Guide to IB Economics – An Overview

If you haven’t heard, IB Economics just became tougher. 

The syllabus now covers more sub-topics and essay questions will come from a broader range of topics, requiring a greater ability to interlink them. There are greater demands for multiple real world examples and there is a new policy recommendation question based on data analysis (for HL Economics only). This is why our IB Economics tuition has also received great demand from students in Singapore, Hong Kong, Malaysia and China.

However, it is for this reason that IB Economics is one of the most popular courses for high school students – the course will provide you with highly valuable knowledge and skills. This includes data analysis, writing techniques and critical thinking: abilities that are highly sought after in careers of policy-making, business, and finance.

The syllabus covers microeconomics, macroeconomics, and global economics, essentially focusing on the optimal way scarce resources should be allocated to better our society and the world. A lot of knowledge will be very useful for any careers as well investment decisions that you will likely make in the future.

IB Economics HL vs SL: Which Should You Take?

Whether one should choose to take up Higher Level (HL) or Standard Level (SL) Economics, it boils down to your interest and future career path. The key differences between the two are that HL has a math based Paper 3 and more content covered in the syllabus. HL economics covers deeper and more complicated content, which students with a genuine passion for Economics will find riveting and enjoyably challenging. There is also greater emphasis on mathematical models for HL Economics, thus providing a better foundation for future undergraduate courses in Economics, Finance and Banking. As the SL syllabus consist of less content and fewer Exam papers to prepare for, it allows for students with some interest in economics to enjoy the course without distracting them from intense studying of other IB Subjects.

For more information, check out our article explaining more about the distinctions between HL and SL Economics, along with valuable insights from past IB students’ sharing.

What Is the IB Economics Syllabus? (4 Units, HL & SL)

The syllabus was last updated in May 2022, where the paper 2 and 3 format changed along with some curriculum revisions (which removed certain sub-units and calculations). However, the main bulk of the curriculum remains the same.

There are 4 main units: Introduction to Economics, Microeconomics, Macroeconomics and Global Economy.

Introduction to Economics lays the foundation for the course, covering the basic economic problem of scarcity and choice, opportunity cost, factors of production, and how different economic systems allocate scarce resources.

Microeconomics examines how consumers and firms make decisions in individual markets and contain sub-topics like Market Failure and Market Structure.

Macroeconomics focussed on the national economy, including on aspects such as economic growth, inflation, unemployment, income inequality and government debt. It also covers macroeconomic policies that the government may utilise.

The Global Economy covers theories pertaining to international trade and protectionism, exchange rates as well as Development Economics, which looks into factors that hinder developmental progress of a country and the possible solutions.

To cover all these units, the IB recommends teaching time of 150 hours for SL students, and 240 hours for HL students. With proper school scheduling, this course should run slightly over a year and a half, with the remaining few months used for student revision in preparation for exams.

The syllabus also uses 9 key concepts of Scarcity, Choice, Efficiency, Equity, Economic well-being, Intervention, Sustainability, Interdependence and Change, which are weaved across the 3 units. It is hoped that IB Economics students will develop the knowledge, skills, values and attitudes that will encourage them to act responsibly as global citizens.

What’s New in the 2022 Syllabus?

The new IB Economics syllabus (introduced in 2022 and still current) promises to be even more rigorous than before. Where the old HL syllabus (2013-2021) had 24 subtopics, it now has 31 subtopics. Hence, a lot more content is taught in schools, albeit squeezed into the same number of teaching hours. For example, in the new syllabus, there seems to be a greater emphasis on the historical context of Economics models, as well as the critique of profit-maximising behaviour of consumers and producers, and behavioural economics in action. The exams now also draw across all four units — Paper 1, for instance, previously tested only two.

IB Economics Assessment Objectives (AO1–AO4)

In IB, different subtopics require different levels of understanding (ONE of the four):

AO1 – Knowledge and Understanding (easiest)

AO2 – Application and Analysis 

AO3 – Synthesis and Evaluation (hardest)

AO4 – Selection, Use and Application of a variety of appropriate techniques and skills

IB Economics Exam Format: Papers 1, 2 & 3 Explained

There are 3 Exam Papers for HL Economics and 2 Exam Papers for SL Economics. Paper 1 is the Essays paper. Paper 2 consists of Case-studies or source-based questions. Paper 3, which only applies to HL Econs, consists mainly of mathematical and graphical questions.

For all papers, students must ensure familiarity with common command terms in the questions such as “Discuss”, “Illustrate” and “Evaluate”. For more details, check out our guide on IB Economics Command Terms.

Paper 1 (Essays)

Paper 1 for both SL and HL consists of 3 essay questions—each question having a part A and part B essay that is worth 10 marks and 15 marks respectively. The 3 questions are generally a Micro, Macro and Global question. Students need to only answer 1 Essay question. This paper contributes 20% of a HL student’s overall grade, and 30% for a SL student’s.

Students often find this paper challenging due to the diverse range of essay questions that can be set, especially given the very broad IB syllabus, which contains many topics and concepts. In fact, new essay questions are popping up in the Exams every year, and thus students need to be well-versed with the entire syllabus.

Furthermore, the part B 15 marker question requires the use of relevant real world examples. To fulfil this requirement, students need to be able to cite relevant countries, policies, statistics and years, seamlessly incorporating 2 or 3 examples to strengthen their arguments.

Success in this paper requires:

• Strong theoretical knowledge: An ability to showcase rigorous and sound Economic reasoning including through relevant diagrams.
• Familiarity with real world examples: Must be relevant, appropriate and sufficient.
• Time-management skills: The student needs to finish the entire essay within the allocated 75 minutes
• Clear communication: The student needs to be able to get his/her points across as articulately and concisely as possible, while consistently employing relevant economics terminology. 
• In-depth argumentation: The student needs to constantly be juggling the pros and cons of his/her argument in order to achieve the expected level of evaluation.

You may wish to learn more about how to write an IB Economics essay.

IBO Sample Economics Paper 1 Questions:

1. Explain two tools open to a central bank to conduct expansionary monetary policy. (10)
2. Using real-world examples, evaluate the effectiveness of monetary policy to achieve low unemployment. (15)

Paper 2 (Source-based)

Paper 2 consists of a 2 page long text and tables of data describing the situation of a real-world country, and requiring the student to answer multiple short paragraph questions and a 15 mark guided essay within 105 minutes. Of this, the student can choose to answer 1 out of 2 options.  This paper contributes 30% of an HL student’s overall grade, and 40% of an SL student’s. 

Students may find this paper challenging because it cuts across multiple topics of the syllabus and the 15 marker requires constant linking back to the text and data provided. Success in this paper (aside from the same writing and time-management skills needed for paper 1) requires:

• Strong Conceptual Knowledge across topics: Questions will likely cut across all units – Micro, Macro and Global.
• Data and text analysis: The student needs to be able to draw evidence using the text and data to analyse multiple perspectives involved.
• Understanding of Diagrams: The student needs to almost always use diagrammatic illustrations to answer a short paragraph question to qualify for at least half of the question’s marks.
• Definitions of Terminology: Every paper 2 contains at least 1 or 2 definition questions about any economics term, requiring accurate and comprehensive content knowledge.

IBO Sample Economics Paper 2 Question: 

Using an exchange rate diagram, explain how an increase in the interest rate by the Nigerian central bank may prevent the continued fall in the value of the naira. (4)

Paper 3 (“Math” and “Policy” – Only for HL)

Paper 3 consists of 2 multi-part questions that are mainly quantitatively focused, along with two 10 mark policy recommendation essays. The questions can ask about any calculation or diagram from the whole IB Economics syllabus, and the 10 mark essays require solid evaluation using the data and information provided in the extracts. This paper contributes 30% of an HL student’s overall grade, while SL students unfortunately miss out on writing the paper 3.

Success in this paper requires:

• Knowledge of calculations: Students need to be able to manipulate economic formulas as calculations are a significant part of the Paper 3. The Math knowledge required is actually basic and the main challenge is actually being able to accurately apply the Economics theory involved.
• Argumentation of policies: The student needs to be able to recommend a policy, therefore needing to capture the most convincing pros that directly utilises the text and data provided and show how the pros outweigh the cons and why the policy is superior to others.
• Understand the question:  Students need to avoid common pitfalls like not understanding the question requirement clearly, e.g. whether the question is asking for the percentage rate of increase or the numerical increase. 

The 105 minutes given to answer the questions can pass by quickly for students; thus, students need to effectively schedule their focus before the exam starts. For instance, some students find it easier to finish all the calculations first and then write the 2 policy recommendation questions after. 

IBO Sample Economics Paper 3 Question: 

Using the data provided, and your knowledge of economics, recommend a policy that could be introduced by the government of Country X in response to the expected fall in the world price of coffee. (10)

The IB Economics Internal Assessment (IA), Explained

All IB Diploma subjects consist of a graded Internal Assessment (IA), as a key component of the final subject grade. Every student has to submit 3 IAs across the 3 units of Micro, Macro and Global. Each IA is a 800 word commentary on news articles selected by the student and approved by the school teachers. School teachers will only provide one written feedback session and a limited number of verbal feedbacks. The IA accounts for 20% of an HL student’s grade and 30% of an SL student’s. The school teachers determine the grades although they may be checked and moderated by an external marker.

Success in the IA requires:

• An in-depth news article: Students need to find an article with numerous statistics that assimilate into the policy’s arguments, e.g. if the student is going to argue that taxes are good because of tax revenue, then the article should have a relevant tax revenue statistic
• Clear formatting: Students need to format the IA well to signpost the analysis, the pros and cons, and the short-term long-term evaluation to prove to the teacher why the IA deserves the top-band. 
• Concise wording: Students need to use the very limited 800 words efficiently, highlighting the key points of the article and successfully discussing the pros and cons.

The IA is not written in an exam condition, and each article analysis is usually completed over a span of a few weeks or months. This means that with correct and focused guidance, the IA may almost be considered a “free” full mark. 

For more in-depth information, check out our Guide to IB Economics IA.

IB Economics Extended Essay

The extended essay (EE) is not part of the mandated IB Economics curriculum, but all students are required to select a subject to write an EE in. The 4000 word essay is not an easy task to complete for any subject, thus students choosing to write their EE in Economics need to be confident in their ability to contextualise theory and hold genuine intrigue in investigating an Economics topic. This EE will not contribute to your IB economics grade, but will be graded along with the TOK to gain the additional 3 points for the full 45 points.

For more information and advice on the EE, refer to our separate article on a Guide to IB Economics Extended Essay.

How to Study for IB Economics: 3 Proven Strategies

Any top IB Economics student requires a diverse range of skills. To prepare for this, students must learn how to expertly juggle memorisation, mathematical application, and logical reasoning on top of having all the Economics knowledge and understanding. Here are some tips used by successful students that quickly helped them bolster their grades: 

1. Active Recall

Active recall is now indisputably more effective in helping students internalise the content for a longer time than passive recall. The key difference between the two is that passive recall involves simply reading or watching the content, while active recall is forcing your mind to immediately utilise the content just learned through quizzes or practice. 

However, setting up your economics notes to fit an active recall model may not always be so convenient. Students are encouraged to put notes into online flashcards, or better yet, speak out their notes. To achieve this, simply read through a page of your notes, and then speak out what you remember onto a new page without referencing any other material. Then mark your new page to see if you have missed out any content, and repeat the process. One way this can be applied is by formatting your real world examples to be Country, Context, Pros, and Cons. Try to recall these 4 characteristics of your example. This way, in the exam hall you can easily recite your real world examples and not miss out on any relevant content by remembering to write down the country, context, pros, and cons.

2. Mind-maps and Infographics

To productively revise, you will need to create short and condensed notes jam-packed with all the relevant information. The last thing you want happening is furiously flipping through pages of a textbook 5 minutes before the exam starts. Infographics are a great way to solve this: one or two pages about a topic filled with everything needed to be known. 

In addition, mindmaps are a great tool to remember the interlinking nature of economic topics, helping you to easily recall the top-tier analysis points in the exam hall. Instead of writing essay plans when revising, try using a mindmap instead to chart out your essay. This will help you to clearly lay out the alternative policies, the evaluations, and the connections to the other economic units. 

Creating such notes can be an effective way to use active recall, but is unrealistic due to the long time taken to generate notes about every single topic. This is why our IB Econs tuition has completed this step for you! We provide mind maps and infographics for your easy referral, along with continuous practice and annotations relating to these notes for you to still enjoy the benefits of active recall.

3. Practice, Practice, Practice

It goes without saying that practice makes perfect. There is no way to see how effective your studying has been without testing yourself through practice. Nearing the exam season, it is advisable to create a table with all of your self tests, marking down your score and which topics you are uncertain about. This way you can easily pinpoint what content needs to be revised further. 

The best way to practice is by doing past IB papers within a self-monitored exam condition. However, marking your own essays can be challenging, and school teachers will be busier and busier as exams draw closer. Our IB Economics tuition is the clear solution, as students consistently practice in and out of class weekly with tailored feedback for every student. We also offer 2 workbooks filled with every possible Paper 3 question to help students familiarise themselves with the numerous economic calculations and related concepts. 

For more in depth tips and tricks, read our article on How to Score a 7 in IB Economics.

What ex-IB Economics Students Wish They knew

We asked some IB Diploma graduates: What could you have improved on if you had to do it all again? Here are their responses:

• Multiple real world examples are a must for top marks – Utilising 3-4 real world examples per paper 1 easily shows you are a well-versed Economist
  
• Start using real world examples immediately – There is no time restraint on how long ago your real world examples need to be. Start using your selected real world examples as soon as you can, this will help build up the long term memory that prevents you from blanking out during the exam, and help you gain continuous feedback on how to perfect your analysis on your selected real world examples
  
• Diagrams save time – A well-labelled and correct diagram gives you half the marks for all 4 mark diagram questions. Diagrams are also often self explanatory, they will help guide you to the correct analysis
  
• The IB Economics syllabus is vague – IB does not tell you exactly what to study. There are multiple diagrams or analysis that can be left out of your school’s textbook as they may be deemed too high-level, but it is this content that wows your examiners and helps you score high marks. (Content like Engel’s curve, Dutch Disease, Laffer’s curve)
  
• Definitions are formulaic – All definition questions have 2 marks. This means that there are often 2 aspects to the defined word that you have to know (e.g. common access resources need to be described as both rivalrous and non-excludable). Once realising this, notes for definitions can be shorted immensely which will increase their effectiveness, or you can use logic to figure out the 2 aspects of a definition you may not know in the exam hall (something as simple as the lesser this word is = more this effect is, can even get you 1 mark)
  
• Finding the right IA article is the whole struggle – A good IA article should be overflowing with statistics and consequences of a policy, without spelling out the analysis for you. To find such articles, lead with the policy. For instance, find out how you will evaluate a tax first, then find an article that will substantiate your evaluation (e.g. if tax revenue is a point you wish to make, then find articles that talk about tax revenue and what it will be allocated towards)
  
• Don’t procrastinate on the IA – The IAs can easily slip up your mind when swamped up in IB work. Do your IAs early so you have plenty of time to perfect your IA with peer and teacher feedback.
  
• Paper 3 Calculations are predictable – There are only so many calculations that can be asked for paper 3. With continuous practice using the right material, paper 3 will be the guaranteed paper to boost your grade.

Conclusion

We hope this guide has given you all the necessary information needed to help you make the necessary decisions to achieve your desired score for the IB Economics exams. Recognised as possibly the best IB Economics Tuition available, where most students achieve their 7 for IB Econs, students from not only Singapore but as far as New Zealand, Hong Kong and the UK attend lessons with us. Our IB Economics Study Guides and Model Essays are also in demand globally, including by IB Schools and IB Economics Teachers.

“Fortunately, under Mr Hong, I was able to brush up on the skills and techniques to ace IB Economics. I think what was extremely helpful was his style of teaching and learning. This ensured that every student will have an opportunity to voice their thoughts about a question posed and he would address any misconception right away, benefiting the other students who could learn from the mistake of others. His timely timed practices before major examinations in school and also before the IB exams were also helpful in allowing our minds to adjust to exam conditions so that we could perform our best during exams. Without Mr Hong’s help, I doubt I would be able to get a 7 for Economics so thank you Mr Hong!”

Gabrielle Cheong, ACS Indep

“The notes in the books are very clear and concise. I find them easier to learn than from the textbook. There are also model answers for IB Paper 1 & 2 questions, which I tend to struggle with. I have now gained a greater understanding of how to structure my answers and how to use the real world examples. The books have been extremely useful.”

Luth Gafoor, SJI International

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