Students' Guide - Using the Virtual Economy for AVCE Business
The main use of the Virtual Economy for AVCE Business will be in Unit 2 - "The competitive business environment". It can be used to help look at how business is affected by government policy through taxation, benefits, exchange rates, public sector services and changes in interest rates. Many of these are tools that are available for controlling the Virtual Economy and students should be able to experiment with different policies and see the impact they have. The model (4th floor) can be used on its own to help to see the impact of different policies on the economy and to help prompt discussion.
The most useful section should be the case studies section. There are three main case studies:
Each case study has three sections to it. The first section sets up a series of scenarios - different types of firm, different families or different governments. The second section then suggests different policies that could be tried out on the Virtual Economy. Having chosen a scenario and a policy you can then go on to the report / issues section that considers the effects of the policies on their family / business / government.
For Unit 2 students can examine the impact of interest rate changes on output and inflation. They can explore the way low interest rates foster growth, which may also increase competitiveness. Equally they can see how high interest rates might reduce aggregate demand and economic activity. The terminology of fiscal and monetary policy is rather daunting and so are many other areas of economic jargon. However, you can always refer to the glossary for help with jargon, playing with the possibilities and gradually absorbing the complicated reality.