The 20,000-hour flight instructor reported that while on an instructional flight at about 700 feet above ground level (AGL), he reduced the engine power to idle, applied carburetor heat, and asked the student pilot to perform a simulated forced landing. The student pilot elected to land in a nearby field on a southerly heading The flight instructor added that the field was adequate for the emergency landing; however, it would require the use of full flaps to make the approach. At approximately 150 feet above ground level (AGL), the student pilot applied partial power and began retracting the electric flaps. According to the flight instructor's statement, he increased the throttle to full power and slightly lowered the airplane's nose high attitude. However, the airplane continued to lose altitude and then stalled just before entering the trees. There was no fire and all three occupants were able to egress from the airplane unassisted.