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Monetary and Fiscal Policy Dashboard

Run the Monetary and Fiscal Policy Dashboard MicroSim Fullscreen
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About This MicroSim

This MicroSim shows how fiscal policy (government spending and taxes) and monetary policy (Federal Reserve interest rates) interact to shape economic outcomes. Students can set each policy to Expansionary, Neutral, or Contractionary with adjustable strength, and observe whether the two policies are aligned, partially coordinated, or conflicting. Historical presets like the 2008 Response, 1970s Confusion, and 2022 Response let students see how real policy combinations played out. A tug-of-war visualization shows the net policy effect, while gauge indicators display GDP growth, inflation, and unemployment.

How to Use

  1. Select a Scenario Preset -- Choose from historical scenarios (2008 Response, 1970s Confusion, 2022 Response, Normal Times) or "Custom" to set your own policy mix.
  2. Set Fiscal Policy -- Use the dropdown to choose Expansionary, Neutral, or Contractionary fiscal stance, then adjust the strength slider.
  3. Set Monetary Policy -- Similarly choose a monetary policy stance and strength using the second row of controls.
  4. Observe the Dashboard -- Watch the two policy panels, the tug-of-war net effect indicator, the coordination badge (Aligned, Partial, or Conflicting), and the three outcome gauges for GDP Growth, Inflation, and Unemployment.
  5. Read the Assessment -- The dashboard provides a color-coded assessment of overall economic health (Goldilocks, Mixed, Overheating, or Recession) along with historical context for preset scenarios.

Iframe Embed Code

You can add this MicroSim to any web page by adding this to your HTML:

<iframe src="https://dmccreary.github.io/economics-course/sims/policy-dashboard/main.html"
        height="602px"
        width="100%"
        scrolling="no"></iframe>

Lesson Plan

Grade Level

9-12 (High School Economics)

Duration

10-15 minutes

Prerequisites

  • Understanding of fiscal policy (government spending and taxation)
  • Understanding of monetary policy (Federal Reserve and interest rates)
  • Familiarity with GDP, inflation, and unemployment indicators

Activities

  1. Exploration (5 min): Have students select each historical preset and note which policies were used and what outcomes resulted. Ask them to identify which scenario produced the healthiest economy and which produced the worst outcomes.
  2. Guided Practice (5 min): Challenge students to find the "Goldilocks" policy combination where all three indicators are in the green zone. Then have them create a scenario where fiscal and monetary policy conflict, and discuss why the 1970s saw exactly this problem.
  3. Assessment (5 min): Students write a brief policy recommendation for an economy with 7% inflation and 3% unemployment, explaining whether fiscal and monetary policy should be aligned or independent, and justifying their reasoning.

Assessment

  • Can the student explain the difference between fiscal and monetary policy?
  • Can the student describe what happens when the two policies conflict vs. align?
  • Does the student understand why policy coordination matters for economic stability?

References

  1. Monetary policy - Wikipedia
  2. Fiscal policy - Wikipedia
  3. Monetary and Fiscal Policy - Investopedia