IB Diploma Programme Economics SL, Unit 1 Introduction to economics (first assessment 2022). Unit 1 is common to SL and HL; SL sits Papers 1 and 2 plus the portfolio (no Paper 3). This topic covers syllabus sections 1.1 and 1.2 in full: what economics is (scarcity, choice, the economic agents, positive and normative statements) and how economists approach the world (the scientific method, economic models, the ceteris paribus assumption, and the nine key concepts that frame the whole course). Worked numbers are original and re-derived below.

Must-know for Unit 1:

Economics 经济学 studies the choices made by economic agents — CONSUMERS, PRODUCERS and the GOVERNMENT (joined later by the rest of the world) — under scarcity 稀缺性: unlimited wants against finite resources. Because resources are scarce, every choice has an opportunity cost 机会成本 — the next-best alternative forgone — and the basic economic questions are what to produce, how to produce it, and for whom. A student's hour spent revising economics cannot also be spent at work; a government budget spent on hospitals cannot also build schools. Economic resources 资源 (the factors of production) are land, labour, capital and enterprise, and each earns a reward — rent, wages, interest and profit.

The distinction that runs through every Paper 2 data response: a POSITIVE statement is testable against evidence ("the inflation rate fell to 3%"), while a NORMATIVE statement carries a value judgement ("inflation should be lower"). Economists can disagree about values while agreeing about facts, and exam answers must keep the two apart.

Worked example. A government has 10 billion to spend and can build one hospital (benefit valued at 10 bn) or two schools (benefit valued at 7 bn). Choosing the hospital has an opportunity cost of the two schools' 7 bn of benefit; the choice is rational if the hospital's benefit exceeds that of the best alternative forgone.

Economics follows the scientific method 科学方法: observe, form a hypothesis, build a model 模型 — a simplified representation of reality (demand curves, production possibility frontiers, circular flow) — make predictions, and test them against data, revising the model when it fails. Models deliberately simplify: their value is explanation and prediction, not photographic realism. The ceteris paribus 其他条件不变 assumption ("all other things equal") lets the economist isolate one relationship at a time — how quantity demanded responds to price, holding income and tastes fixed — the same discipline used in every later unit.

IB economics frames the whole course through nine key concepts 核心概念: SCARCITY and CHOICE (the underlying problem), EFFICIENCY and EQUITY (how well and how fairly resources are used), ECONOMIC WELL-BEING and SUSTAINABILITY (outcomes now and for the future), CHANGE, INTERDEPENDENCE (agents and nations linked through trade and markets) and INTERVENTION (when and how governments act). Every real-world issue the syllabus examines — and every portfolio commentary — is analysed through these lenses.

Worked example. A tuition subsidy is a model question: the hypothesis is that lower fees raise enrolment; the model (demand) predicts enrolment rises when price falls, ceteris paribus; the test compares enrolment before and after, or across regions with and without the subsidy; a mismatch (say, enrolment flat because incomes also fell) sends the economist back to re-specify the model — the method in one loop.

• Economics defined through scarcity and choice; the three (later four) economic agents (1.1).
• Opportunity cost applied to consumers, producers and government (1.1).
• Resources/factors of production and their rewards (1.1).
• Positive versus normative statements, with the disagreement insight (1.1).
• The scientific method loop: hypothesis → model → prediction → data test → revision (1.2).
• Models as deliberate simplifications; ceteris paribus and what it isolates (1.2).
• The nine key concepts framing every unit; in Paper 1 name the concept, then the theory (1.2).

IB Diploma Programme Economics SL, Unit 2 Microeconomics (first assessment 2022). This topic covers the SL content of syllabus sections 2.1–2.7 in full: demand, supply, competitive market equilibrium, the critique of maximizing behaviour, elasticity of demand and supply, and the role of government in microeconomics. One shared market model runs through the worked examples: demand $Q_d = 140 - 2P$ and supply $Q_s = 20 + 4P$, equilibrium $P = 20$, $Q = 100$ — the same numbers used across the Edexcel drives. At SL the model is read as a DIAGRAM: the values quoted below are taken from it, and solving the functions algebraically belongs to HL Paper 3.

Must-know for this topic:

Demand 需求 is the quantity consumers are willing AND able to buy at each price over a period (2.1). The demand curve slopes downward — the LAW of demand — explained by DIMINISHING MARGINAL UTILITY: each extra unit gives less additional satisfaction, so a lower price is needed to justify it. A change in the good's own price MOVES ALONG the curve; shifts follow income (normal/inferior), the prices of substitutes and complements, tastes, expectations and the number of consumers. CONSUMER choice theory (2.4's critique): the rational, utility-maximising consumer is a simplification — bounded rationality, herd behaviour, framing and imperfect information bend real choices, and BEHAVIOURAL economics supplies the evidence.

Supply 供给 is the quantity producers are willing AND able to sell at each price (2.2); higher prices make production profitable, so the curve slopes upward. Own-price changes move ALONG; shifts follow costs of production, technology, indirect taxes and subsidies, and the number of sellers. The profit-maximising producer assumption (2.4 again) is also a simplification — satisficing, corporate social responsibility and stakeholder aims bend it.

Equilibrium (2.3) is where the curves cross, $Q_d = Q_s$: on the diagram $P^* = 20$, $Q^* = 100$. At $P = 12$ the diagram shows $Q_d = 116$ against $Q_s = 68$: excess demand of 48 — the price is bid up; at $P = 25$, $Q_s = 120$ against $Q_d = 90$: excess supply of 30 — the price is pushed down. The market's self-correction is the "invisible hand" allocating resources by price signals, rationing and incentives.

Welfare: consumer surplus 消费者剩余 is the area below the demand curve above price; producer surplus 生产者剩余 the area above supply below price. At equilibrium here: $CS = \tfrac12 \times 100 \times (70 - 20) = 2500$ and $PS = \tfrac12 \times 100 \times 20 = 1000$. Allocative efficiency 配置效率 holds where $P = MC$ — the competitive equilibrium in the absence of externalities — and the SUM of the surpluses (social surplus) is then maximised. Any price away from equilibrium creates deadweight loss.

Price elasticity of demand 需求价格弹性 (2.5): $PED = \tfrac{\%\Delta Q_d}{\%\Delta P}$. On the shared model at $P = 20$: price rising to 22 moves $Q_d$ from 100 to 96, so $PED = \tfrac{-4\%}{+10\%} = -0.4$ — inelastic. The TOTAL REVENUE test: TR $= P \times Q$ rises from 2000 to 2112 when price rises, confirming inelastic demand; TR peaks (unitary PED) at $P = 35$, $Q = 70$, TR $= 2450$. PED depends on substitutes, necessity, the share of income and time. Along a straight-line demand curve PED is NOT constant: it is elastic on the high-price stretch and inelastic on the low-price stretch, so the TR test gives different answers at different points. Firms use PED to set prices; governments use it to predict tax revenue.

Price elasticity of supply 供给价格弹性 (2.6): $PES = \tfrac{\%\Delta Q_s}{\%\Delta P}$; price 20 → 24 moves $Q_s$ 100 → 116, so PES $= +0.8$. PES depends on spare capacity, stocks, factor mobility and time. IB applications: primary commodities tend to have INELASTIC supply (growing periods, perishability) and often inelastic demand (necessities) — so small demand shifts cause LARGE price swings, the volatility that commodity exporters suffer.

Income elasticity of demand (2.5): YED $= \tfrac{\%\Delta Q_d}{\%\Delta \text{income}}$ — positive for normal goods, negative for inferior goods, above 1 for luxuries. Firms use YED to forecast demand over the business cycle; for the economy it explains why the primary sector (low YED) shrinks relative to services (high YED) as incomes grow.

Government intervenes (2.7) when markets fail or on equity grounds. Indirect taxes 间接税: a specific tax of 6 shifts supply vertically up by 6; on the shared diagram the consumer price rises to 24, quantity falls to 92 and producers keep 18 — consumers pay 4 more, producers receive 2 less, revenue $6 \times 92 = 552$ per day, and incidence follows relative elasticity (demand at $-0.4$ is the inelastic side, so consumers bear more). Subsidies 补贴 (6 per unit) reverse the shift: $P_c = 16$, $Q = 108$, cost $6 \times 108 = 648$. Price controls: a maximum price 最高价格 at 16 creates excess demand $108 - 84 = 24$ (rationing, queues, black markets); a minimum price 最低价格 at 24 creates excess supply $116 - 92 = 24$ (the government may have to buy the surplus). Quantity controls (quotas) restrict supply directly. Every intervention answer weighs the correction against unintended consequences — the Unit-1 key concepts (intervention, efficiency, equity) are the framing.

• Demand definition, the law from diminishing marginal utility, movements vs shifts (2.1).
• Supply definition, movements vs shifts (2.2).
• Equilibrium (20, 100) read from the diagram; excess demand 48 at 12; excess supply 30 at 25; the invisible hand (2.3).
• The critique of maximizing behaviour: bounded rationality, herding, framing for consumers; satisficing and CSR for producers (2.4).
• PED with the −0.4 calculation and the TR test (2000 → 2112 → 2450); determinants; elastic and inelastic stretches of a straight-line demand curve (2.5).
• PES +0.8 with determinants; commodity volatility from double inelasticity (2.6); YED classifications and the sector shift (2.5).
• Consumer/producer surplus (2500/1000); allocative efficiency at P = MC; social surplus (2.3).
• Government (2.7): tax of 6 (price 24, quantity 92, revenue 552, incidence 4:2); subsidy of 6 (price 16, quantity 108, cost 648); maximum price 16 (shortage 24); minimum price 24 (surplus 24).

Boundary notes: SL sits Paper 1 (essays) and Paper 2 (data response), not Paper 3 — so elasticity from percentage changes is examinable, while solving linear functions and computing incidence areas is HL. Paper 1 essays want a diagram, definitions and evaluation of government failure against market failure; Paper 2 wants the case data read into the diagram. The nine key concepts (intervention, efficiency, equity) frame the policy questions. All worked numbers are original on the shared model.

IB Diploma Programme Economics SL, Unit 2 Microeconomics (first assessment 2022). This topic covers syllabus sections 2.8 (market failure — externalities and common pool or common access resources) and 2.9 (public goods) in full, and the market's inability to achieve equity (listed as 2.12; at SL the same ground is assessed through 3.4, the economics of inequality and poverty). The externality model reuses the shared curves in inverse form — demand (marginal private benefit) $P = 70 - Q/2$, supply (marginal private cost) $P = Q/4 - 5$, market equilibrium $(100, 20)$ — with an external cost or benefit of 6 per unit. At SL the model is read as a labelled DIAGRAM; the areas quoted are illustrative, and computing them is HL Paper 3.

Must-know for this topic:

An externality 外部性 is a cost or benefit falling on a THIRD PARTY not involved in the transaction (2.8). Negative production externalities — pollution, congestion — put the marginal social cost 边际社会成本 MSC above MPC; positive consumption externalities — vaccination, education — put the marginal social benefit 边际社会效益 MSB above MPB. The market trades at $(100, 20)$ where MPB $=$ MPC; with an external cost of 6 per unit, MSC $=$ MPC $+ 6$ crosses MSB at $(92, 24)$ — the market OVER-produces by 8 units and the deadweight welfare loss is $\tfrac12 \times 8 \times 6 = 24$ per day. With an external benefit of 6 on consumption, the social optimum moves to $(108, 16)$ — the market UNDER-consumes by 8, again sacrificing 24 of welfare. Diagrams label MPB/MSB and MPC/MSC and shade the welfare-loss triangle between the curves over the gap — the drawing earns the marks.

Policy responses follow the diagnosis: a Pigouvian TAX equal to the marginal external cost (6 here) shifts MPC to the social optimum; a SUBSIDY equal to the marginal external benefit does the reverse; regulation caps the quantity; tradable permits fix the total and let the market find the price. Common pool or common access resources 公共资源 (also 2.8) — fisheries, groundwater, the atmosphere — are RIVAL but NON-EXCLUDABLE: each user imposes costs on the others, so without property rights or quotas the resource is over-used (the tragedy of the commons), and sustainability — a Unit-1 key concept — frames the long-run evaluation.

A public good 公共物品 (2.9) is NON-RIVAL (one person's consumption does not reduce another's) and NON-EXCLUDABLE (no one can be stopped from using it): street lighting, national defence, flood control. Non-excludability creates the free-rider problem 搭便车问题 — everyone can benefit without paying, so no private firm can collect revenue, so the market UNDER-provides or does not provide at all. The state provides public goods from taxation, valuing them at society's willingness to pay. The contrast pair: common pool resources are non-excludable but RIVAL (each fish caught is gone); public goods are non-excludable AND non-rival — the two exam cases travel together.

Markets reward scarcity of resources, not need (2.12): the price mechanism answers "for whom?" by willingness and ability to pay, so market outcomes can be efficient yet grossly UNEQUAL — the equity 公平 half of the efficiency-equity key-concept pair. IB measures: the LORENZ CURVE plots cumulative income against cumulative population (from the poorest); the GINI COEFFICIENT — area between the equality line and the Lorenz curve over the whole triangle — runs from 0 (perfect equality) to 1 (one person takes all). Original example: quintile shares $5, 10, 15, 20, 50$ percent give a Lorenz curve through $(20,5), (40,15), (60,30), (80,50)$; the area under it is $3000$ of the $10000$ square, so Gini $= 1 - 2 \times 0.30 = 0.40$. Poverty 贫困 may be ABSOLUTE (basic needs unmet) or RELATIVE (deprivation against the social norm). Responses: progressive taxation, transfer payments, and access to education and health — each weighing equity gains against incentive and efficiency costs, the trade-off every Paper-1 essay must evaluate. The Gini arithmetic shown is a reading aid; SL is asked to interpret the coefficient and the curve, not to compute areas.

• Externality definition; MSC/MSB with the $(100,20) \to (92,24)$ negative-production and $(108,16)$ positive-consumption optima; welfare loss 24 in each direction (2.8).
• Pigouvian tax and subsidy at the marginal external cost/benefit; regulation; tradable permits (2.8 policy, labelled diagrams).
• Common pool or common access resources: rival + non-excludable, tragedy of the commons, sustainability (2.8).
• Public goods: non-rival + non-excludable; the free-rider problem and non-provision; state provision (2.9).
• The market's "for whom" answer and its equity failure; Lorenz curve and Gini read at 0.40; absolute vs relative poverty; the three redistribution instruments and their trade-offs (2.12; SL assesses this through 3.4).

Boundary notes: SL Paper 1 essays on market failure want the labelled diagram (MPB/MSB/MPC/MSC, both optima, the shaded triangle), a policy with its mechanism, and evaluation of government failure against the market failure it corrects. The key concepts sustainability, equity, efficiency and intervention frame this whole topic. All worked numbers are original on the shared model.

IB Diploma Programme Economics SL, Unit 3 Macroeconomics (first assessment 2022). This topic covers the SL content of syllabus sections 3.1–3.7 in full: measuring economic activity and illustrating its variations, aggregate demand and aggregate supply, macroeconomic objectives, the economics of inequality and poverty, monetary policy, fiscal policy and supply-side policies. One shared macro model runs through the worked examples — AD $P = 90 - Y/2$ against SRAS $P = 20 + Y/2$, equilibrium $(70, 55)$ — with the CPI arithmetic from the earlier drives. At SL the model is read as a DIAGRAM; the Keynesian multiplier, the natural rate of unemployment and the deflator algebra are HL extensions and are left out.

Must-know for this topic:

Gross domestic product 国内生产总值 (3.1) is the value of all final goods and services produced within a country in a period — measurable by the output, income or expenditure approach (they agree in principle). NOMINAL GDP uses current prices; REAL GDP removes price changes with the GDP deflator (illustration: nominal index 112 at deflator 108 is real 103.7 — the algebra is HL, the idea is SL); per head divides by population. GDP PER CAPITA is a headline welfare proxy with limits (non-market activity, distribution, environmental damage, price differences), which is why the IB pairs it with alternative indicators — the OECD Better Life Index, the Happiness Index and the Happy Planet Index — that add health, education and the environment to income. The business cycle 经济周期 (also 3.1) illustrates short-run fluctuations around the trend: recovery → boom → recession → trough; each stage moves growth, inflation and unemployment together.

Aggregate demand 总需求 (3.2) $= C + I + G + (X - M)$; the components follow disposable income and confidence (consumption), the interest rate and expectations (investment), the budget (government spending) and incomes, exchange rates and world demand (net exports). The AD curve slopes down with the price level (wealth, interest-rate and trade effects); a price change MOVES along, a component change SHIFTS. Illustration: with $C = 60$, $I = 20$, $G = 20$ and $X - M = 0$, AD $= 100$.

Aggregate supply 总供给: short-run AS rises with the price level; the LONG run divides the schools — the KEYNESIAN range is flat with spare capacity then curves up to full employment; the MONETARIST (classical) AS is vertical at the natural level of output, so demand-side policy moves only prices. On the shared model AD meets SRAS at $(70, 55)$; a demand injection shifting AD up 15 gives the new equilibrium $(85, 62.5)$ — more output AND a higher price level; against a vertical LRAS the same shift only raises prices. Shifters of LRAS: technology, productivity, education, labour-force growth, institutional quality.

The two long-run views give the two policy camps: with spare capacity the Keynesian reads a demand injection as output gained at little inflation cost; the monetarist reads the same injection as inflation with no lasting output gain, and sends the government to supply-side policy instead. Every Paper 1 macro essay chooses its diagram with this in mind.

The objectives (3.3): LOW unemployment 失业 (measured by the ILO definition; types cyclical, structural, seasonal, frictional; costs to the individual, society and the economy); LOW AND STABLE inflation 通货膨胀 (the CPI basket: weights 50/30/20 over relatives 110/100/120 gives CPI $= 109$, inflation 9%; demand-pull vs cost-push); EQUITY IN THE DISTRIBUTION OF INCOME (3.4 pairs here — the Lorenz curve and Gini with the quintile 5/10/15/20/50 calculation of 0.40, absolute vs relative poverty, and the equity-efficiency trade-off); and ECONOMIC GROWTH (rising real GDP, shown as an outward PPC or a rightward LRAS, with its consequences for living standards, the environment and equity). The objectives CONFLICT: low unemployment against low inflation, growth against environmental sustainability, growth against equity — every objective answer names the conflict and evaluates it. A sustainable level of government debt is the HL-only objective.

Monetary policy 货币政策 (3.5) is the central bank's management of interest rates and the money supply: higher rates raise borrowing costs, cut consumption and investment, cool demand and inflation (and appreciate the currency). QE adds money when rates are near the zero bound; the equity of distributional effects is the standard critique. A rate cut works through the same mechanism in reverse — the SAM India anchor (6.5% → 6.25%) shows a 25-point cut supporting demand.

Fiscal policy 财政政策 (3.6) uses government spending and taxation: expansionary (more spending, lower taxes) shifts AD right; contractionary does the reverse. The BUDGET balance divides into the structural deficit (persists at full employment) and the cyclical deficit (varies with the cycle); automatic stabilisers (taxes falling, benefits rising in recessions) dampen fluctuations without discretion. Debt and deficits raise sustainability and intergenerational-equity concerns; time lags and political pressures are the standing constraints.

Supply-side policies 供给侧政策 (3.7) shift LRAS right: education and training, infrastructure, deregulation and privatisation, lower taxes on work and investment, labour-market reform. On the shared model, LRAS from 85 to 105 along AD cuts the price level from 47.5 to 37.5 while output RISES — growth with disinflation, the contrast the IB wants drawn against demand management.

• GDP by the three approaches; nominal vs real (the deflator idea); per capita; welfare limits and the three alternative indicators; the business cycle's four stages (3.1).
• AD = C + I + G + (X − M) with each component's shifter; movements vs shifts (3.2).
• SRAS; the Keynesian vs monetarist long run; LRAS shifters (3.2).
• The objectives: ILO unemployment with its four types and costs; CPI 109 → 9% with both causes; growth and its consequences; the conflicts between objectives (3.3).
• Inequality and poverty: Lorenz/Gini 0.40; absolute vs relative; equity-efficiency (3.4).
• Monetary policy: the interest-rate mechanism, QE, distributional critique; the India 6.5 → 6.25 anchor (3.5).
• Fiscal policy: the AD shift; structural vs cyclical deficits; automatic stabilisers; debt and lag constraints (3.6).
• Supply-side: the six instruments; LRAS 85 → 105 cutting prices from 47.5 to 37.5 with rising output (3.7).

Boundary notes: SL sits Papers 1 and 2 only; the multiplier, deflator and AD/AS algebra are HL Paper 3. Paper 1 macro essays want a labelled AD/AS diagram, the transmission mechanism named link by link, and evaluation of trade-offs and lags — the key concepts change, interdependence and intervention frame it. All worked numbers are original or SAM-adapted as labelled.

IB Diploma Programme Economics SL, Unit 4 The global economy (first assessment 2022). This topic covers the SL content of syllabus sections 4.1–4.10 in full: the benefits of international trade, types of trade protection, the arguments for and against trade control, economic integration, exchange rates, the balance of payments, sustainable development, measuring development, barriers to growth and development, and development strategies. The trade model reuses the shared curves at a world price of 12 and the exchange model sits at 5 domestic per foreign currency. At SL both are read as DIAGRAMS: the tariff arithmetic, the comparative-advantage calculations, the Marshall–Lerner condition, the J-curve and the terms of trade are HL extensions and are left out.

Must-know for this topic:

The benefits of trade (4.1): free trade 自由贸易 — trade without government barriers — lets each country specialise in what it produces most cheaply and import the rest. The SL list of gains: increased competition driving efficiency, lower prices for consumers, greater choice and variety, access to resources and larger markets, economies of scale, more efficient resource allocation and faster growth (the comparative-advantage theory behind the gains is the HL extension). Types of trade protection 贸易保护 (4.2): tariffs 关税 (import taxes), quotas 配额 (quantity limits), SUBSIDIES to domestic producers, and administrative/technical barriers. The tariff on the shared diagram: at the world price 12 imports are 48; a tariff of 4 raises the domestic price to 16, imports fall to 24 and domestic output rises; the diagram shows the revenue rectangle on the imports that remain and the two welfare-loss triangles — the labelled DIAGRAM is the SL requirement, the arithmetic is Paper 3.

The arguments (4.3): FOR protection — infant industries, protection of domestic employment, anti-dumping, national security, revenue for developing states, diversification; AGAINST — higher consumer prices, retaliation and trade wars, inefficiency behind the wall, rent-seeking. The IB evaluation always weighs short-run protection against long-run comparative advantage. Economic integration 经济一体化 (4.4) deepens in stages — free-trade area, customs union, common market, economic and monetary union — trading trade creation against trade diversion; the WTO polices the multilateral rules.

The exchange rate 汇率 (4.5) is the price of one currency in another, set by demand and supply: interest rates, speculation, and the imports/exports of goods and services. The model: demand meets supply at 5 domestic per foreign currency; import-demand growth shifts demand right and the rate moves to 6.5 — a depreciation 贬值 (import prices rise in domestic currency and export prices fall abroad, so net exports tend to improve while import-cost inflation rises — the current-account effect depends on demand elasticities, an HL extension). Fixed systems revalue or devalue by policy; floating systems appreciate or depreciate by the market.

The balance of payments 国际收支 (4.6) records all transactions with the rest of the world: the CURRENT ACCOUNT (goods and services, primary and secondary income) and the CAPITAL AND FINANCIAL ACCOUNTS; the accounts balance overall, so a current-account deficit is matched by net financial inflows — borrowing abroad or selling assets. A persistent deficit can be corrected by expenditure-SWITCHING policies (depreciation of the currency, trade protection) or expenditure-REDUCING policies (deflating demand); each route carries its own cost, and supply-side competitiveness is the long-run answer — the SL evaluation pairs them.

Sustainable development 可持续发展 (4.7) meets present needs without compromising future generations — the intergenerational equity that GDP ignores and the key concept sustainability frames. MEASURING DEVELOPMENT (4.8): GDP per head (Purchasing Power Parity adjusted), the Human Development Index 人类发展指数 (education, health and income in one geometric mean), and complements such as health, education and gender measures; each indicator hides distribution. BARRIERS (4.9): the savings gap (domestic saving too small to fund the investment growth needs), primary-product dependency, debt, capital flight, corruption and poor governance, geographical isolation, and the poverty trap (low income → low savings → low investment → low growth, the circle that locks the lowest-income countries out of growth). STRATEGIES (4.10): trade liberalisation and export promotion, FDI and multinational investment, aid and debt relief, microfinance, human-capital development and infrastructure — each evaluated for dependency, sustainability and equity; the IB pairs every strategy with the barriers it targets.

• Free trade and the SL gains list — competition, prices, choice, scale, resources, growth (4.1).
• Tariffs, quotas, subsidies, administrative barriers; the tariff diagram read off (imports 48 → 24) with the revenue rectangle and welfare-loss triangles labelled (4.2).
• The protection arguments both ways; integration's four stages with trade creation vs diversion; the WTO (4.3–4.4).
• Exchange-rate determination at 5; depreciation to 6.5 with its price effects; revaluation vs appreciation (4.5).
• Balance of payments structure; current vs capital/financial accounts; financing a deficit; expenditure-switching vs expenditure-reducing correction (4.6).
• Sustainable development and intergenerational equity (4.7).
• Measuring development: PPP GDP per head, HDI's three components, the complements (4.8).
• Barriers: savings gap, primary-product dependency, debt, capital flight, governance, geography, the poverty trap (4.9).
• Strategies: liberalisation, FDI, aid, debt relief, microfinance, human capital, infrastructure — each with the barriers it targets (4.10).

Boundary notes: SL sits Papers 1 and 2 only; the tariff, exchange-rate and terms-of-trade arithmetic belong to HL Paper 3. Paper 1 essays want the labelled diagram, the mechanism, and evaluation against the key concepts (interdependence, sustainability, equity, intervention). All worked numbers are original on the shared models.