Foreign exchange rates and their impact on businesses have been a recurring theme in IELTS Writing Task 2 essays. This topic combines elements of economics, international trade, and business management, making it a versatile and challenging subject for test-takers. Based on past exam trends and the increasing globalization of markets, we can expect this theme to continue appearing in future IELTS tests. Let’s explore a relevant question that has appeared in recent exams:
Some people think that the government should help struggling businesses stay open, while others believe that inefficient businesses should be allowed to close. Discuss both views and give your own opinion.
Analyzing the Question
This question, while not directly mentioning foreign exchange rates, allows candidates to discuss how economic factors, including currency fluctuations, can impact business performance. The task requires:
- Discussing arguments for government support of struggling businesses
- Exploring reasons why inefficient businesses should be allowed to fail
- Providing a personal opinion on the issue
Let’s examine three sample essays of varying quality, demonstrating different approaches and skill levels in addressing this topic.
Sample Essay 1 (Band 8-9)
The debate over whether governments should intervene to support struggling businesses or allow market forces to determine their fate is complex and multifaceted. While there are valid arguments on both sides, I believe that a balanced approach, considering the nature of the business and broader economic factors, is most appropriate.
Proponents of government assistance argue that supporting struggling businesses can preserve jobs and maintain economic stability. In times of economic downturn or when faced with external challenges such as unfavorable exchange rates, even well-managed companies may face temporary difficulties. Government intervention through loans, subsidies, or tax relief can provide these businesses with the breathing room they need to adapt and recover. This approach can prevent the domino effect of business closures, unemployment, and reduced consumer spending that could lead to a more severe economic crisis.
On the other hand, those who advocate for allowing inefficient businesses to close argue that this process is essential for a healthy, dynamic economy. They contend that market competition drives innovation and efficiency, and that propping up underperforming companies hinders this natural evolution. When inefficient businesses fail, resources such as labor and capital are reallocated to more productive sectors, potentially leading to greater overall economic growth. Moreover, the threat of failure incentivizes businesses to adapt to changing market conditions, including fluctuations in foreign exchange rates, which is crucial in an increasingly globalized economy.
In my opinion, a nuanced approach that considers the specific circumstances of each case is most beneficial. Governments should indeed provide temporary support to otherwise viable businesses facing extraordinary challenges, such as a global pandemic or extreme currency volatility. This support should be targeted and time-limited, with clear conditions for repayment or restructuring. However, for chronically underperforming businesses that fail to adapt to market realities, including long-term shifts in exchange rates or global trade patterns, allowing them to close may ultimately benefit the economy.
In conclusion, while the instinct to preserve jobs and economic stability through government intervention is understandable, it must be balanced against the need for economic dynamism and efficiency. A carefully calibrated approach that supports viable businesses through temporary crises while allowing truly inefficient ones to exit the market will likely yield the best outcomes for long-term economic health and resilience.
Foreign exchange rates influencing business decisions
Sample Essay 2 (Band 6-7)
The question of whether governments should help struggling businesses or let them close is a difficult one. There are good reasons for both sides, and I will discuss these before giving my own opinion.
On one hand, some people think the government should help businesses that are having trouble. They say this is important because it can save jobs and help the economy. When businesses close, many people lose their jobs, which can cause big problems for families and communities. Also, if many businesses close at the same time, it can hurt the whole economy. Government help, like giving money or reducing taxes, can give these businesses a chance to recover and become successful again.
However, others believe that businesses that are not doing well should be allowed to close. They argue that this is how the market naturally works. When inefficient businesses close, it makes room for new, better businesses to start. This can lead to more innovation and improvements in products and services. Also, they say that if the government always helps struggling businesses, it might encourage them to take too many risks or not try hard enough to succeed on their own.
In my opinion, I think there should be a balance between these two views. I believe the government should help businesses in some situations, but not all the time. For example, if a business is struggling because of a temporary problem, like changes in foreign currency values or a natural disaster, then government help might be good. But if a business is always doing poorly and can’t keep up with changes in the market, then maybe it should be allowed to close.
In conclusion, while there are good arguments for both helping struggling businesses and letting them close, I think the best approach is to look at each situation carefully. The government should help when it’s really needed, but also allow the market to work naturally most of the time. This way, we can protect jobs and the economy while still encouraging businesses to be efficient and innovative.
Sample Essay 3 (Band 5-6)
Nowadays, there is a big debate about whether the government should help businesses that are having problems or let them close. This is an important issue because it affects many people’s lives and the economy. I will talk about both sides of this argument and give my opinion.
Some people think the government should help businesses that are struggling. They say this is good because:
- It saves jobs for workers
- It keeps the economy strong
- It helps communities where the businesses are located
These people believe that if businesses close, it will cause many problems. Workers will lose their jobs and might not be able to pay for food or housing. Also, when businesses close, it can make the whole economy weaker.
But other people think that businesses that are not doing well should be allowed to close. They have these reasons:
- It is natural for some businesses to fail
- New and better businesses can start when old ones close
- Government should not waste money on businesses that are not successful
These people say that when businesses close, it can actually be good for the economy in the long run. New businesses might have better ideas and create more jobs.
In my opinion, I think both sides have good points. I believe the government should help some businesses, but not all of them. Maybe they could help businesses that are important for the country or that have many workers. But they should not help businesses that are always doing badly.
To conclude, this is a difficult issue with no easy answer. The government needs to think carefully about when to help businesses and when to let them close. They should try to find a balance that is good for workers, businesses, and the whole economy.
Explanation of Band Scores
Band 8-9 Essay:
- Task Response: Fully addresses all parts of the task with a well-developed response. Presents a clear position throughout the essay.
- Coherence and Cohesion: Logically organizes information and ideas with clear progression throughout. Uses a range of cohesive devices appropriately.
- Lexical Resource: Uses a wide range of vocabulary with very natural and sophisticated control of lexical features.
- Grammatical Range and Accuracy: Uses a wide range of structures with full flexibility and accuracy.
Band 6-7 Essay:
- Task Response: Addresses all parts of the task, though some parts may be more fully covered than others.
- Coherence and Cohesion: Arranges information and ideas coherently and there is a clear overall progression.
- Lexical Resource: Uses an adequate range of vocabulary for the task. There may be some errors in word choice but these do not impede communication.
- Grammatical Range and Accuracy: Uses a mix of simple and complex sentence forms. Makes some errors in grammar and punctuation but they rarely reduce communication.
Band 5-6 Essay:
- Task Response: Addresses the task only partially. The format may be inappropriate in places.
- Coherence and Cohesion: Presents information with some organization but there may be a lack of overall progression.
- Lexical Resource: Uses a limited range of vocabulary, but this is minimally adequate for the task.
- Grammatical Range and Accuracy: Uses only a limited range of structures. Errors may cause some difficulty for the reader.
Key Vocabulary to Remember
- Intervention (noun) – /ˌɪntəˈvenʃən/ – the action or process of intervening
- Multifaceted (adjective) – /ˌmʌltɪˈfasɪtɪd/ – having many different aspects or features
- Proponents (noun) – /prəˈpəʊnənts/ – people who advocate for a theory, proposal, or course of action
- Subsidies (noun) – /ˈsʌbsɪdiz/ – money granted by the state to help an industry or business
- Incentivize (verb) – /ɪnˈsentɪvaɪz/ – motivate or encourage someone to do something
- Volatility (noun) – /ˌvɒləˈtɪləti/ – liability to change rapidly and unpredictably, especially for the worse
- Calibrated (adjective) – /ˈkælɪbreɪtɪd/ – carefully assessed, set, or adjusted
- Resilience (noun) – /rɪˈzɪliəns/ – the capacity to recover quickly from difficulties; toughness
In conclusion, the impact of foreign exchange rates on businesses is a complex topic that often appears in IELTS Writing Task 2. By understanding how to approach these questions and using appropriate vocabulary and structure, you can improve your chances of achieving a high band score. Remember to practice writing essays on similar topics, such as the effects of global trade on cultural diversity or the impact of cryptocurrency regulations on global markets. Feel free to share your practice essays in the comments section for feedback and further improvement.