Source: https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-6-short-and-long-run-aggregate-supply [Revision notes](https://senecalearning.com/en-gb/revision-notes.md) › [IB Diploma](https://senecalearning.com/en-gb/revision-notes/ib-diploma.md) › [Economics](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics.md) › [Economics: IB Diploma](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma.md) › Short & Long-Run Aggregate Supply # Short & Long-Run Aggregate Supply Economics: IB Diploma, topic 2.2.6 ## Short Run Aggregate Supply Curve AS is the total quantity of output firms will produce and sell at a given price level. ### Short run aggregate supply ![Short run aggregate supply](https://image-v2.cdn.app.senecalearning.com/2018-08/b30d8ef0-bafc-4ee2-a65f-03e54aa53994/2.2.2%20sras%20small.png) - The SRAS curve is upward sloping. - The SRAS curve shows the total quantity firms will produce at each price level. - The curve shows how suppliers will react to a higher price level for final outputs of goods and services, holding inputs constant. - This is represented by the increasingly upwards sloping curve. ### Movement along the SRAS ![Movement along the SRAS](https://image-v2.cdn.app.senecalearning.com/2018-08/41c56404-cce7-427b-a4f9-eaebbd6594e3/shopping-food-prices-.jpg) - Movement along the SRAS curve is caused by a change in the average price level. ### Shifts in the SRAS curve ![Shifts in the SRAS curve](https://image-v2.cdn.app.senecalearning.com/2018-06/47c78a31-a7be-42a4-b923-a6c80c6b88b6/cost-1.jpg) - Shifts in the SRAS curve can be caused by several factors: - Business costs: labour and raw material costs may rise. - Exchange rates: the exchange rate may lead to higher prices of imports. - The government can impose taxes which can increase the cost of producing goods or services. ### Supply side shock ![Supply side shock](https://image-v2.cdn.app.senecalearning.com/2018-09/e52d5d48-cef7-4a2b-a9ad-4264044bdc53/farm-tractor.jpg) - A supply-side shock is anything (positive or negative) that causes SRAS to change. - Examples could be a bad harvest, technological improvement, or a new mineral discovery. - A rise in global oil prices will cause the SRAS to shift left as imported costs of production rise. - This will lead to the equilibrium level of real GDP falling, and the General Price Level to rise - that is, cost-push inflation, potentially causing the purchasing power of consumers to fall if wages have not caught up. ### Difference between short run and long run ![Difference between short run and long run](https://image-v2.cdn.app.senecalearning.com/courseImages/biology/7.5.1%20-%20Food%20Production/vats-min.jpg) - In the short run, at least one of the 'factors of production' (labour, land, enterprise or capital) are fixed. - In the long run, all factors of production are variable. - In the long run, the economy is operating at full employment (this is known as the natural rate of unemployment). ## Long-Run Aggregate Supply Underlying economic growth is shown by a rightward shift in the long-run aggregate supply curve (LRAS). This represents an increase in the productive capacity of the economy. ### Long-run factors ![Long-run factors](https://image-v2.cdn.app.senecalearning.com/2018-08/8f86d3e6-58c6-4bc2-92b2-19c1b7ad7b4e/2.1.1%20LRAS%20shifting%20right%20small.png) - The most important factor to shift LRAS outwards (to the right) is productivity growth. But it could also be an increase in the amount of factors of production (e.g. population growth). - Productivity could mean output per unit of labour (per worker). ### Other long-run factors ![Other long-run factors](https://image-v2.cdn.app.senecalearning.com/2018-08/d642b9ad-125b-4af3-b7cf-eee22a59de9b/2.1.1%20LRAS%20shifting%20right%20small.png) - Technology - e.g. faster broadband. - Infrastructure - e.g. better trains and roads and ports would mean goods and services can be produced and transported more efficiently. - Enterprise. - Cultural attitudes - e.g. if in some countries women were permitted to participate in the labour market, this would shift LRAS to the right. ### Other long-run factors cont. ![Other long-run factors cont.](https://image-v2.cdn.app.senecalearning.com/2018-08/027d74ee-61fd-4709-9324-423fa6e2ad29/2.1.1%20LRAS%20shifting%20right%20small.png) - Factor mobility - e.g. the more occupational and geographical mobility there is in an economy, the more the LRAS will shift out. - Economic incentives - e.g. if corporation tax is lowered to attract foreign firms or domestic firms invest more, then the LRAS will shift out. ### Using AS/AD to show equilibrium ![Using AS/AD to show equilibrium](https://image-v2.cdn.app.senecalearning.com/2018-08/8f268e69-06fe-4ea7-a8cc-216f7c4aa9bb/2.3.3%20Equilibirum%20small.png) - The intersection between the AD and AS curves shows the equilibrium price level and real GDP of the economy. - At a low price level, firms have little incentive to produce, but consumers are willing to buy. - As the price level rises (also known as inflation), AS rises and AD falls until equilibrium is reached. ## Test yourself on Short & Long-Run Aggregate Supply - Is the SRAS curve upwards or downwards sloping? - Which of the following factors would increase long run aggregate supply? - Which of the following would shift LRAS? [Practise this topic for free](https://app.senecalearning.com/classroom/course/7b55fd22-05a1-435c-9704-355732f0e415/section/afa53436-9dfb-4b8a-9c80-c75735a1e6d2/session) - Previous topic: [2.2.5 IB Multiple Choice - Aggregate Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-5-ib-multiple-choice-aggregate-demand.md) - Next topic: [2.2.7 Alternative Models of LRAS](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-7-alternative-models-of-lras.md) ## Economics: IB Diploma contents ### 1 Microeconomics - 1.1 Competitive Markets: Demand & Suply - [1.1.1 Markets & Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-1-markets-and-demand.md) - [1.1.2 Diminishing Marginal Returns](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-2-diminishing-marginal-returns.md) - [1.1.3 Supply](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-3-supply.md) - [1.1.4 Market Equilibrium](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-4-market-equilibrium.md) - [1.1.5 Price Mechanism](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-5-price-mechanism.md) - [1.1.6 Consumer & Producer Surplus](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-6-consumer-and-producer-surplus.md) - [1.1.7 IB Multiple Choice - Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-7-ib-multiple-choice-demand.md) - [1.1.8 IB Multiple Choice - Supply](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-1-8-ib-multiple-choice-supply.md) - 1.2 Elasticity - [1.2.1 Elasticities of Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-1-elasticities-of-demand.md) - [1.2.2 Factors Affecting Price Elasticity of Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-2-factors-affecting-price-elasticity-of-demand.md) - [1.2.3 Elasticity of Supply](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-3-elasticity-of-supply.md) - [1.2.4 Price Elasticity of Supply](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-4-price-elasticity-of-supply.md) - [1.2.5 IB Multiple Choice - Price Elasticity of Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-5-ib-multiple-choice-price-elasticity-of-demand.md) - [1.2.6 IB Multiple Choice - Price Elasticity of Supply](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-6-ib-multiple-choice-price-elasticity-of-supply.md) - [1.2.7 IB Multiple Choice - Other Elasticities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-2-7-ib-multiple-choice-other-elasticities.md) - 1.3 Government Intervention - [1.3.1 Indirect Taxes & Subsidies](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-3-1-indirect-taxes-and-subsidies.md) - [1.3.2 Application Question - Taxing Prices or Quantities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-3-2-application-question-taxing-prices-or-quantities.md) - [1.3.3 Subsidies & Price Controls](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-3-3-subsidies-and-price-controls.md) - [1.3.4 Deadweight Loss & Government Intervention](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-3-4-deadweight-loss-and-government-intervention.md) - [1.3.5 Elasticity & Tax Incidence](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-3-5-elasticity-and-tax-incidence.md) - [1.3.6 IB Multiple Choice - Government Intervention](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-3-6-ib-multiple-choice-government-intervention.md) - 1.4 Market Failure - [1.4.1 Types of Market Failure](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-1-types-of-market-failure.md) - [1.4.2 Introduction to Externalities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-2-introduction-to-externalities.md) - [1.4.3 Negative Externalities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-3-negative-externalities.md) - [1.4.4 Policy for Negative Externalities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-4-policy-for-negative-externalities.md) - [1.4.5 Positive Externalities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-5-positive-externalities.md) - [1.4.6 The Deadweight Welfare Loss of Externalities](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-6-the-deadweight-welfare-loss-of-externalities.md) - [1.4.7 Case Study - The Externalities of Education](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-7-case-study-the-externalities-of-education.md) - [1.4.8 Public Goods & the Free-Rider Problem](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-8-public-goods-and-the-free-rider-problem.md) - [1.4.9 Asymmetric Information](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-9-asymmetric-information.md) - [1.4.10 End of Topic Test - Market Failure](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-10-end-of-topic-test-market-failure.md) - [1.4.11 Application Questions - Market Failure](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-4-11-application-questions-market-failure.md) - 1.5 HL: Theory of the Firm & Market Structures - [1.5.1 Theory of the Firm & Market Structures](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/1-5-1-theory-of-the-firm-and-market-structures.md) ### 2 Macroeconomics - 2.1 The Level of Overall Economic Activity - [2.1.1 The Circular Flow of Income](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-1-1-the-circular-flow-of-income.md) - [2.1.2 Defining GDP](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-1-2-defining-gdp.md) - [2.1.3 Limitations of GDP](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-1-3-limitations-of-gdp.md) - [2.1.4 IB Multiple Choice - Economic Indicators](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-1-4-ib-multiple-choice-economic-indicators.md) - [2.1.5 Business Cycles](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-1-5-business-cycles.md) - [2.1.6 Output Gaps](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-1-6-output-gaps.md) - 2.2 Aggregate Demand & Aggregate Supply - [2.2.1 The Aggregate Demand Curve](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-1-the-aggregate-demand-curve.md) - [2.2.2 Components of Aggregate Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-2-components-of-aggregate-demand.md) - [2.2.3 Shape of the Aggregate Demand Curve](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-3-shape-of-the-aggregate-demand-curve.md) - [2.2.4 Shifts in Aggregate Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-4-shifts-in-aggregate-demand.md) - [2.2.5 IB Multiple Choice - Aggregate Demand](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-5-ib-multiple-choice-aggregate-demand.md) - [2.2.6 Short & Long-Run Aggregate Supply](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-6-short-and-long-run-aggregate-supply.md) - [2.2.7 Alternative Models of LRAS](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-7-alternative-models-of-lras.md) - [2.2.8 Equilibrium in the AD-AS Model](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-8-equilibrium-in-the-ad-as-model.md) - [2.2.9 Output Gaps & the AD-AS Model](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-2-9-output-gaps-and-the-ad-as-model.md) - 2.3 Macroeconomic Objectives - [2.3.1 Introduction to Unemployment](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-1-introduction-to-unemployment.md) - [2.3.2 Limitations of Unemployment](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-2-limitations-of-unemployment.md) - [2.3.3 Types of Unemployment](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-3-types-of-unemployment.md) - [2.3.4 Causes & Impact of Unemployment](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-4-causes-and-impact-of-unemployment.md) - [2.3.5 Defining Inflation](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-5-defining-inflation.md) - [2.3.6 Measuring Inflation](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-6-measuring-inflation.md) - [2.3.7 Use of Index Numbers](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-7-use-of-index-numbers.md) - [2.3.8 The Consumer Price Index](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-8-the-consumer-price-index.md) - [2.3.9 Consequences of Inflation](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-9-consequences-of-inflation.md) - [2.3.10 Causes of Inflation](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-10-causes-of-inflation.md) - [2.3.11 Inflation & Unemployment Tradeoff](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-11-inflation-and-unemployment-tradeoff.md) - [2.3.12 The Short-Run Phillips Curve](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-12-the-short-run-phillips-curve.md) - [2.3.13 The Long-Run Phillips Curve](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-13-the-long-run-phillips-curve.md) - 2.4 Economic Growth, Poverty & Inequality - [2.4.1 Measuring Economic Growth](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-1-measuring-economic-growth.md) - [2.4.2 Determinants of Productivity](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-2-determinants-of-productivity.md) - [2.4.3 Economic Growth & Productivity](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-3-economic-growth-and-productivity.md) - [2.4.4 Absolute & Relative Poverty](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-4-absolute-and-relative-poverty.md) - [2.4.5 Inequality](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-5-inequality.md) - [2.4.6 Inequality 2](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-6-inequality-2.md) - [2.4.7 Lorenz Curve](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-7-lorenz-curve.md) - [2.4.8 Government Policy on Poverty](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-8-government-policy-on-poverty.md) - [2.4.9 End of Topic Test - Poverty & Inequality](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-9-end-of-topic-test-poverty-and-inequality.md) - [2.4.10 Application - Inequality & Poverty](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-4-10-application-inequality-and-poverty.md) - 2.5 Fiscal Policy - [2.5.1 Introduction to Fiscal Policy](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-5-1-introduction-to-fiscal-policy.md) - [2.5.2 Fiscal Policy and AD-AS Model](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-5-2-fiscal-policy-and-ad-as-model.md) - [2.5.3 Fiscal Policy Lags](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-5-3-fiscal-policy-lags.md) - [2.5.4 Automatic Stabilizers](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-5-4-automatic-stabilizers.md) - [2.5.5 IB Multiple Choice - Fiscal Policy](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-5-5-ib-multiple-choice-fiscal-policy.md) - 2.6 Monetary Policy - [2.6.1 Objectives of Monetary Policy](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-6-1-objectives-of-monetary-policy.md) - [2.6.2 Monetary Policy Implementation](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-6-2-monetary-policy-implementation.md) - [2.6.3 Monetary Policy & AD-AS Model](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-6-3-monetary-policy-and-ad-as-model.md) - [2.6.4 Monetary Policy Lags & Pitfalls](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-6-4-monetary-policy-lags-and-pitfalls.md) - 2.7 Supply-Side Policies - [2.7.1 Supply-Side Policies](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-7-1-supply-side-policies.md) - [2.7.2 Supply-Side Policies 2](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-7-2-supply-side-policies-2.md) ### 3 The Global Economy - 3.1 International Trade - [3.1.1 Globalisation](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-1-globalisation.md) - [3.1.2 Globalisation for LEDCs](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-2-globalisation-for-ledcs.md) - [3.1.3 Globalisation for MEDCs](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-3-globalisation-for-medcs.md) - [3.1.4 Comparative Advantage & Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-4-comparative-advantage-and-trade.md) - [3.1.5 Protectionism](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-5-protectionism.md) - [3.1.6 Arguments for Protectionism](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-6-arguments-for-protectionism.md) - [3.1.7 Arguments Against Protectionism](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-7-arguments-against-protectionism.md) - [3.1.8 End of Topic Test - Globalisation & Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-8-end-of-topic-test-globalisation-and-trade.md) - [3.1.9 Case Study - Globalisation & Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-1-9-case-study-globalisation-and-trade.md) - 3.2 Exchange Rates - [3.2.1 Floating Exchange Rates](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-2-1-floating-exchange-rates.md) - [3.2.2 Fixed Exchange Rate](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-2-2-fixed-exchange-rate.md) - [3.2.3 Effect of a Stronger & Weaker Dollar](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-2-3-effect-of-a-stronger-and-weaker-dollar.md) - 3.3 The Balance of Payments - [3.3.1 Balance of Payments](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-3-1-balance-of-payments.md) - [3.3.2 Balance of Payments 2](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-3-2-balance-of-payments-2.md) - [3.3.3 FDI & Reducing a BoP Deficit](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-3-3-fdi-and-reducing-a-bop-deficit.md) - 3.4 Economic Integration - [3.4.1 Customs Unions & WTO](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-4-1-customs-unions-and-wto.md) - [3.4.2 Merged Currency](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-4-2-merged-currency.md) - 3.5 Terms of Trade - [3.5.1 Absolute & Comparative Advantage](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-5-1-absolute-and-comparative-advantage.md) - [3.5.2 Gains from Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-5-2-gains-from-trade.md) - [3.5.3 Terms of Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-5-3-terms-of-trade.md) - [3.5.4 IB Multiple Choice - Comparative Advantage & Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-5-4-ib-multiple-choice-comparative-advantage-and-trade.md) - 3.6 Economic Development - [3.6.1 Factors Influencing Growth & Development](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-6-1-factors-influencing-growth-and-development.md) - [3.6.2 International Institutions](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-6-2-international-institutions.md) - [3.6.3 Measures of Development](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-6-3-measures-of-development.md) - [3.6.4 Barriers to Development](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-6-4-barriers-to-development.md) - [3.6.5 Case Study - The Bottom Billion](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-6-5-case-study-the-bottom-billion.md) - [3.6.6 End of Topic Test - Emerging & Developing](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-6-6-end-of-topic-test-emerging-and-developing.md) - 3.7 The Role of Domestic & International Factors - [3.7.1 Interventionist Strategies](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-7-1-interventionist-strategies.md) - [3.7.2 Development Strategies](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-7-2-development-strategies.md) - [3.7.3 Development Promotion Policies](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-7-3-development-promotion-policies.md) - [3.7.4 End of Topic Test - Growth & Global Development](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-7-4-end-of-topic-test-growth-and-global-development.md) - [3.7.5 Application Questions -Growth & Global Development](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-7-5-application-questions-growth-and-global-development.md) - 3.8 The Role of International Trade - [3.8.1 International Institutions](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-8-1-international-institutions.md) - [3.8.2 End of Topic Test - Globalisation & Trade](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-8-2-end-of-topic-test-globalisation-and-trade.md) - 3.9 The Role of Foreign Aid - [3.9.1 Aid](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-9-1-aid.md) - [3.9.2 Limitations of Aid](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-9-2-limitations-of-aid.md) - [3.9.3 Support for Aid](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-9-3-support-for-aid.md) - [3.9.4 Application Questions - Developing Countries](https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/3-9-4-application-questions-developing-countries.md)