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A concise page with just the diagrams and calculations from the Global Economy part of the syllabus.
Certain chapters are omitted because they do not have any diagrams or calculations.
Important: This page is designed to be a nice refresher for diagrams you've already learned. A lot of these are easy once you've learned them properly in class, so don't try to just memorize everything from here!
4.1 Benefits of International Trade
4.1 Benefits of International Trade
Diagram: Free trade illustrating exports and imports:
Calculation (HL ONLY): From a diagram, the quantity of exports/imports and export/import expenditure:
Diagram (HL ONLY): Linear PPC showing different opportunity costs and the potential gains from specialization and trade as a result of comparative advantage:
Calculation (HL ONLY): Opportunity costs from a set of data in order to identify comparative advantage:
4.2 Types of Trade Protection
4.2 Types of Trade Protection
Diagram: A tariff and its effect on price, production, consumption, expenditures, revenue, and welfare:
Calculation (HL ONLY): From a diagram, the effects on stakeholders of tariffs:
Here, you simply need to calculate the areas and distances referenced in the diagram above.
Diagram: A quota and its effect on price, production, consumption, expenditures, revenue, and welfare:
Calculation (HL ONLY): From a diagram, the effects on stakeholders of quotas:
Here, you simply need to calculate the areas and distances referenced in the diagram above.
Diagram: A subsidy and its effect on price, production, consumption, expenditures, revenue, and welfare:
Calculation (HL ONLY): From a diagram, the effects on stakeholders of subsidies:
Here, you simply need to calculate the areas and distances referenced in the diagram above.
4.5 Exchange Rates
4.5 Exchange Rates
The following diagrams are from the perspective of the US central bank, and the “foreign currency” is the euro.
Diagram: The exchange rate determination and changes in equilibrium in a floating exchange system:
Calculation: Using exchange rates, the price of a good in different currencies:
Calculation: Changes in the value of a currency from a set of data:
Diagram: AD/AS curves to show potential consequences of changes in the exchange rate on the economy:
Diagram: How a fixed exchange rate is maintained:
Diagram: The exchange rate determination and changes in equilibrium in a managed exchange system:
4.6 Balance of Payments
4.6 Balance of Payments
Calculation: Elements of the balance of payments from a set of data:
Here, you simply need to identify which elements belong to which account (current, capital, financial), and add them up. Click here for an example.
Diagram (HL ONLY): The relationship between the current account balance and the exchange rate:
Calculation (HL ONLY): The Marshall-Lerner condition:
Diagram (HL ONLY): The J-curve with reference to the Marshall-Lerner condition:
4.9 Barriers to Economic Growth and/or Economic Development
4.9 Barriers to Economic Growth and/or Economic Development
Diagram: A poverty cycle showing and linked combination of factors that perpetuate poverty:
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