The Global Economy — IB Economics Higher Level
1. Unit at a Glance
This unit follows a logical flow from the core theory of why countries trade, to barriers to trade, then international finance, then broader topics of economic integration, globalisation and development. Core topics are required for both SL and HL candidates, with additional quantitative and advanced analysis topics reserved for HL only.
You will build from theoretical foundations to real-world evaluation, learning to apply models to assess policy choices and their distributional impacts across different economies and population groups.
Common Pitfalls
Why: Absolute advantage refers to lower absolute production cost, while comparative advantage is based on opportunity cost, which is the correct basis for mutual gains from trade
Why: Many students misclassify transactions, leading to incorrect analysis of balance of payments imbalances
Why: While aggregate gains from free trade are common, they often come with concentrated losses for import-competing industries and their workers