Teachers' Guide - Using the Virtual Economy for Teaching Business Studies

The Virtual Economy could be used in a variety of ways to support teaching. It could be used simply to encourage research. Students could be asked to research particular topics / issues. For example they could research:

• the impact of tax changes on the redistribution of income
• the effect of the business cycle on unemployment and inflation
• the changes in demand for products that takes place with the business cycle
• how different firms will be affected by external influences
• the impact of tax changes on the demand for different products (depending on income elasticity)
• the way firms should adapt their marketing and employment policies in response to different policy changes

The research would mainly take the form of experimentation with the model but they could also research in the library and other areas. The areas most likely to be helpful for research will be the 2nd floor - Economic Policy (which has explanations of every variable) and the 3rd floor - Library (which has a full glossary). However, they should be warned from getting too far into the economic theory that these areas contain.

To focus this experimentation it may be best to use the Case Studies floor (1st floor). There are case studies on people, firms and government. The case studies look at the impact of different policies on these groups. There are further details on these on page 8.

The model could also be used as part of work set for students. There are printable worksheets available on the Economic Policy floor. These printable worksheets have a small printer icon beside them. Though many worksheets may be more appropriate for economics students, there are one or two that business students could try. In particular there is one in the income tax section on the Economic Policy floor (follow the links to policy tools and income tax) that looks at the effect of tax changes on business.

Teachers and lecturers may want to use the model for classroom experimentation. If there is an Internet connection, then it would be possible to use the model as a basis for discussion with classes. Students could suggest policies and try to predict the outcome of them. The policies can then be tried on the model to see how good their predictions were. Students could do this individually or in groups as well. Different groups could be set different targets, and they could see how easily they can meet them. This also should help to provide a basis for discussion.

We would recommend that initially students are encouraged to use the selected variables input form. This has fewer variables to change and once they have gained confidence with it they can then move on to the more complex input form with all variables. Both of these methods of input use the same model, and so will give the same results.