IBDP Economics Chapter 11 Notes

Macroeconomic objectives II Economics Growth and Equity in the Distribution of Income

STUDY NOTES FOR ECONOMICS CHAPTER 11 – Macroeconomic objectives II Economics Growth and Equity in the Distribution of Income

These notes have specially been curated by expert teachers to simplify and enlighten concepts given in IB Macroeconomic objectives II : Economic Growth and Equity in the Distribution of Income HL. The notes are comprehensive in nature and are sufficient to study the chapter in depth and one need not look for other resources beyond the notes provided on our website which can be accessed for free. The notes for Macroeconomic objectives II : Economic Growth and Equity in the Distribution of Income IBDP HL are available on our official website and can be downloaded for free. The material made available on Tychr’s website is available for all IBDP subjects and is specially curated after an extensive amount of effort to ensure that the notes are in consonance with the IB curriculum and are an amalgamation from various textbooks prescribed by the IBO.

In this chapter we study basic concepts of macroeconomics which is the branch of economics that deals with the performance, structure and behaviour of the entire economy on a large scale that differs from microeconomics which deals with how individual economic players such as consumers and firms make decisions. We first look at economic growth which is an increase in real GDP expressed % change over a period of time.

Growth is shown through the shift of the PPC curve which is caused due to the increase in quantity or quality of resources. economic growth is also added with the increase in physical, human or natural capital, increase in investment or increase in productivity. In the AD AS model a rightward long run aggregate supply curve shift causes economic growth. Macroeconomics also deals with the equity in the distribution of income. Next we are introduced to the Lorenz curve which shows the degree of income inequality in an economy.

It is a diagrammatic concept which also introduces the idea of the Gini coefficient. This chapter also deals with day to day economic concepts and ideas such as poverty. In Economics absolute poverty is measured with the poverty line and the concept of relative poverty is the comparison of income of individuals with the median incomes. Factors causing poverty, its consequences and ways to promote equity are also discussed in this chapter. Achieving progressivity through proportional taxation and evaluating equity in income distribution vs efficiency are some of the important concepts discussed in the chapter.