High inflation and its effects on purchasing power have become increasingly common topics in IELTS Writing Task 2 essays, particularly in recent years as global economies face inflationary pressures. Based on analysis of past IELTS exams, this topic has appeared in various forms, especially in questions about economic challenges and consumer behavior. Understanding how inflation erodes purchasing power is crucial for achieving a high score in the writing section.
High inflation eroding purchasing power illustrated through declining value of money
Analysis of Common Task 2 Questions
Let’s examine a frequently appearing question type:
In many countries, the cost of living continues to rise while people’s purchasing power decreases. What are the causes of this problem and what measures can governments take to address it?
Question Analysis
- Type: Cause and Solution
- Key Topics: Cost of living, purchasing power, government intervention
- Required Approach: Discuss both causes and solutions
- Word Count: Minimum 250 words
Sample Essay 1 (Band 8.0)
The persistent increase in living costs coupled with declining purchasing power has become a significant economic challenge worldwide. This essay will analyze the root causes of this issue and propose potential government interventions to mitigate its impact.
The primary causes of this economic predicament are multifaceted. Firstly, excessive money supply and loose monetary policies often lead to inflation, which inherently diminishes currency value. How inflation affects disposable income is evident in how consumers find their salaries buying fewer goods and services over time. Secondly, global supply chain disruptions and resource scarcity contribute to price increases across various sectors. Additionally, wage growth typically lags behind inflation rates, creating a widening gap between income and expenses.
Regarding solutions, governments can implement several measures to address this issue. The most crucial step involves implementing prudent monetary policies to control inflation rates effectively. This could include adjusting interest rates and regulating money supply. Furthermore, governments should consider introducing price control mechanisms for essential commodities while how does inflation affect consumer banking behavior suggests that promoting savings through favorable interest rates could help preserve purchasing power.
Government measures to control inflation and protect purchasing power
In conclusion, while the erosion of purchasing power poses significant challenges, coordinated government actions focusing on monetary policy and price stability can help alleviate this problem. The success of these measures depends on consistent implementation and regular monitoring of economic indicators.
Sample Essay 2 (Band 6.5)
Nowadays, many people are worried because things are getting more expensive but their money can buy less. This essay will look at why this happens and what governments can do about it.
There are several reasons why living costs go up. First, when prices increase, people’s salaries don’t go up as fast, so they can’t buy as much as before. Second, when there are problems with getting products from other countries, prices go up because there aren’t enough things to buy. The impact of inflation on middle-class savings shows how people’s money becomes worth less over time.
The government can help solve this problem in different ways. They can control prices of important things like food and fuel. Also, they can make rules to stop companies from charging too much money. Another thing they can do is help people earn more money by creating better jobs.
To conclude, the problem of high prices and low purchasing power is serious, but governments can help by controlling prices and helping people earn more money.
Key Vocabulary
- Purchasing power (n) /ˈpɜːtʃəsɪŋ paʊə/ – ability to buy goods and services
- Monetary policy (n) /ˈmʌnɪtri ˈpɒləsi/ – central bank’s actions to control money supply
- Supply chain disruptions (n) /səˈplaɪ tʃeɪn dɪsˈrʌpʃən/ – interruptions in product delivery systems
- Prudent (adj) /ˈpruːdnt/ – careful and wise in handling practical matters
- Commodities (n) /kəˈmɒdɪtiz/ – raw materials or primary agricultural products
For practice, try writing your own essay about how unemployment affects purchasing power or how digital currencies might impact inflation rates. Share your essays in the comments section for feedback and discussion.
