- The increased interdependence of economies has benefits and costs.
- Increased economic integration may result in efficiency, welfare gains and improvements in economic well-being but the benefits may not result in equity.
- Perceptions of the meanings of development and equity change over time and vary across cultures.
- Governments and other economic agents may intervene in an attempt to promote economic well being and equity in societies.
- The pursuit of sustainability is subject to various constraints.
- Effective strategies should take account of the relevant social, economic, and political context.
Key concepts: scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence, intervention.
|Benefits of International Trade||>> Benefits of International Trade;|
>> Absolute & Comparative advantage;
>> Limitation of the theory of comparative advantage.
|Types of Trade Protection||>> Tariffs;|
>> Subsidy/ Export Subsidy;
>> Administrative barriers.
|Arguments for & against Trade protection||>> Advantages of trade protection;|
>> disadvantages of trade protection;
>> Free trade vs Trade Protection.
|Economic Integration||>> Preferential Trade Agreements;|
>> Trading blocs;
>> Advantages & disadvantages of trading blocs;
>> Monetary Union;
>> World Trade Organization.
|Exchange rates||>> Floating exchange rates;|
>> changes in demand & supply for a currency;
>> Consequences of changes in exchange rate on economic indicators;
>> Fixed Exchange Rate;
>> Managed exchanged rates.
|Balance of Payments||>> Balance of payment;|
>> components of balance of payment;
>> Interdependence between the accounts;
>> Relationship between current account & exchange rate;
>> relationship between financial account & exchange rate;
>> Implications of a persistent current account deficit;
>> Methods to correct a persistent current account deficit;
>> Implications of a persistent current account surplus.
|Sustainable Development||>> Meaning;|
>> Sustainable Development Goals;
>> Relationship between sustainability and poverty.
|Measuring Development||>> The multidimensional nature of economic development;|
>> Single indicators;
>> Composite indicators;
>> Strengths and limitations of approaches to measuring economic development;
>> Possible relationship between economic growth and economic development.
|Barriers to economic growth||>> Poverty traps/poverty cycles;|
>> Economic barriers;
>> Political & Social barriers;
>> Significance of different barriers to economic growth and/or economic development.
|Economic growth and/or economic development strategies||>> Strategies to promote economic growth;|
>> Strengths and limitations of strategies for promoting economic growth;
>> Strengths and limitations of government intervention versus market-oriented approaches to achieving economic growth and economic development
Inquiry—possible areas to explore
- The impacts of changes in the exchange rate on different stakeholders and the economy, for a chosen country.
- Why a government chooses to manage the exchange rate, for a chosen country.
- Methods a government uses to manage its exchange rate and why, for a chosen country.
- The patterns of current account deficits/current account surpluses for different countries.
- The patterns of economic development for countries in a region, using selected data.
- The relationship between economic growth and development, for chosen countries.
- The impact of a poverty reduction strategy, for a chosen country.
- The impacts of FDI in a chosen country on economic growth and development.
- The impacts of a microfinance project/debt relief/health programme/education programme in a chosen country/region.
Theory of knowledge questions
- Free trade is advocated on the grounds that it leads to greater efficiency. Yet it results in both winners and losers. Do economists have a moral responsibility toward the losers when they advocate free trade?
- To what extent would increased economic integration ever be considered undesirable?
- Is it ethically sound for economically developed countries to demand that less developed countries remove their trade barriers in the interests of free trade when they continue to provide income support to their farmers? Can one country know what is right for another to do?
- To what extent does possession of knowledge carry with it an ethical responsibility?
- Economic development draws from a set of values set out by Denis Goulet in 1971 (life sustenance, self-esteem and freedom). Does this make the pursuit of economic development unscientific?
- What knowledge questions might be encountered in constructing a composite indicator to measure development?
- Are the values on which development is based universal or do they depend on culture? Are there some goals among the Sustainable Development Goals that may not be acceptable to some cultures?
- Do economically more developed nations have a moral obligation to assist economically less developed nations, such as through foreign aid or World Bank lending? What criteria should economists use to make such judgments?