Economics · Mr. Myers · Extra Credit

Economic Policy Simulator

Read the data. Diagnose a struggling economy. Recommend policy — knowing every decision has a cost.

Estimated time: 12–15 minutes. You'll generate a printable report at the end to turn in.

Step 1 of 5 — Read the Data

Four economies at a glance

Here are profiles and economic data for four countries. Study them carefully — one of these economies is in serious trouble.

United States

North America
Mixed economy based on technology, services, finance, and manufacturing. World's largest economy by nominal GDP.

Country X

Northern Europe
Small, stable democracy. Economy based on technology, finance, and international trade. High standard of living, strong social services.

Country Y

South America
Mid-sized economy. Based on agriculture, light manufacturing, and natural resources. Steady but unremarkable growth, growing middle class.

Country Z

Sub-Saharan Africa
Large, landlocked nation. Economy based on subsistence farming and raw material exports. History of political instability, limited public infrastructure.
Indicator USA Country X Country Y Country Z
GDP per Capita$75,000$95,000$74,000$4,200
GDP Growth Rate High growth from a tiny base is still tiny — see below. 2.8%3.1%2.6%7.3%
Inflation Rate2.9%1.8%3.1%38%
Food Expenditure % of household income spent on food6.8%5.2%7.1%61%
Unemployment Rate4.2%4.6%4.3%18%
Poverty Rate10.6%6.3%11.2%54%

On growth rates: A country at $4,200 per person growing 7.3% adds about $307 per person per year. The USA at $75,000 growing 2.8% adds over $2,100 per person. A high growth rate from a small base does not mean prosperity.

Country profiles are fictional. Values are modeled on real-world economies for instructional purposes.

Based on this data, which country is in the most economic trouble?

Step 2 of 5 — Country Z's Two Crises

Two crises. Pick which one to fight first.

As Country Z's economic advisor, you're facing two acute crises. Read the numbers. Then set your priority. Real economists genuinely disagree about which of these matters more — there is no objectively correct answer.

38%
Crisis 1
Inflation Rate
Prices nearly double every two years. Wages can't keep up — every paycheck buys less. Savings become worthless within months.
USA: 2.9%  ·  Healthy range: 1–3%
18%
Crisis 2
Unemployment Rate
Nearly 1 in 5 workers has no job — no income for food, rent, or medicine. Factories sit idle. Tax revenue falls.
USA: 4.2%  ·  Healthy range: 4–6%

Which crisis do you tackle first?

Pick the one you believe needs to be addressed first, and be ready to defend it.

Step 3 of 5 — Choose a Policy

Choose your policy direction

Which type of economic policy will address this problem?

Step 4 of 5 — The Tradeoff

Predict what happens next

Step 5 of 5 — Defend Your Decision

Write your advisor's brief

Here are the decisions you've made so far. Use them to write a complete answer to each of the three questions below. Each question appears after you finish the one before it.

Complete — Final Report

Your Economic Policy Report

Print this page and turn it in for extra credit.