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Progress: 1 / 20

Nominal GDP is $2.5 trillion and the deflator is 125. What is the real GDP?

$2.0 trillion

What does 'sticky wages' refer to in the Keynesian model?

Wages do not fall easily, which can prevent the economy from adjusting back to full employment.

What can cause a shift to the left in the aggregate supply curve?

An increase in production costs, such as higher wages or raw material prices.

How does technological innovation affect economic growth in the long run?

It boosts productivity and increases the potential output of the economy.

What happens to real GDP when there is demand-pull inflation?

Real GDP may increase initially, but excessive demand can eventually cause inflation without growth.

What are the main components of the circular flow of income model?

Households, firms, government, financial markets, and the foreign sector.

Nominal GNI is $2.7 trillion and the deflator is 108. What is the real GNI?

$2.5 trillion

What is the difference between GDP and GNI?

GNI includes net income from abroad, while GDP does not.

C is $1.2 trillion, I is $600 billion, G is $700 billion and NX is -$100 billion. What is GDP?

$2.4 trillion

What does purchasing power parity (PPP) compare between countries?

The relative value of currencies based on the cost of a standard basket of goods.

What is one limitation of using GDP per capita to measure living standards?

It does not account for income inequality or non-market transactions.

Why is sustained economic growth important for developing countries?

It helps reduce poverty, improve living standards, and create employment opportunities.

What is the role of the multiplier effect in stimulating economic growth?

It amplifies the impact of an initial injection of spending through repeated rounds of consumption.

A country's GDP is $3.6 trillion and its population is 60 million. What is GDP per capita?

$60,000

What causes the economy to return to full employment during a deflationary gap in the monetarist model?

Wages and prices adjust downward over time, shifting SRAS rightward automatically.

What does GDP measure in an economy?

The total value of all goods and services produced within a country over a specific period.

What does the economic cycle describe?

The recurring pattern of expansion, peak, contraction, and trough in an economy.

How can an increase in investment affect long-run aggregate supply?

It can increase productive capacity and shift the long-run aggregate supply curve to the right.

What is the G in the AD function?

Government spending.

If real GDP was $2.8 trillion last year and $3.1 trillion this year, what is the GDP growth rate?

10.7%

China Posts Record Trade Surplus Despite Tariffs

China Posts Record Trade Surplus Despite Tariffs

Carney’s Big Bet: Canada Tackles Tariffs with Trillion-Dollar Ambition

Carney’s Big Bet: Canada Tackles Tariffs with Trillion-Dollar Ambition

China’s GDP Growth Slows as Policymakers Weigh New Stimulus

China’s GDP Growth Slows as Policymakers Weigh New Stimulus

India Slashes Taxes to Spark Spending Surge — But Will It Work?

India Slashes Taxes to Spark Spending Surge — But Will It Work?

Tariffs Bite as South Korea’s Export Growth Slows Sharply

Tariffs Bite as South Korea’s Export Growth Slows Sharply

Bank of England Cuts Interest Rates to 4% in Push to Revive Weak Growth

Bank of England Cuts Interest Rates to 4% in Push to Revive Weak Growth

China’s EV Giants Going Global

China’s EV Giants Going Global

Nigeria’s economy on a rapid rise but so are prices

Nigeria’s economy on a rapid rise but so are prices

China’s Economy Grows 5.4% — But Can It Withstand Trump’s Tariff Tsunami?

China’s Economy Grows 5.4% — But Can It Withstand Trump’s Tariff Tsunami?

Can Defense and Housing Turn the Tide on Sluggish GDP Growth in the UK?

Can Defense and Housing Turn the Tide on Sluggish GDP Growth in the UK?

South Africa Unveils $54.5 Billion Infrastructure Plan to Boost Growth

South Africa Unveils $54.5 Billion Infrastructure Plan to Boost Growth

U.S. Economy on Track for Contraction as Spending and Exports Decline

U.S. Economy on Track for Contraction as Spending and Exports Decline

India’s Consumer Market Shrinks as Wealth Inequality Deepens

India’s Consumer Market Shrinks as Wealth Inequality Deepens

UK to streamline Infrastructure Development in Push for Economic Growth

UK to streamline Infrastructure Development in Push for Economic Growth

Nigeria Joins BRICS: What Does it Mean for the Global Economy?

Nigeria Joins BRICS: What Does it Mean for the Global Economy?

China’s Economy Surges with Q4 GDP Growth of 5.4%

China’s Economy Surges with Q4 GDP Growth of 5.4%

Saudi Arabia Bets Big on Mining with a $100 Billion Investment

Saudi Arabia Bets Big on Mining with a $100 Billion Investment

American Brands are Feeling the Squeeze as Sales Drop in China

American Brands are Feeling the Squeeze as Sales Drop in China

Nvidia Supercharges India’s AI Future

Nvidia Supercharges India’s AI Future

World Bank Calls for Greater Debt Relief to Aid Developing Nations

World Bank Calls for Greater Debt Relief to Aid Developing Nations

New Zealand’s Tourism Tax Hike: A Boost or Barrier for Economic Growth?

New Zealand’s Tourism Tax Hike: A Boost or Barrier for Economic Growth?

Thailand’s Wage Hike: A Double-Edged Sword?

Thailand’s Wage Hike: A Double-Edged Sword?

Germany Unemployment Forecast for a Decade High

Germany Unemployment Forecast for a Decade High

India Set to Overtake Japan as World’s Third Largest Economy by 2025

India Set to Overtake Japan as World’s Third Largest Economy by 2025

China’s Economy Surges with High-Tech Manufacturing Boost

China’s Economy Surges with High-Tech Manufacturing Boost

Japan Bids Farewell to Negative Interest Rates

Japan Bids Farewell to Negative Interest Rates

The Budget in Brief: Cuts, Reliefs, and Reforms

The Budget in Brief: Cuts, Reliefs, and Reforms

AI’s Thirst for Power: The Environmental Cost of Artificial Intelligence

AI’s Thirst for Power: The Environmental Cost of Artificial Intelligence

India’s Economy Shines with Robust Growth of 8.4%

India’s Economy Shines with Robust Growth of 8.4%

India Unlocks Space Sector to Global Investors

India Unlocks Space Sector to Global Investors

assorted wine bottles

Thailand’s Strategic Tax Cut on Alcohol to Revitalise Tourism

Is China Going Through Mexico to Bypass US Tariffs?

Is China Going Through Mexico to Bypass US Tariffs?

China’s Stumbling Economic Recovery

China’s Stumbling Economic Recovery

Japan Automakers Invest $4.3 Billion in Thailand’s EV Future

Japan Automakers Invest $4.3 Billion in Thailand’s EV Future

Major Tax Breaks in Saudi to Boost Business Hub Ambitions

Major Tax Breaks in Saudi to Boost Business Hub Ambitions

Japan’s Slips into an Economic Downturn: Here’s the why and what is to be done!

Japan’s Slips into an Economic Downturn: Here’s the why and what is to be done!

Made in India’ Rises as ‘Made in China’ Declines on US Retail Shelves

Made in India’ Rises as ‘Made in China’ Declines on US Retail Shelves

U.S. Treasury to Borrow $776 Billion in Q4

U.S. Treasury to Borrow $776 Billion in Q4

Bank of England Holds Firm on the Interest Rate

Bank of England Holds Firm on the Interest Rate

Apple Braces for Potential Fourth Quarter Revenue Decline Amid Global Challenges

Apple Braces for Potential Fourth Quarter Revenue Decline Amid Global Challenges

South Africa’s Unemployment Crisis: A Ticking ‘Time Bomb’!

South Africa’s Unemployment Crisis: A Ticking ‘Time Bomb’!

Nigeria’s Lithium Strategy: More Than Just Mining!

Nigeria’s Lithium Strategy: More Than Just Mining!

Mexico’s ‘Super Peso’: More Money Sent, But Less to Spend!

Mexico’s ‘Super Peso’: More Money Sent, But Less to Spend!

China’s Big Bet: $137 Billion Infrastructure Boost to Rev Up Economy!

China’s Big Bet: $137 Billion Infrastructure Boost to Rev Up Economy!

U.S. Growth Up, Euro Zone Dips, and Global Economy ‘Limps Along’!

U.S. Growth Up, Euro Zone Dips, and Global Economy ‘Limps Along’!

black and white dairy cow s head

China Welcomes Colombian Beef: Brazil Braces for Market Shifts!

IB Business Management Teaching resources

China’s Capital Control Conundrum: A Bid to Boost Foreign Investment!

Bank of England’s Interest Rate Riddle: Balancing Inflation and Growth!

Bank of England’s Interest Rate Riddle: Balancing Inflation and Growth!

U.S. Retail Sales Surprise with July Jump!

U.S. Retail Sales Surprise with July Jump!

China’s Central Bank Cuts Reserve Ratio to Boost Economic Recovery

China’s Central Bank Cuts Reserve Ratio to Boost Economic Recovery

Swiss Voters Greenlight Global Minimum Tax and Ambitious Climate Law

Swiss Voters Greenlight Global Minimum Tax and Ambitious Climate Law

Inflation Takes a Breather: US Sees Lowest Annual Rate in Over Two Years

Inflation Takes a Breather: US Sees Lowest Annual Rate in Over Two Years

Solar Power Shines: Clean Energy Investments Set to Eclipse Oil in 2023

Solar Power Shines: Clean Energy Investments Set to Eclipse Oil in 2023

China’s Export Surprise: A 7.5% Plunge in May Shakes Economic Predictions

China’s Export Surprise: A 7.5% Plunge in May Shakes Economic Predictions

South Africa’s Fiscal Policy Crisis: A Cautionary Tale for Future Economists

South Africa’s Fiscal Policy Crisis: A Cautionary Tale for Future Economists

The UK Economy is sick: The Economic Impact of Rising Illness Rates

The UK Economy is sick: The Economic Impact of Rising Illness Rates

Ethiopia to break Up Ethio-telecom’s Mobile Payments Monopoly

Ethiopia to break Up Ethio-telecom’s Mobile Payments Monopoly

Argentina’s Central Bank Hikes Interest Rate to 97%!

Argentina’s Central Bank Hikes Interest Rate to 97%!

China’s Economic Recovery Boosts Sales for U.S. Companies

China’s Economic Recovery Boosts Sales for U.S. Companies

Genies CEO Banks on ChatGPT to Supercharge Productivity and Cut Costs

Genies CEO Banks on ChatGPT to Supercharge Productivity and Cut Costs

Germany’s Controversial Proposal to Subsidise Electricity for Industry

Germany’s Controversial Proposal to Subsidise Electricity for Industry

China’s Green Investment Wave Electrifies Europe’s EV Industry

China’s Green Investment Wave Electrifies Europe’s EV Industry

Debt Ceiling Dilemma: US Economy Teeters on the Brink

Debt Ceiling Dilemma: US Economy Teeters on the Brink

supermarket aisle during panic buying

UK Inflation on a Roll: Record Bread Prices Send Inflation Soaring

Fed Raises Interest Rates (again!) to Combat Inflation

Fed Raises Interest Rates (again!) to Combat Inflation

Climate change

Africa’s Economic Decline: Devastating Impact of Climate Change

Corporation Tax to rise to 25% for the most profitable firms

Corporation Tax to rise to 25% for the most profitable firms

Argentina Inflation hits 100%

Argentina Inflation hits 100%

Biden to propose tax hike on highest earners to fund Medicare

Biden to propose tax hike on highest earners to fund Medicare

Food prices at a 14-year high as the UK battles inflation

Food prices at a 14-year high as the UK battles inflation

Rampant food inflation at a 31 year high in Japan

Rampant food inflation at a 31 year high in Japan

Dark days for the UK economy…

Dark days for the UK economy…

The “mini” budget which is going to have maximum impact

The “mini” budget which is going to have maximum impact

automated container port

Singapore boasts the world’s largest fully automated port

UK prices spiraling upwards as inflation hits 40-year high

UK prices spiraling upwards as inflation hits 40-year high

Monetary easing to free up $188 billion for Chinese banks

Monetary easing to free up $188 billion for Chinese banks

Pakistan registers a Q3 current account deficit of $3.4 billion

Pakistan registers a Q3 current account deficit of $3.4 billion

There could be extreme water scarcity in Egypt this decade

There could be extreme water scarcity in Egypt this decade

China US trade tensions relaxing under Biden Administration

China US trade tensions relaxing under Biden Administration

Pound on a high as over 20% of the UK gets vaccinated

Pound on a high as over 20% of the UK gets vaccinated

China records 2.3% GDP growth in 2020

China records 2.3% GDP growth in 2020

$900 billion COVID-19 relief bill

US Congress passes $900 billion Covid-19 relief bill – so where’s all that cash going?

Japan to lend $414 million to Myanmar for huge infrastructure project and corporate financing

Japan to lend $414 million to Myanmar for huge infrastructure project and corporate financing

an image to show businesses closed down because of the coronavirus

Young people are the worst affected as unemployment creeps up in the UK

South Korea’s economy is outperforming all other OECD members. Here’s why.

South Korea’s economy is outperforming all other OECD members. Here’s why.

an image to show Indian currency when inflation is very high

Cost-push inflation is driving up prices throughout the Indian Economy

an image to show the global economic impact of covid 19

UK hit the hardest amongst the world’s largest economies

The global economic impact of Covid-19

IMF announces that the economic woes of 2020 are likely to be even worse than expected!

Union Jack like the one to be painted on the UK Prime Ministers Plane at a cost of £900,000

£900,000 of taxpayer’s money to be spent on painting the PM’s plane

Australia in recession

An economy down under: Australia facing the prospect of a deep recession

South Africa: an economy in lockdown is an economy in freefall

South Africa: an economy in lockdown is an economy in freefall

an image of a worker in India with a facemark on during Covid-19

Indian economy to shrink for the first time in forty years

an image of Canadian dollars as the economy experiences deflation

Deflation in Canada: why economists will tell you that falling prices is not something to be happy about

an imge to show an empty shopping mall as retail sales plummet in the US

Declining rate of retail sales at a historic low as consumer confidence plummets in the US

an image of New York when the US economy contracted by 4.8%

Coronacrisis in the USA: negative growth and the worst decline since 2008

an image show China's negative economic growth

China’s economy has reduced in size for the first time in decades

an image to show the extent of the global corona-crisis: world economy set to shrink by 3% in 2020

The extent of the global corona-crisis: world economy set to shrink by 3% in 2020

an image of Paris as France enters recession

Coronavirus plunges the French economy into recession

an image of Singapore

Singapore to inject another US$3.6 billion into the economy as coronavirus cases spike

An image of Dhaka in Bangladesh

Over a million clothing workers in Bangladesh have lost their jobs as Covid-19 brings the textile industry to a standstill

An image to show Chinese manufacturing opening up again

The factory of the world is firing up again: China records strong growth in manufacturing activity for March

IB Economics Revision

US senate announces a $2 trillion fiscal stimulus

supermarket aisle during panic buying

We’ve heard about the toilet paper, but what else are people panic buying?

Rishi Sunak

UK government to step in and pay people’s wages

Interest rate in the UK has been cut to lowest in history – what a time to be studying economics!

Interest rate in the UK has been cut to lowest in history – what a time to be studying economics!

Now this is monetary policy: US Federal Reserve is throwing everything it’s got at the coronavirus

Now this is monetary policy: US Federal Reserve is throwing everything it’s got at the coronavirus

Welcome to the bear market: global stocks have had their worst day since the crash of 1987

Welcome to the bear market: global stocks have had their worst day since the crash of 1987

Now is the time to borrow: Bank of England slashes interest rates to 0.25%

Now is the time to borrow: Bank of England slashes interest rates to 0.25%

Lebanon is forced to default on debt as a financial crisis consumes the economy

Lebanon is forced to default on debt as a financial crisis consumes the economy

Here is ten thousand HK dollars… Help kickstart our economy!

Here is ten thousand HK dollars… Help kickstart our economy!

At what cost should the UK balance its budget?

At what cost should the UK balance its budget?

Corona Credit Crunch for many Chinese businesses

Corona Credit Crunch for many Chinese businesses

Consumers in Israel are consuming their way to economic expansion

Consumers in Israel are consuming their way to economic expansion

Global defence spending increasing in an uncertain world

Global defence spending increasing in an uncertain world

Study suggests that one-third of all plant and animal species could be extinct by 2070

Study suggests that one-third of all plant and animal species could be extinct by 2070

When high levels of demand come back to bite: inflation in Ghana continuing its upward trajectory

When high levels of demand come back to bite: inflation in Ghana continuing its upward trajectory

Interest rate in Pakistan to stay at a mighty 13.25%!

Interest rate in Pakistan to stay at a mighty 13.25%!

American productivity bounces back in the fourth quarter of 2019

American productivity bounces back in the fourth quarter of 2019

US government to increase spending on Artificial Intelligence and Quantum Computing

US government to increase spending on Artificial Intelligence and Quantum Computing

Is Argentina the best place to buy a house this year?

Is Argentina the best place to buy a house this year?

Chinese economy could take a US$60 billion hit following the deadly coronavirus outbreak

Chinese economy could take a US$60 billion hit following the deadly coronavirus outbreak

Unemployment levels in Hungary at a record low!

Unemployment levels in Hungary at a record low!

Economic growth slowing down in the Philippines

Economic growth slowing down in the Philippines

UK interest rate looks set for a reduction

UK interest rate looks set for a reduction

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