IB Internal Assessment (IA) Economics Higher level (HL) 2025 November Solution & Worked Answer

Evaluating Market Interventions: Rent Ceilings in Sydney, Expansionary Macroeconomic Policies in India, and Import Tariffs in the USA

Solution Overview

This portfolio examines the impact of government interventions on economic wellbeing, stability, and efficiency. It investigates rent ceilings in Sydney's housing market, expansionary fiscal and monetary policies in India, and import tariffs on US apparel.

Utilizing microeconomic supply-demand models, the Keynesian AD/AS framework, and international trade diagrams, the author analyzes market disequilibria, recessionary gaps, and trade imbalances. Key findings highlight the trade-offs between affordability and shortages, the risks of demand-pull inflation and crowding out, and the resulting allocative and productive inefficiencies.

The work is distinguished by its rigorous application of economic theory to current events and a nuanced evaluation of short-term gains versus long-term systemic failures.

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