Economic Stabilizers Slides Economic Stabilizers
Fiscal & Monetary Command
MISSION: STABILITY
Dual Control Systems
Fiscal Policy
Controlled by Congress & President
Tools: Taxes and Spending
"The People's Purse"
Monetary Policy
Controlled by The Federal Reserve
Tool: Managing the Money Supply
"The Banker's Bank"
Fiscal Policy: Budget Tools
Taxation
Personal Income Tax: Money taken from household earnings.
Corporate Tax: Taxes on business profits.
Taxes determine how much "disposable income" consumers have to spend.
Government Spending
Infrastructure: Roads, bridges, and public works projects.
Public Services: Defense, education, and healthcare funding.
Spending directly injects money into the economy to create jobs and demand.
Fiscal Strategy Modes
Expansionary Policy
Goal: Stimulate Growth
LOWER Taxes
RAISE Gov Spending
Outcome:
Increases aggregate demand to fight Recession and high unemployment.
Contractionary Policy
Goal: Slow the Economy
RAISE Taxes
LOWER Gov Spending
Outcome:
Reduces aggregate demand to control Inflation and overheating.
Monetary Policy: The Fed's Toolbox
Interest Rates
Adjusting the Fed Funds Rate to make borrowing cheaper or more expensive.
Open Market Ops
Buying or selling Gov Bonds to put cash in or take it out.
Reserve Requirement
Changing how much cash banks must keep in their vaults.
Monetary Strategy: Money Supply
Easy Money Policy
Goal: Increase Money Supply
LOWER Interest Rates
LOWER Reserve Req.
BUY Bonds (Open Market)
Fights Recession!
Tight Money Policy
Goal: Decrease Money Supply
RAISE Interest Rates
RAISE Reserve Req.
SELL Bonds (Open Market)
Fights Inflation!
Mission Briefing
CRISIS IMMINENT
As the National Economic Council, you must coordinate Fiscal and Monetary policy to save the nation.
Phase 1
Draft Plan (Report Template)
Phase 2
Build Command Slides
Phase 3
Cross-Ex Defense
Command Deck Directive
Strategic Questions
Q1: Interest Rate Conflict
"If your fiscal and monetary tools conflict, what happens to interest rates?"
Q2: Global Dollar Value
"How will your plan affect the international value of the dollar?"
Presentation Flow
Diagnosis & Targets
Coordinated Policy Map
Risk Analysis
Defense: Cross-Ex Phase
Build slides in Google Slides
Policy Primer Notes PHASE 2: POLICY FOUNDATIONS
Policy Primer Notes
Economic Stabilization Command Unit
Name:
Date:
Fiscal Policy
Controlled by ________________________________ using tools of ____________________ and ____________________.
Monetary Policy
Controlled by ________________________________ using tools of ____________________, ____________________, and ____________________.
Fiscal Command Strategies
Scenario Policy Type Taxes Gov Spending Recession Expansionary ____________________ ____________________ Inflation Contractionary ____________________ ____________________
Monetary Command Strategies
Scenario Policy Type Interest Rates Reserve Req. Open Market Ops Recession Easy Money ___________ ___________ ___________ Inflation Tight Money ___________ ___________ ___________
System Analysis & Definitions
Budget Concepts
Disposable Income:
Infrastructure Spending:
Fed Concepts
Interest Rates:
Open Market Ops:
Phase 2 Complete: Move to Stabilization Report
Economic Crisis Dossier TOP SECRET // EYES ONLY
Economic Crisis Dossier
National Economic Council | Briefing #849-STAB
Mission Instruction: Phase 1
Review the two active economic threats below. Your group must select ONE scenario (Alpha or Omega) to neutralize. Complete the Brainstorming Log below before proceeding to Phase 2.
Scenario Alpha
Status: Critical
Threat Level: Recession
Intelligence Data
• Unemployment has surged to 9.2%
• GDP growth negative for 2 quarters.
• Consumer spending at 10-year low.
"Major retail chains are closing branches. Families are tightening their belts. We need movement now."
Scenario Omega
Status: Overheating
Threat Level: Inflation
Intelligence Data
• CPI (Inflation) has hit 7.8%.
• Housing prices spiked 25% in 6 months.
• Wages can't keep up with costs.
"The value of the dollar is eroding daily. We must cool this down before the bubble pops."
Initial Brainstorming Log
Target:
Alpha
Omega
Policy Ideas (Fiscal/Monetary):
Potential Risks:
Confidential // NEC Protocol 1
Phase 1 Complete
Crisis Command Project Guide Crisis Command
Economic Stabilization Project Guide
Deadline
60 MINS
Mission Sequence
Phase 1
Read Dossier & Select Scenario
Phase 2
Complete Policy Primer Notes
Phase 3
Draft Stabilization Report
Phase 4
Build Command Slides & Defend
Command Deck Directive
Your group must translate your Phase 3 Report into a 3-slide "Command Deck" (using Google Slides) to present to the National Economic Council. Be prepared for a high-intensity cross-examination.
Slide 1: Diagnosis
• Identify Scenario Alpha or Omega
• Visual data points from Dossier
• Clear "Economic Threat" statement
Slide 2: Action Map
• Fiscal Tools (Tax/Spend)
• Monetary Tools (Fed Actions)
• Coordinated Strategy Name
Slide 3: Risk Analysis
• Anticipated opposition arguments
• Defense of the "Lag" problem
• Goal prediction (e.g., GDP forecast)
Defense: The Cross-Examination
During Phase 4, your facilitators (and peer groups) will ask strategic "interrogation" questions. Your defense script must prepare for the following:
Strategy: Coordinated Deficit Defense
Advanced Analysis
"If your Fiscal policy is adding debt to the economy, but your Monetary policy is raising interest rates, aren't you just fighting yourself?"
Potential Counter
Explain the Crowding Out Effect and how coordination minimizes it.
Key Term
Policy Coordination Mix
Strategy: The Consumer Confidence Pivot
Psychology Factor
"Why should we trust that consumers will spend their tax rebate if unemployment is still high?"
Potential Counter
Discuss Marginal Propensity to Consume and government multiplier effects.
Key Term
Fiscal Multiplier
Stabilization Report Template PHASE 3: STRATEGIC PLANNING
Stabilization Report
National Economic Council Task Force
Target Scenario: __________
Advisor Group: __________
Crisis Diagnosis
Key Problem Indicators (Data points from Dossier):
Primary Economic Goal (Target Outcome):
Fiscal Policy Tools
Tax Action:
Increase Decrease
Rationale for Tax Choice:
Spending Action:
Increase Decrease
Specific Project/Program Idea:
Monetary Policy Tools
Money Supply Strategy:
Easy Money Tight Money
Federal Reserve Actions:
Interest Rates:
Raise Lower
Reserve Req:
Raise Lower
Open Market Ops:
Buy Bonds Sell Bonds
Defense Preparation (Cross-Examination)
The "Conflict" Problem
How will your fiscal deficit/surplus affect interest rates? Does it make the Fed's job harder or easier? Defend your coordination strategy.
The "Lag" Problem
How long will it take for these policies to actually reach the people? How do you defend the delay in results during a crisis?
Phase 4 Readiness Check
Next Step: Create Command Slides based on the Project Guide Directive.
Diagnosis Slide
Policy Action Map
Defense Script
End of Task Force Report #849032
Facilitator Operations Guide FACILITATOR OPERATIONS GUIDE // VERSION 2.1
Economic Stabilizers
Simulation Operations Manual
PBL: Project-Based
60-Minute Simulation Pacing
0-10 MINS
Phase 1
Dossier Review, Scenario Selection (Alpha/Omega), and Brainstorming.
10-25 MINS
Phase 2
Instructional Phase: Use "Economic Stabilizer Slides" to complete "Policy Primer Notes."
25-45 MINS
Phase 3
Team Execution: Complete "Stabilization Report" and "Command Presentation" slides.
45-60 MINS
Phase 4
Cross-Examination: Teams present 3-slide decks and defend against facilitator inquiries.
Strategic Interrogation Bank
Alpha (Recession) Targets
"Why did you choose infrastructure projects over simple tax rebates?"
Look for: Multiplier effect vs. immediate liquidity arguments.
"If the Fed lowers rates but consumers are too afraid to borrow, is your plan dead?"
Look for: Discussing consumer confidence and psychological barriers.
Omega (Inflation) Targets
"Raising taxes during high inflation might cripple low-income families. How do you justify this?"
Look for: Priority of price stability over short-term household pain.
"If you sell bonds (OMO), you're taking money out of banks. Does this risk a bank run?"
Look for: Understanding the liquidity role of the Federal Reserve.
Mission Success Indicators
Coordinated Success:
Students should recognize that Expansionary Fiscal (Deficit Spending) paired with Easy Money (Lower Rates) is the standard recession cure, but note the risk of long-term debt.
Risk Awareness:
Advanced groups will identify that Tight Money can lead to unemployment spikes (Phillips Curve trade-off), which they must defend during the cross-examination phase.
