For the 15 marks essay of IB Econ paper 1, writing a real life example cohesively and comprehensively is very important not only to prove your understanding and analysis skills of the content, but also to receive the designated marks according to the grading criteria.
In particular, through students' RLE, examiners evaluate whether students have the ability to properly connect and analyse Econ Theory and concepts to actual economic situations.
It all proves the fact that RLE is now an indispensable content in the 15 marks essay and is important enough to determine the level 6 and level 7 essays.
Real Life Examples of Supply-side Policy
Deregulation: Deregulation involves removing government regulations and barriers to entry that hinder competition in markets. This can increase productivity and innovation by allowing firms to operate more efficiently and reducing costs. An example of deregulation is the U.S. Airline Deregulation Act of 1978, which removed many government regulations that limited competition among airlines.
Infrastructure spending: Investment in infrastructure, such as transportation and energy systems, can increase the efficiency of the economy by reducing transaction costs and improving productivity. China has implemented a massive infrastructure spending program over the past few decades, which has helped to transform the country’s economy and improve its overall productivity. This includes a range of projects, such as the construction of new ports, railways, highways, and energy pipelines.
Privatisation: Privatisation involves transferring ownership and control of state-owned enterprises to private companies. This can increase efficiency, competition, and innovation in industries that were previously controlled by the government. An example of this is the privatisation of British Telecom in 1984.
Investment in education and training: Investment in education and training can improve the quality and productivity of the workforce, leading to long-term economic growth. For example, the German government has implemented a successful apprenticeship system that combines classroom learning with on-the-job training to prepare workers for specific industries.
Tax cuts: Reducing taxes on businesses and individuals can increase incentives to work, invest, and innovate, leading to increased economic growth. An example of this is the U.S. Tax Cuts and Jobs Act of 2017, which lowered the corporate tax rate from 35% to 21%.
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