GDP=C+I+G+(X−M)GDP equals cap C plus cap I plus cap G plus open paren cap X minus cap M close paren
Used to calculate the inflation rate.
For an HL student, the primary focus for calculation questions resides in (Elasticities and Costs) and Macroeconomics (Keynesian Multiplier and Terms of Trade).
Multiplier (k)=11−MPC=1MPS+MPT+MPMMultiplier open paren k close paren equals the fraction with numerator 1 and denominator 1 minus MPC end-fraction equals the fraction with numerator 1 and denominator MPS plus MPT plus MPM end-fraction Where: = Marginal Propensity to Consume, = Savings, = Imports.
PES=%ΔQs%ΔPPES equals the fraction with numerator % cap delta cap Q sub s and denominator % cap delta cap P end-fraction Percentage Change Calculation ib economics hl formula booklet
$$Profit = Total Revenue (TR) - Total Cost (TC)$$ $$Average Total Cost (ATC) = \fracTCQ$$
Unemployment Rate=Number of UnemployedLabor Force×100Unemployment Rate equals the fraction with numerator Number of Unemployed and denominator Labor Force end-fraction cross 100 The Keynesian Multiplier The Multiplier ( ):
. Understanding the "leakages" (MPS + MRT + MPM) is vital for Paper 3.
If $M$ grows by 10% and $Y$ grows by 3%, calculate inflation. GDP=C+I+G+(X−M)GDP equals cap C plus cap I plus
Calculating the new equilibrium price, the change in consumer/producer surplus, and the government revenue or cost.
Δ GDP=k×Δ Injectioncap delta GDP equals k cross cap delta Injection 2. Inflation and Unemployment Measures
Macroeconomic calculations focus on measuring economic activity, inflation, unemployment, and the distribution of income. Measuring Economic Activity
Quantitative assessment plays a critical role in the International Baccalaureate (IB) Diploma Programme Economics Higher Level (HL) course. Unlike Standard Level (SL) students, HL students are heavily tested on their mathematical competencies, particularly in Paper 3, which is dedicated entirely to policy-focused quantitative data analysis, calculation, and evaluation. PES=%ΔQs%ΔPPES equals the fraction with numerator % cap
The formulas compiled above are explicitly tested in . Understanding the architecture of this paper is crucial for effective preparation. Duration: 1 hour 45 minutes Weighting: 30% of your total IB Economics HL grade Format: Students must answer two compulsory questions .
| | Equation | Calculation Tips | | :--- | :--- | :--- | | Price Elasticity of Demand (PED) | PED = (%Δ Qd) / (%Δ P) | The result is always negative due to the inverse relationship between price and quantity demanded. Interpret the absolute value (ignore the sign for elasticity). | | Income Elasticity of Demand (YED) | YED = (%Δ Qd) / (%Δ Income) | The sign (+/-) matters : positive = normal good, negative = inferior good. | | Cross Elasticity of Demand (XED) | XED = (%Δ Qd of Good A) / (%Δ Price of Good B) | Positive value = substitutes; negative value = complements. | | Price Elasticity of Supply (PES) | PES = (%Δ Qs) / (%Δ P) | The result is always positive due to the direct relationship between price and quantity supplied. |
1MPWthe fraction with numerator 1 and denominator cap M cap P cap W end-fraction 3. The Global Economy: Trade & Development