Explain why economic development is considered to be multidimensional.
Using real-world examples, evaluate the usefulness of GNI per person at purchasing power parity as a measure of economic development.
Explain how health and education indicators may be used to assess economic development.
Using real-world examples, discuss the view that health and education indicators are more useful than income per person when comparing levels of economic development.
Explain how the Human Development Index measures economic development.
Using real-world examples, evaluate the use of the Human Development Index for comparing economic development between countries.
Explain how the Inequality-adjusted Human Development Index may reveal information that is concealed by the Human Development Index.
Using real-world examples, discuss the view that measures of inequality are essential for an accurate assessment of economic development.
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Explain two ways in which economic growth may promote economic development.
Using real-world examples, to what extent is economic growth necessary for economic development?
Explain how energy and environmental indicators may provide evidence about economic development.
Using real-world examples, evaluate the usefulness of environmental indicators when measuring economic development.
Explain why GDP per person and GNI per person may give different indications of a country's material living standards.
Using real-world examples, discuss whether income per person at purchasing power parity provides a reliable basis for ranking countries by economic development.
Read the extracts and answer the questions that follow.
Navora has experienced rapid growth in mining and construction. The government expects higher household incomes and tax revenue to improve living standards. However, much of the mining industry is foreign-owned and concentrated in one region.
The government describes economic development as a broader objective than economic growth. It has increased spending on rural clinics, schools and electricity connections, but shortages of trained workers have delayed some projects.
Average income has risen, but the income share received by the poorest households has fallen. Some economists argue that economic inequality prevents many households from benefiting from growth.
Mining has increased employment and exports but has also polluted rivers used by rural communities. The government is considering pollution taxes and stronger environmental regulations.
Officials are developing a dashboard containing income, health, education, inequality, energy and environmental indicators. They believe that no single indicator provides a complete measure of development.
Income and distribution indicators for Navora.
| GNI per person at PPP / US$ | 2020 | 2024 |
|---|---|---|
| GNI per person at PPP / US$ | 8000 | 10000 |
| Gini coefficient | 0.38 | 0.46 |
Composite and environmental indicators for Navora, 2020 and 2024.
| Year | HDI | IHDI | emissions / tonnes per person |
|---|---|---|---|
| 2020 | 0.720 | 0.648 | 3.0 |
| 2024 | 0.760 | 0.640 | 4.5 |
Define the term economic development (Text A, paragraph 2).
Define the term economic inequality (Text A, paragraph 3).
Using Table 1, calculate the percentage increase in Navora’s GNI per person at PPP between 2020 and 2024. Show your working.
Using Table 2, calculate the percentage loss of potential human development due to inequality in 2024, using .
Using an AD/AS diagram, explain how growth in mining and construction may increase Navora’s real output (Text A, paragraph 1).
Using a Lorenz curve diagram, explain the change in Navora’s income distribution between 2020 and 2024 (Table 1).
Using a negative production externality diagram, explain how mining pollution may reduce economic well-being (Text B, paragraph 1).
Using a PPC diagram, explain how spending on schools and clinics could affect Navora’s future productive capacity (Text A, paragraph 2).
Using information from the texts/data and your knowledge of economics, discuss the view that the rise in GNI per person at PPP shows that Navora achieved economic development between 2020 and 2024.
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Belesia’s government uses GNI per person at PPP when comparing material living standards with neighbouring countries. Economists warn that it is an average and may conceal unequal access to services.
Agricultural exports have raised national income, but droughts and falling soil quality threaten future production. Urban households have gained more than remote farming communities.
The government publishes a Human Development Index (HDI) value alongside separate health and education statistics. It is considering whether to give greater priority to primary healthcare.
New clinics have reduced preventable deaths. However, school enrolment has increased more rapidly than teaching quality because classrooms and trained teachers remain scarce.
Belesia plans to finance renewable electricity and irrigation. These projects may improve health and productive capacity but involve an opportunity cost because government revenue is limited.
Belesia's GNI at PPP and population, 2021 and 2025.
| Year | GNI at PPP / US$ billion | Population / million |
|---|---|---|
| 2021 | 48 | 8 |
| 2025 | 60 | 9 |
Development outcomes in Belesia, 2021 and 2025.
| Year | HDI | Life expectancy / years | Expected years of schooling / years |
|---|---|---|---|
| 2021 | 0.610 | 64 | 10.0 |
| 2025 | 0.670 | 68 | 11.5 |
Define the term GNI per person at PPP (Text A, paragraph 1).
Define the term Human Development Index (HDI) (Text A, paragraph 3).
Using Table 1, calculate Belesia’s GNI per person at PPP in 2025. Show your working.
Using Table 2, calculate the percentage increase in life expectancy between 2021 and 2025.
Using an AD/AS diagram, explain how rising agricultural exports may cause economic growth in Belesia (Text A, paragraph 2).
Using a positive consumption externality diagram, explain how primary healthcare may improve economic development (Text B, paragraph 1).
Using a PPC diagram, explain the opportunity cost of Belesia’s decision to invest in renewable electricity and irrigation (Text B, paragraph 2).
Using a PPC diagram, explain how improved health and education could affect Belesia’s productive capacity (Table 2).
Using information from the texts/data and your knowledge of economics, evaluate the usefulness of the HDI compared with GNI per person at PPP for measuring development in Belesia.
Read the extracts and answer the questions that follow.
Many rural households in Darsana lack reliable electricity and use wood for cooking. Indoor air pollution contributes to respiratory illness and households spend many hours collecting fuel.
An energy indicator can measure access to electricity, clean cooking, energy use per person or the renewable share of energy. The government warns that total energy use alone may not reveal whether energy is accessible or sustainable.
Darsana’s economic well-being has improved in cities, where electricity supports refrigeration, digital communication and productive activity. Rural progress has been slower.
A proposed hydroelectric dam would increase renewable electricity and create construction jobs. It may also displace communities and damage river ecosystems.
The government expects electricity to improve schooling, healthcare and business productivity. Critics argue that the project’s national benefits could conceal severe local costs.
Energy access indicators in Darsana, 2020 and 2025.
| Indicator | 2020 | 2025 |
|---|---|---|
| Population with electricity access | ||
| Population with clean cooking access | ||
| Renewable energy share of total energy |
Income and health indicators for Darsana, 2020 and 2025.
| Year | Real GDP / US$ billion | Population / million | Life expectancy / years |
|---|---|---|---|
| 2020 | 36 | 12 | 62 |
| 2025 | 45 | 13 | 64 |
Define the term energy indicator (Text A, paragraph 2).
Define the term economic well-being (Text A, paragraph 3).
Using Table 2, calculate Darsana’s real GDP per person in 2025.
Using Table 1, calculate the percentage increase in the share of the population with electricity access between 2020 and 2025.
Using a positive consumption externality diagram, explain how access to electricity may improve development (Text B, paragraph 2).
Using a negative production externality diagram, explain how construction of the dam could create market failure (Text B, paragraph 1).
Using a PPC diagram, explain how reliable electricity could affect Darsana’s productive capacity (Text A, paragraph 3).
Using an AD/AS diagram, explain how construction of the dam may affect real output and the price level in the short run (Text B, paragraph 1).
Using information from the texts/data and your knowledge of economics, evaluate whether energy indicators provide sufficient evidence that economic development improved in Darsana between 2020 and 2025.
Explain why the construction of a composite development indicator involves value judgements.
Using real-world examples, evaluate the view that composite indicators are superior to single indicators for measuring economic development.
Explain how the Happy Planet Index measures sustainable well-being.
Using real-world examples, evaluate whether the Happy Planet Index gives a more meaningful assessment of economic development than the Human Development Index.
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Explain how the Gender Inequality Index measures disadvantages associated with gender.
Using real-world examples, discuss the usefulness of the Gender Inequality Index in assessing a country's economic development.
Read the extracts and answer the questions that follow.
Coralia’s technology sector has generated rapid economic growth. Nevertheless, women remain under-represented in parliament and senior employment, while maternal mortality remains high in rural areas.
The government uses the Gender Inequality Index (GII) to monitor disadvantages in reproductive health, empowerment and labour-market participation. A lower value is considered an improvement.
Coralia also publishes an Inequality-adjusted Human Development Index (IHDI). The gap between HDI and IHDI remains substantial because health, education and income achievements are unevenly distributed.
The government plans to provide maternal healthcare, scholarships for girls and childcare services. It expects these policies to increase female labour-force participation and economic security.
Some businesses oppose the additional taxes needed to finance the policies. They argue that higher business costs could reduce investment, while supporters expect a healthier and better-educated workforce to raise productivity.
Gender indicators for Coralia, 2019 and 2024.
| Year | GII | Female labour-force participation / % | Maternal mortality / per 100 000 live births |
|---|---|---|---|
| 2019 | 0.520 | 48 | 180 |
| 2024 | 0.390 | 56 | 120 |
Human development indicators for Coralia, 2019 and 2024.
| Year | HDI | IHDI |
|---|---|---|
| 2019 | 0.700 | 0.560 |
| 2024 | 0.750 | 0.630 |
Define the term Gender Inequality Index (GII) (Text A, paragraph 2).
Define the term Inequality-adjusted Human Development Index (IHDI) (Text A, paragraph 3).
Using Table 1, calculate the percentage decrease in Coralia’s GII between 2019 and 2024.
Using Table 2, calculate the percentage loss of potential human development due to inequality in 2024.
Using a positive consumption externality diagram, explain how scholarships for girls may improve development (Text B, paragraph 1).
Using a labour-market demand and supply diagram, explain how childcare services may affect female employment (Text B, paragraph 1).
Using a PPC diagram, explain how improved maternal health and education may affect Coralia’s potential output (Texts A and B).
Using an AD/AS diagram, explain how lower business investment caused by higher taxes could affect Coralia’s real output in the short run (Text B, paragraph 2).
Using information from the texts/data and your knowledge of economics, discuss whether the GII is the most useful indicator for assessing economic development in Coralia.
Read the extracts and answer the questions that follow.
Estavia has high income per person, long life expectancy and strong reported life satisfaction. However, transport and housing consume large quantities of energy.
Researchers use the Happy Planet Index (HPI) to assess how efficiently Estavia converts environmental resources into long and satisfying lives. The government also reports carbon emissions separately.
Environmental groups argue that present consumption is inconsistent with sustainability because it depletes natural resources and imposes costs on future generations.
The government plans taxes on fossil fuels and subsidies for public transport. These policies may lower emissions but could raise living costs for rural households lacking alternatives.
Investment in renewable energy could create employment and reduce pollution. Its success will depend on distributional effects, infrastructure and public acceptance.
Well-being indicators for Estavia in 2020 and 2025.
| Year | HPI / points | Life expectancy / years | Life satisfaction / 10 |
|---|---|---|---|
| 2020 | 47 | 79 | 7.2 |
| 2025 | 52 | 80 | 7.4 |
Income and carbon dioxide emissions in Estavia, 2020 and 2025.
| Indicator | 2020 | 2025 |
|---|---|---|
| Real GNI per person / USD | 42000 | 45000 |
| Carbon dioxide emissions / tonnes per person | 12 | 9 |
Define the term Happy Planet Index (HPI) (Text A, paragraph 2).
Define the term sustainability (Text A, paragraph 3).
Using Table 2, calculate the percentage decrease in carbon dioxide emissions per person between 2020 and 2025.
Using Table 1, calculate the percentage increase in Estavia’s HPI between 2020 and 2025.
Using a negative consumption externality diagram, explain why fossil-fuel consumption may reduce economic well-being (Text B, paragraph 1).
Using a demand and supply diagram, explain how a tax on fossil fuels could reduce emissions (Text B, paragraph 1).
Using a PPC diagram, explain the opportunity cost of Estavia’s investment in renewable energy (Text B, paragraph 2).
Using an AD/AS diagram, explain how investment in renewable energy may affect Estavia’s real output in the short run (Text B, paragraph 2).
Using information from the texts/data and your knowledge of economics, discuss whether the HPI is more useful than real GNI per person for measuring economic development in Estavia.
Read the extracts and answer the questions that follow.
Faron has achieved almost universal primary-school enrolment. However, many pupils are absent during harvest seasons and national tests reveal weak literacy.
The government uses single indicators such as enrolment, literacy and mean years of schooling. Officials recognize that each measure answers a different question and that enrolment does not measure teaching quality.
Faron’s per capita income has increased because of growth in commercial agriculture. The average conceals substantial regional and household differences.
The government plans teacher training, school meals and improved rural transport. These policies may increase attendance, learning and future productivity.
Financing the programme requires resources currently used for other public services. Benefits may also take several years to affect measured output.
Education indicators in Faron, 2020 and 2025.
| Indicator | 2020 | 2025 |
|---|---|---|
| Primary enrolment | 91% | 96% |
| Literacy, ages 15–24 | 72% | 81% |
| Mean years of schooling | 6.0 years | 6.8 years |
Income and inequality indicators for Faron, 2020 and 2025.
| Indicator | 2020 | 2025 |
|---|---|---|
| Real GNI (US$ billion) | 30 | 39 |
| Population (million) | 10 | 12 |
| Gini coefficient | 0.40 | 0.44 |
Define the term single indicator (Text A, paragraph 2).
Define the term per capita income (Text A, paragraph 3).
Using Table 2, calculate Faron’s real GNI per person in 2020 and 2025.
Using Table 1, calculate the percentage increase in literacy among people aged 15 to 24 between 2020 and 2025.
Using a positive consumption externality diagram, explain why the market may underprovide education in Faron (Text B, paragraph 1).
Using a PPC diagram, explain the opportunity cost of increased spending on teacher training and school meals (Text B, paragraph 2).
Using a PPC diagram, explain how improved literacy and schooling could affect Faron’s economy in the long run (Table 1).
Using a Lorenz curve diagram, explain the change in Faron’s distribution of income between 2020 and 2025 (Table 2).
Using information from the texts/data and your knowledge of economics, evaluate the usefulness of education indicators for measuring economic development in Faron.
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Galenia’s offshore petroleum industry has increased real GDP and exports. The sector is capital-intensive, employs few local workers and imports much of its equipment.
Government officials emphasize economic growth, while civil-society organizations argue that development also requires improvements in health, education, equity and security.
Petroleum revenue has increased the government’s capacity to fund services, but weak administration has delayed projects. Income gains are concentrated among skilled urban workers.
Galenia’s HDI has risen, but its IHDI remains much lower. Rural communities experience poor sanitation, limited schooling and unreliable electricity.
Petroleum extraction has also caused coastal pollution. The government is deciding whether to save more revenue for future generations or expand current social spending.
Galenia’s output, population and unemployment in 2020 and 2024.
| Year | Real GDP / US$ bn | Population / million | Unemployment / % |
|---|---|---|---|
| 2020 | 50 | 10 | 11 |
| 2024 | 65 | 11 | 10 |
Development and inequality indicators in Galenia, 2020 and 2024.
| Year | HDI | IHDI | Gini coefficient |
|---|---|---|---|
| 2020 | 0.680 | 0.544 | 0.43 |
| 2024 | 0.730 | 0.570 | 0.49 |
Define the term economic growth (Text A, paragraph 2).
Define the term IHDI (Text B, paragraph 1).
Using Table 1, calculate the percentage increase in Galenia’s real GDP per person between 2020 and 2024.
Using Table 2, calculate the percentage loss of potential human development due to inequality in 2024.
Using an AD/AS diagram, explain how higher petroleum exports may increase Galenia’s real output (Text A, paragraph 1).
Using a Lorenz curve diagram, explain the change in Galenia’s income distribution between 2020 and 2024 (Table 2).
Using a negative production externality diagram, explain how petroleum extraction may reduce development (Text B, paragraph 2).
Using a PPC diagram, explain how effective spending of petroleum revenue on education and sanitation could affect Galenia’s economy.
Using information from the texts/data and your knowledge of economics, discuss the extent to which economic growth has resulted in economic development in Galenia.
Aruna has experienced sustained economic growth. However, some observers argue that the benefits have not been distributed equally. Rural communities have limited access to healthcare and electricity, while air pollution in major cities has increased.
Table 1 provides selected economic and development indicators for Aruna.
Selected economic and development indicators for Aruna, 2022 and 2024.
| Indicator | 2022 | 2024 |
|---|---|---|
| Real GDP at PPP | billion international dollars | billion international dollars |
| Population | million | million |
| GDP at market exchange rates | Not provided | US$62 billion |
| Total GNI at PPP | Not provided | billion international dollars |
| HDI | Not provided | |
| IHDI | Not provided | |
| Access to electricity | ||
| Urban particulate air pollution |
Define the term economic development.
Using Table 1, calculate Aruna's GNI per person at PPP in 2024.
Using Table 1, calculate Aruna's GDP per person at market exchange rates in 2024.
Using Table 1, calculate the percentage loss in potential human development due to inequality in 2024.
Using Table 1, calculate the average annual percentage growth in Aruna's real GDP per person between 2022 and 2024.
Explain why the increase in Aruna's real GDP per person may not represent an equivalent improvement in economic development.
Explain why both single and composite indicators should be used to measure Aruna's development.
Using the text/data provided and your knowledge of economics, recommend a policy that the government of Aruna should implement to convert economic growth into broader economic development.
Belpa's average income and school enrolment have increased, but women continue to experience lower labour-market participation and political representation than men. The government is considering whether to expand subsidized childcare, maternal healthcare or secondary education for girls.
Table 1 provides selected gender and development indicators.
Selected gender and development indicators for Belpa
| Indicator | Belpa data |
|---|---|
| Labour-force participation rate | Women: ; men: |
| Parliamentary seats | Women: 36 seats; total: 180 seats |
| Secondary-school completion | Girls: ; boys: |
| Maternal mortality rate | 2020: 240 deaths per 100,000 live births; 2024: 180 deaths per 100,000 live births |
| Gender Inequality Index (GII) | 2024: 0.487 |
Table 2 provides estimated annual costs and coverage of two proposed programmes.
Table 2: Proposed programmes in Belpa. Available additional annual budget: USD 100 million.
| Programme | Annual cost / USD million | Women served annually |
|---|---|---|
| Childcare subsidy | 96 | 120 000 |
| Maternal-clinic programme | 72 | 600 000 |
Calculate the gender gap in labour-force participation in Belpa.
Calculate the percentage of Belpa's parliamentary seats held by women.
Calculate female secondary-school completion as a percentage of male secondary-school completion.
Calculate the percentage decrease in Belpa's maternal mortality rate between 2020 and 2024.
Using Table 2, calculate the annual government expenditure per woman served by each proposed programme.
Explain what Belpa's Gender Inequality Index value indicates about its economic development.
Explain one limitation of using the GII as the only measure of Belpa's development.
Using the text/data provided and your knowledge of economics, recommend a policy that the government of Belpa should implement to reduce gender inequality and promote economic development.
Deltora's government aims to achieve universal electricity access. Access remains particularly low in remote areas, where households rely on expensive and polluting fuels. The government argues that rural electrification could also improve education and productive opportunities.
Table 1 provides data for three mutually exclusive and collectively exhaustive regions of Deltora. For the first three rows, the electricity-access percentages are shares of each region's population; use the listed regional populations for both years.
Deltora's regional population, electricity access and educational outcomes
| Region or household group (first 3 regions: mutually exclusive and collectively exhaustive) | Population / millions (used in both years) | Population share with electricity access, 2021 / % | Population share with electricity access, 2024 / % | Secondary-school completion, 2024 / % |
|---|---|---|---|---|
| Urban region | 8 | 98% | 99% | — |
| Rural region | 12 | 62% | 74% | — |
| Remote region | 4 | 25% | 45% | — |
| Households with electricity | — | — | — | 82% |
| Households without electricity | — | — | — | 51% |
Table 2 provides income and purchasing-power information.
Purchasing-power data for Deltora.
| Item | Value / unit |
|---|---|
| Annual income per person | 9600 local currency units |
| Market exchange rate | 4 local currency units per US dollar |
| Representative basket cost in Deltora | 1600 local currency units |
| Representative basket cost in United States | US$500 |
Using Table 1, calculate the percentage of Deltora's population with electricity access in 2021.
Using Table 1, calculate the number of people without electricity access in 2021.
Using Table 1, calculate the increase in the number of people with electricity access between 2021 and 2024.
Calculate the difference in secondary-school completion between households with and without electricity in 2024.
Using Table 2, calculate Deltora's annual income per person at the market exchange rate and at PPP.
Explain why the data do not prove that electricity access alone causes higher secondary-school completion.
Explain why electricity access and energy use per person may give different information about economic development.
Using the text/data provided and your knowledge of economics, recommend a policy that the government of Deltora should implement to increase electricity access and promote economic development.
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Explain why an increase in real GDP may fail to produce a corresponding improvement in economic development.
Using real-world examples, examine the view that the distribution of the benefits of economic growth is the most important determinant of whether growth leads to economic development.
Explain why different indicators may produce conflicting assessments of a country's level of economic development.
Using real-world examples, to what extent is it possible to identify one best measure of economic development?
Read the extracts and answer the questions that follow.
Harapan has lower income than Isola but stronger public healthcare and lower emissions. Isola has a larger financial sector and higher average income, but income inequality is substantial.
Analysts use purchasing power parity (PPP) to compare the countries because market exchange rates do not reflect differences in local prices.
The countries receive similar HDI scores, yet their results differ when inequality and environmental pressures are considered. This illustrates the multidimensional nature of development.
Harapan favours health, education and low-carbon infrastructure. Isola argues that higher income provides households and governments with more choices.
Researchers warn that rankings depend on component selection, normalization, weights, data reliability and the purpose of comparison.
Income, health and education indicators for Harapan and Isola.
| Country | GNI per person at PPP / USD | Life expectancy / years | Mean years of schooling / years |
|---|---|---|---|
| Harapan | 18 000 | 81 | 11 |
| Isola | 24 000 | 77 | 12 |
Composite, distributional and environmental measures for Harapan and Isola.
| Country | HDI | IHDI | emissions / tonnes per person |
|---|---|---|---|
| Harapan | 0.810 | 0.745 | 3 |
| Isola | 0.820 | 0.656 | 10 |
Define the term purchasing power parity (PPP) (Text A, paragraph 2).
Define the term multidimensional nature of development (Text A, paragraph 3).
Using Table 2, calculate the percentage loss of potential human development due to inequality for Isola.
Using Table 1, calculate how much higher Isola’s GNI per person at PPP is than Harapan’s, expressed as a percentage of Harapan’s value.
Using a PPC diagram, explain how investment in health and education may affect Harapan’s productive capacity (Text B, paragraph 1).
Using a Lorenz curve diagram, explain why Isola’s IHDI may be substantially below its HDI (Table 2).
Using a negative production externality diagram, explain how Isola’s emissions may cause its income measure to overstate development (Table 2).
Using an AD/AS diagram, explain how an increase in government infrastructure spending could raise Isola’s real output in the short run (Text B, paragraph 1).
Using information from the texts/data and your knowledge of economics, evaluate whether Harapan is more economically developed than Isola.
Read the extracts and answer the questions that follow.
A large share of Jandor’s agricultural and household production is not recorded. Survey coverage is weakest in remote regions, and population estimates are revised infrequently.
Officials publish GDP per person as the main development indicator. Researchers argue that omitted informal production and inaccurate population data reduce its reliability.
Jandor also publishes a composite indicator, combining several normalized measures into one index. Missing health data are estimated using older surveys.
Recorded GDP fell after factories closed, while carbon emissions also declined. The government claimed that lower emissions represented environmental progress, but unemployment and poverty increased.
A new household survey suggests that health and education outcomes differ sharply by region. Economists recommend publishing disaggregated data and confidence intervals rather than relying only on national averages.
Recorded output, population and unemployment in Jandor.
| Year | Recorded real GDP / US$ bn | Estimated population / million | Unemployment rate / % |
|---|---|---|---|
| 2021 | 28 | 7.0 | 8 |
| 2024 | 26 | 7.2 | 13 |
Social and environmental indicators in Jandor, 2021 and 2024.
| Indicator | 2021 | 2024 |
|---|---|---|
| Carbon dioxide emissions / tonnes per person | 4.0 | 3.2 |
| Life expectancy / years | 70 | 69 |
| Secondary-school completion / % | 68 | 64 |
Define the term GDP per person (Text A, paragraph 2).
Define the term composite indicator (Text A, paragraph 3).
Using Table 1, calculate the percentage change in Jandor’s recorded real GDP per person between 2021 and 2024.
Using Table 2, calculate the percentage decrease in carbon dioxide emissions per person between 2021 and 2024.
Using an AD/AS diagram, explain how factory closures may have reduced Jandor’s recorded real GDP (Text B, paragraph 1).
Using a PPC diagram, explain the effect of factory closures and unemployment on Jandor’s use of productive resources (Table 1).
Using a negative production externality diagram, explain why lower emissions could improve well-being even though Jandor’s output fell (Text B, paragraph 1).
Using a Lorenz curve diagram, explain how national averages may conceal regional inequality in Jandor (Text B, paragraph 2).
Using information from the texts/data and your knowledge of economics, discuss the problems involved in measuring changes in economic development in Jandor.
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Kintala’s real GDP remained almost unchanged for three years. The government nevertheless expanded primary healthcare by redirecting expenditure from administrative buildings.
A progressive cash-transfer programme reduced severe deprivation. Supporters claim that improved equity can raise development without an immediate increase in total output.
Critics emphasize the opportunity cost of redistribution and argue that higher taxes may weaken incentives. The government expects healthier children to become more productive adults.
Rural vaccination and nutrition improved, while income inequality declined. Public debt limits the government’s ability to expand all programmes simultaneously.
Economists argue that better health and education could eventually support growth, creating a two-way relationship between growth and development.
Output and income distribution in Kintala
| Year | Real GDP / US$ billion | Population / million | Gini coefficient |
|---|---|---|---|
| 2021 | 40.0 | 8.0 | 0.50 |
| 2024 | 40.4 | 8.2 | 0.42 |
Health and education indicators in Kintala, 2021 and 2024.
| Indicator | 2021 | 2024 |
|---|---|---|
| Infant mortality / deaths per 1000 live births | 42 | 30 |
| Primary-school completion / % | 70 | 78 |
| Life expectancy / years | 65 | 68 |
Define the term equity (Text A, paragraph 2).
Define the term opportunity cost (Text A, paragraph 3).
Using Table 1, calculate the percentage change in Kintala’s real GDP per person between 2021 and 2024.
Using Table 2, calculate the percentage decrease in infant mortality between 2021 and 2024.
Using a PPC diagram, explain the opportunity cost of redirecting spending from administrative buildings to primary healthcare (Text A, paragraph 1).
Using a Lorenz curve diagram, explain the change in Kintala’s income distribution between 2021 and 2024 (Table 1).
Using a positive consumption externality diagram, explain why vaccination may be underconsumed without government intervention (Text B, paragraph 1).
Using a PPC diagram, explain how the improvements in health and education may affect Kintala’s future economic growth (Table 2).
Using information from the texts/data and your knowledge of economics, evaluate the view that economic development requires economic growth.
Read the extracts and answer the questions that follow.
Lumora has improved average health and education, but women’s political representation and labour-force participation remain low. Coastal tourism also creates a large ecological footprint.
The government currently emphasizes the HDI, while equality organizations prefer the GII and environmental groups prefer the HPI. Each index answers a different question.
Index construction requires selecting components and assigning weights. Changing these value judgements may alter country rankings even when the underlying data are unchanged.
A single headline index makes trends easy to communicate and may attract public attention. However, good performance in one component can offset weak performance elsewhere.
Lumora plans childcare services, renewable transport and expanded secondary education. Officials want indicators that reveal whether these policies reach disadvantaged groups.
Composite indicators for Lumora, 2020 and 2025.
| Year | HDI | GII | Happy Planet Index / points |
|---|---|---|---|
| 2020 | 0.740 | 0.460 | 45 |
| 2025 | 0.780 | 0.410 | 43 |
Underlying development indicators for Lumora in 2020 and 2025.
| Indicator | 2020 | 2025 |
|---|---|---|
| Life expectancy / years | 74 | 76 |
| Female labour-force participation / % | 44 | 49 |
| Ecological footprint / global hectares per person | 3.5 | 4.2 |
Define the term HDI (Text A, paragraph 2).
Define the term weights in a composite indicator (Text A, paragraph 3).
Using Table 1, calculate the percentage decrease in Lumora’s GII between 2020 and 2025.
Using Table 2, calculate the percentage increase in Lumora’s ecological footprint between 2020 and 2025.
Using a labour-market demand and supply diagram, explain how childcare services may affect female labour-force participation (Text B, paragraph 2).
Using a negative production externality diagram, explain how tourism may reduce environmentally sustainable well-being in Lumora (Text A, paragraph 1).
Using a PPC diagram, explain how expanded secondary education may affect Lumora’s potential output (Text B, paragraph 2).
Using an AD/AS diagram, explain how investment in renewable transport may affect Lumora’s real output in the short run (Text B, paragraph 2).
Using information from the texts/data and your knowledge of economics, discuss which composite indicator is most useful for measuring economic development in Lumora.
Read the extracts and answer the questions that follow.
Meridia is encouraging solar-panel manufacturing to generate exports, employment and tax revenue. The government expects faster growth to finance health, education and clean-water services.
Officials seek inclusive growth, meaning that opportunities and gains should be broadly shared. The strategy includes worker training and infrastructure in poorer regions.
Environmental groups support renewable energy but warn that mineral extraction for panels may damage ecosystems. They argue that development must protect natural capital.
Manufacturing has raised real output and employment, although wages remain low in some factories. Tax revenue has increased, but local governments differ in their ability to provide services.
The government reports income, HDI, inequality, electricity access and emissions. Policymakers disagree about whether improvements in most indicators can compensate for deterioration in one dimension.
Growth and distribution indicators for Meridia, 2020 and 2025.
| Year | Real GDP / billions of US dollars | Population / millions | Gini coefficient |
|---|---|---|---|
| 2020 | 72 | 18 | 0.45 |
| 2025 | 90 | 20 | 0.41 |
Human and environmental development indicators in Meridia.
| Indicator | 2020 | 2025 |
|---|---|---|
| HDI | 0.690 | 0.750 |
| Electricity access / % | 70 | 84 |
| emissions / tonnes per person | 2.5 | 3.4 |
Define the term inclusive growth (Text A, paragraph 2).
Define the term natural capital (Text A, paragraph 3).
Using Table 1, calculate the percentage increase in Meridia’s real GDP per person between 2020 and 2025.
Using Table 2, calculate the percentage increase in carbon dioxide emissions per person between 2020 and 2025.
Using an AD/AS diagram, explain how solar-panel exports may increase Meridia’s real output in the short run (Text A, paragraph 1).
Using a Lorenz curve diagram, explain the change in Meridia’s income distribution between 2020 and 2025 (Table 1).
Using a negative production externality diagram, explain how mineral extraction may weaken sustainable development (Text A, paragraph 3).
Using a PPC diagram, explain how worker training and regional infrastructure may affect Meridia’s productive capacity (Text A, paragraph 2).
Using information from the texts/data and your knowledge of economics, evaluate whether Meridia’s industrial strategy is likely to promote economic development as well as economic growth.
Senara's mineral-export sector has generated rapid economic growth. Government revenue and employment have increased, but mining has also contributed to water pollution, deforestation and carbon emissions. The government is considering a carbon tax, renewable-energy investment and direct transfers to mining communities.
Table 1 compares sustainable well-being in Senara and Toran. For this question, use the simplified index formula provided in the table.
Simplified index:
| Country | Well-being / 10 | Life expectancy / years | Inequality factor | Ecological footprint / gha per person |
|---|---|---|---|---|
| Senara | 6.8 | 76 | 0.88 | 2.2 |
| Toran | 7.4 | 80 | 0.92 | 5.0 |
Table 2 provides economic and environmental data for Senara.
Senara's economic and environmental indicators, 2020 and 2024.
| Indicator | 2020 | 2024 |
|---|---|---|
| Real GDP / US dollars (billions) | 120 | 180 |
| Population / millions | 30 | 33 |
| Carbon emissions / million tonnes | 60 | 72 |
| Renewable energy share of total supply / % | 18 | 30 |
Define the term sustainability.
Using Table 1, calculate the simplified index value for Senara.
Using Table 1, calculate the simplified index value for Toran and identify which country has the higher value.
Using Table 2, calculate the percentage change in Senara's carbon emissions per unit of real GDP between 2020 and 2024.
Using Table 2, calculate the percentage increase in Senara's real GDP per person between 2020 and 2024.
Calculate the change in Senara's renewable-energy share between 2020 and 2024.
Explain two limitations of using the Happy Planet Index as the only measure of Senara's development.
Using the text/data provided and your knowledge of economics, recommend a policy that the government of Senara should implement to ensure that mineral-led growth promotes sustainable economic development.
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Luma's government reports a relatively high national development index. Civil-society organizations argue that the national average conceals poverty and unequal access to services in particular regions.
Table 1 provides normalized component scores for Luma and neighbouring Nera. For this question, the simplified composite index assigns a weight of 40% to health, 40% to education and 20% to income.
Normalized component scores and weights for a simplified composite development index.
| Component | Weight / % | Luma score / index | Nera score / index |
|---|---|---|---|
| Health | 40 | 0.82 | 0.70 |
| Education | 40 | 0.68 | 0.76 |
| Income | 20 | 0.74 | 0.78 |
Table 2 provides inequality and regional poverty data for Luma.
Luma's distributional indicators by region.
| Indicator | National | North | Central | South | Unit |
|---|---|---|---|---|---|
| HDI | 0.748 | — | — | — | Index |
| IHDI | 0.620 | — | — | — | Index |
| Population | 12 | 4 | 6 | 2 | million |
| Poverty rate | — | 12 | 28 | 45 | % |
| Mean annual income | 7200 | — | — | — | international dollars |
| Median annual income | 3900 | — | — | — | international dollars |
Define the term composite indicator.
Using Table 1, calculate the simplified composite development index for Luma and Nera.
Using Table 2, calculate Luma's percentage loss in potential human development due to inequality.
Using Table 2, calculate Luma's national poverty rate.
Calculate Luma's median income as a percentage of its mean income.
Explain why Luma's higher simplified composite index does not establish that it has better development outcomes than Nera in every dimension.
Explain why Luma's national poverty rate should be considered together with its regional poverty rates.
Using the text/data provided and your knowledge of economics, recommend a policy that the government of Luma should implement to reduce regional inequality in economic development.
Marindi's economy has grown rapidly because of manufacturing exports. The government collects a larger share of national income in taxation than previously, but significant inequalities in access to public services remain. It is deciding whether to allocate additional revenue to primary healthcare, education or cash transfers.
Table 1 provides national accounts and fiscal data.
Marindi's national accounts and fiscal data
| Indicator | 2022 | 2024 |
|---|---|---|
| Nominal GDP / billion local currency units | 240 | 315 |
| GDP deflator / index (100 = base year) | 120 | 135 |
| Population / million | 40 | 44 |
| Tax revenue / % of nominal GDP | 14 | 16 |
| Government healthcare expenditure / % of tax revenue | 8 | 10 |
Table 2 provides selected development indicators.
Marindi's selected development indicators, 2022 and 2024.
| Indicator | 2022 | 2024 |
|---|---|---|
| Life expectancy / years | 67 | 68 |
| Secondary-school completion / % | 61 | 64 |
| Electricity access / % | 79 | 82 |
| Gini coefficient | 0.42 | 0.45 |
| Carbon emissions per person / tonnes | 2.8 | 3.4 |
Using Table 1, calculate Marindi's real GDP in 2022 and 2024 and the percentage increase over the period.
Using Table 1, calculate the percentage increase in Marindi's real GDP per person between 2022 and 2024.
Using Table 1, calculate the increase in Marindi's nominal tax revenue between 2022 and 2024.
Using Table 1, calculate the increase in nominal government expenditure on healthcare between 2022 and 2024.
Distinguish between economic growth and economic development.
Using Tables 1 and 2, explain why Marindi's economic growth has produced uneven development outcomes.
Using the text/data provided and your knowledge of economics, recommend how the government of Marindi should use its additional tax revenue to promote inclusive and sustainable economic development.