How to use real-world examples in IB Economics

Choose evidence that answers the question

Begin with the issue you need to explain. A case about a change in interest rates may help analyse monetary policy, while a policy affecting the price of a particular product may help explain incentives in a market. State the connection explicitly so the reader can see why the example is relevant.

Check what the evidence describes. A policy announcement tells you what was planned; a later statistical release may describe an observed outcome. An estimate of a future benefit has a different status from a measured change. Keep the location, time period and source attached to each fact.

Build a concise example card

A useful revision card separates the evidence from your interpretation. Record:

1. The event: what changed, where and when?
2. The source: who reported it, and what does the evidence measure?
3. The mechanism: which incentive, cost or constraint changed, and how might behaviour respond?
4. The outcome: what does the model predict, and what was actually observed?
5. The evaluation: whose outcomes differ, what matters over time, and what remains uncertain?

Use enough detail to make the example specific. A few relevant facts that you understand are easier to apply than a long list of figures with no explanation.

Worked example: England’s plastic bag charge

Evidence. England introduced a 5p charge for single-use plastic carrier bags at large retailers in October 2015. From May 2021, the minimum charge became 10p and its coverage was extended to all businesses. Defra reports that the main retailers sold 164 million single-use bags in 2024–25, almost 98% fewer than in 2014.

Analysis. The charge changes the cost of taking a new bag at checkout. Reusing a bag becomes relatively more attractive, giving consumers an incentive to change their behaviour. This is an example of a price signal used to discourage consumption associated with environmental costs.

Evaluation. The reported fall concerns single-use bags sold by the main retailers. It does not measure every type of bag or all environmental effects. Consumers may substitute towards other bags, and the impact of those alternatives depends partly on how often they are reused. The before-and-after figures alone do not isolate the effect of the charge from every other change over the period.

Source: Defra, single-use plastic carrier bag charge data for England, 2024–25. This is a dated historical case, so retain the reporting period when using the figures.

Apply the same method across the course

For a macroeconomic case, trace the transmission mechanism. If a central bank lowers a policy rate, explain how this might affect borrowing costs, spending and aggregate demand. Then examine the conditions: bank lending, confidence, existing fixed-rate loans and the time needed for a response can all matter.

For a trade case, identify the specific barrier and the products affected. Explain the likely effects on consumers, producers and firms using imported inputs, then consider adjustment costs and whether lower costs reach buyers. The public real-world examples page includes sourced historical cases on an ECB rate decision and the UK–Australia trade agreement.

Practise using the example

Close your notes and explain the case in a short paragraph. Name the event, use a relevant fact, develop the mechanism, and qualify the conclusion with a specific reason. Return to the source to check dates and figures.

If a diagram helps, make its labels match the case and explain the change in the text. The diagram guide shows how to connect a curve shift with a causal explanation. Build your collection around the topics you are studying and revisit cases when your understanding develops.