Measuring Economic Activity (DP IB Economics: HL)

Extract A, Paragraph 4

The Malaysian economy experienced significant changes in 2023 as domestic households increased their savings rates in response to economic uncertainty. Simultaneously, the government launched a major infrastructure development program worth RM50 billion. Local businesses reported declining sales as consumer spending fell, though export orders remained stable. The central bank noted that the higher savings rates were affecting economic growth despite increased government expenditure.

Extract B, Paragraph 2

Brazil's economic recovery in 2023 was driven by substantial foreign investment in its renewable energy sector. International companies invested over $15 billion in solar and wind projects across the country. However, most of these companies repatriated their profits to their home countries, leading to concerns about the long-term benefits for Brazil's economy. The government's statistical office noted a significant gap between GDP and GNI figures.

Extract C, Paragraph 3

The Indonesian government announced plans to boost economic growth through increased infrastructure spending and export promotion initiatives. However, critics argue that simultaneous increases in taxation to fund these projects might offset the intended benefits. The Finance Ministry projects that the new policies will increase both government spending and tax revenue by approximately 15% over the next year.

Extract A, Paragraph 2

Singapore's economy showed mixed performance in 2023, with nominal GDP reaching $498 billion. However, the country experienced inflation of 5.2% during the same period. The Monetary Authority of Singapore emphasised the importance of distinguishing between nominal and real economic growth when assessing the economy's actual performance. Several industries, particularly technology and financial services, reported strong revenue growth, though consumers complained about rising prices.

Extract C, Paragraph 1

South Korea's statistical office reported that while the country's total GDP grew by 15% in nominal terms, population growth was 2% during the same period. Economic analysts emphasised the importance of considering population changes when assessing living standards. The government noted that comparing GDP per capita with other Asian economies provided a more meaningful measure of economic development.

Extract B, Paragraph 1

Thailand's economic indicators showed signs of overheating in late 2023. Manufacturing capacity utilisation reached 95%, while job vacancies hit record highs. The central bank reported rising wage pressures and increasing inflation. Several industries reported difficulties in meeting orders due to labour shortages, leading to concerns about sustainable growth rates.

Extract C, Paragraph 3

Costa Rica achieved modest economic growth of 3% in 2023, significantly lower than many developed nations. However, the country ranked highly in the Happy Planet Index due to its strong environmental policies, high life expectancy, and reported life satisfaction. Despite lower GDP per capita than its neighbours, Costa Rica's sustainable development approach has attracted international attention.

Extract D, Paragraph 2

Japan experienced slow GDP growth in 2023, yet ranked highly in several OECD Better Life Index categories, particularly in safety, education, and life expectancy. The country's ageing population contributed to minimal economic expansion, but social surveys indicated high levels of life satisfaction. Economists debated whether traditional growth metrics remained relevant for mature economies with changing demographic profiles.