Wednesday, November 12, 2008

Tips On Writing A Good Economic Essay

Tips To Write Good Essay For Unit 3 (15m)

(1) Knowing the allocation of marks
. The last question in Unit 3: Managing the Economy (Edexcel) is always a short essay of 15m. The allocation of the marks is consistent & is always 3m+6m+6m. The first 3m is always for defining policies (fiscal, monetary or supply side policies), explaining phrases & drawing diagram. The first 6m is always meant for explanation of policies. Students can choose to give only 2 explanations (3+3) or even 3 explanations (2+2+2) if they are not confident enough of expressing & elaborating their ideas. As for the second 6m (evaluations), it works the same. Students can either give 2 or 3

(2) Understand the policies well. To be very frank, the essays are 90% predictable. The only thing they can ask you is non-other than fiscal, monetary & supply side policies & how they affect price level, real output & UK macroeconomic objectives. For those demand management policies, anything that increases consumption (C), investment (I), government spending (G) & net export (X-M) will surely increase AD. Meanwhile for supply side policies, anything that increases productivity, level of employments & competition will increase AS. That’s all

(3) Explanation must be clear. Students must practice or develop their writing skills. They must be able to explain a transmission mechanism (process of an event) CLEARLY for e.g. how with an increase in interest rates affect investment & therefore AD? Sample:

"When interest rates increase, firms may be tempted to cut investment spending. This is because, costs of financing a project or business expansion had increased. Also this may reduce the rate of return on capital & that is reward from investment is now lower. When investment falls, AD will fall"

(4) Good evaluation. There are few traditional techniques I always recommend on evaluation. First, students can always say about lags (delays) in policies such as recognition lags, implementation lags & effect lags. Second, compare between policies. Which is more suitable for e.g. to achieve economic growth between supply side & fiscal and reason for you to say so? Third, comment on what will happen to the price level & real output in an economy near full employment after policies take off. Fourth, costs & benefits for each policy e.g. tax cut may not be effective, privatisation & deregulation fails for British Rail & British Energy, dismantling of national minimum wage creates greater income inequality etc. Fifth, depends on the multiplier effect, the greater is its increase, the heavier will be the pressure onto price level

(5) Read case studies
. This is my priority of all, but unfortunately is not a popular option among students. Sometimes, students didn’t realise that they can’t actually impress the examiners to get those extra marks by showing some level of maturity in writing & also by projecting themselves as a very knowledgeable candidate. Students can always throw in events e.g. relating to incidence that happens during the era of Mrs. Thatcher (coal mine strikes) when they write supply side policies, what happens during era of Nigel Lawson (Lawson Boom), stating that pound has strengthened against dollar all this while (except recently), mentioning about the ambitious spending by Mr. Brown on healthcare & education sectors etc

Explanations given by students tend to be very on the theoretical side without actually relating any real life events to support it

(6) Wise time allocation. Some students tend to spend too long on the earlier part, leaving not much space for them to complete the essay part. Please allocate at least 20-25 minutes for this section for you to think, draft & come out with good evaluations

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