IBDP · Economics SL
Global Economy
4.1–4.10 Global Economy
48 min readStandardForms the entire Paper 2 (data-response) exam for SL — roughly a third of your total grade, plus a possible essay strand in Paper 1
This is the topic where Economics stops being diagrams-in-a-vacuum and starts being the news. Every extract in your Paper 2 exam — a WTO ruling, a sanctions regime, a currency collapse — is testing whether you can bolt a real event onto a model and say precisely whose costs and whose benefits are at stake. The content itself splits into two engines: trade (why countries trade, how they group together, how they block each other) and macro-for-nations (exchange rates, balance of payments, growth vs development). Learn them as one connected story, because that's how the data-response questions are built.
Overview — the shape of Global Economy
Why this topic is graded the way it is
- Paper 2 is dedicated entirely to this topic for SL — two data-response questions, each built around a real news extract, exactly like the WTO/sanctions/customs-union scenarios in your question bank.
- The topic bolts two things together: the trade side (comparative advantage, protection, integration, WTO rules) and the macro-for-nations side (exchange rates, balance of payments, growth vs development).
- Nearly every question — data response or essay — is really asking you to identify a winner and a loser (consumers, domestic firms, the government, a trading partner) and then justify a judgement. Diagrams and definitions are the tools; the judgement is the point.
The shape of the chapter
Command terms this topic tests hardest
| Command term | What it demands | AO | Mark-earning move |
|---|---|---|---|
| Define | State the precise technical meaning | AO1 | 'Customs union' needs BOTH clauses (free trade between members AND a common external tariff) for full 2 marks — one clause caps you at 1/2 (see Q7a). |
| Distinguish between | Give the point of difference, not two separate definitions | AO2 | FTA vs customs union hinges on the external tariff only — both already share tariff-free trade internally, so restating that fact earns nothing. |
| Explain, using a diagram | Narrate cause → curve shift → new equilibrium → real effect | AO2/AO3 | A correctly drawn diagram with no verbal causal chain is only worth partial credit — you must say WHY the curve moved. |
| Calculate | Apply a formula to given data and show working | AO2 | A correct final number with no visible formula/working can still drop the method mark if the examiner can't see how you got there. |
| Evaluate / To what extent | Both sides + an explicit judgement criterion + a real example | AO3 | A balanced list of pros and cons with no final stated judgement caps the answer below the top mark band. |
Key point
Every Global Economy question is testing one transferable skill: read a real extract, map it onto the right model, and say whose costs and whose benefits are on the table. Memorising definitions without practising extract-based questions is the single biggest reason marks leak here.
Overview