XED=% change in quantity demanded of Good X% change in price of Good YXED equals the fraction with numerator % change in quantity demanded of Good X and denominator % change in price of Good Y end-fraction
Value of goods and services produced measured at current market prices. Real GDP: Value of output adjusted for inflation. Formula: Inflation and Unemployment Metrics Consumer Price Index (CPI) and Inflation Rate CPI Formula: Inflation Rate: Unemployment Rate Formula:
While the booklet is provided, it does not mean you shouldn't memorize the formulas. Relying solely on the booklet wastes precious time, especially during a fast-paced exam. 2. Key Formulas to Know (Broken Down by Unit) ib economics hl formula booklet
While SL uses 1/(1-MPC) , HL goes further with open-economy multipliers that include the :
These form the foundation of microeconomic quantitative analysis Linear Functions: is the intercept and is the slope) is the intercept and is the slope) Price Elasticity of Demand (PED): Income Elasticity of Demand (YED): Cross Price Elasticity of Demand (XED): Price Elasticity of Supply (PES): 2. Theory of the Firm (HL Only) XED=% change in quantity demanded of Good X%
By the law of demand, PED is always negative. However, economists express it as an absolute value when discussing elasticity. If a question asks for the value, state the negative number but interpret its absolute magnitude.
The formula booklet is a safety net, not a cheat sheet. Spend your revision time practicing past Paper 3 questions Relying solely on the booklet wastes precious time,
Real GDP=Nominal GDPGDP Deflator×100Real GDP equals the fraction with numerator Nominal GDP and denominator GDP Deflator end-fraction cross 100 Inflation and Unemployment
ΔImportsΔIncomethe fraction with numerator cap delta Imports and denominator cap delta Income end-fraction Marginal Propensity to Withdraw (MPW): Calculating the Multiplier ( Formulas: Effect on GDP: 4. Global Economics Formulas
This guide breaks down everything you need to know about the , how to use it effectively, and the "hidden" math you need to memorize. 1. Why the Formula Booklet Matters
As soon as the exam starts, flip to the formula booklet. Do not start writing yet. Mentally tag three things: