Source: https://senecalearning.com/en-gb/revision-notes/ib-diploma/economics/economics-ib-diploma/2-3-12-the-short-run-phillips-curve [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) › The Short-Run Phillips Curve # The Short-Run Phillips Curve Economics: IB Diploma, topic 2.3.12 ## The Phillips Curve The Phillips Curve suggests that there is a tradeoff for policymakers between unemployment and inflation (i.e. both can't be low), based on observations made by economist A.W. Phillips in the 1950s. ### Short-run Phillips curve (SRPC) ![Short-run Phillips curve (SRPC)](https://image-v2.cdn.app.senecalearning.com/2018-08/bb1e6b29-522f-4011-9943-8004fa38f760/2.3.4%20Short%20run%20phillips%20curve%20small.png) - The theory is that if unemployment went down, there would be an increase in inflationary pressure. And if unemployment went up, inflationary pressure would fall. - If unemployment is high, there is lots of competition for vacancies and jobs. Firms can keep wages low and there is low cost-push inflationary pressure. - If unemployment is low, the labor market is 'tight'. Firms need to offer much higher wages to get workers to come for them and existing workers have more power. ### Policy implications ![Policy implications](https://image-v2.cdn.app.senecalearning.com/2018-08/daff6480-f96a-4075-9f2e-5f4e87b89af7/2.3.4%20Short%20run%20phillips%20curve.png) - The SRPC has policy implications, arguing that a government can aim for low unemployment or low inflation, but not both. ### Stagflation ![Stagflation](https://image-v2.cdn.app.senecalearning.com/2018-08/acd29e0f-3fc2-4b00-885a-31e1a69573d9/unemployment-no-money.jpg) - This is an increase in both unemployment and inflation. - A shift in the Phillips curve is caused by supply shocks and changes in inflationary expectations. - Over long periods, when aggregate supply shifts, the downward-sloping Phillips curve can shift so that unemployment and inflation are both higher. ### Examples of stagflation ![Examples of stagflation](https://image-v2.cdn.app.senecalearning.com/memory-location-images/Detroit,%20USA-min.jpg) - The U.S. economy experienced the pattern of higher unemployment and inflation in the deep recession from 1973 to 1975, and again in back-to-back recessions from 1980 to 1982. - Economists have concluded that two factors cause the Phillips curve to shift. The first is supply shocks, like the mid-1970s oil crisis. The second is changes in people’s expectations about inflation. In other words, there may be a tradeoff between inflation and unemployment when people expect no inflation, but when they realize inflation is occurring, the tradeoff disappears. ### When does the SRPC hold? ![When does the SRPC hold?](https://image-v2.cdn.app.senecalearning.com/2018-04/4339fdf2-3637-43c5-9f69-077f7853390b/shutterstock_652234435.jpg) - We should interpret a downward-sloping Phillips curve as valid for short-run periods of several years, but over longer periods, when aggregate supply shifts, the downward-sloping Phillips curve can shift so that unemployment and inflation are both higher (as in the 1970s and early 1980s) or both lower (as in the early 1990s or first decade of the 2000s). ## Test yourself on The Short-Run Phillips Curve - The short-run Phillips curve implies that which of these government aims are NOT possible? - What do supply shocks and changes in inflationary expectations cause? [Practise this topic for free](https://app.senecalearning.com/classroom/course/7b55fd22-05a1-435c-9704-355732f0e415/section/5b094a54-39e0-4dc9-86e7-6c835261ca00/session) - Previous topic: [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) - Next topic: [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) ## 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)