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IB Economics Revision

The Global Economy

International trade, exchange rates, the balance of payments and economic development.

Learn itInteractive mini-lessons for your exam boardPLAYQuick game on The Global EconomyVelvet RevisionYour IB Economics course mapFree PDF100 AI prompts for IB Economics

The Global Economy is a core part of IB Economics. Revise the key concepts and common mistakes below, then lock them in with the free games.

Key concepts

FTAFree trade area — no internal tariffs
Customs unionFTA plus common external tariff
Common marketCustoms union + factor mobility
Monetary unionCommon market + single currency
Trade creationSwitch from costly home to cheap partner
Trade diversionSwitch from cheap non-member to costly member
Current accountTrade, income, transfers — flows
Capital accountAsset transfers, debt forgiveness
Financial accountCross-border asset transactions
Floating rateCurrency price set by market supply / demand
AppreciationCurrency rises under a floating regime
J-curveDepreciation worsens CA before improving it
Absolute advantageProduces more with same resources
Comparative advantageLower opportunity cost

What your exam board covers

Where The Global Economy sits in each exam board's specification. Tap a board to see what it lists.

HLUnit 4 — The global economy
  • 4.1 Benefits of international trade (comparative advantage HL only)
  • 4.2 Types of trade protection
  • 4.3 Arguments for and against trade control/protection
  • 4.4 Economic integration (trade creation/diversion and monetary union HL only)
  • 4.5 Exchange rates
  • 4.6 Balance of payments (current account, Marshall-Lerner and J-curve HL only)
  • 4.7 Sustainable development
  • 4.8 Measuring development
  • 4.9 Barriers to economic growth and/or economic development
  • 4.10 Economic growth and/or economic development strategies

Source: IB Diploma Economics guide, accessed 23 June 2026.

SLUnit 4 — The global economy
  • 4.1 Benefits of international trade
  • 4.2 Types of trade protection
  • 4.3 Arguments for and against trade control/protection
  • 4.4 Economic integration
  • 4.5 Exchange rates
  • 4.6 Balance of payments
  • 4.7 Sustainable development
  • 4.8 Measuring development
  • 4.9 Barriers to economic growth and/or economic development
  • 4.10 Economic growth and/or economic development strategies

Source: IB Diploma Economics guide, accessed 23 June 2026.

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▶ Two Truths, One Lie▶ Reveal Race▶ Connections Grid▶ Falling Words▶ Word Web

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More IB Economics topics

Introduction to EconomicsMicroeconomicsFirms & Market StructuresMacroeconomicsHL Extension & Quantitative
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