IB Economics Notes Chapter 13-15
Exam Questions with 100% Correct
Answers | Graded A+
Define 'macroeconomics': - ✔✔The study of a national economy
List the five (5) main macroeconomic variables and their objectives -
✔✔1)Economic growth - A steady rate of increase of national output
2)Employment - A low level of unemployment
3)Price stability - A low and stable rate of inflation
4)External stability - A favorable balance of payments position
5) Income distribution - An equitable distribution of income
Describe how saving is a leakage and explain how it will cause the amount of
income circulating in the economy to fall: - ✔✔Saving is a leakage because it is
income received but not used to finance expenditure on goods and services
1|Page
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
, Describe how investment is an injection and explain how it will cause the
amount of income circulating in the economy to rise: - ✔✔Investment is an
injection because firms use income from outside of the households in the
circular flow, and allows the amount of income circulating in the economy to
rise
Describe how imports are a leakage: - ✔✔Imports are a leakage because it
represents expenditure of income not returning to the firms
Describe how exports are an injection: - ✔✔Exports represent a source of
income not coming directly from the household
Describe how taxes are a leakage: - ✔✔Taxes take money out from the circular
flow of the economy
Describe how government spending is an injection: - ✔✔Government spending
puts money back into the circular flow
Define 'transfer payments' and provide examples; injection? - ✔✔Payments to
individuals that are not the result of an increase in output; not an injection;
pensions, unemployment benefits, child allowance payments
Describe when the economy is in equilibrium: - ✔✔When leakages are equal to
injections
2|Page
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
Exam Questions with 100% Correct
Answers | Graded A+
Define 'macroeconomics': - ✔✔The study of a national economy
List the five (5) main macroeconomic variables and their objectives -
✔✔1)Economic growth - A steady rate of increase of national output
2)Employment - A low level of unemployment
3)Price stability - A low and stable rate of inflation
4)External stability - A favorable balance of payments position
5) Income distribution - An equitable distribution of income
Describe how saving is a leakage and explain how it will cause the amount of
income circulating in the economy to fall: - ✔✔Saving is a leakage because it is
income received but not used to finance expenditure on goods and services
1|Page
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
, Describe how investment is an injection and explain how it will cause the
amount of income circulating in the economy to rise: - ✔✔Investment is an
injection because firms use income from outside of the households in the
circular flow, and allows the amount of income circulating in the economy to
rise
Describe how imports are a leakage: - ✔✔Imports are a leakage because it
represents expenditure of income not returning to the firms
Describe how exports are an injection: - ✔✔Exports represent a source of
income not coming directly from the household
Describe how taxes are a leakage: - ✔✔Taxes take money out from the circular
flow of the economy
Describe how government spending is an injection: - ✔✔Government spending
puts money back into the circular flow
Define 'transfer payments' and provide examples; injection? - ✔✔Payments to
individuals that are not the result of an increase in output; not an injection;
pensions, unemployment benefits, child allowance payments
Describe when the economy is in equilibrium: - ✔✔When leakages are equal to
injections
2|Page
©NINJANERD 2025/2026. YEAR PUBLISHED 2025.
