The topic of global markets’ influence on local investments has become increasingly prevalent in IELTS Writing Task 2 examinations. Based on analysis of past exam papers and impact of global trade on stock prices, this theme appears in approximately 15% of economics-related questions. Let’s examine a recent IELTS task 2 question on this topic.
IELTS Writing Task 2 Question About Global Markets and Local Investments
Some people believe that global financial markets have too much influence over how local businesses operate and invest. To what extent do you agree or disagree with this statement? Provide reasons and relevant examples to support your answer.
Question Analysis
This question requires candidates to:
- Take a clear position on the influence of global financial markets
- Provide specific examples of how global markets affect local businesses
- Discuss both positive and negative aspects of this influence
- Support arguments with relevant examples
Sample Essay 1 (Band 8.5)
The increasingly interconnected nature of global financial markets has sparked debate about their impact on local business operations and investments. While some argue this influence is excessive, I largely agree that global markets significantly shape local business decisions, though this influence brings both opportunities and challenges.
The how global markets affect investment strategies demonstrates several key impacts on local businesses. Firstly, global market conditions directly affect funding availability and costs for local enterprises. When international interest rates fluctuate, local borrowing costs change accordingly, influencing investment decisions. For instance, when the Federal Reserve adjusts rates, businesses worldwide must reconsider their expansion plans and operational strategies.
Moreover, global market trends significantly influence local business strategies and competitiveness. Companies must adapt to international standards and practices to remain viable in an interconnected economy. For example, Vietnamese textile manufacturers have had to upgrade their technology and environmental practices to meet global supply chain requirements, demonstrating how international markets drive local business evolution.
However, this influence isn’t entirely negative. The impact of globalization on banking systems has created opportunities for local businesses to access diverse funding sources and expand into new markets. Small enterprises can now participate in global trade through digital platforms, accessing customers and suppliers worldwide. This interconnectedness has fostered innovation and efficiency improvements in local business operations.
In conclusion, while global financial markets substantially influence local business decisions, this impact is a complex mixture of challenges and opportunities. The key lies in helping local businesses adapt to and benefit from global market forces while maintaining their competitive advantage.
Sample Essay 2 (Band 6.5)
I agree that global financial markets have too much control over local businesses. This situation creates many problems for small companies and can harm local economies.
First, big global markets make it hard for local businesses to compete. When international companies enter local markets, they often have more money and better technology. For example, many small shops in my country closed when big international supermarkets opened. This shows how global markets can hurt local businesses.
The impact of foreign investments on domestic markets also affects how local companies operate. They must follow international rules and standards, which can be expensive. Sometimes, these rules don’t match local conditions, making it harder for local businesses to succeed.
Also, when global markets have problems, local businesses suffer too. During the 2008 financial crisis, many small companies in developing countries lost money because of problems in other countries. This shows that global markets have too much power over local businesses.
In conclusion, I think global financial markets control local businesses too much. Governments should protect local companies and help them compete with big international businesses.
Band Score Analysis
Band 8.5 Essay:
- Clear, sophisticated argument development
- Excellent cohesion and coherence
- Advanced vocabulary effectively used
- Complex sentence structures
- Relevant examples and support
Band 6.5 Essay:
- Basic argument structure
- Simple but clear ideas
- Limited vocabulary range
- Basic sentence structures
- Some examples but less developed
Key Vocabulary
- interconnected (adj) /ˌɪntəkəˈnektɪd/ – joined or connected together
- fluctuate (v) /ˈflʌktʃueɪt/ – to change frequently in size, amount, or level
- viability (n) /ˌvaɪəˈbɪləti/ – ability to succeed or continue to exist
- adaptation (n) /ˌædæpˈteɪʃən/ – the process of changing to suit different conditions
- competitiveness (n) /kəmˈpetətɪvnəs/ – ability to compete successfully
Impact of Global Financial Markets on Local Businesses Diagram
Consider practicing with these similar topics:
- The impact of international trade on local cultures
- Global corporations’ influence on small businesses
- Economic globalization effects on developing nations
Share your practice essays in the comments for feedback and discussion.
