evaluation economics essay

Tuesday, May 15, 2007

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Another great article! It is also a good idea, when judging the reliability of sources, to question the pulication date for the data given as this can effect accuracy of information. Other than that, I think you've pretty much covered it all! --Nina http://howtostudyexams.com

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How to Write a Good Economics Essay

Last Updated: March 7, 2023 References

This article was co-authored by Emily Listmann, MA . Emily Listmann is a private tutor in San Carlos, California. She has worked as a Social Studies Teacher, Curriculum Coordinator, and an SAT Prep Teacher. She received her MA in Education from the Stanford Graduate School of Education in 2014. This article has been viewed 127,157 times.

A good economics essay requires a clear argument that is well-supported by appropriately referenced evidence. Research your topic thoroughly and then carefully plan out your essay. A good structure is essential, as is sticking closely to the main essay question. Be sure to proofread your essay and try to write in formal and precise prose.

Preparing to Write Your Essay

• For example a question such as “Discuss the macroeconomic consequences of rising house prices, alongside falling interest rates” could be divided into 2 parts: 1 part could be on the effects of rising prices, and 1 on the effects of falling interest rates.
• In this example you could begin by discussing each separately and then bringing the 2 together and analysing how they influence each other.
• Be sure to keep the question at the forefront of your mind and don’t veer off topic. [1] X Research source

• Be sure that you understand all the key terms that you are being asked about.
• Try to keep your reading focussed closely to the essay question.
• Don’t forget to look at any lecture or class notes you have made.
• 3 Come up with a thesis statement . A thesis statement is the main argument you will make in your essay. It should be 1-2 sentences long and respond to the essential question that’s being asked. The thesis will help you structure the body of your essay, and each point you make should relate back to the thesis.

• Once you have put together a list of key points, then try to add in some more detail that brings in elements from your research.
• When you come to write out your essay, you can develop a paragraph based on each point.

• All of the evidence and explanation will be in the main body of the essay.
• Order the key points in the body of your essay in such a way that they flow logically.
• If you are writing a longer essay, you can break the main body into different sections. [2] X Research source
• If you have a word limit, be sure to take this into account when you are planning.
• Allocate yourself a rough number of words per section.
• The introduction and conclusion can be just a paragraph each.

Writing the Essay

• What your essay is about.
• What material you will cover in the essay.
• What your argument is. [3] X Research source

• Having this stated clearly at the start can help you to stay focussed on the question as you work your way through the essay.
• Try writing out this one or two sentence statement and sticking it up in front of you as you write, so it’s stays at the forefront of your mind.

• Try to begin each paragraph with a sentence that outlines what the paragraph will cover.
• Look at the opening sentence of each paragraph and ask yourself if it is addressing the essay question. [5] X Research source

• Try to engage with arguments that run counter to yours, and use the evidence you have found to show the flaws.
• It might help to imagine someone reading the essay, and anticipating the objections that he might raise.
• Showing that you have thought about potential problems, and you can make an argument that overcomes them, is a hallmark of an excellent essay. [6] X Research source
• If there is conflicting evidence, discuss it openly and try to show where the weight of the evidence lies. [7] X Research source
• Don’t just ignore the evidence that runs counter to your argument.

• In the conclusion you can add a few sentences that show how your essay could be developed and taken further.
• Here you can assert why the question is important and make some tentative suggestions for further analysis.

Proofreading and Making Revisions

• As you read through it, think about how closely you stick to main overarching question.
• If you notice paragraphs that drift off into other areas, you need to be tough and cut them out.
• You have a limited number of words so it’s essential to make every one count by keeping tightly focussed on the main question.

• Think about how you use the evidence too. Do you critically engage with it, or do you merely quote it to support your point?
• A good analytical essay such discuss evidence critically at all times.
• Even if the evidence supports your argument, you need to show that you have thought about the value of this particular piece of data.
• Try to avoid making any assumptions, or writing as if something were beyond dispute. [10] X Research source

• Remember an academic essay should be written in a formal style, so avoid colloquialisms.
• Avoid contractions, such as “don’t”, or “won’t”.
• Try to avoid paragraphs that are more than ten or fifteen lines long.
• Think about how it looks on the page. [12] X Research source

• Always include a bibliography, but don’t include references to things you haven’t read or didn’t inform your argument. [13] X Research source
• Your teacher will know if you just add a load of titles into your bibliography that are not evidenced in the body of your essay.
• Always follow the bibliography format used by your department or class.

Community Q&A

You Might Also Like

• ↑ http://www.economicshelp.org/help/tips-economic-essays/
• ↑ http://www.writing.utoronto.ca/advice/planning-and-organizing/organizing
• ↑ http://carleton.ca/economics/courses/writing-preliminaries/academic-essay-writing/
• ↑ https://www.economicsnetwork.ac.uk/archive/lse_writing/page_11.htm
• ↑ http://homes.chass.utoronto.ca/~mcmillan/writing.pdf
• ↑ https://www.royalholloway.ac.uk/economics/documents/pdf/essaywriting-departmentofeconomics.pdf

About This Article

Before you begin writing your economics essay, make sure to carefully read the prompt so that you have a clear sense of the paper's purpose and scope. Once you have read the prompt, conduct research using your textbook and relevant articles. If you cannot find research materials, ask your instructor for recommendations. After your research is done, construct a 1-2 sentence thesis statement and begin outlining your main ideas so that your essay will have a clear structure. Make sure to leave time to write a draft and revise your work before it is due. If you want to learn more, like how to cite the sources you used for your essay, keep reading the article! Did this summary help you? Yes No

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Economics Extended Essay: A Complete Guide (Including Topics)

by  Antony W

July 18, 2022

Are you looking for a complete guide on Economics Extended Essay? You’ve come to the right place.

The IB diploma program is a comprehensive education framework that requires students to:

• Complete 3 to 5 Internal Assessments
• Write a Theory of Knowledge Essay
• Complete an Extended Essay in a topic of your choice.

As an IB student, you must compose a 4,000-word autonomous, self-directed essay on a topic of your choosing. An extended essay (EE) in economics gives you the chance to do an in-depth research on a topic of personal interest that is academically rigorous and worthy of study.

Engaging in and completing the extended essay in economics enables you to:

• Enhance your research abilities
• Apply economic theory to a real-world scenario or issue 
• Analyze and evaluate the results of your study

The extended essay involves around 40 hours of preparation, with the assistance of a school-based EE supervisor. The result of the study should be a clear and well-organized analytical essay that handles the specific research subject successfully.

To succeed in the economics EE, you must be prepared to do research to deepen your understanding of the theory and to collect meaningful and trustworthy data that you can analyze in the context of the theory and the research topic.  

How to Structure an Economics Extended Essay

The table below shows what the structure of your economics extended essay assignment should include:  

Economics Extended Essay Assessment Criteria

The table below is a summary of the assessment criteria that IB uses to grade all the economics extended essays:  

Choosing an Economics Extended Essay Topic

In picking an appropriate topic for your economics EE, you should consider the portion of the course material that most piques your attention. As a framework for investigating the issue that most interests you, your essay should focus on the fundamental economic concepts.

You must undertake secondary research, but you may also conduct pertinent original research depending on the area of economic content selected. You should use the economic theories, methods, and instruments presented in the curriculum to the selected issue.

While choosing the topic for the economics EE make sure that:

• The topic isn’t historical. The chosen topic and research question you choose to focus on should be no more than five years old
• You can answer the research question using economic theories and concepts
• The topic you choose provides opportunities for critical analysis of the information and data collected
• The scope of the essay has a clear focus, while allowing room for your analysis.

You should avoid picking broad topics, as the EE needs critical and reflective thinking abilities on a particular subject.

However, keep in mind that excessively narrow themes sometimes want particular data that may not be accessible.

So choose your topic wisely, making sure that it isn’t too wide or too narrow to fit within the scope of the assignment’s requirements.

Examples of Economics Extended Essay Topics

The following are some examples of economics extended essay topics to give you an idea of what a specific, concise, and focused topic looks like:

• What is the major factor influencing cabbage demand in Busan, South Korea?
• In what capacity does Chartwells Compass Group (school catering service providers) compete in Sevenoaks, United Kingdom?
• How has Leicester City Football Club’s (LCFC) championship triumph contributed to the city’s economic growth?
• How has the application of the Double Stamp Duty affected the Shek Kip Mei, Hong Kong home market?
• How has demonetization affected the Mumbai Metropolitan Region’s residential real estate market?
• To what degree is the repeal of the sugar tax in Denmark economically justifiable?
• How has the increase in tariffs influenced the demand for Tallinn, Estonia vodka?

Data Collection in Economic Extended Essay

You are encouraged to do original research on any topic covered within the curriculum. In other words, you need to spend time establishing value for your topic be it in microeconomics, macroeconomics or the global economy.

Doing original research goes a long way to show that the title as well as the research question is an issue unanswered by secondary sources.

An EE concentrating on a facet of microeconomics might be undertaken utilizing primary research in the form of surveys, questionnaires, or interviews with pertinent businesspeople. However, these must be directly pertinent to the study subject.

Keep in mind that Extended Essay themes from Macroeconomics and The Global Economy require more secondary research in the form of data extraction from published academic papers, historical records, government publications, newspaper/online articles, and statistical databases.

An EE based on one of these two areas of the syllabus demands the collection and clear use of relevant secondary data and information to aid in the development of reasoned arguments.  

Economics Extended Essay Analysis and Evaluation

The analysis of your economics extended essay can only be effective if you use pertinent economic theories to analyze data collected.

Throughout the EE, you should incorporate applicable economic theories, models, and methods with your research’s findings.

For example, you can exhibit critical analysis and evaluation by a sound assessment and judgment of the amount to which the applicable economic theory is beneficial in addressing your research question and within the context of the issue.

If you cannot establish relevant connections to the selected topic and research issue avoid establishing knowledge claims based on economic theories, models, and instruments.

In order to answer the specific research question, you should include supporting evidence or facts throughout the essay.

Note that Criterion C of the assessment standards requires you to offer precise findings for each analyzed point. In other words, you must provide interim conclusions throughout your writing. You must also demonstrate a critical understanding of the veracity of the obtained and utilized data.

When developing your arguments, you should also demonstrate knowledge and comprehension of the limitations of your own research as well as the flaws in the economic theories and underlying assumptions of the models utilized. To do this, evaluate the extent to which economic theory may or may not describe the examined topic’s facts.  

The Reflection Session for Economics Extended Essay  

Being reflective is one of the IB learner profile characteristics, and it is now a formal requirement of the EE evaluation criteria.

IB uses the Reflections on Planning and Progress Form (RPPF), which has a 6-point value, to evaluate reflections. This is a substantial amount of points, which can determine the distinction between two grades on the final examination.  

As part of the EE requirements, you will be required to hold three mandatory reflection sessions with your supervisor, and each of these reflection sessions appear on the official RPPF.

Reflection in the EE focuses on the process of the assignment itself.

Consider the following areas of reflection for each portion of the RPPF:

• How did you overcome the problems, setbacks, and barriers you encountered, and what did you learn in the process?
• Which of the IB learner profile characteristics apply to you?
• What did you learn, and did new views emerge?  

The maximum word count for all three reflections is 500. You must write the reflection in your own word and pertain only to your personal learning journey throughout the course.

About the author 

Antony W is a professional writer and coach at Help for Assessment. He spends countless hours every day researching and writing great content filled with expert advice on how to write engaging essays, research papers, and assignments.

Evaluation for Micro Economics

Evaluation is the ability to look at issues from a critical perspective; to look at other potential outcomes. Evaluation questions will typically begin with words like, discuss, evaluate, to what extent, assess.

These are some ways to get evaluation marks for microeconomics. (note there are potentially more ways to evaluate but this gives a few ideas)

1. Elasticity. e.g the effect of a tax increase depends upon the elasticity of demand. If demand for cigarettes is inelastic, a tax will be relatively ineffective in reducing demand. However, if demand for a good is quite price elastic, then a tax increase will reduce demand significantly. If we look at the effect of a minimum wage or trade union, the impact will also depend on the elasticity of demand. For example, if demand and supply are inelastic, then the impact of a minimum wage on unemployment will be relatively small.

The impact of a subsidy depends on the elasticity of demand

If demand is price elastic (e.g. diagram on the left, then a subsidy causes a bigger percentage change in demand. If demand is price inelastic, then a subsidy only causes a small rise in demand.

2. Significance A rise in the price of oil has a significant impact on the costs of firms. A rise in the price of water is much less significant.

For example What is the impact of a rise in the price of coffee beans on coffee shops like Starbucks? Estimates suggest that coffee beans only account for 2% of the final price of a Starbucks, therefore it will be relatively insignificant. Starbucks would be more greatly affected by a change in city centre rents or an increase in the minimum wage.

For a question on – discuss why women get lower wages than men, you could one reason why women get lower paid than men is men tend to gain more qualifications. However, this point is relatively insignificant because women’s academic qualifications have, more or less, caught up with men and so this point is no longer so significant as it was 40 years ago.

3. Depends on the industry. If we are examining whether a merger is in the public interest, it depends very much on the industry in question. For example a merger between two firms in the car industry may enable significant economies of scale, because in that industry there are high fixed costs. However, if the merger was between two firms in the retail business, the scope for economies of scale is much less. Therefore, the Competition and Markets Authority will look at the scope for economies of scale in the industry.

4. Short Term / Long Term. The impact of a rise in oil prices in the short term is likely to involve only a small fall in demand because demand is inelastic. But, over time demand becomes more elastic as people start to find alternatives to oil, such as hybrid cars. Therefore, the effect of rising oil prices will be different in the long term to the short term.

5. Government intervention may always lead to government failure

E.g. government subsidies may encourage inefficiency because firms start to rely on government handouts. This is an unintended consequence. The EU Common Agricultural Policy (CAP) involved subsidies to ensure minimum prices but this caused an increase in supply and the cost proved much higher than expected.

6. Depends on market structure

The effect of a trade union depends on whether it is operating in a competitive market or monopsonistic market.

7. Depends on the objective of firms

For example, a profit maximising firm is more likely to collude. A firm seeking to maximise market share is more likely to start a price war. Useful for a question on – Discuss how firms in Oligopoly compete?

See: Objectives of firms

8. Depends on contestability of market

A merger may be OK, if the market remains contestable . But, if there are barriers to entry the merger may reduce competition too much.

• Evaluation for exams
• Writing evaluative essays
• Tips for writing economic essays
• economic toolkit

Up: Home : Study Guidance > Effective Writing and Referencing > Writing the Economics Essay

• Writing the Economics Essay

An academic rhetoric (or organisation) is important to convince a reader that you understand the topic well – poor organisation can signal muddled thinking.

Thesis – Justification – Support

This is the rhetoric used by Bray et al.

Thesis – the main concept or idea that you are proposing

Justification – the reasons why your thesis is valid

Support – evidence that backs up your justification

Essay structure – your introduction, main body, and conclusion

Box: An example

The Thesis – Justification – Support rhetoric can be applied to an individual paragraph of an essay, or on an entire essay. For example, take the essay question:

‘The accumulation of capital is sufficient for ensuring sustainable growth in per capita living standards’. Discuss.

One possible answer would be:

Thesis: if we define capital as physical capital, the accumulation of capital will lead to diminishing returns

Justification: Demonstration of the Solow model : capital accumulation can result in higher levels of income but after a certain level not higher levels of consumption per capita (due to diminishing marginal returns).

Support: examples, such as India’s heavy investment drive in the 1950s, 1960s which was associated with low levels of ‘Hindu growth’; or econometric evidence, such as that from Mankiw, Romer and Weil (1992), which supports some of the conclusions of the Solow model (but also suggests improvements, see below).

The next section of the essay would play with the assumptions of the Solow model – for example by expanding our definition of capital to include human capital (and, if you’re really trying to impress, social capital and ‘natural’ capital as well).

You might also want to discuss if technological progress (the source of per capita income growth in the Solow model) is related to capital accumulation, for example through ‘ learning by doing ‘ (Arrow, 1962)

Previous: Effective Writing and Referencing

Next: What makes good justification?

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Economics Essay Examples

Ace Your Essay With Our Economics Essay Examples

Published on: Jun 6, 2023

Last updated on: Jan 31, 2024

Share this article

Are you struggling to understand economics essays and how to write your own?

It can be challenging to grasp the complexities of economic concepts without practical examples.

But don’t worry! 

We’ve got the solution you've been looking for. Explore quality examples that bridge the gap between theory and real-world applications. In addition, get insightful tips for writing economics essays.

So, if you're a student aiming for academic success, this blog is your go-to resource for mastering economics essays.

Let’s dive in and get started!

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What is an Economics Essay?

An economics essay is a written piece that explores economic theories, concepts, and their real-world applications. It involves analyzing economic issues, presenting arguments, and providing evidence to support ideas. 

The goal of an economics essay is to demonstrate an understanding of economic principles and the ability to critically evaluate economic topics.

Why Write an Economics Essay?

Writing an economics essay serves multiple purposes:

• Demonstrate Understanding: Showcasing your comprehension of economic concepts and their practical applications.
• Develop Critical Thinking: Cultivating analytical skills to evaluate economic issues from different perspectives.
• Apply Theory to Real-World Contexts: Bridging the gap between economic theory and real-life scenarios.
• Enhance Research and Analysis Skills: Improving abilities to gather and interpret economic data.
• Prepare for Academic and Professional Pursuits: Building a foundation for success in future economics-related endeavors.

Paper Due? Why Suffer? That's our Job!

If you’re wondering, ‘how do I write an economics essay?’, consulting an example essay might be a good option for you. Here are some economics essay examples:

Short Essay About Economics

A Level Economics Essay Examples

Here is an essay on economics a level structure:

Band 6 Economics Essay Examples

Here are some downloadable economics essays:

Economics essay pdf

Economics essay introduction

Economics Extended Essay Examples

In an economics extended essay, students have the opportunity to delve into a specific economic topic of interest. They are required to conduct an in-depth analysis of this topic and compile a lengthy essay. 

Here are some potential economics extended essay question examples:

• How does foreign direct investment impact economic growth in developing countries?
• What are the factors influencing consumer behavior and their effects on market demand for sustainable products?
• To what extent does government intervention in the form of minimum wage policies affect employment levels and income inequality?
• What are the economic consequences of implementing a carbon tax to combat climate change?
• How does globalization influence income distribution and the wage gap in developed economies?

IB Economics Extended Essay Examples 

IB Economics Extended Essay Examples

Economics Extended Essay Topic Examples

Extended Essay Research Question Examples Economics

Tips for Writing an Economics Essay

Writing an economics essay requires specific expertise and skills. So, it's important to have some tips up your sleeve to make sure your essay is of high quality:

• Start with a Clear Thesis Statement: It defines your essay's focus and argument. This statement should be concise, to the point, and present the crux of your essay.
• Conduct Research and Gather Data: Collect facts and figures from reliable sources such as academic journals, government reports, and reputable news outlets. Use this data to support your arguments and analysis and compile a literature review.
• Use Economic Theories and Models: These help you to support your arguments and provide a framework for your analysis. Make sure to clearly explain these theories and models so that the reader can follow your reasoning.
• Analyze the Micro and Macro Aspects: Consider all angles of the topic. This means examining how the issue affects individuals, businesses, and the economy as a whole.
• Use Real-World Examples: Practical examples and case studies help to illustrate your points. This can make your arguments more relatable and understandable.
• Consider the Policy Implications: Take into account the impacts of your analysis. What are the potential solutions to the problem you're examining? How might different policies affect the outcomes you're discussing?
• Use Graphs and Charts: These help to illustrate your data and analysis. These visual aids can help make your arguments more compelling and easier to understand.
• Proofread and Edit: Make sure to proofread your essay carefully for grammar and spelling errors. In economics, precision and accuracy are essential, so errors can undermine the credibility of your analysis.

These tips can help make your essay writing journey a breeze. Tailor them to your topic to make sure you end with a well-researched and accurate economics essay.

To wrap it up , writing an economics essay requires a combination of solid research, analytical thinking, and effective communication. 

You can craft a compelling piece of work by taking our examples as a guide and following the tips.

However, if you are still questioning "how do I write an economics essay?", it's time to get professional help from the best essay writing service -  CollegeEssay.org.

Our economics essay writing service is always ready to help students like you. Our experienced economics essay writers are dedicated to delivering high-quality, custom-written essays that are 100% plagiarism free.

Also try out our AI essay writer and get your quality economics essay now!

Barbara P (Literature)

Barbara is a highly educated and qualified author with a Ph.D. in public health from an Ivy League university. She has spent a significant amount of time working in the medical field, conducting a thorough study on a variety of health issues. Her work has been published in several major publications.

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Example 25-Mark Essay in style of AQA Economics A-level

Below is an example model answer to a 25 mark question in the style of AQA Economics A-level.

For extra practice questions or exam technique advice, check out the following posts:

Question for model answer

Consider the following question. This is a question I have written in the style of a 25-mark AQA Economics A-level question for section B:

Taking effect from 1st April 2023, the UK Government has committed to increasing the corporation tax rate from 19% to 25% for companies with profits above £250,000 per year. For firms with profits below £50,000, there is no increase in corporation tax rates. But for firms with profits between £50,000 and £250,000 there will be a smaller increase in corporation tax rates.

(Source: here )

Evaluate the effects on the UK economy of increasing corporation tax rates on firms making high profits (25 marks) .

This is a key macroeconomics essay on current affairs. A quick essay plan is here:

• Define key terms.
• Laffer curve – higher government revenue.
• Evaluation – position on Laffer curve.
• AD effect – lower investment and negative multiplier effect.
• Evaluation – proportion of AD that comes from investment.
• LRAS effect – reduced incentives and productivity.
• Evaluation – need to compare corporation tax rates to those of other economies.

Conclusion.

Possible model answer

Corporation tax is a tax on firms’ profits. Aggregate demand (AD) is the total demand in the economy, AD = C+I+G+X-M. 

Increasing corporation tax rates may increase tax revenue for the UK Government. The Laffer curve shows this. An increase in tax rates from T to T1 raises tax revenue from R to R1. This revenue could go towards reducing the budget deficit. The government’s budget deficit is very high at 14.9% of the UK’s GDP in 2020-21. This is because of government spending in the pandemic on for example the furlough scheme. Reducing the budget deficit may lead to government borrowing and hence reduced debt interest payments. With less spending on debt interest the UK Government could choose to spend more money in the future on other priorities such as healthcare spending. Sounder public finances might also make investors more confident in the UK Government’s ability to make bond repayments. This may reduce the interest rates at which investors are willing to buy government bonds and thus reduce future borrowing costs.

Whether the tax increase raises government revenue depends on the position of the UK economy on the Laffer curve. If instead the economy is at point (T1,R1) before raising corporation taxes, then increasing the corporation tax rate to T2 may decrease revenue to R. This is because a corporation tax rise may reduce incentives to start or grow a business, reducing the size of the tax base. The UK Government does predict that tax revenue would rise by over £10bn a year because of the corporation tax rate rise. With corporate tax rates relatively low now, it is likely that there will be higher revenue. But the effect of higher taxes on incentives may reduce the extent to which revenue increases.

Increasing corporation tax rates “from 19% to 25% for companies with profits above £250,000 per year”  reduces the post-tax profits of these firms. This leaves reduced funds for investment, so investment may fall. Also as firms know any future profits will be taxed at a higher rate, this will disincentivise investment further. This is because firms will have reduced returns (lower post-tax profits) from any new investment. So investment falls and as investment is a component of aggregate demand (AD=C+I+G+X-M), aggregate demand shifts left from AD to AD1. This may cause a negative multiplier effect. This is where a fall in investment leads to a larger than proportionate fall in A. Lower investment results in lower incomes for firms and cuts in wages, so consumers cut their spending, meaning consumption also falls and so on. So AD shifts further left to AD2. This results in lower real GDP as real GDP falls from Y to Y2. Hence corporation tax may lower real GDP, likely resulting in lower living standards.

However this argument depends on the proportion of AD influenced by the corporation tax rate rise. Only firms making larger profits are facing a corporation tax rise. So firms making lower profits, for example small businesses, are less likely to reduce their investment. Also consumption is the largest component of AD, making up roughly 60% of AD, not investment. So a given percentage fall in investment may have only a smaller effect on AD. Corporation tax is likely to reduce AD leading to lower real GDP. But these impacts are limited by the relative importance of investment to AD and the design of the policy to target high profit firms only.

Decreased investment can also influence the supply side of the economy. Lower investment could mean reduced firm spending on capital goods and human capital. So this could reduce productivity and hence the productive capacity of the economy. This means the LRAS could shift to the left. Higher corporation taxes could mean higher business costs, shifting the short-run aggregate supply curve left too. Lower productivity and higher business costs could lead to a higher price level in the UK economy, reducing the competitiveness of the UK as a place to do business. Productivity for the UK economy is 15% below the average of other G7 economies (as of 2015), so corporate tax rises could further worsen this UK productivity gap with other nations. So there may be fewer businesses choosing to set up in the UK, preferring to set up abroad.

However this depends on the level of corporation tax rates in other economies. The UK has the lowest corporate tax rate among the G7 economies, even after the tax rise. Hence there may be fewer incentives to set up a business abroad, so the effect on competitiveness is reduced. Also many economies have agreed to a global minimum corporation tax of 15%, further reducing the risk to competitiveness from raising corporation taxes. While the corporation tax rate rise may reduce investment, it is less likely to have a significant impact on competitiveness.

Overall raising corporation tax on firms making high profits is likely to be effective in raising revenue. While raising corporation tax will reduce aggregate demand and aggregate supply, by raising taxes only on higher-profit firms, the impact is limited. The impact of the tax rise does depend on how other countries respond – if other countries maintain or reduce their tax rates to attract more businesses, then increasing corporate taxes could significantly reduce the incentive for international businesses to set up in the UK. However, given the increasing degree of tax cooperation globally, as shown by the 15% minimum corporate tax rate agreement, it seems likely that countries will not seek to undercut each other’s corporate tax rates.

Application is throughout using examples from the short extract and from own knowledge to support analysis and evaluation.

Analysis is detailed, using chains of reasoning and graphs to support the answer.

Evaluation is also detailed, making use of chains of reasoning and where relevant, data about the economy. The conclusion addresses the question and justifies the answer.

Note for the conclusion you could have picked another side for this policy too depending on the arguments used. You could also use other possible points – there is no right way of doing this. For example with interest rates at historical lows, how does that impact the cost of government borrowing and the necessity of raising taxes? What other factors may matter for investment beside corporate tax rates?

This essay would likely score level 5 according to AQA Economics A-level criteria.

For more guidance on AQA exam technique (25 markers, 15 markers, 9 markers and more), check out the blue button below:

Other Questions

How many words should there be in a 25 marker economics.

Most 25 mark responses, that can be replicated within exam conditions, are within the range of 700 to 1100 words.

However this is arbitrary – word count does not matter as much, provided you answer the question and write in depth.

Achieving depth in analysis and evaluation, answering the question – see my economics resources here for more information on essay structures and how to evaluate.

How should you structure a 25 marker economics essay?

Introduction

Depending on depth of your previous points, add another round of analysis and evaluation.

For more information on AQA Economics essay structure, I recommend the following article linked here .

How should you write a conclusion for 25 markers economics?

A conclusion has these key elements:

• Answer the question.
• Justify your answer in step 1.
• Consider other evaluation points, including real-world context, for further justification or that may go against your answer.

How should you evaluate in economics 25 markers?

I recommend the “depends on” structure for AQA Economics style evaluation. For more information on this, see my AQA Economics style evaluation guide here .

More Resources

Here is a link to an online course for AQA Economics A level exam technique:

For practice questions on microeconomics, please see the button here:

For macroeconomics practice questions, please see the button here:

If you are interested in more A-level Economics resources, please feel free to click the button below:

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Evaluating Monetary Policy (Online Lesson)

Last updated 28 Apr 2020

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In this online lesson, we cover some of the key approaches for evaluating the effectiveness of monetary policy. You may want to take a look at the lesson introducing monetary policy and the lesson for quantitative easing first.

WHAT YOU'LL STUDY IN THIS ONLINE LESSON:

• A review of the main types of macro policy and key aspects of monetary policy
• Evaluating monetary policy and its effectiveness by looking at why the interest rate transmission mechanism may not work in practice
• The need for alternative monetary policy approaches
• Inflation targeting
• Broader evaluation points

Additional teacher guidance is available at the end of this lesson.

Thank you to Peter McGinn and Jon Clark for their contributions to this lesson.

HOW TO USE THIS ONLINE LESSON

Follow along in order of the activities shown below. Some are interactive game-based activities, designed to test your understanding and application of monetary policy. Others are based on short videos, including activities for you to think about and try at home, as well as some extra worksheet-based activities.

If you would like to download a simple PDF worksheet to accompany the video activities, you can download it here: Evaluating Monetary Policy . You can print it off and annotate it for your own notes, or make your own notes on a separate piece of paper to add to your school/college file.

ACTIVITY 1: VIDEO - REVIEW OF THE TYPES OF MACRO POLICY

Test yourself against "The Cube" in this quick review activity of the different types of macro policy.

ACTIVITY 2: VIDEO - MONETARY POLICY KEY TERMS

Before we can address some of the key evaluation points for monetary policy, it's important to make sure that the essential monetary policy terminology is spot on! Check your knowledge in this quick review video.

ACTIVITY 3: GAME - MULTIPLE CHOICE QUESTIONS

Test yourself against the clock with these MCQs on monetary policy.

ACTIVITY 4: VIDEO - BREAKDOWN OF THE TRANSMISSION MECHANISM

For the last decade or so, changes to Bank Rate have not been as effective as they had been in the past. The interest rate transmission mechanism has broken down in parts. This video activity takes you through some of the reasons for this.

ACTIVITY 5: READING AND THINKING TIME - INFLATION TARGETS

From the 1990s onwards, a number of Central Banks decided to introduce inflation targets as part of their monetary policy approach.

For a brief overview of the UK's inflation target, take a look at the Bank of England information here . You can follow this up with a slightly more in-depth explanation of inflation targeting from the IMF here .

Next, take a look at this article from the Federal Reserve Bank of San Francisco on the pros and cons of inflation targeting. You could also read this opinion piece from CNBC , which considers whether inflation targets should be scrapped in light of the impact of COVID-19.

Finally, download this tutor2u resource On Target . On the 2nd page, you will find a series of statements regarding inflation targeting as a monetary policy. Some are advantages of this approach whilst others are disadvantages. Your task is to i) organise the statements into advantages and disadvantages ii) rank those statements from "most convincing" to "least convincing".

ACTIVITY 6: GAME - INFLATION TARGETS

In this Higher or Lower game, build your knowledge of how different economies approach inflation targeting.

ACTIVITY 7: VIDEO - UNCONVENTIONAL MONETARY POLICY

When Central Banks realised that the traditional interest rate transmission mechanism was not going to be as effective as they'd hoped following the Financial Crisis of 2007-2009, they had to turn to some alternative approaches. This video introduces you to some of these unconventional approaches to monetary policy.

ACTIVITY 8: SYNOPTIC THINKING

In your A level exams, you will need to be able to use your economics in a synoptic way i.e. making connections across different aspects and topics in your course. Download this tutor2u Synoptic Assessment Mat to help you practise this skill in relation to monetary policy.

ACTIVITY 9: VIDEO - GENERAL EVALUATION POINTS FOR MONETARY POLICY

In this final video for this lesson, we take you through some of the wider evaluation points for monetary policy.

ACTIVITY 10: DATA RESPONSE

The best way to work out how well you've understood the material in the online lessons on monetary policy is to have a go at some exam-style questions! We've put together a data response set of questions that you could tackle. If you are doing AQA Economics then download this AQA-style data response . If you are doing Edexcel Economics, then download this Edexcel-style data response . If you are following an alternative specification, ask your teacher which of these is the most appropriate for you.

ACTIVITY 11: ESSAY ANALYSIS

An effective way of learning how to write good essays is to read essays that would be awarded high marks in an exam and then analyse the reasons why they would be awarded high marks. You can have a go at this for the following two essays:

• Evaluating the effectiveness of inflation targeting as a tool of monetary policy
• Evaluating the impact of monetary policy on economic performance

Jot down some notes on the key features of these essays, and try highlighting the aspects of the essay that you might not have thought to include yourself if you had tackled that essay title.

EXTENSION READING

The Bank of England has produced a number of reports which aim to compare and contrast different approaches to monetary policy. T his paper focuses on comparing credit easing with quantitative easing, and is worth a read.

This transcript of a speech for the ECB considers why some commentators have regarded recent monetary policy as ineffective, and attempts to explain why they are wrong.

ADDITIONAL TEACHER GUIDANCE

This lesson comprises:

• around 30 minutes of guided video, spread over 5 videos, and supported by an accompanying worksheet
• around 20-25 minutes of student thinking time and activity, spread throughout those 5 videos
• an independent reading and ranking activity on inflation targeting, which could take students anywhere between 15 minutes and 1 hour, depending on their level of involvement
• 2 interactive games testing their application and knowledge of monetary policy
• a synoptic thinking activity (solutions available within the activity download)
• a suggested data response activity
• an essay-based activity, in which 2 example essays on monetary policy are provided (along with some examiner commentary) and students need to consider the strong features of these essays
• extension reading

We anticipate that the "core" of the lesson would take around one hour, with an extra 90 minutes for the written tasks. For the data response activity, there is a choice between an AQA-style and an Edexcel-style data response. Please advise your students which is the most appropriate for them, especially if you follow a different awarding body specification. You can find suggested answers to the AQA DR here and to the Edexcel DR here .

• Monetary policy
• Unconventional Monetary Policy
• Central Bank
• Inflation target
• Quantitative easing (QE)

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Guest Essay

This Is the Best Way for Biden to Talk About the Economy

Mr. Wu is a law professor at Columbia, a contributing Opinion writer and the author of “The Curse of Bigness: Antitrust in the New Gilded Age.” He served on the National Economic Council as a special assistant to the president for competition and tech policy from 2021 to 2023.

Since the early 2000s, most Americans have generally been dissatisfied with the economy, and many are insecure about their place in it. The dissatisfaction peaked during the Great Recession of 2007 to 2009 but persists, even as the economy is growing and unemployment and inflation combined are roughly where they were during the relatively upbeat days of the Kennedy administration. This is a stubborn, long-term disgruntlement.

Unlike short-term economic dissatisfaction, which lends itself to tinkering with interest rates and budgetary trade-offs, long-term dissatisfaction suggests a deeper, structural problem with the economy that requires more drastic measures. It is perhaps the signature achievement of the Biden administration that it has recognized this problem — specifically, the increasingly centralized, unbalanced nature of economic power in the United States over the past four decades — and is trying to address it.

But this policy wisdom also presents a political challenge. The administration’s strategy is unconventionally bold and far-reaching — an attempt to replace today’s toxic form of capitalism with an earlier, fairer model of free enterprise. Viewed through the narrow lens of conventional economic thinking, that strategy is easily misunderstood or overlooked, perhaps especially by its would-be allies in the political center and on the center-left. Today’s familiar left-right economic debates, for example, in which the left wins by taxing and spending and the right wins by cutting taxes, have precious little to do with the more ambitious vision of President Biden’s administration.

Americans are desperate for a fundamentally different, fairer kind of economy, and Mr. Biden is working to give them one. The urgent challenge, politically, is helping voters understand that.

To appreciate the novelty of the Biden administration’s approach to the economy, it is worth remembering that over the past 40 years the orthodoxy on the center-left has been a tax-and-transfer strategy. It has meant tolerating or even encouraging corporate consolidation and profit while maintaining the expectation that those profits would be redistributed in the service of the less powerful and less well-off. The popular metaphor of a national pie suggested focusing first on growing the pie and then on dividing it up equitably.

This logic has been a favorite of those arguing for deregulation and tax cuts since the 1980s. It was also used extensively to promote the World Trade Organization and free trade policies: The idea was that increased profits would be used to compensate displaced workers later on. Today, the same thinking would permit mergers between credit card companies like Discover and Capital One: Even if they charged higher rates and fees, we could always redistribute the profits later.

The problem is that “later” never seems to come. The pie metaphor has always been misleading: An actual pie must be divided before being eaten. But corporate profits aren’t like that. They go directly to the owners and managers and usually stay there. Redistributing profits requires prying money out of some very strong hands, hands that become stronger the wealthier they get. In a political system in which money talks, the pie will rarely get divided.

The Biden administration, in a break with center-left orthodoxy, seeks to address economic inequality not through taxation and transfers but through policies that allow more people and businesses to earn wealth in the first place. That is the meaning of the somewhat mysterious liberal catchphrase “growing from the middle out.” The goal is not the redistribution but the predistribution of wealth, to use a term popularized by the political scientist Jacob Hacker.

This approach calls for a different kind of capitalism — one that opposes the centralization of economic power and favors a market in which wealth can be earned by people and businesses in a broader set of regions, drawn from a wider array of social classes and involving a more diverse set of industries.

Over the past three years of the Biden administration, you can see this philosophy at work in what may seem like different areas. It is at the heart of the Justice Department’s continuing New Deal-style antimonopoly campaign, which has already prevented dozens of unwise mergers (like the recent proposed acquisition of Spirit Airlines by JetBlue Airways). It undergirds Mr. Biden’s renewed support for organized labor, as well as his worker-centered trade policy and the increasingly combative approach to the economic threat posed by China. It explains the reinvigoration of industrial policy on Capitol Hill, most notably through supporting regional manufacturing like the huge semiconductor factories being built in Arizona by the Taiwan Semiconductor Manufacturing Company. It also underlies the administration’s campaign against junk fees across the economy, including the creation of a rule limiting credit card late fees that will save Americans an estimated $10 billion a year.

These efforts are usually discussed and understood separately. But they share an underlying logic: All are aimed at leveling imbalances of economic power, and all assume that the economy works better for most Americans when it is more competitive and when earning power is more broadly distributed. (I worked on some of these issues on the National Economic Council, where I served as a special assistant to the president for competition and tech policy.)

There is arguably nothing more American than the balancing of power. The authors of the Constitution of the United States believed that unaccountable and centralized power was the chief evil facing any nation. Had the founders been familiar with the modern American corporation, surely they would have wanted to check its power.

Americans understand this instinctually. The National Football League, the nation’s most popular and successful sports league, doesn’t allow the richest organizations in places like New York or Los Angeles to build unbeatable teams. It has developed a structure of competition that rebalances power by way of a draft, salary cap and other techniques. No one thinks it unusual that a small city like Kansas City, Mo., can become a football powerhouse. In its own way, the N.F.L. — widely accepted as fair by Americans — provides a model for the U.S. economy.

When overly focused on metrics like growth and employment, economic analysis can fail to grasp how most Americans actually experience the economy. Most people understand all too well that those in the broad economic middle of the country are having a much harder time than their parents did — and that something went seriously astray starting in the early 2000s. They want a more fundamental kind of economic change.

To succeed in the 2024 election, Mr. Biden needs to convince voters that he has begun a long fight against today’s toxic form of capitalism. He needs them to understand that he is making the economy fairer and more productive. He needs to explain that Donald Trump’s invocations of economic grievance are real and justified but that unlike Mr. Trump — who used those grievances to fuel tribal politics while doling out corporate tax cuts and other giveaways to wealthy friends and donors — he is actually doing something about it.

Tim Wu, a law professor at Columbia, is the author of “The Curse of Bigness: Antitrust in the New Gilded Age.” He served on the National Economic Council as a special assistant to the president for competition and tech policy from 2021 to 2023.

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips . And here’s our email: [email protected] .

Follow the New York Times Opinion section on Facebook , Instagram , TikTok , WhatsApp , X and Threads .

5 major challenges that have China headed for a '100-year storm,' according to billionaire investor Ray Dalio

• The billionaire investor Ray Dalio says five major trends have China headed for a "100-year storm."
• They include a debt problem, an internal wealth gap, and increasingly fraught relations with the US.
• "The circumstances and the mood in China have indisputably changed to become more threatening," he said.

There are major economic and geopolitical challenges brewing a "100-year storm" in China, says the billionaire investor Ray Dalio.

In a LinkedIn post on Wednesday, Dalio listed five major forces casting a shadow on Beijing, detailing headwinds he says have been building up over the past four decades.

"When there is a lot of debt and big wealth gaps at the same time as there are great domestic and international power conflicts and/or great disruptive changes in nature (like droughts, floods, and pandemics, which China is especially prone to) and great changes in technology, there is an increased likelihood of a '100-year big storm,'" Dalio wrote. "That is the current environment in China."

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First, the debt problem . China has for the past few years been mired in a property crisis that has hamstrung its economy by sending real-estate prices, asset prices, and employment in a downward spiral. On top of that, the country has an aging population, which is weighing on the financial system, especially under the legacy of the one-child policy. Dalio said those trends were depressing economic activity, prices, and psychology.

Then there's a growing internal wealth gap that has spurred the government to push for more "common prosperity," Dalio said. He added that the shifting policy focus had been "fear-inducing," which has additionally soured the mood in China.

Next, there's the increasingly fraught relations with the US . The power conflict between the two countries has bled into investor sentiment, steering money away from China. Businesses have been caught in the crossfire too, trying to appease the US.

"In trade and capital flows, a cat-and-mouse game has developed that has led companies and people to move to neutral countries and to try to appear to be non-Chinese or not Chinese sympathizers, so much so that the Chinese are having problems getting other countries and companies to accept them being there and/or investing in them," Dalio wrote.

China is also dealing with a technological war with the US, Dalio wrote. Both countries are pouring money into technologies including AI and quantum computing, each trying to get the lead over the other, he said.

Finally, there are the risks of the climate crisis , including floods, droughts, and pandemics, all of which are likely to cost a lot, he said.

"The circumstances and the mood in China have indisputably changed to become more threatening," Dalio said.

Watch: Protesters in China are trying to break out of quarantine

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