In the Virtual Economy there are a number of worksheets. Working through these will help you to understand the changes that take place in the economy as the government alters its policy. The worksheets also suggest experiments you can make on the Virtual Economy model, to see if it acts as economic theory predicts. They are more appropriate for A-level Economics. If you are doing AS
and A2 level or AVCE Business why not have a look at the Case Studies floor.
| Floor |
Room |
Section in room |
Worksheets |
| 3rd - Economic policy |
Policy tools |
Income tax |
1. Income tax - a demanding tax? The effects of income tax changes on the level of aggregate demand.
2. Income tax - supplying the Inland Revenue or the economy? The effect of tax changes on the supply-side.
3. Income tax - who pays what? The nature of tax - progressive / regressive, marginal and average rates.
4. Income tax - a taxing business? The effect of tax changes on business. |
| Policy tools |
Government expenditure |
1. Government expenditure - how much? The impact of government expenditure on the macroeconomy.
2. Government expenditure - on what? The way governments should spend their money to have the maximum impact. |
| Policy tools |
Interest rates |
1. Interest rate - an interesting rate? The factors determining interest rates and the impact that changes have on the economy. |
| Policy tools |
VAT and other indirect taxes |
1. VAT - who pays what? The impact of indirect taxes on prices and income distribution.
2. VAT - a demanding tax? The effects that indirect tax changes have on the macroeconomy.
3. VAT - taxing externalities. Using indirect taxes to try to correct market failure. |
| 3rd - Economic policy |
Outcomes |
Unemployment |
1. Unemployment - whose problem? The causes of unemployment, and policies to reduce unemployment.
2. The Phillips Curve - trading off unemployment and inflation? The relationship between unemployment and inflation. Is there still a Phillips Curve? |
| Outcomes |
Debt ratio |
1. The debt ratio - what determines its value and why does it change? |
| Outcomes |
Inflation |
1. Inflation - are price increases inevitable? Causes of inflation and policies to reduce it.
2. The Phillips Curve - trading off unemployment and inflation? The relationship between unemployment and inflation. Is there still a Phillips Curve? |
| Outcomes |
Economic growth |
1. Economic growth. What creates economic growth, costs of economic growth and policies to influence it. |
| Outcomes |
PSNCR |
1. PSNCR. What determines its value and policies to change it. |
