic Policy and the Virtual Chancellor Simulation

1088 WordsApr 14, 20135 Pages
Contemporary Economic Policy Assignment: Virtual Chancellor Introduction The Virtual Chancellor Simulation is a web site designed to give to anyone the power to control for a moment the keys of the economic growth model of hisher country and try according to them, by changing the suitable parameters, to lead the economy to its own prosperity. However it is not an easy thing to be in that position, because you have to take under consideration a lot of variables and risks and you have to satisfy every level of the society, from the poor families and pensioners to the rich people and of course the goals set by the government. After running the model approximately three hundred times to see what changes each parameters have and what they…show more content…
My findings mostly fit with the idea of the Keynesian model. This model develops a theory that would explain determinants of saving, consumption, investment and production. In that theory, the interaction of aggregate demand and aggregate supply determines the level of output and employment in the economy. Keynesian economics had as a priority to increase government spending and decrease taxes in order to stimulate aggregate demand. In case of a budget surplus the Keynesian Model had two main strategies 1) to slow the pace of strong economic growth 2) To stabilize prices when inflation is too high So according to fiscal policy: The Government can affect productivity levels * By increasing or decreasing tax levels * By increasing or decreasing public spending * Curbs inflation * Increases employment * Maintains healthy value of money References (Accessed
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