Students' Guide - List of Theories
Throughout the Virtual Economy you will find explanations of relevant economic theory. You may want to refer to them if you are studying a particular topic or if you want to find out more about how different aspects of the economy work.
To access the theories in each section simply follow the relevant link:
| Floor | Room | Section in room | Theory |
|---|---|---|---|
| 3rd - Economic policy | Policy tools | Income tax | T1 - The canons of taxation T2 - Progressive and regressive taxes T3 - Marginal and average tax rates T4 - Demand-side and supply-side effects of tax changes T5 - The Laffer curve |
| Policy tools | Government expenditure | T1 - Transfer payments T2 - Public and merit goods T3 - Current and capital government expenditure T4 - Automatic and discretionary government expenditure T5 - The Multiplier | |
| Policy tools | Interest rates | T1 - Why do interest rates vary? T2 - Monetary policy - using interest rates T3 - The effect of interest rates on demand T4 - How are interest rates maintained? | |
| Policy tools | VAT and other indirect taxes | T1 - The effect of indirect taxes on prices T2 - Progressive and regressive taxes T3 - Who pays how much tax - the effect of elasticity T4 - Taxing to compensate for externalities | |
| 3rd - Economic policy | Outcomes | Unemployment | T1 Costs of unemployment - who pays? T2 Types of unemployment T3 Causes of unemployment - whose fault is it? T4 Phillips Curve - the relationship between unemployment and inflation |
| Outcomes | Debt ratio | T1 The relationship between the PSNCR & the National Debt T2 Causes of debt - what determines it? T3 Debt and Europe - do we meet the Maastricht criteria? | |
| Outcomes | Inflation | T1 Costs of inflation - who pays? T2 Demand-pull inflation T3 Cost-push inflation T4 Phillips Curve - the relationship between unemployment and inflation T5 Inflation and the money supply | |
| Outcomes | Economic growth | T1 Causes of the trade cycle T2 Costs of growth - who pays? T3 Sources of growth - where does it come from? T4 Boosting growth - how can we grow more? | |
| Outcomes | PSNCR | T1 The relationship between the PSNCR and the trade cycle T2 Cyclical and structural PSNCR's T3 The PSNCR and money supply - the effect of borrowing on the money supply T4 The relationship between the PSNCR & the National Debt | |
| 4th floor - Library | Theory | Neo-Classical | Free market theory Say's Law Quantity Theory of Money |
| Theory | Keynesian | The labour market The market for loanable funds (money market) The Multiplier Keynesian inflation theory | |
| Theory | Monetarist | Quantity theory of money Expectations-augmented Phillips Curve |