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macro discussion 4.docx - 4-2 Simulation Discussion:...

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4-2 Simulation Discussion: Monetary SystemHello class!I kept playing the game several times and can say I like these simulations more when you're noton a time limit and can actually think about your decisions thoroughly. With that being said, the first fewgo around I kept getting extreme inflation rates but was starting my feds fund rate at 3.00 and that justseemed no matter what I did my inflation rates consistently stayed super high. Over time I realized that nomatter the choices I made if I started at that 3.00 mark Id get relatively the same outcome, while riskybecause it could have done the reverse effect and kept my unemployment super high, I decided to up my
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Unformatted text preview: federal funds rate to 5.00 and from there decreased each round by .25 to see where my growth would be and so it wouldn't get out of control too fast so I could still recover from my choices. By keeping in the . 25 range I was able to successfully keep my job. By doing this and from this week's reading, I learned that the lower the interest rates, people can spend more money and borrow more money, but if too many funds are available, that's when we see a climb in inflation....
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