Unveiling the Perfect Economics IA: Exploring Real-World Applications

Choosing a suitable topic for your International Baccalaureate (IB) Internal Assessment (IA) can be challenging, especially when considering the availability of articles that align with real-world situations.

In this blog post, Blen will guide you through a comprehensive list of potential IA topics that cover various sections of the course, such as Microeconomics, Macroeconomics, and the Global Economy. Each IA should also connect to a different key concept, ensuring a diverse and engaging exploration of economic principles.

Diagram of Supply and Demand.

Macroeconomics

  • Change of price in a market: Exploring the impact of demand

A change in demand can significantly affect market prices, either raising them through increased demand or lowering them through decreased demand. This topic involves illustrating the initial change using diagrams and discussing how firms respond to these changes by extending or contracting their supply. It is important to identify non-price factors that influence demand, analyze new market outcomes, and evaluate the effects on stakeholders. An example could be the sudden increase in demand for personal protective equipment (PPE) during the Covid-19 pandemic.

  • Change in supply: Analyzing market price fluctuations

Changes in supply, often newsworthy, can lead to price fluctuations in various markets. Oil markets frequently experience price changes due to shifts in supply. Similar to changes in demand, this topic requires identifying and explaining the non-price factors affecting supply and examining consumer responses to these changes. Additionally, evaluating the effects on stakeholders is crucial.

Government Intervention

  • Indirect Tax: Understanding market outcomes

Government intervention in the form of an indirect tax on specific products can have significant market outcomes. Analyzing the type of tax, its effects on market equilibrium, and discussing elasticity and the burden of taxation are essential aspects of this topic. Diagrams should demonstrate the impact of the tax on price and quantity, as well as the changes in revenue, employment, and welfare loss. Advanced-level students should also explore changes in consumer and producer surplus.

  • Subsidy: Examining the role of government support

Governments often employ subsidies to lower prices for essential goods or services, aiming to improve income distribution and affordability. This topic involves analyzing the effects of subsidies on market equilibrium, consumer and producer surplus, and government spending. Graphs can illustrate changes in price, quantity, revenue, and employment, while also highlighting the impact on welfare and the economy.

Market Failure

  • Correction of negative externality: Addressing market failures

Negative externalities often require corrective measures, such as the application of taxes, to reduce the quantity demanded. This topic focuses on the analysis of market failures, demonstrating how taxes can improve allocative efficiency. Diagrams should illustrate the initial market failure and the impact of taxes on quantity until the optimal output is reached. It is crucial to identify whether the negative externality is related to consumption or production and evaluate the effects on stakeholders.

  • Correction of positive externality: Promoting positive outcomes

To address positive externalities, subsidies or direct provision can be implemented to incentivize the production of goods or services that are underprovided by the market. This topic explores the market failure associated with underprovision, demonstrating how subsidies or direct provision can lead to allocative efficiency. Graphs can illustrate the market failure and the impact of intervention on quantity, providing society with more products at a lower price.

 

Μacroeconomics

  • Economic Growth: Analyzing GDP increases

Rising GDP levels are newsworthy and have profound implications for an entire macroeconomy. This topic involves analyzing the quantified increase in GDP and its effects on economic well-being. Evaluating potential demand-pull inflation and the economy's overall performance, including government budget implications, are essential components of this topic.

  • Negative Economic Growth (recession): Understanding economic contractions

Negative economic growth can lead to recessions, characterized by a decline in GDP over two consecutive quarters. Exploring the causes and consequences of negative economic growth, including rising unemployment and falling output, provides a comprehensive analysis. Evaluating methods governments can employ to address the recessionary gap and restore full employment equilibrium is crucial.

The Global Economy

  • Protectionism: Investigating trade policies

Trade protectionism, including tariffs and import quotas, is frequently discussed in the news. This topic examines the effects of trade protection measures on various stakeholders, such as balance of trade and foreign exchange rates. Analyzing the interdependence of economies and evaluating the consequences of protectionism provides a comprehensive understanding of this issue.

  • Foreign Exchange: Exploring exchange rate fluctuations

Significant changes in foreign exchange rates can have far-reaching implications. This topic involves analyzing the impact of exchange rate fluctuations on balance of trade and stakeholders. Recommendations for central bank interventions to mitigate negative outcomes can be provided, enhancing the understanding of foreign exchange dynamics.

While choosing an IA topic for your economics course may seem daunting, considering real-world applications and connecting them to key economic concepts can lead to engaging and insightful research.

The list of potential topics provided in this blog post covers various aspects of Microeconomics, Macroeconomics, and the Global Economy, ensuring a diverse and comprehensive exploration of economic principles.

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