Economic Data, Research and Applied Investigation
This section covers economic data, research and applied investigation, including tables, charts and case material. The exam tests data literacy: choosing evidence, calculating correctly and explaining limitations.
Core rules
- Distinguish primary and secondary data, quantitative and qualitative data, cross-section and time-series data.
- Use index numbers with a clear base year. An index of 112 means a 12% rise from the base. Real values adjust for inflation; nominal values do not.
- Per capita figures divide by population. Percentage changes use the original value as the denominator. Percentage points measure differences between percentages.
- For tables, check units, base year, totals and whether values are real or nominal. For charts, use line graphs for time series, bar charts for categories and pie charts for shares.
- Correlation does not prove causation. Consider sample size, bias, omitted variables and data revision.
- In case material, quote the evidence, calculate, then explain the economic mechanism.
Worked example
An output index is 100 in 2020 and 112 in 2024. Prices rise 20% over the period. The real index is 112 divided by 1.20 = 93.3, so real output has fallen about 6.7%, even though nominal output rose.
Traps
Do not average percentages directly. Do not compare nominal values across years without adjustment. Do not assume a small sample represents the population. Do not claim causation from a strong correlation. Do not ignore footnotes defining the data.