Unit 4
The Global Economy
International trade, exchange rates, balance of payments, sustainable development, and economic development strategies.
4.1
Benefits of International Trade
Comparative advantage, gains from trade, absolute advantage (HL).
To come 4.2
Types of Trade Protection
Tariffs, quotas, subsidies, administrative barriers, and their effects on markets.
To come 4.3
Arguments for and Against Protection
Infant industries, national security, anti-dumping, ELDC diversification, and disadvantages of protection.
To come 4.4
Economic Integration
Trading blocs, WTO, monetary union. Advantages and disadvantages.
To come 4.5
Exchange Rates
Floating, fixed, managed exchange rates. Determinants, consequences, and fixed vs floating comparison (HL).
To come 4.6
Balance of Payments
Current, capital, and financial accounts. Persistent deficits/surpluses, Marshall-Lerner condition and J-curve (HL).
To come 4.7
Sustainable Development
Sustainable development goals, the meaning of sustainability, and relationship to poverty (HL).
To come 4.8
Measuring Development
Single and composite development indicators — HDI, GII, IHDI, Happy Planet Index.
To come 4.9
Barriers to Economic Development
Poverty traps, economic barriers, and political and social barriers.
To come 4.10
Development Strategies
Trade strategies, diversification, social enterprise, market-based and interventionist policies, aid, FDI, and institutional change.
To come