IB Economics SL

policies of government intervention (as well as the opposites of free markets)

floors and ceilings (minimum wage), safety and environmental regulation, subsidies and taxes, regulation of monopolies, public services and governmental organizations

benefits of free markets and free trade

more competition so R&D, productive efficiency (lowest prices) (comparative advantage / specialization), allocative efficiency, more variety, cheaper input costs for producers (commodities)

no trade barriers so export market does good / better alliances

benefits of government intervention

tax revenue for governments, safety and environmental standards (sustainability), detract demerit goods and promote merit goods, more economic equity, public services, prevent abuse of power like monopolies

choice, equity, sustainability

policies of Keynesians (demand-side)

fiscal policy (taxes, infrastructure building), monetary policy (interest rate / Fed Funds Rate), stimulus checks

government intervention

expansionary vs contractionary

policies of supply siders (neo-classical)

deregulation on standards, lower minimum wage, subsidies, R&D investment, lower interest rates and taxes for businesses

benefits of protectionism

tariff revenue for governments, higher environmental and safety standards, domestic industry protection (baby industries / unfair dumping), national security (reduced reliance),

Graphs

S/D, externality, AS/AD, world (tariff, quota), currency exchange, lorenz curve, PPC diagram, poverty cycle, business cycle