IB skill practice

Explain economic growth and the business cycle

Economics SL macroeconomics skill with original exam-style diagram, data-response, and policy-evaluation seeds.

Paper 1, Paper 2 5 marks Difficulty 4

Identify a recessionary gap

A business cycle diagram in a Wellington budget case study shows actual output below trend output. Explain the recessionary gap. Use the labelled macro diagram, data, or extract evidence before writing the answer. Enter the answer and choose the interpretation that best matches the macroeconomic evidence.

Worked practice: economic evidence and answer

Identify the economic evidence first, then state the result and interpretation.