Economics SL
4
Chapters
96
Notes
Unit 1 - Intro to Econ & Core Concepts
Unit 2 - Microeconomics
Unit 3 - Macroeconomics
Unlocking National Income Stats: What They Reveal About Economies
GNI vs. GDP: Which Better Measures Economic Well-Being?
Understanding Aggregate Demand Beyond GDP
Understanding Aggregate Supply Monetarist Vs. Keynesian Views
Understanding Macroeconomic Equilibrium: A Deep Dive
Understanding Equilibrium Monetarist Vs Keynesian Models Explained
Economic Growth Blessing or Curse for Living Standards
Understanding Unemployment Myths, Measurements, and Meaning
Deflation Demystified: Why Lower Prices Aren't Always Better!
Understanding Inflation Insights & Implications For Economies
Understanding Equality Vs. Equity In Income Distribution
Understanding Economic Inequality Income vs. Wealth
Unveiling Income Inequality: The Power of Lorenz Curve & Gini Coefficient
Understanding 2018's Lorenz Curve Income Quintile Insights
Understanding Poverty: Absolute Vs. Relative Explained
Understanding Poverty Beyond Just Income Measures
Understanding Globalization, Technology, and Income Inequality Impact
Understanding Taxes From Direct To VAT Explained!
Understanding Tax Rates ATR vs MTR Explained
Unlocking Equity: How Taxation Curbs Income Inequalities
Strategies To Combat Poverty Beyond Traditional Taxation
Unraveling Money From Basics To Banking & Policy Mechanics
Understanding The Demand For Money: A Deep Dive
Central Bank's Tools Steering Money Supply & Interest Rates
Impact Of Contractionary Monetary Policy On Aggregate Demand
Monetary Policy Key Strengths and Limitations Explained
Mastering Fiscal Policy: How Government Spending Influences Economy
Unlocking The Power Of The Keynesian Multiplier
Unveiling Fiscal Policy: Key Advantages & Notable Disadvantages
Unlocking Economic Growth: The Power of Supply-Side Policies
Boosting Growth: The Power of Supply-Side Policies
Unveiling Supply-Side Policies: Market-Based Vs. Interventionist Insights
Unlocking Macroeconomic Objectives: Tools & Tactics for Policymakers
Mastering Price Stability: Fiscal vs. Monetary Policies
Effective Policies To Counter Different Types Of Unemployment
Macroeconomic Dilemma: Unemployment Vs. Inflation
Unit 4 - The Global Economy
Economics SL
Unit 3 - Macroeconomics
Understanding Inflation Insights & Implications For Economies
494 words
3 mins read
Last edited on 5th Nov 2024
Table of content
Government (National) debt
What is Government Debt
- Definition: The total money that the government owes.
- Budget Deficit: When the government spends more than it collects.
- Budget Surplus: When the government spends less than it collects.
- Real World Example: Think of it like your pocket money! If you spend more than you have, you borrow (deficit). If you save, you have extra (surplus).
Bonds and IOUs
- Definition: A bond is a promise to pay back money at a specific date with interest.
- How it Works: People buy bonds, effectively lending money to the government.
- Real World Example: Imagine giving your friend a note saying, "I'll pay you $10 in a week."
- That's like a bond, but governments use it on a bigger scale!
Debt as a percentage of GDP
Why use GDP
- Reasoning: Comparing debt to the economy's size (GDP) gives a better picture.
- Real World Example: If a giant has $1000 and a dwarf has the same, that money means something different for each. Debt to GDP helps us see how big a burden the debt is to the economy.
Effects on the Debt/GDP Ratio
- Debt to GDP Ratio: How the economy can pay off its debt.
- Changes: This ratio can increase if debt rises faster than GDP or if GDP decreases because of recession.
- Real World Example: Greece had a high debt to GDP ratio, making their debt more burdensome than a country with a bigger economy like the UK.
Costs of high national debt
Debt Servicing
- Definition: Paying back the borrowed money and interest.
- Opportunity Costs: The money could have been spent on things like schools and healthcare.
- Real World Example: It's like spending all your money on candy and not having enough for a new book.
Inflation and Currency Depreciation
- Monetizing the Debt: Printing more money to pay off debt, which can lead to inflation and currency loss.
- Real World Example: Imagine printing your own money to buy things; soon, your money might not be worth much!
Credit Ratings
- Explanation: Credit agencies grade governments on their risk to lenders.
- Real World Example: Just like in school, getting an 'A' is best! A lower grade means higher interest rates.
Impact on Future Taxation and Government Spending
- Austerity Policies: Cutting spending and raising taxes to reduce debt.
- Real World Example: Imagine having to cut down on outings and save more pocket money to pay back a debt.
Unlock the Full Content! 
Dive deeper and gain exclusive access to premium files of Economics SL. Subscribe now and get closer to that 45 🌟
Economics SL
Unit 3 - Macroeconomics
Understanding Inflation Insights & Implications For Economies
494 words
3 mins read
Last edited on 5th Nov 2024
Table of content
Government (National) debt
What is Government Debt
- Definition: The total money that the government owes.
- Budget Deficit: When the government spends more than it collects.
- Budget Surplus: When the government spends less than it collects.
- Real World Example: Think of it like your pocket money! If you spend more than you have, you borrow (deficit). If you save, you have extra (surplus).
Bonds and IOUs
- Definition: A bond is a promise to pay back money at a specific date with interest.
- How it Works: People buy bonds, effectively lending money to the government.
- Real World Example: Imagine giving your friend a note saying, "I'll pay you $10 in a week."
- That's like a bond, but governments use it on a bigger scale!
Debt as a percentage of GDP
Why use GDP
- Reasoning: Comparing debt to the economy's size (GDP) gives a better picture.
- Real World Example: If a giant has $1000 and a dwarf has the same, that money means something different for each. Debt to GDP helps us see how big a burden the debt is to the economy.
Effects on the Debt/GDP Ratio
- Debt to GDP Ratio: How the economy can pay off its debt.
- Changes: This ratio can increase if debt rises faster than GDP or if GDP decreases because of recession.
- Real World Example: Greece had a high debt to GDP ratio, making their debt more burdensome than a country with a bigger economy like the UK.
Costs of high national debt
Debt Servicing
- Definition: Paying back the borrowed money and interest.
- Opportunity Costs: The money could have been spent on things like schools and healthcare.
- Real World Example: It's like spending all your money on candy and not having enough for a new book.
Inflation and Currency Depreciation
- Monetizing the Debt: Printing more money to pay off debt, which can lead to inflation and currency loss.
- Real World Example: Imagine printing your own money to buy things; soon, your money might not be worth much!
Credit Ratings
- Explanation: Credit agencies grade governments on their risk to lenders.
- Real World Example: Just like in school, getting an 'A' is best! A lower grade means higher interest rates.
Impact on Future Taxation and Government Spending
- Austerity Policies: Cutting spending and raising taxes to reduce debt.
- Real World Example: Imagine having to cut down on outings and save more pocket money to pay back a debt.
Unlock the Full Content!
Dive deeper and gain exclusive access to premium files of Economics SL. Subscribe now and get closer to that 45 🌟
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