Group Three - The Humanities

What do we learn in IB Economics?

In IB Economics, you will learn about four different areas of economics:

Microeconomics.

This concerns economics on the “small scale”, on the individual person and firm. You will learn about the market mechanisms of supply and demand, how the consumers and firms behave and respond to incentives etc. You also learn about market failures and what happens when the free market does not act “as it should”.

HL students will also learn about different market structures, such as monopolies, oligopolies and perfect competition, how firms operate to maximise profits and so on.

Macroeconomics.

Macroeconomics concerns economics on a “large scale”, on the national economy as a whole. This concerns topics as GDP, unemployment, inflation/deflation, interest rates etc. There will be a lot of focus on topics such as aggregate demand and supply, and the difference between different macroeconomic philosophies. You will learn about the difference between Keynesian theory and neo-classical theory of aggregate supply, and how fiscal and monetary policies may affect aggregate demand and GDP (essentially how they affect the economy). You will learn how to discuss pros and cons of different policies and how they may affect the economy based on its current situation.

International Economics.

In the international section, you will learn about free trade, how trading policies and protectionist policies may affect the economy etc. This topic is relatively closely connected to macroeconomics. You will also learn about exchange rates’ effects on things as imports and exports, and you will learn about how different policies may affect and/or influence things such as exchange rates. As with microeconomics, there will be a focus on evaluating pros and cons on different policies and viewpoints and how to apply theory to different real-life situations.

Development

This might be the shortest section of the curriculum. This section does not include as much “theory” as the other sections. There will be a focus on topics as international aid, economic development.

How do we learn?

In class, we have lectures based on the book and curriculum. We read a lot of articles and watch economics-related videos on YouTube. We discuss different economic topics and situations. We also work with exercises. We have to follow real world events from around the world, as the exam requires students to apply knowledge from real life situations.

How are we assessed in this subject?

External assessment

Both SL and HL students have the written exams Paper 1 and Paper 2. HL students also have a third exam, Paper 3. As part of the response you need to make reference to real-world examples.

Paper 1 is usually based on section 1 and 2 of the curriculum. This is a more theoretical exam, where you have to explain a theory and evaluate a statement for different stakeholders. Exam questions could be something like: “Evaluate the use of an indirect tax on demerit goods for different stakeholders in the economy?”.

Paper 2 is a written response to a text and/or data. Usually this paper will be more related to section 3 and 4. You are often presented with an article and have to answer questions related to the article, about different economic theories and economic consequences of policies etc. that the country in the article has implemented. For example, the article may be about how a country experiencing inflation had decided to raise the interest rates, and it will be your task to evaluate this policy and whether it will be a good policy for the country’s economy for different stakeholders based on the information from the text.

Paper 3 is only for HL students. This is paper is often referred to as the “math paper” by students. Don’t let that frighten you, though. The mast is usually just basic multiplication, adding, subtracting and dividing. Nothing more difficult than what you learned in the eighth grade. The calculations often involve calculating percentages and tax incidence, the amount of subsidies and tariffs etc. You are also allowed to use a calculator. This might be the easiest paper, and many students think of this paper as an easy way to score marks and boost the grade.

Internal Assessment (IA)

You will have to write three commentaries on articles regarding something related to economics. Each commentary is to be 750 words at most, and you will write a commentary on three of the four sections of the economics curriculum. Examples would be to write a commentary on sugar taxes, the effect of a country’s decision to change interest rates, impose tariffs on imports etc.

What is the workload in this subject?

The workload in Economics might be smaller than in other subjects, such as math and the sciences. However, this does not imply that you do not have to work. The theory of economics might be “easy”, relatively speaking, compared to some other subjects, but to do well in economics requires that you stay updated on particularly economics related news. It is necessary to know about real-world examples for your exams, and how to apply theory to real life. Economics is too a large extent about evaluating and understanding.

Many students find that the learning curve in economics is quite steep. In the beginning, the theory might be more difficult. However, economics becomes easier with time because most things tie together, and the more you learn about other topics, the more you understand about the previous ones. This is especially true for International and Macroeconomics. These sections overlap in numerous ways, and many find that macroeconomics becomes much easier once they learn about international, vice versa.