EconDaddy’s RWE Booklet Exemplar for the

Open Book Exams (OBE)

WARNING AND GUIDANCE FOR STUDENTS
This booklet serves as an exemplar of real-world examples intended to support students in preparing
for Open Book Exams (OBE) in Economics. It is crucial to note the following:

● Personal Interpretation: The content within this booklet represents my personal

interpretation and compilation of real-world economic examples. It has not been reviewed or
approved by the OBE research team or any official examination body. It follows the rules of
max. 60 words per RWE, max. 2 pages, max. 1200 words, no highlight or italics but uses bold.
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examples, it is not exhaustive. There are numerous other relevant examples that can equally
illustrate economic theories and concepts. You are encouraged to explore and include a
variety of examples that resonate with your understanding and study.
● Inclusion of Unfeatured Examples in Exams: Even within your personally developed booklet,
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DISCLAIMER
The content of this booklet is in no way connected with nor endorsed by the International
Baccalaureate Organization. Although the author is an IB Economics examiner contracted by the
International Baccalaureate Organization, he does not represent the Organization.
Microeconomics:
Tax on cigarettes: cigarette tax rate - pack of 20 cigarettes: $2.87 (California). $2.00 deposited into:
California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund. 2020-21: California
collected $1.97b in total tobacco tax revenue
US cotton subsidy: Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) introduced in
2014. 2018: Payments to farmers triggered if average price fell below 52.00 cents/pound. From 1995
to 2020, the U.S. cotton industry received approximately $41.8 billion in subsidies (Environmental
Working Group report).
Food subsidy: subsidised bread available to over 70 million Egyptians. Price kept under $1/loaf. Cost
$2.9bn in fiscal year 2022-23, 2.6% of the budget.
Maximum price - Housing: Berlin Feb 2020 rent cap. Berlin law froze rents for ~1.5m apartments at
the June 2019 level for five years. Eliminated June 2021 Germany's Constitutional Court
Maximum price - food: Venezuela: rice, milk, flour, cooking oil. 2016-17: 30% of basic products were
reported unavailable in stores; early 2018 the government announced price increases of up to 2,900%
for certain food products, which still failed to keep pace with inflation, which was projected (IMF) to
reach 1,000,000% by the end of 2018.
Alcohol minimum price: Scotland minimum unit pricing for alcohol (MUP) May 1, 2018. 50 pence per
unit of alcohol. 3.6% drop in sales in 2020 (British Medical Journal); 13.4% reduction in deaths
directly related to alcohol (University of Glasgow study, 2023).
US federal minimum wage: $7.25/hour. NYC minimum wage: $16/hour
Tradeable permit: European Union Emissions Trading System (EU ETS) (since 2005) combatting
climate change, covering >11,000 power stations and industrial plants + airline emissions in 27 EU
countries + Iceland, Norway, Liechtenstein: 45% EU's greenhouse gas emissions. 2022: the EU's net
GHG emissions down 3% (following a 30 year trend), €38.8 billion raised, mostly allocated to national
budgets.
Natural monopoly: Florida Power & Light Company (part of NextEra Energy, a leading electric utility
in the U.S. by market value) provides electricity to approx 10 million people. Federal Energy
Regulatory Commission (FERC) in the US regulates electric power, natural gas, and oil industries​to
prevent price gouging and ensure service quality.
International agreement: The Paris Agreement (2015) aims to limit global warming to below 2°C,
ideally 1.5°C, compared to pre-industrial levels. Nations commit to Nationally Determined
Contributions (NDCs) to reduce emissions, with plans to enhance efforts over time.
Nationalization: YPF (Yacimientos Petrolíferos Fiscales) in 2012: was Argentina's largest oil company.
The Argentine government nationalized 51% of YPF's shares (predominantly owned by the Spanish oil
firm Repsol) to ensure national energy security, achieve energy self-sufficiency, and protect
Argentina's sovereign resources.
Asymmetric information solution through government response: Dodd-Frank Wall Street Reform
and Consumer Protection Act (US, 2010) in response to the 2007-2008 financial crisis: creation of
Consumer Financial Protection Bureau (CFPB). Requiring banks to provide clear and concise
information about financial products; CFPB is authority to enforce consumer protection laws and
regulate financial products; Promotes financial literacy among consumers.

Macroeconomics:
Negative net property income from abroad: World Bank, 2022: Australia -$78.17 billion
Positive net property income from abroad: World Bank, 2022: US $148.55 billion
GDP vs. inequality: India: the top 10% income share 30% (1980s) → 56% (2020), following
deregulation and liberalization reforms. China: the top 10% share 28% → 41% (2019). The lower rise
of inequality in China was associated with stronger growth rates (avg. 9.5% vs. 6.5% in India) and
much faster poverty eradication than in India.
Parallel economy: IMF (2018): Largest shadow economy - Zimbabwe 60.6% Bolivia 62.3%; lowest:
Austria 8.9% and Switzerland 7.2%.
Environmental degradation: Alberta Tar Sands (Canada), an unconventional oil deposit, has been
extracted → economic growth, job creation, energy sector investment; but considerable
environmental impacts: water pollution, greenhouse gas emissions, habitat destruction.
OECD Better Life Index: selected data US: housing 8.6; Income 8.5; jobs 8.8; community 7.8;
education 7.4; environment 8.2; civic engagement 7.0; health 8.6. South Africa: housing 2.6; Income
0.1; jobs 0.0; community 5.7; education 1.0; environment 1.4; civic engagement 3.9; health 3.1.
Happiness Index: (2024) Finland 1st (7.74), Denmark 2nd (7.58) vs. Lebanon 142nd (2.71),
Afghanistan 143rd (1.72)
Unemployment vs inflation: US unemployment 5.8% Jul 2008 → 9.5% Jul 2009 vs. inflation 5.6% Jul
2008 → -2.1% Jul 2009; unemployment 6.7% Nov 2020 → 4.6% Oct 2021 vs. inflation 1.2% Nov 2020
→ 6.2% Oct 2021. Unemployment peak during COVID-19: 14.9% Apr 2020. Inflation peak: 9.1% Jul
2022.
Expansionary fiscal policy: American Recovery and Reinvestment Act (ARRA) 2009: $831 billion
2009-19. Personal income tax cut: $400 per individual or $800 per family. $48.1 billion → Department
of Transportation for infrastructure projects.
Contractionary fiscal policy: UK austerity measures in 2010 included significant cuts to public
spending (£81 billion over four years), reductions in welfare benefits, and increases in taxes (VAT:
17.5% → 20%). The government aimed to reduce the fiscal deficit from over 10% of GDP in 2010 to
nearly 1% by 2015.
Expansionary monetary policy: US interest (funds) rate cut from 5.25% to 0.25% (2007-2009),
quantitative easing QE3 Sep 2012: Fed purchasing mortgage-backed securities of $40 billion per
month (increased to $85 billion in Dec 2012). Unemployment reduced 10% 2009 → 5% 2016.
Contractionary monetary policy: US interest (funds) rate raised 0,25% 2022 → 5.5% 2023. Inflation
reduced 9.1% Jul 2009 → 3% Jun 2023.
Interventionist supply-side policy - investment into human capital: UK August 2019, Boris Johnson's
government announced a £14 billion education funding boost for England over three years to level up
educational opportunities and outcomes across the country. Raised the minimum funding: primary
schools: to £4,000 per pupil by 2021-2022, and for secondary schools to £5,000 per pupil by
2020-2021.

The Global Economy:

US Steel Tariffs (2018): 25% tariff on imported steel to protect domestic industries from foreign
competition, targeting Chinese & EU imports. It led to retaliatory tariffs and increased costs for US
industries reliant on steel imports.
EU Rice Import Quotas from Cambodia and Myanmar (2019): EU imposed a safeguard measure on
imports of Indica rice from Cambodia and Myanmar to protect EU producers from a surge in imports.
This measure came after Italy requested protection for its rice farmers, citing significant market
disruption and economic damage due to the influx of rice imports from these two countries.
Renewable Energy Subsidies (Germany, EEG 2000): Renewable Energy Act (EEG) provides subsidies
for renewable energy production, including solar, wind, and biomass. By offering feed-in tariffs, the
policy guarantees producers fixed payments for energy supplied to the grid, incentivizing the shift
towards renewable energy sources and supporting Germany’s energy transition goals.
India's Export Subsidy for Sugar (2019): India implemented subsidies for sugar exports to reduce
domestic surplus and support farmers. The government compensated exporters, aiming to make
Indian sugar competitive in the global market.
Current Account deficit (US, 2023): narrowed by $152.8 billion, (15.7%) to $818.8 billion down to
3.0% of GDP vs. 3.8% previously.
Current Account surplus: German Current Account in surplus since 2002 (above 4% of GDP on
average) mostly due to car exports.
Fixed currency: Since 1999, the Bulgarian lev has been pegged to the Euro at a fixed rate of 1.95583
leva for 1 Euro.
Managed ER system: the SNB kept the Swiss franc artificially weak - min. ER at CHF 1.20 per euro