As an IELTS Writing Task 2 expert, I’ve noticed that questions related to economics and financial institutions have been appearing more frequently in recent exams. The Role Of Central Banks In Controlling Inflation is a particularly relevant topic that candidates should be prepared to discuss. In this article, we’ll explore a sample question on this subject and provide two model essays to help you achieve a high band score.
Analyzing the Question
Let’s examine a typical IELTS Writing Task 2 question on this topic:
Some people believe that central banks should focus solely on controlling inflation, while others argue that they should have broader responsibilities. Discuss both views and give your own opinion.
This question requires you to:
- Discuss the view that central banks should focus only on controlling inflation
- Discuss the view that central banks should have wider responsibilities
- Provide your own opinion on the matter
Now, let’s look at two sample essays that address this question – one aimed at a Band 8-9 score, and another for a Band 6-7 score.
Band 8-9 Sample Essay
Central banks play a crucial role in maintaining economic stability, and there is ongoing debate about the scope of their responsibilities. While some argue that these institutions should concentrate exclusively on inflation control, others believe they should have a broader mandate. In my opinion, while inflation management is paramount, central banks should also address other economic concerns to ensure overall financial health.
Those who advocate for a narrow focus on inflation control argue that price stability is the cornerstone of a healthy economy. They contend that by maintaining low and stable inflation rates, central banks create an environment conducive to long-term economic growth and prosperity. This approach allows businesses and individuals to make informed financial decisions without the uncertainty of rapidly changing prices. Moreover, proponents of this view argue that expanding the central bank’s responsibilities could lead to conflicting objectives and potentially compromise its effectiveness in managing inflation.
On the other hand, supporters of a broader mandate for central banks argue that the modern economy is too complex to be managed through inflation control alone. They believe that central banks should also consider factors such as employment rates, economic growth, and financial stability. This holistic approach would allow central banks to respond more effectively to diverse economic challenges, such as recessions or financial crises. Additionally, advocates of this view argue that central banks have unique insights into the financial system, making them well-positioned to address a wide range of economic issues.
In my view, while controlling inflation should remain the primary focus of central banks, they should not ignore other economic factors. The 2008 financial crisis demonstrated that a narrow focus on inflation can overlook systemic risks in the financial sector. By adopting a balanced approach that prioritizes inflation control while also monitoring other economic indicators, central banks can better safeguard the overall health of the economy. This approach would allow them to respond more flexibly to various economic challenges while maintaining their commitment to price stability.
In conclusion, the role of central banks in modern economies extends beyond mere inflation control. While managing inflation should remain their primary objective, central banks should also consider other economic factors to ensure comprehensive financial stability and sustainable growth.
(Word count: 345)
Band 6-7 Sample Essay
The role of central banks in the economy is a topic of debate. Some people think they should only focus on controlling inflation, while others believe they should have more responsibilities. This essay will discuss both views and give my opinion.
Those who support central banks focusing only on inflation control have some good reasons. Keeping inflation low and stable is very important for the economy. When prices don’t change too much, people and businesses can plan better for the future. They know how much things will cost and can make good decisions about spending and saving. Also, if central banks try to do too many things, they might not do a good job of controlling inflation, which is their main job.
However, other people think central banks should do more than just control inflation. They say that the economy is complicated and has many parts. Central banks should look at things like jobs, economic growth, and the health of banks and other financial companies. These people believe that by looking at all these things, central banks can help the whole economy, not just one part of it. They also think that central banks have special knowledge about money and finance, so they should use this knowledge to help with different economic problems.
In my opinion, I think central banks should mainly focus on controlling inflation, but they shouldn’t ignore other important economic issues. Inflation control is very important, but sometimes other problems in the economy can be just as serious. For example, during the big financial crisis in 2008, many central banks had to do more than just control inflation to help the economy. I think central banks should be ready to help with other economic problems when necessary, but they should always remember that keeping inflation under control is their most important job.
To conclude, while controlling inflation should be the main job of central banks, they should also be prepared to address other economic issues when needed. This balanced approach can help ensure the overall health of the economy.
(Word count: 329)
Key Points to Remember When Writing
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Structure: Both essays follow a clear structure with an introduction, body paragraphs discussing each view, the writer’s opinion, and a conclusion. The Band 8-9 essay has more sophisticated paragraph transitions and a more nuanced discussion.
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Vocabulary: The Band 8-9 essay uses more advanced vocabulary and economic terms, while the Band 6-7 essay uses simpler language. For example:
- Band 8-9: “cornerstone,” “conducive,” “mandate,” “systemic risks”
- Band 6-7: “very important,” “complicated,” “health of banks”
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Grammar: The Band 8-9 essay demonstrates a wider range of complex structures, while the Band 6-7 essay uses simpler sentence structures.
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Task Response: Both essays address all parts of the question, but the Band 8-9 essay provides more detailed examples and a more developed argument.
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Coherence and Cohesion: The Band 8-9 essay uses more sophisticated linking words and phrases, creating a smoother flow between ideas.
Essential Vocabulary for This Topic
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Inflation (noun) /ɪnˈfleɪʃn/: A general increase in prices and fall in the purchasing value of money.
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Monetary policy (noun) /ˈmʌnɪtəri ˈpɒləsi/: The actions of a central bank to influence the amount of money and credit in an economy.
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Price stability (noun) /praɪs stəˈbɪləti/: A state of the economy in which the general price level is relatively constant.
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Economic growth (noun) /ˌiːkəˈnɒmɪk ɡrəʊθ/: An increase in the amount of goods and services produced per head of the population over a period of time.
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Financial crisis (noun) /faɪˈnænʃl ˈkraɪsɪs/: A situation in which the value of financial assets drops rapidly.
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Systemic risk (noun) /sɪˈstemɪk rɪsk/: The possibility that an event at the company level could trigger severe instability or collapse an entire industry or economy.
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Mandate (noun) /ˈmændeɪt/: An official order or commission to do something.
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Recession (noun) /rɪˈseʃn/: A period of temporary economic decline during which trade and industrial activity are reduced.
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Interest rates (noun) /ˈɪntrəst reɪts/: The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.
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Fiscal policy (noun) /ˈfɪskl ˈpɒləsi/: The use of government spending and taxation to influence the economy.
In conclusion, understanding the role of central banks in controlling inflation is crucial for tackling IELTS Writing Task 2 questions on economics and financial institutions. By familiarizing yourself with the key concepts and vocabulary related to this topic, you’ll be better prepared to write a high-scoring essay. Remember to practice writing essays on similar topics, such as the role of financial regulation in economic stability or the impact of monetary policy on digital currencies. You can also expect to see questions about related topics like the economic effects of digital currencies on traditional banking.
To further improve your skills, try writing your own essay on the question provided in this article and share it in the comments section below. This practice will help you apply what you’ve learned and receive feedback from others preparing for the IELTS exam.