Paper 4 — The Global Economy
Battle Card
FORGE · WEC14 Battle Card — compiled 2026-09-29. Last-look reference only: every real formula, definition-cue and marking-tariff snapshot on this page is already derived in full, with its worked chain and full citation trail, somewhere else in this technique hub — see "Where each line comes from" at the end for exactly where. Nothing here is re-derived or newly argued; this page exists to be read in the last ten minutes before the exam, not studied from. Not affiliated with or endorsed by Pearson Edexcel.
WEC14 Battle Card (Unit 4: Developments in the Global Economy)
One page. If it isn't here, it isn't a last-look item — go back to the curriculum lesson,
forge-exam-technique-guide.md, or codex-definitions-and-application-bank.md.
Paper snapshot
2 hours, 80 marks, WEC14/01. A 6 MCQ, 1 mark each (6). B Q7(a)–(e), one source booklet, 34 marks (2+4+6+8+14). C 2 essays chosen from 3 offered, 20 marks each (40). No official Pearson time-per-section exists — this course's own heuristic is ≈6–9 / ≈51 / ≈60 min. Examiner-confirmed: "most candidates were not actually able to complete the paper in the time available" (Jan 2025). Protect Section C's second essay — it's the one that gets rushed.
Formulas and calculations — write these down cold
| Quantity | Formula | Watch for |
|---|---|---|
| Terms of trade index | (export price index ÷ import price index) × 100 | Price only — says nothing about export revenue (price × quantity) or the trade balance |
| % change vs percentage-point change | Δ as a fraction of the start value ≠ the raw index-point gap | Only identical if the start value is exactly 100 — the single most-repeated calc error on the paper |
| Marshall-Lerner condition | PEDx + PEDm > 1 | Required for a depreciation/devaluation to improve the trade balance in the long run only |
| J-curve | Trade balance dips immediately post-devaluation (price effect), recovers only once volumes adjust | The dip is mechanical and happens regardless of elasticities — only the eventual direction depends on Marshall-Lerner |
| Gini coefficient | Area A ÷ Area (A+B) | 0 = perfect equality, 1 = perfect inequality; a curve moving closer to the equality line = lower Gini |
| Balance of trade | X − M (goods only) | Deficit = imports > exports / (X−M) negative; surplus = the reverse — both halves needed, and reversing them is a documented recurring error |
| Current account | trade in goods + trade in services + primary income + secondary income | "Capital and financial account" is an informal combined phrase in MS wording — the precise spec term for most of it is financial account alone |
| Relative unit labour cost | wage cost ÷ output per worker | NOT the wage level alone — a high-wage, high-productivity country can still have the lower unit cost |
| Laffer curve | R(0%) = R(100%) = 0 ⇒ a hump with a revenue-maximising rate t* | A rate above t* can be cut with revenue and output both rising — never assert which side of t* a real economy sits on without evidence |
| AD identity (for tax/spend effects beyond Laffer) | AD = C + I + G + (X − M) | Whether a shift hits output/employment or the price level depends on spare capacity |
| HDI | average of 3 indexed components: health (life expectancy), education (mean + expected years schooling), income (GNI per capita, PPP) | Uses GNI, not GDP — growth (GDP) and development (HDI) are separable claims, confirmed as an examiner-tested distinction |
| Relative poverty threshold | a stated fraction of the current median income (convention: 60%) | "Below the median" alone is not a valid definition — exactly 50% of any population sits below its own median by construction, whatever the inequality level |
Definition-cue pairs — the ones that get swapped under pressure
- Revaluation (fixed/managed, government decision) vs appreciation (floating, market-driven) — same direction, different regime and cause.
- Devaluation (fixed/managed, government decision) vs depreciation (floating, market-driven).
- Free trade area (internal free trade only) → customs union (+ common external tariff — the half most often dropped) → common market (+ free labour/capital movement) → economic and monetary union (+ shared currency).
- Trade creation (shift to a genuinely lower-cost bloc producer — welfare ↑) vs trade diversion (shift away from a lower-cost outside producer once the external tariff disappears internally — welfare ↓).
- Absolute poverty (fixed real threshold, can reach zero) vs relative poverty (moves with the median, cannot reach zero except by distribution collapse).
- Fiscal deficit (a flow, one period) vs national debt (the accumulated stock of past deficits).
- Structural deficit (persists at full/potential output — closes only via policy) vs cyclical deficit (closes automatically as the output gap narrows).
- Financial account of crowding out: government borrowing competes for loanable funds (raises rates, cuts private investment) vs resource crowding out: government spending competes directly for the same finite factors of production.
- Tariff (tax, raises price, generates govt revenue) vs quota (quantity limit, generates none directly) vs non-tariff barrier (standards/licensing — no price or quantity set at the border) vs subsidy (payment to domestic producers — the cost sits on the budget, not the shelf price).
- Market-orientated strategy (removes a government-imposed distortion: liberalisation, FDI promotion, subsidy removal, privatisation, floating the exchange rate, microfinance) vs interventionist strategy (supplies what a genuine market failure withholds: human capital, protectionism, managed exchange rates, infrastructure, TNC joint ventures, buffer stocks).
- WTO's three roles: liberalise trade (cut tariff/non-tariff barriers) · set the rules · resolve disputes [MS: Jun 2025 Q7(d)] — not a fourth invented role.
- Harrod-Domar (savings gap → investment gap → growth constraint) vs Lewis dual-sector model (surplus agricultural labour moves to higher-productivity industry) — frequently mixed up in both directions.
- World Bank (long-term development lending/projects) vs IMF (BoP/financial-stability lending, usually with conditionality) — role-flip is a confirmed recurring error; TNCs are not international institutions for this spec point.
Tariff-diagram reminder (a plain single-country tariff, not the bloc trade-creation/diversion diagram)
Domestic price rises Pw → Pw+t. Four separate areas move — score/identify each independently:
| Area | What happens |
|---|---|
| Consumer surplus | Shrinks — higher price, some buyers priced out entirely |
| Producer surplus | Grows — higher price, higher domestic output |
| Government revenue | Tariff × units still imported |
| Deadweight welfare loss | Two triangles — surplus destroyed, not transferred to anyone |
Named national weak point: candidates misidentifying which labelled area is the consumer-surplus loss, confusing it with producer surplus or the welfare triangles [MS: Oct 2021 examiner report — "distinction between consumer and producer surplus needs to be covered"].
Tariff-by-tariff marking snapshot — what actually earns the mark
| Tariff | Structure | Evaluation? |
|---|---|---|
| Section A MCQ (×6, 1 mark) | Recall / single-step application | — |
| B Q7(a), 2 marks | Pure calculation — correct unit and label, not just the number | — |
| B 4-mark "explain what is meant by…" | K2 + Ap2 — two distinct data points from the source required | No |
| B 6-mark "analyse/examine two…" | K2 + An2 + Ap2 | No — earns zero if written, confirmed twice, 4 years apart |
| B 8-mark "examine two…" | K2 + An2 + Ap2 + Eval2 | Yes — required, confirmed twice, 4 years apart |
| B Q7(e), 14 marks "discuss…" | KAA /8 + Eval /6, each capped at Level 3 — neither half reaches Level 4 | Yes; cover 2 source points developed, not 3+ listed |
| Section C essay (×2), 20 marks | KAA /12 (L1–4) + Eval /8 (L1–3, no L4) | Yes; informed judgement required for Eval L3 |
The 6-vs-8-mark line is the exact cutoff for whether Section B wants evaluation at all — it does
not sit between Section B and Section C. Full derivation and every quote: §2 of
forge-exam-technique-guide.md.
Top-5 danger warnings
- Percentage vs percentage-point. The single most-repeated calculation error on the paper — hits Q7(a) calculations (30% of candidates still lost a mark on Ghana's national-debt figure), terms-of-trade index changes, and tax/interest-rate questions alike. [MS: Jan 2025 Q7(a)]
- Two-stage reasoning chains cap KAA at Level 2 — confirmed on 4 separate series, 3 different topics (terms of trade, aid/development, income inequality, and named again in the general summary). "X causes Y, so Z happens" and stopping there is the ceiling, whatever the economics; a named, directional third/fourth stage is what's actually credited. [MS: Jan 2021 Q8/Q9; Jan 2024 Q8; Jan 2025 general summary]
- The country gate caps Section C at Level 3 KAA (max 9/12) if the stem's required category — developed, developing, "of your choice" — isn't named in the body of the answer, confirmed near-identically in ~12 of 13 mark schemes read; check the exact stem wording every time, since it is not a blanket paper-wide rule. [MS: Jan 2024 Q8]
- "Relative poverty = income below the median" is not a valid definition — exactly 50% of any population sits below its own median by construction, at any level of inequality. Only 6% of candidates scored full marks on this exact point. [MS: Jan 2021 Q7(c)]
- Writing evaluation on the 6-mark Section B part earns nothing at all — not merely wasted effort, actively non-credited, confirmed twice 4 years apart. Save the "however" sentence for the 8-mark part or Q7(e). [MS: Jan 2021 Q7(b); Jan 2025 Q7(c)]
Where each line comes from
Every formula, definition-cue and marking-tariff line above is a compressed pointer into work
already done and fully cited elsewhere in this technique hub — this page adds no new fact,
only the single-page format. Sources checked directly for this compression pass:
research/veridian/WEC14-verified-facts.md (the primary research bank); the seven lesson files
in content/veridian/curriculum/wec14/ (terms-of-trade-and-trading-blocs.ts for the ToT
formula, the tariff diagram and the %-vs-percentage-point trap; balance-of-payments-exchange- rates-and-competitiveness.ts for Marshall-Lerner, the J-curve, RULC and the current-account
components; poverty-and-inequality.ts for the Gini derivation and the relative-poverty
threshold; the-role-of-the-state.ts for the Laffer curve and the deficit/debt pairs;
growth-and-development.ts for HDI's three components and the market-orientated/
interventionist split); forge-exam-technique-guide.md (the tariff-by-tariff marking structure
and 5 of the "new for this document" danger items, of which this card selects the top 5); and
codex-definitions-and-application-bank.md (cross-checked for every definition-cue pair above,
none copied verbatim). signal-frequency-and-boundaries.md was read but not drawn on directly —
this card states no frequency or grade-boundary figure of its own; where a danger warning needed
a real count, it is cited to the primary mark scheme or examiner report directly, not restated
as a probability.
What this card deliberately leaves out. Grade boundaries and topic-frequency tables (already
in signal-frequency-and-boundaries.md, not duplicated here); the full application/KAA country-
example bank (codex-definitions-and-application-bank.md); the exam-day protocol and self-mark
checklist (forge-exam-technique-guide.md §3 and §5); and 3 of the 8 paper-wide danger items
forge-exam-technique-guide.md §4 already documents in full (bullet-point-format essays capped
by structure; copying the extract earning zero analysis; the flexible KAA/Eval direction note) —
real and citable, but a "top 5" selection has to leave something out, and those three are one
click away rather than repeated here.