11.2: Economic Theory - Classroom Activity
- Page ID
- 231692
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)Policy Scenario Simulation
In this class period we compare Neoliberal and Keynesian economic policy through the lens of an economic crisis.
Imagine that we are faced with
- 10% unemployment
- 8% inflation, and
- a shrinking economy with a -3% GDP.
Our economy is in a recession. Business leaders and labor unions are up in arms and are trying to influence government policy.
How do we get the economy back on track, fulfilling the economic policy goals outlined in our module introduction? Which theorist's ideas prove more valuable and effective in this scenario?
1. Pair up with a student next to you and compare the basic principles of Neoliberalism and Keynesianism.
Create a chart, answering these questions:
- What is the role of government in the economy?
- How does each view the role of markets?
- Can you provide two typical policies for each?
- Which historical examples can you provide where each theory was practiced?
2. After that, your class is divided into two groups, each functioning as
presidential advisors.
You either find yourself in the neoliberal adviser group or in the Keynesian advisor group:
- Propose two or three policy solutions based on your assigned economic ideology.
- Justify your decisions based on your theoretical principles (e.g., why do you think that policy x will reduce inflation?)
- How are your solutions affecting the lower class in the short- and long-term?
3. Class discussion
- Which approach feels more realistic?
- Which groups would benefit or lose from each set of policies?
- Can you see how each of these economic policy suggestions play out in other current real-world scenarios such as climate, healthcare, or student debt policy?
- Based on your findings, which theorist and political party should the ecnonomically disadvantaged support?
Evaluation Rubric
| Criteria | Excellent (4 pts) | Proficient (3 pts) | Developing (2 pts) | Beginning (1 pt) |
|---|---|---|---|---|
| Understanding of Ideologies (SLO 1 & 2) | Demonstrates a clear, nuanced understanding of both Neoliberalism and Keynesianism, including core principles and historical context. | Demonstrates a clear understanding of both ideologies, with minor gaps or inaccuracies. | Shows basic understanding but with significant misconceptions or oversimplifications. | Demonstrates minimal or confused understanding of the ideologies. |
| Application to U.S. Policy (SLO 3) | Accurately applies both frameworks to real or simulated U.S. policy examples with strong justification. | Applies both ideologies to policy examples with some justification. | Attempts to apply ideologies to policies but with unclear or weak justification. | Fails to connect ideologies to relevant policies or misapplies them. |
| Group Participation & Collaboration | Actively contributes to group work, demonstrates leadership or facilitation, and engages respectfully with others’ ideas. | Participates consistently and contributes useful insights to the group. | Participates minimally or inconsistently; contributions may lack clarity or relevance. | Rarely participates or disrupts group dynamics. |
| Presentation of Policy Scenario (SLO 4 & 5) | Presents a clear, persuasive, and well-reasoned argument from the assigned ideological perspective with creative and realistic solutions. | Presents a coherent argument with mostly clear reasoning and relevant solutions. | Presentation lacks clarity or depth; reasoning is underdeveloped or inconsistent. | Presentation is unclear, unprepared, or largely off-topic. |
| Critical Thinking & Reflection (SLO 4 & 5) | Demonstrates deep reflection and critical engagement with the consequences of each ideology, including effects on various social groups. | Demonstrates thoughtful engagement and identifies some social consequences. | Demonstrates limited reflection; may overlook key social or political impacts. | Demonstrates little to no reflection or critical engagement. |