Guide for Teachers - Economic Growth

Method:

Setting up:

The students will need to be briefed about the purpose and aims of the game. Initially, they should each be given some limited resources and some cash. The teacher sets themselves up as a foreign firm who supplies various key resources to each region - this allows you to be able to introduce some element of withdrawal from the circular flow if desired and to also be the Office for National Statistics (ONS).
As the first round gets underway, the students may wish to buy additional resources to begin producing the goods in which they specialise. Once they have produced these items they can begin to sell them to get extra money to buy more resources and also the things they need to survive and prosper.
It is important that the students take care with the items they produce - anything that does not meet quality standards will be regarded as waste and each region is to be encouraged not to buy shoddy goods.
The intention is that each region must first seek to reach the minimum level of items required to survive. Once they have got these then they will be able to generate further wealth in subsequent rounds. If a region has not got the required survival resources after two rounds they leave the game having starved to death or died of hypothermia!
It is vital that you impress on each region the importance of taking accurate records of the transactions they complete during each round.

Running the game:

The first round should last 15 minutes but every successive round should run for ten minutes. It is important to adhere to these time limits. The students are able to buy basic raw materials from you as the overseas exporter but can also negotiate with the other regions to buy materials off them as well as the finished goods.
At the end of each round, only the completed transactions that have been recorded should be counted. Each region hands in its completed record sheet to you and you should transfer the total incomes and expenditure to the National GDP Record Sheet (available as HTML or Word). The teacher can decide whether to use the income or expenditure method as the measure of GDP (in theory it should be the same but in practice will not be and in itself is useful as a means of generating discussion about calculating national income statistics). Students will be expected to calculate the percentage change in GDP to record the economic growth of the nation, which can be done in a spreadsheet and graphed if required.
As the supplier of the basic materials needed for production, you are in a position to dictate prices to a certain extent. If you feel that there is a large demand for scissors, for example, then you can begin to force up the price. Students will soon get to understand why prices are rising!
The game is based on three items - food, clothing and shelter - but this does not mean you should only have three regions/groups. It becomes very interesting when there are three groups producing food (the easiest to produce), two producing clothing and only one producing shelter, for example. In this scenario students will invariably work out quite quickly that they are in a monopoly position and begin to exert a considerable degree of monopoly power!
It is possible, therefore, to play this game successfully with a large number of students. The game can get quite frenetic and chaotic but this is a sign that things are going well!
Initially the regions should be given the following resources:
- Shelter:
  - Four pieces of yellow paper
  - Two pieces of black paper
  - One piece of white paper
  - A template of the shelter
  - One pair of scissors
  - Two rulers
  - Three pencils
  - Glue or sticky tape
  - £1,000
- Food:
  - Six pieces of yellow paper
  - A template of the food
  - Two pairs of scissors
  - Two rulers
  - Two pencils
  - Glue or sticky tape (they may realise fairly early on they do not need it and can sell it on)
  - £700
- Clothing:
  - Five pieces of blue paper
  - A template of the clothing
  - One pair of scissors
  - Four pencils
  - One ruler
  - £600
The initial prices of items:
- Shelter - £250
- Food - £25
- Clothing - £50
- Scissors - £100
- Paper:
  - Yellow - £10
  - Black - £5
  - White - £5
  - Red/blue - £10
- Rulers - £20
- Pencils - £10
- Glue - £10
As the supplier of raw materials you are in a position to respond to changing market conditions by changing prices. If there is a run on scissors for example, then you might decide to increase the price of scissors sharply! The regions themselves can dictate their own prices to some extent. If there is more than one region producing each resource then competition will keep prices in check but if only one region is producing shelter, for example, then they might decide to increase price quite dramatically in response to the demand.
Allow a degree of autonomy in the way the game is played but be aware of the potential for friction if regions do not get what they want!

Extension work:

It is possible to bring some complications into the game by introducing a government that imposes income taxes. The tax paid must be in the form of assets not money!

The teacher could also introduce some injections into the economy by releasing some extra resources into the system or indeed show what might happen if resources were lying idle (remove one or two items from each region at the beginning of the round!).

You could also give each team some extra cash at the beginning of a round to simulate printing money to see what effect this has on the economy.

Economic Growth - Guide for Teachers

Purpose:

Learning Objectives:

Requirements:

Timing:

Method:

Setting up:

Running the game:

Extension work:

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