IBDP Economics Chapter 19 Notes

consequences of economic growth and the balance between markets and intervention

STUDY NOTES FOR ECONOMICS CHAPTER 19 – CONSEQUENCES OF ECONOMIC GROWTH AND THE BALANCE BETWEEN MARKETS AND INTERVENTION

These notes have specially been curated by expert teachers to simplify and enlighten concepts given in IB Consequences of economic growth and the balance between Markets and intervention 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 Consequences of economic growth and the balance between Markets and intervention 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 the students will be taught about the consequences of economic growth. Economic growth and Unemployment- long term induction and unemployment results from economic growth but not all growth can lower unemployment. Economic growth and Inflation- in the keynesian model price level remains constant in the expansionary phase because of scarce capacity until the level of potential output. in the classical model and aggregate demand increase will increase the price level. Both models agree that growth caused by increases in aggregate demand is inflationary around the level of potential output. Economic growth and Income distribution- there is no clear relationship between GDP per capita growth and income distribution.

Inequalities arise from liberalisation and loss of coupling protection and the policies decide whether economic growth is good or bad for distribution. Economic growth and Current account- economic growth can lead to a larger deficit/ smallest surplus in the upper phase of the Business Cycle but over the long term there is little likely growth. Economic growth and Sustainability- Rapid growth leads to sustainable resources used which can cause air pollution, soil degradation etc. All governments can pursue growth and sustainability with some policies and thus economic growth and sustainability can be pursued together. Lastly, the chapter discusses balance between market and intervention. The strengths and weaknesses of market oriented policies and that of interventionist policies are discussed in detail along with the importance of market with government intervention.