Balance of payments (includes HL only sub-topics)
IB Economics Syllabus
SL & HLSyllabus concepts to know
Balance of payments
Credit and debit items
Surplus or deficit on an account
Components of the balance of payments
Current account
Current account — Balance of trade in goods
Current account — Balance of trade in services
Current account — Income
Current account — Current transfers
Capital Account
Capital Account — Capital transfers
Capital Account — Transaction in non-produced, non-financial assets
Financial account
Financial account — Foreign direct investment (FDI)
Financial account — Portfolio investment
Financial account — Reserve assets
Financial account — Official borrowing
Interdependence between the accounts
Zero balance in the balance of payments
Credits matched by debits
Deficits matched by surpluses
Relationship between the current account and the exchange rate (HL only)
Relationship between the financial account and the exchange rate (HL only)
Implications of a persistent current account deficit in
exchange rates
interest rates
foreign ownership of domestic assets
debt
credit ratings
Unit 4: The global economy
Unit 4: The global economy
demand management
economic growth
Methods to correct a persistent current account deficit
(HL only)
Expenditure switching
Expenditure reducing
Supply-side policies
Effectiveness of measures to correct a persistent current account deficit (HL only).
The Marshall-Lerner condition and the J-curve effect
(HL only)
Implications of a persistent current account surplus in
domestic consumption and investment
exchange rates
inflation
employment
export competitiveness
Inquiry—possible areas to explore (not an exhaustive list)
The impacts of changes in the exchange rate on different stakeh country.
Why a government chooses to manage the exchange rate, for a cho
Methods a government uses to manage its exchange rate and why,
The patterns of current account deficits/current account surplu
Study & practice 4.6 Balance of payments (includes HL only sub-topics)
Practice 4.6 in Question Bank
IB exam-style questions, with mark schemes and explanations, for all papers.
Read Notes for 4.6
Detailed notes written by examiners, strictly aligned with the syllabus.
Review 4.6 Flashcards
Active recall practice for key concepts and definitions.
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