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IB Economics

Unit 3: Macroeconomics

The Ceteris modules for IB economics, Macroeconomics, listed under each specification section. Each module teaches one idea, with questions through the page.

3.1 Measuring economic activity and illustrating its variations

Nominal and real numbersTell a nominal figure from a real oneConcept · 6 min · FreeConverting a nominal figure to a real oneConvert a nominal figure into a real oneCalculation · 6 minWhat GDP measuresSay what GDP counts and what it leaves outConcept · 7 minThe circular flow of incomeFollow a pound round the circular flow and name each leakHow it works · 7 min

3.2 Variations in economic activity: aggregate demand and aggregate supply

Aggregate demandSay what aggregate demand is and name its four partsConcept · 7 minShort-run and long-run aggregate supplyTell short-run aggregate supply from long-runTell them apart · 6 min

3.3 Macroeconomic objectives

Measuring inflation with a price indexBuild a price index and work out an inflation rate from itCalculation · 7 minDemand-pull and cost-push inflationTell demand-pull inflation from cost-pushTell them apart · 6 minMeasuring unemploymentSay who counts as unemployed and who does notConcept · 7 minTypes of unemploymentSort a case of unemployment into its typeTell them apart · 8 minWhat economic growth is, and what it is notTell growth from a recovery, and real growth from nominalConcept · 7 min

3.4 Economics of inequality and poverty

Absolute and relative povertyTell absolute poverty from relative povertyTell them apart · 6 minThe Lorenz curve and the Gini coefficientRead inequality off a Lorenz curve and say what a Gini number meansCalculation · 7 min

3.5 Demand management: monetary policy

How banks create moneyExplain how one deposit becomes more money in the banking systemHow it works · 7 minMonetary policySay what monetary policy is and who sets itConcept · 7 minThe transmission mechanismFollow an interest-rate change through to inflationHow it works · 6 min

3.6 Demand management: fiscal policy

The multiplierWork out a multiplier and apply it to an injectionCalculation · 7 minFiscal policySay what fiscal policy is and which way each tool pullsConcept · 6 minAutomatic stabilisersSay what an automatic stabiliser is and name twoConcept · 6 minThe budget deficit and the national debtTell a deficit from a debt, and cyclical from structuralConcept · 8 min

3.7 Supply-side policies

Supply-side policyTell a market-based supply-side policy from an interventionist oneTell them apart · 6 min