What is Economics? (DP IB Economics: HL)

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As developing nations industrialise, they often face a trade-off between producing consumer goods for immediate use and investing in capital goods for future growth. This decision impacts their economic trajectory for years to come.

Draw a Production Possibilities Curve showing the trade-off between consumer goods and capital goods for a developing economy.

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The rise of the gig economy has transformed how factors of production are utilised. Companies like Uber and Airbnb allow individuals to use their personal cars and homes as productive assets.

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When the EU decided to invest heavily in COVID-19 vaccine development, it faced significant opportunity costs. Investment in the Hyperloop Transportation system was reduced.

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The global supply chain crisis of 2021 demonstrated the high level of interdependence in the modern economy. A shortage of microchips in Taiwan led to production slowdowns in car factories across North America and Europe.

Define the term interdependence indicated in bold in the text (Text A, Paragraph 1).

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South Korea's dramatic economic growth in the late 20th century was marked by a significant outward shift in its production possibilities curve. The country's productive capacity expanded across multiple sectors.

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Additional reforms include upgrading old infrastructure and offering incentives to private sector firms to invest in projects that will improve productive capacity. Some government policies are already being implemented. These include a large power plant construction programme, tax incentives to infant industries such as oil refining to help attract more investment, and tax cuts for industries like transport, telecommunications, metal production and agricultural processing.