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IB Economics real-world examples

Connect economic theory to evidence for class discussions and revision

Find a relevant case, check its source and explain the economics behind it. Search the bank by unit, chapter, SL or HL content, region and period.

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Illustrative entry structure - this is not a real-world case

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Concept → place and period → source → key facts → economic mechanism → evaluation.

  • Context: what happened, where and when?
  • Analysis: which concept explains the change, and through what mechanism?
  • Evaluation: whose outcomes differ, and what depends on the context?

How it works

  1. Sign in and select the topic you are revising.
  2. Read an example and its linked source.
  3. Practise using it in your own economic argument.

How to use a real-world example in an economics answer

Start with the question and the economic concept you need to explain. Choose a case that helps answer that question, rather than adding an example simply because you remember it.

Record where and when the event happened, the source, and a small number of relevant facts. Check what a statistic measures and which period it covers before using it as evidence.

Explain the connection: what changed, how did consumers, firms or governments respond, and why? Where a diagram helps, link its changes explicitly to the facts of the case.

For evaluation, consider who gains or loses, how the effects may change over time, and what the evidence cannot establish. A case can support an argument without proving that the same outcome will occur everywhere.

Students can use the bank to build a concise revision collection by topic. Teachers can use the same filters to find material for discussion, compare cases and ask students to explain the underlying economic mechanism.

  • Filter by unit, chapter, course level, region and period
  • Read factual summaries and follow linked sources
  • Practise connecting evidence, analysis and evaluation

Real-world examples: facts, analysis and evaluation

Microeconomics: the plastic bag charge in England

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

Economic mechanism: Charging for a previously free bag changes the incentive at checkout. Reusing a bag becomes more attractive, illustrating how a price signal can reduce consumption associated with environmental costs.

Evaluation: These figures measure single-use bags from the main retailers, not all plastic consumption. Substitution towards other bags and changes in retailer behaviour matter; the before-and-after comparison alone does not isolate the effect of the charge.

Defra: carrier bag data for England, 2024–25

Macroeconomics: the ECB interest rate cut in June 2024

On 6 June 2024, the European Central Bank announced a 0.25 percentage point cut in its three key interest rates. The deposit facility rate became 3.75% on 12 June 2024.

Economic mechanism: If lower policy rates feed through to borrowing costs, households and firms may increase consumption and investment. This can support aggregate demand, with effects on output and inflation depending on spare capacity.

Evaluation: A rate cut does not mean that policy is loose: the ECB still described financing conditions as restrictive. Transmission takes time and depends on lending conditions, confidence and existing fixed-rate loans.

European Central Bank: monetary policy decisions, 6 June 2024

The global economy: the UK–Australia trade agreement

The UK–Australia free trade agreement entered into force on 31 May 2023. It removed Australian tariffs on qualifying UK goods exports, while liberalisation for some sensitive agricultural imports into the UK was phased over time.

Economic mechanism: Removing a tariff can reduce the cost of an imported product, benefiting consumers and firms that use imported inputs. Exporters gain market access, while competing domestic producers face stronger competition.

Evaluation: Benefits depend on firms using the preferences and on how much lower costs reach buyers. Consider trade creation versus trade diversion, adjustment costs and the timing of tariff changes; announced projections are not observed outcomes.

UK Department for Business and Trade: agreement launch, 31 May 2023

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