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ECONOMICS

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The Gold Standard

The gold standard was a monetary system that was in use across the world until the great depression of the 1930s. The system essentially determined that a country's monetary value was directly linked to the amount of gold they had in their reserves. This system failed and was abandoned by the U.S when the great depression hit, to prevent its citizens from cashing in deposits which would ultimately deplete gold supplies, and keep interest rates high, the relationship between gold and currency was cut. This allowed the U.S government to produce more money which stimulated the economy and lowered rates, which aided employment and the development of businesses.

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In real life economic systems, all have flaws, the gold standard is just one example of how an economic system can crash and affect people of different backgrounds across numerous countries. When the gold standard failed due to the depression, it not only impacted the U.S but also the U.K which also used this monetary system. 

How this relates to games

In games, we do not need to use complex changing economic systems, we simply need the system to be fair for the player to exist within. When we have an item in a game we need it to be valued fairly to other items, for instance a rare material in a game should reflect that in its price, whereas something common should be priced low. However, to price an item we need to understand three things:


1. Autonomous demand. This is essentially understanding what demand would an item have if it was free?

2. Demand due to supply. This is an understanding that 

3. Supply Coefficient. This is how easy is this commodity to make per unit. In terms of the raw materials and final price, how many of the final product can I make?

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After having an understanding of these three, we can work out how much an item should be available to be sold for and how much it should be priced for.

To work this out we can use two calculations:

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Quantity demand = Autonomous demand - demand due to supply x price

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Quantity supply = Supply coefficient x price

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For example, if we were trying to work out the price of bread in a game:

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The autonomous demand would be 5000

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5000 - 100price = 70price

5000 = 170price (we want all of the price on one side)

(divide both by 170)

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CSV Sheets

In games, we do not need to use complex changing economic systems, we simply need the system to be fair for the player to exist within. When we have an item in a game we need it to be valued fairly to other items, for instance a rare material in a game should reflect that in its price, whereas something common should be priced low. However, to price an item we need to understand three things:


1. Autonomous demand. This is essentially understanding what demand would an item have if it was free?

2. Demand due to supply. This is an understanding that 

3. Supply Coefficient. This is how easy is this commodity to make per unit. In terms of the raw materials and final price, how many of the final product can I make?

​

After having an understanding of these three, we can work out how much an item should be available to be sold for and how much it should be priced for.

To work this out we can use two calculations:

​

Quantity demand = Autonomous demand - demand due to supply x price

​

Quantity supply = Supply coefficient x price

​

For example, if we were trying to work out the price of bread in a game:

​

The autonomous demand would be 5000

​

5000 - 100price = 70price

5000 = 170price (we want all of the price on one side)

(divide both by 170)

​

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