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How does an economy grow?
Macroeconomics 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
ADC + I + G + (X − M) at each price level
SRASShort-run aggregate supply, upward
LRASVertical at full employment output
Multiplierk = 1/(1−MPC) = 1/MPW
MPCMarginal propensity to consume
Output gapDifference of actual vs potential GDP
Monetary policyCentral bank changes rates / money
Fiscal policyGovernment changes tax and spending
ExpansionaryBoosts AD: lower rates or higher G
ContractionaryCools AD: higher rates or lower G
QEQuantitative easing — central bank asset buys
Automatic stabiliserTax / benefit that smooths the cycle
InflationSustained rise in average price level
CPIIndex of average household basket
What your exam board covers
Where Macroeconomics sits in each exam board's specification. Tap a board to see what it lists.
HLUnit 3 — Macroeconomics
- 3.1 Measuring economic activity and illustrating its variations
- 3.2 Variations in economic activity — aggregate demand and aggregate supply
- 3.3 Macroeconomic objectives (growth, unemployment, inflation; Phillips curve HL only)
- 3.4 Economics of inequality and poverty
- 3.5 Demand management — monetary policy (money creation and tools HL only)
- 3.6 Demand management — fiscal policy (Keynesian multiplier HL only); supply-side policies
Source: IB Diploma Economics guide, accessed 23 June 2026.
SLUnit 3 — Macroeconomics
- 3.1 Measuring economic activity and illustrating its variations
- 3.2 Variations in economic activity — aggregate demand and aggregate supply
- 3.3 Macroeconomic objectives (growth, unemployment, inflation)
- 3.4 Economics of inequality and poverty
- 3.5 Demand management — monetary policy
- 3.6 Demand management — fiscal policy; supply-side policies
Source: IB Diploma Economics guide, accessed 23 June 2026.
LLearn Macroeconomics step by step
Free interactive mini-lessons: short screens, worked examples and quick checks. Pick your exam board:
Common mistakes to avoid
Questions where students often pick the tempting wrong answer — make sure you know the right one:
How does an economy grow?✗ By printing more money. ✓ By increasing real output (real GDP) over time.
Who is counted as unemployed?✗ Anyone not in a job, including children and retirees. ✓ People able to work and actively seeking a job but without one.
Practise Macroeconomics — free games
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