SERIES: IB ECONOMICS DECODED _PART 4

What Does IB Economics Actually Assess?

There is one important question that is sometimes overlooked:

What skills and abilities does the IB assess students on?

In Economics, the IB uses four Assessment Objectives (AOs) to evaluate students’ knowledge, understanding, and skills.

1. AO1 – Knowledge and Understanding

Does the student understand economic concepts, theories, and terminology?

For example:

“What is inflation?”

This is the foundation of economic knowledge.

2. AO2 – Application and Analysis

This is a more advanced step. Can students apply their Economics knowledge to specific real-world situations and explain the relationships between different economic factors?

For example:

Students should not simply state: “Interest rates increase.”

Instead, they need to explain the chain of economic effects:

Higher interest rates → Higher borrowing costs → Potential decreases in consumption and investment → Lower aggregate demand → Reduced inflationary pressures.

This is what analysis involves.

3. AO3 – Synthesis and Evaluation

Can students identify and consider:

• Benefits;
• Limitations;
• Relevant conditions;
• Different impacts;
• Trade-offs;

and use these considerations to reach a well-reasoned conclusion?

For example:

Raising interest rates may help reduce inflation.

However:

It may also discourage investment and slow economic growth.

So, the key question becomes:

Under what circumstances would this policy be appropriate?

This is the essence of evaluation.

4. AO4 – Use and Application of Appropriate Skills

This objective covers practical Economics skills, including:

• Performing calculations;
• Drawing and accurately labelling diagrams;
• Identifying and interpreting data;
• Solving quantitative problems.

A simple way to understand the four Assessment Objectives:

AO1: What do you know?

↓

AO2: How do you apply that knowledge?

↓

AO3: How deeply can you evaluate an issue?

↓

AO4: How accurately can you use appropriate Economics tools and skills?

This is why an essay containing a large amount of economic knowledge does not necessarily achieve a high mark.

If students stop at demonstrating that “I know a lot”, they are mainly showing evidence of AO1.

The IB expects much more:

“I know → I apply → I analyse → I evaluate → I develop a well-reasoned argument.”

This is one of the key principles to understanding how to study and succeed in IB Economics.