Economic stimulus packages and their impact on savings is a relevant and increasingly common topic in IELTS Writing Task 2. Based on recent trends, this theme is likely to appear more frequently in future exams, especially given the global economic challenges faced in recent years. Let’s explore this topic through a sample question that closely resembles those seen in actual IELTS exams.
Some people think that economic stimulus packages encourage people to spend more and save less. To what extent do you agree or disagree with this statement?
Analyzing the Question
This question requires candidates to consider the relationship between economic stimulus measures and personal saving habits. It’s crucial to:
- Understand the concept of economic stimulus packages
- Consider how these packages might influence spending and saving behaviors
- Develop a clear stance on the extent to which you agree or disagree
- Provide reasons and examples to support your position
Now, let’s examine sample essays for different band scores, starting with a high-level response.
Sample Essay 1 (Band 8-9)
Economic stimulus packages are government interventions designed to boost economic activity during periods of recession or crisis. While some argue that these measures encourage excessive spending at the expense of saving, I largely disagree with this assertion. In my view, the impact of stimulus packages on savings is more nuanced and depends on various factors.
Firstly, it’s important to recognize that the primary goal of stimulus packages is to inject money into the economy and increase consumer confidence. This doesn’t necessarily translate to decreased savings. In fact, during uncertain times, many individuals may use the additional funds to bolster their emergency savings or pay off debts, which is a form of saving. For instance, during the COVID-19 pandemic, studies showed that a significant portion of stimulus checks in the United States were used for savings or debt reduction rather than immediate spending.
Moreover, the impact on savings can vary depending on the design of the stimulus package. Some packages include incentives for long-term savings, such as tax breaks for retirement contributions or matched savings programs. These features can actually encourage people to save more, contradicting the notion that stimulus packages universally reduce savings.
However, it’s true that in some cases, stimulus measures can lead to increased spending. This is often the intended effect in the short term, as increased consumer spending can help revitalize a struggling economy. Yet, this doesn’t necessarily mean long-term savings habits are negatively affected. As the economy improves and job security increases, people may find themselves in a better position to save in the future.
Economic stimulus impact on savings and spending
Additionally, the effect of stimulus packages on savings can differ across socioeconomic groups. While middle and upper-income households might use the funds to increase savings, lower-income households may need to spend the money on essential needs. This highlights the importance of targeted stimulus measures that consider the diverse financial situations within a population.
In conclusion, while economic stimulus packages can influence spending patterns, I disagree that they necessarily lead to reduced savings across the board. The relationship between stimulus measures and saving behavior is complex and influenced by factors such as package design, economic conditions, and individual circumstances. Policymakers should strive to create balanced stimulus programs that support immediate economic needs while also encouraging responsible financial behavior, including saving for the future.
managing finances during economic recession
Sample Essay 2 (Band 6-7)
Economic stimulus packages are used by governments to help the economy during difficult times. Some people believe these packages make people spend more and save less money. I partly agree with this idea, but I think it’s not always true for everyone.
Firstly, it’s true that stimulus packages can make people spend more. When the government gives people money or reduces taxes, many people might use this extra money to buy things they need or want. This is often what the government wants because more spending can help businesses and create jobs. For example, during the COVID-19 pandemic, many countries gave money to people, and some used it to buy food, pay rent, or get new things for their homes.
However, I don’t think stimulus packages always make people save less. Some people might use the extra money to pay off debts or put it in their savings accounts. This is especially true if people are worried about the future and want to have some money saved for emergencies. Also, some stimulus packages include ways to help people save, like giving extra money if people put some in their retirement accounts.
role of government spending in economic recovery
Another point to consider is that different people might use the money in different ways. Rich people might save more of the stimulus money because they don’t need it for daily expenses. Poor people might have to spend most of it on things they really need. So, the effect on savings can be different for different groups of people.
In conclusion, I partly agree that economic stimulus packages can make people spend more and save less. But I think it depends on many factors, like how the package is designed, what the economic situation is like, and each person’s financial situation. Governments should try to make stimulus packages that help the economy now but also encourage people to save for the future.
Sample Essay 3 (Band 5-6)
Economic stimulus packages are when the government gives money to people to help the economy. Some people think this makes people spend more and save less money. I agree with this idea because I think it is mostly true.
First, when people get extra money from the government, they often want to buy things they couldn’t afford before. This is good for shops and businesses because they sell more things. For example, in my country, when the government gave people money during the COVID-19 problem, many people bought new phones or clothes.
Also, if people think they can get money from the government when there are problems, they might not try to save as much money themselves. They might think the government will always help them, so they don’t need to save for emergencies.
But sometimes, people might use the extra money to save or pay their debts. This is good because it helps people have more money for the future. But I think most people prefer to spend the money on things they want now.
The government wants people to spend money to help the economy grow. If everyone saved all the money, it wouldn’t help shops and businesses as much. So, the government probably wants people to spend more than save.
In conclusion, I agree that economic stimulus packages make people spend more and save less. This is because people like to buy things they want, and the government wants people to spend money to help the economy. But it’s important for people to try to save some money too, even when they get extra money from the government.
Explaining the Scoring of Each Sample Essay
Band 8-9 Essay:
This essay demonstrates excellent writing skills and a sophisticated approach to the topic:
- Task Response: The essay fully addresses all parts of the task, presenting a clear position with a well-developed argument.
- Coherence and Cohesion: Ideas are logically organized with clear progression throughout. Paragraphing is well-managed with effective use of cohesive devices.
- Lexical Resource: A wide range of vocabulary is used with very natural and sophisticated control of lexical features.
- Grammatical Range and Accuracy: A wide range of structures is used with full flexibility and accuracy.
Band 6-7 Essay:
This essay shows a competent handling of the task with some good features:
- Task Response: The essay addresses all parts of the task, although some aspects are more fully covered than others.
- Coherence and Cohesion: There is a clear overall progression, but some paragraphs may be better connected.
- Lexical Resource: An adequate range of vocabulary is used for the task, with some attempts at less common vocabulary.
- Grammatical Range and Accuracy: A mix of simple and complex sentence forms is used, with generally good control and only occasional errors.
Band 5-6 Essay:
This essay addresses the task in a basic way:
- Task Response: The essay addresses the task, but the development of ideas is limited.
- Coherence and Cohesion: The overall organization is visible, but paragraphing may be inadequate.
- Lexical Resource: A limited range of vocabulary is used, with some errors in word choice and spelling.
- Grammatical Range and Accuracy: Simple sentences are used accurately, but more complex structures may contain errors.
Key Vocabulary to Remember
Economic stimulus package (noun) – /ˌiːkəˈnɒmɪk ˈstɪmjələs ˈpækɪdʒ/ – A set of economic measures put together by a government to stimulate a struggling economy.
Consumer confidence (noun) – /kənˈsjuːmə ˈkɒnfɪdəns/ – The degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.
Incentive (noun) – /ɪnˈsentɪv/ – Something that motivates or encourages someone to do something.
Socioeconomic (adjective) – /ˌsəʊsɪəʊˌiːkəˈnɒmɪk/ – Relating to or concerned with the interaction of social and economic factors.
Revitalize (verb) – /ˌriːˈvaɪtəlaɪz/ – To give new life or vigor to something.
Debt reduction (noun) – /det rɪˈdʌkʃən/ – The process of decreasing the amount of money owed.
Targeted measures (noun) – /ˈtɑːɡɪtɪd ˈmeʒəz/ – Actions or policies designed to address specific issues or groups.
Financial behavior (noun) – /faɪˈnænʃəl bɪˈheɪvjə/ – The way individuals manage their money and make financial decisions.
Consumer spending (noun) – /kənˈsjuːmə ˈspendɪŋ/ – The amount of money spent by households in an economy.
Fiscal policy (noun) – /ˈfɪskəl ˈpɒləsi/ – Government spending policies that influence macroeconomic conditions.
In conclusion, the topic of economic stimulus packages and their impact on savings is a complex and relevant issue for IELTS Writing Task 2. As you prepare for your exam, consider practicing with similar topics such as:
- The role of government in managing economic crises
- The balance between individual financial responsibility and government support
- Long-term effects of economic stimulus measures on national economies
Remember to structure your essay clearly, use a range of vocabulary and grammatical structures, and provide specific examples to support your arguments. Feel free to practice writing an essay on this topic and share it in the comments section for feedback and discussion. Good luck with your IELTS preparation!