Summer 2025 Exam Suite Verdict

The Summer 2025 International Advanced Level (IAL) Economics papers for Units 1 and 2 offered a balanced but highly testing experience for candidates. The examiners maintained a consistent focus on core micro and macro principles while introducing complex, real-world case studies—ranging from shipping disruptions in the Red Sea to interest rate hikes by the US Federal Reserve. Overall, the papers reward precision in definition, accuracy in diagrammatic representation, and robust evaluation that directly refers to the source material.

Where the Marks Were Won and Lost

In Unit 1 (Markets in Action), high-scoring candidates excelled at drawing the external benefits diagram for online education, ensuring that the marginal social benefit (MSB) curve was correctly positioned above the marginal private benefit (MPB), and clearly identifying the area of welfare loss/underconsumption. In contrast, many marks were lost on price elasticity calculations where students failed to express the final answer as a coefficient or made simple percentage change calculation errors.

In Unit 2 (Macroeconomic Performance and Policy), the Keynesian AS/AD diagram representing a negative output gap was a significant mark-earner. Marks were lost where candidates failed to label the axes correctly or confused the Keynesian horizontal section of the AS curve. The 14-mark essay on the US Federal Reserve's interest rate hikes saw students struggling to link monetary policy to both consumption and investment simultaneously, often neglecting the exchange rate and trade effects.

Examiner Pitfalls & Hidden Traps

  • Incorrect Diagram Shifts: In Unit 1 Q12(e) (Subsidies), a common trap was shifting the demand curve instead of the supply curve or failing to show the correct consumer/producer subsidy areas.
  • Confusing Level vs. Rate of Change: In Unit 2, examiners highlighted that candidates frequently confuse a decrease in the rate of inflation with a decrease in the price level.
  • Generic Evaluation: For high-tariff essay questions (20 marks), failure to reference specific country contexts (such as Colombia for employment or Fiji/Egypt/India for GDP comparisons) capped candidate scores to a maximum of Level 3 (9/12 marks).

Preparation and Revision Strategy

To maximize scores in future series, students should focus on:

  1. Calculations: Practice elasticity coefficients (\(PES\), \(XED\), \(YED\)) and multiplier formulas (\(1/(1-MPC)\) or \(1/MPW\)) to secure guaranteed marks in Sections A and B.
  2. Diagrammatic Mastery: Memorize the exact shapes and labels of the Keynesian AD/AS diagram, negative output gaps, and welfare loss areas under market failure.
  3. Application Integration: Always extract and explicitly cite data points from the source booklets to support evaluation arguments.