The topic of inflation and its impact on purchasing power has become increasingly prevalent in IELTS Writing Task 2 examinations. Based on analysis of past exam questions from 2018-2023, this economic theme appears in approximately 15% of all Task 2 questions, particularly in questions about economy and society. Let’s examine some real and predicted essay questions on this topic.
how inflation affects disposable income is a crucial concept that frequently appears in IELTS essays, especially when discussing economic impacts on society.
Analysis of Task 2 Question
Some people believe that rising inflation rates are the biggest threat to economic stability and individual financial security. To what extent do you agree or disagree with this statement?
This question requires candidates to:
- Express their opinion on inflation’s impact
- Support their viewpoint with relevant examples
- Discuss both economic stability and personal finance
- Provide a clear, well-reasoned argument
Impact of inflation on purchasing power illustrated through declining value of money
Model Answer (Band 8-9)
Rising inflation undoubtedly poses significant challenges to both economic stability and personal financial security, and I strongly agree that it represents one of the most serious economic threats we face today. This essay will examine why inflation’s erosive effects are particularly devastating and how they impact various aspects of the economy and individual welfare.
Firstly, inflation systematically undermines economic stability at the macro level. When prices rise rapidly, it becomes increasingly difficult for businesses and individuals to plan for the future, as how inflation erodes fixed income investments demonstrates. This uncertainty can lead to reduced investment, decreased consumer spending, and eventual economic slowdown. For example, in many developing countries, high inflation rates have triggered currency devaluation and economic crises, affecting millions of citizens.
Moreover, inflation poses a severe threat to individual financial security. For the average person, impact of inflation on middle-class savings can be devastating, particularly for those on fixed incomes or with limited investment options. When prices rise faster than wages, purchasing power decreases, making it increasingly difficult for families to maintain their standard of living. This is especially problematic for retirees and those depending on savings, as their accumulated wealth gradually loses value.
In conclusion, while there are other significant economic challenges, inflation’s pervasive and persistent nature makes it particularly threatening to both economic stability and individual financial security. The evidence clearly shows that uncontrolled inflation can devastate economies and personal finances alike.
Impact of inflation on household budget allocation and spending patterns
Model Answer (Band 6-7)
I agree that inflation is a big problem for economic stability and personal finances. This essay will discuss why inflation causes many problems for people and the economy.
When inflation increases, it makes everything more expensive. This is bad for people because their money cannot buy as much as before. For example, if someone saves money for retirement, importance of inflation-adjusted retirement funds shows how inflation can make their savings worth less over time. This makes it hard for people to plan their future.
Another problem is that inflation affects businesses. When prices keep going up, companies find it difficult to plan their costs and prices. This can lead to fewer jobs and less economic growth. In many countries, high inflation has caused economic problems that affect everyone.
However, while inflation is a serious problem, there are other important economic issues too, like unemployment and inequality. These problems can also affect economic stability and personal finances badly.
In conclusion, I agree that inflation is one of the biggest threats to economic stability and personal financial security, but it is not the only serious economic problem we face today.
Detailed Band Score Analysis
Band 8-9 Essay Analysis
- Task Response: Fully addresses all parts of the task with well-developed ideas
- Coherence and Cohesion: Logical organization with clear progression
- Lexical Resource: Sophisticated vocabulary usage with natural style
- Grammatical Range: Complex structures used accurately
Band 6-7 Essay Analysis
- Task Response: Addresses the task but with less development
- Coherence and Cohesion: Clear overall progression but simpler linking
- Lexical Resource: Adequate vocabulary with some repetition
- Grammatical Range: Mix of simple and complex structures
Key Vocabulary
- Erosive (adj) /ɪˈrəʊsɪv/ – gradually destructive
- Pervasive (adj) /pəˈveɪsɪv/ – spreading widely throughout
- Currency devaluation (n) /ˈkʌrənsi diːˌvæljuˈeɪʃən/ – reduction in currency value
- Purchasing power (n) /ˈpɜːtʃəsɪŋ ˈpaʊə/ – buying capacity of money
- Economic stability (n) /ˌekəˈnɒmɪk stəˈbɪləti/ – steady economic conditions
Practice Suggestions
Try writing your own essay on these related topics:
- The relationship between inflation and income inequality
- Government measures to control inflation
- Impact of inflation on different social classes
Share your practice essays in the comments section for feedback and discussion.
