Real-world examples are the backbone of a successful Internal Assessment (IA) in IB Economics. They provide the context needed to apply economic theory, demonstrate your understanding, and earn top marks. However, choosing the right examples and integrating them effectively can be challenging. In this guide, we’ll explore how to find, evaluate, and use real-world examples to create top-scoring commentaries.
1. Why Are Real-World Examples Important?
IB Marking Criteria
Application (3 marks): Examiners assess your ability to connect economic theory to real-world scenarios.
Evaluation (3 marks): Using examples supports your evaluation by grounding your arguments in practical evidence.
Benefits of Using Examples
Demonstrates Depth of Understanding: Real-world data shows you can apply theory in practice.
Adds Credibility: Specific examples make your analysis and evaluation more convincing.
Differentiates Your IA: Unique examples stand out to examiners, showing originality.
2. Characteristics of a Strong Example
Not all examples are created equal.
To maximize your IA score, ensure your examples are:
Recent: Articles should be no more than 12 months old.
Relevant: Directly tied to economic theories (e.g., externalities, subsidies, inflation).
Specific: Includes measurable data, such as prices, GDP figures, or unemployment rates.
From Credible Sources: Use reputable news outlets like The Economist, BBC, or Financial Times.
3. Finding the Right Examples
1. Best Sources for Articles
General News:
BBC News (Economy Section)
Reuters
Al Jazeera
Economics-Specific Sites:
The Economist
Financial Times
Government or Organization Reports:
World Bank, IMF, or national statistics agencies.
2. Search Strategies
Use keywords tied to IB topics:
Microeconomics: “pollution tax,” “government subsidies,” “price controls.”
Macroeconomics: “GDP growth,” “inflation trends,” “unemployment rate.”
International Economics: “tariffs,” “trade restrictions,” “exchange rate volatility.”
3. Use Google Alerts
Set up alerts for relevant terms like “supply chain disruption” or “fiscal policy” to receive the latest articles directly to your inbox.
4. Integrating Examples into Your IA
Here’s a step-by-step guide to incorporating real-world examples effectively:
1. Choose the Right Example for Each Commentary
Microeconomics: Articles on taxes, subsidies, or market failure.
Example: A tax on sugary drinks in the UK reduced consumption by 10% in the first year.
Macroeconomics: News on inflation, unemployment, or fiscal/monetary policies.
Example: The Federal Reserve raised interest rates in 2023 to combat inflation.
International Economics: Reports on trade barriers, exchange rates, or global markets.
Example: The US-China trade war increased tariffs on electronics, reducing trade volume by 20%.
2. Link the Example to Economic Theory
Start by summarizing the article in 1–2 sentences.
Example: “According to Reuters, the UK government implemented a sugar tax in 2023 to address rising obesity levels and healthcare costs.”
Use the data to illustrate the theory.
Example: “The tax increased the price of sugary drinks, shifting the supply curve from S1 to S2. As a result, equilibrium price rose from P1 to P2, reducing quantity consumed from Q1 to Q2, as shown in the diagram.”
3. Use the Example in Your Evaluation
Discuss how the example demonstrates the limitations or effectiveness of the policy.
Example (for subsidies):
“While subsidies increased solar panel adoption in Germany by 40%, the policy has a high opportunity cost, as government spending on other sectors like healthcare was reduced.”
5. Examples for Common IA Topics
Microeconomics
Topic | Example |
Taxes | The UK’s sugar tax reduced sugary drink sales by 10% in its first year. |
Subsidies | US government subsidies for electric vehicles increased adoption by 50% between 2020 and 2023. |
Market Failure | A pollution tax in Sweden reduced CO2 emissions by 25% over a decade. |
Price Controls | Venezuela’s price ceiling on basic goods led to shortages of essential items like bread |
Macroeconomics
Topic | Example |
Inflation | Argentina’s inflation rate surged to over 100% in 2023 due to excessive money printing. |
Unemployment | Germany maintained a 3% unemployment rate in 2022 despite global economic challenges. |
Fiscal Policy | The US passed a $1.9 trillion stimulus package in 2021 to boost demand during the COVID-19 pandemic. |
Monetary Policy | The European Central Bank raised interest rates in 2023 to combat rising inflation. |
International Economics
Topic | Example |
Trade Barriers | The US imposed 25% tariffs on Chinese goods during the trade war, reducing bilateral trade volume. |
Exchange Rates | The Turkish lira depreciated by 30% against the US dollar in 2023, increasing export competitiveness. |
Free Trade Agreements | The African Continental Free Trade Agreement boosted intra-African trade by 20% in its first year. |
7. Step-by-Step Example: Writing a Commentary
Topic: Market Failure (Microeconomics)
Article: “UK Sugar Tax Reduces Sales of Sugary Drinks by 10%” – BBC News, April 2023
Step 1: Introduce the Article
"The article highlights the UK government’s implementation of a sugar tax in 2023 to combat rising obesity rates. The tax increased the price of sugary drinks by 20%, leading to a 10% reduction in sales within the first year."
Step 2: Apply Economic Theory
"The sugar tax is an example of government intervention to correct market failure caused by negative externalities. As shown in Figure 1, the tax shifts the supply curve leftward from S1 to S2, increasing the price from P1 to P2 and reducing the quantity consumed from Q1 to Q2. This decrease in consumption helps internalize the external costs associated with obesity-related healthcare expenses."
Step 3: Evaluate the Policy
Pros:
"The tax effectively reduced sugary drink consumption and raised public awareness about the health risks of excessive sugar intake."
Cons:
"However, the tax disproportionately affects low-income households, as sugary drinks constitute a larger share of their budget. Additionally, producers may pass the tax burden entirely onto consumers, reducing its equity."
Alternative Solutions:
"Complementary measures, such as subsidies for healthier alternatives or public awareness campaigns, could address these limitations and make the policy more effective in the long run."
Step 4: Conclusion
Overall, while the sugar tax is an effective tool for reducing consumption of sugary drinks, its regressive nature and potential for unintended consequences suggest that it should be part of a broader strategy to combat obesity."
8. Tips for Maximizing Marks with Examples
Use Diagrams:Always include a relevant diagram (e.g., supply and demand, externalities) and refer to it in your analysis.
Be Concise:Avoid over-explaining the article; focus on linking it to the theory and evaluating its impact.
Use Multiple Perspectives:Discuss the policy’s impact on different stakeholders (e.g., consumers, producers, governments).
Keep a Real-World Example Bank:Maintain a list of examples categorized by topic so you can quickly find relevant articles during the writing process.
Conclusion
Using real-world examples effectively is key to crafting high-scoring IB Economics IAs. By choosing relevant, recent, and specific articles and integrating them into your analysis and evaluation, you can showcase your understanding of economic theory and its application. Remember to structure your commentary clearly, use diagrams, and critically assess the policy or event for a comprehensive response.