Practise MYP Individuals & Societies questions on 5.3 Economic Decline and review the explanations to check your understanding.
Use these questions for topic practice and to find ideas you want to revisit in your notes or lessons.
How can sustained economic decline lead to a cycle of lower long-term development in a state?
Why might a sustained decrease in the price level (deflation) be considered harmful for workers?
In the labour market, why does unemployment typically rise during a period of economic decline?
In the context of the 2008–09 Financial Crisis, what were 'derivatives'?
How do internal factors like corruption and inequality typically interact with external pressures to deepen an economic decline?
By eliminating the wealth gap between the rich and the poor
By forcing the state to modernize its infrastructure to attract investment
By reducing government revenue needed to fund essential services like health and education
By increasing the literacy rate through lower costs of living
It can reduce business revenues, potentially leading to lower wages or job cuts
It causes an immediate shift of the Aggregate Supply curve to the right
It automatically increases the purchasing power of all wages
It leads to a mandatory increase in income taxes
The demand for labour shifts left because firms cannot sell enough output
Government legislation prevents firms from hiring more than a certain number of workers
Workers collectively decide to stop working to protest low wages
The supply of labour increases because people need more money
Direct loans made by the World Bank to developing nations
New currencies created to replace the US dollar
Financial instruments created by repackaging mortgage and consumer debts
Government bonds used to fund social programs
They provide a buffer that prevents external shocks from affecting the economy
They cause an immediate shift from a trade deficit to a trade surplus
They weaken institutional resilience, making the state more vulnerable to external shocks
They ensure that government revenue remains stable regardless of trade disruptions
