Revision Questions

The Art of Explaining

Explaining economic impacts is key to bringing the intricate and interdependent nature of our economies to life. Whether you are studying IGCSE, IB, A-Level or any other economics course you will need to write essays where you provide an in-depth analysis of the consequences of economic events, policies, and decisions.

With the help of AI, you now have EconXplain. Your own personal economics assistant who will help and guide you to create the best possible explanations, allowing you to refine this key exam skill.

Below is list of starter sentences by topic to get you going on an explanation. Choose one and have a go at writing up the explanation. For each one aim to write around 80-100 words.

The key to explaining is developing and adding to the point before. As you get to the end of a sentence ask yourselves these 3 questions to help you add more depth and details.

WHY?

HOW?

SO?

Once you have finished your explanation, it is time for the magic to begin.

Click on the image to the right to access your AI economics assistant. If you have not used Poe AI before you will need to sign up with an email address. Once you are in, all you need to do is copy in your answer and hit send. You will then receive instant feedback on your paragraph. Read it carefully, consider the changes and then give it another go.

Once you have mastered one of the topic sentences, try some more!

TAXATION

  • One impact of increasing income tax rates is…
  • One advantage of implementing a value-added tax (VAT) is…
  • One disadvantage of high property taxes is…
  • One impact of tax exemptions for charitable donations is…
  • One advantage of lowering corporate tax is…
  • One disadvantage of introducing a flat tax system is…
  • One impact of environmental taxes on industries is…
  • One advantage of tax incentives for small businesses is…
  • One disadvantage of heavy taxation on luxury goods is…
  • One impact of reducing sales tax on essential goods is…
  • One advantage for a government of imposing an excise tax on highly inelastic goods is…
  • One impact of government subsidies on agricultural production is…
  • One advantage of subsidies in renewable energy sectors is…
  • One disadvantage of long-term subsidies on consumer goods is…
  • One impact of subsidies on public transportation systems is…
  • One advantage of offering subsidies to startups is…
  • One disadvantage of reducing educational subsidies is…
  • One impact of subsidies on domestic industries competing with international markets is…
  • One advantage of healthcare subsidies for low-income families is…
  • One disadvantage of subsidies in the technology sector is…
  • One impact of environmental protection subsidies on sustainable practices is…

SUBSIDIES

REGULATING POSITVE EXTERNALITIES

  • One impact of tax credits for renewable energy investments on the solar power industry is…
  • One advantage of subsidizing public transportation in urban areas is…
  • One disadvantage of government-funded public health campaigns in preventive healthcare is…
  • One impact of offering research grants for green technology development is…
  • One advantage of providing free public Wi-Fi in community spaces is…
  • One disadvantage of compulsory education policies for private schooling options is…
  • One impact of incentivizing tree planting and urban green spaces on local ecosystems is…
  • One impact of safety regulations in the construction industry on housing development costs is…
  • One impact of carbon emission taxes on the automotive industry is…
  • One advantage of imposing noise regulations on urban construction projects is…
  • One disadvantage of strict waste disposal laws for manufacturing industries is…
  • One advantage of mandatory recycling programs for reducing landfill waste is…
  • One disadvantage of banning single-use plastics for small retail businesses is…
  • One impact of imposing health warnings on tobacco product packaging is…
  • One advantage of restrictions on commercial fishing in protecting marine ecosystems is…

REGULATING NEGATIVE EXTERNALITIES

UNEMPLOYMENT

  • One impact of high youth unemployment is…
  • One advantage of addressing structural unemployment through retraining programs is…
  • One disadvantage of long-term unemployment on an individual’s skillset is…
  • One impact of cyclical unemployment during a recession is…
  • One advantage of government initiatives to reduce frictional unemployment is…
  • One disadvantage of persistent unemployment in rural areas is…
  • One impact of technological advancements on unemployment rates in manufacturing is…
  • One advantage of targeted employment subsidies for older workers is…
  • One impact of inflation on household purchasing power is…
  • One advantage of mild inflation for economic growth is…
  • One disadvantage of hyperinflation on a country’s currency stability is…
  • One impact of inflation on fixed-income earners is…
  • One advantage of low inflation in stimulating consumption is…
  • One disadvantage of inflation in the housing market is…
  • One impact of inflation on long-term investment decisions is…
  • One advantage of inflation targeting by central banks is…
  • One disadvantage of rapid inflation on international trade competitiveness is…
  • One impact of inflation on living standards is…
  • One impact of inflation on savings is…

INFLATION

ECONOMIC GROWTH

  • One impact of increasing interest rates on consumers is…
  • One advantage of raising interest rates to control inflation is…
  • One disadvantage of increased interest rates on small business financing is…
  • One impact of higher interest rates on the housing market is…
  • One advantage of increasing interest rates for savers is…
  • One impact of increasing the interest rate during a period of high inflation is…
  • One impact of increased interest rates on a country’s currency value is…
  • One advantage of tightening monetary policy through interest rate hikes is…
  • One impact of increased government borrowing on interest rates is…
  • One impact of higher interest rates on global investment flows is…

INCREASING INTEREST RATES

DECREASING INTEREST RATES

  • One impact of decreasing interest rates on mortgage payments is…
  • One advantage of lowering interest rates for stimulating economic activity is…
  • One disadvantage of reduced interest rates for pension funds and retirees is…
  • One impact of lower interest rates on consumer spending behavior is…
  • One advantage of cutting interest rates for corporate investment is…
  • One disadvantage of persistently low interest rates on banking sector profitability is…
  • One impact of decreasing interest rates on a nation’s exchange rate is…
  • One advantage of reducing interest rates in combating deflationary pressures is…
  • One disadvantage of low interest rates in creating asset bubbles is…
  • One impact of reduced interest rates on the housing market is…

INCREASED GOVERNMENT SPENDING

DECREASED GOVERNMENT SPENDING

  • One impact of increased private investment in local industries is…
  • One advantage of heightened Foreign Direct Investment (FDI) for a developing country’s economy is…
  • One disadvantage of increased private investment in real estate markets is…
  • One impact of increased FDI on a host country’s employment levels is…
  • One advantage of rising private investment in technology startups is…
  • One disadvantage of increased FDI in terms of national sovereignty and control over key sectors is…
  • One impact of increased private investment on regional economic disparities is…
  • One advantage of increased private investment in renewable energy is…
  • One disadvantage of heavy reliance on FDI for economic development is…
  • One impact of increased private investment on domestic competition and local businesses is…

INCREASED PRIVATE INVESTMENT

DECREASED PRIVATE INVESTMENT

  • One impact of decreased private investment in the manufacturing sector is…
  • One advantage of reduced private investment in overheated market sectors is…
  • One disadvantage of a decline in private investment for small and medium enterprises is…
  • One impact of decreased private investment on national economic growth is…
  • One advantage of reduced speculative investment in financial markets is…
  • One disadvantage of falling private investment in research and development is…
  • One impact of decreased private investment on job creation and employment rates is…
  • One advantage of decreased private investment in volatile markets is…
  • One disadvantage of reduced private investment on technological advancement is…
  • One impact of a decline in private investment in the housing sector is…
  • One impact of imposing tariffs on imported goods is…
  • One advantage of using quotas to limit foreign imports is…
  • One disadvantage of protectionist subsidies for domestic industries is…
  • One impact of tariffs on consumer prices in the domestic market is…
  • One advantage of quotas in safeguarding local industries from foreign competition is…
  • One disadvantage of protectionist policies in the context of global trade relations is…
  • One impact of government subsidies on the competitiveness of domestic products is…
  • One advantage of tariffs in generating additional government revenue is…
  • One disadvantage of quotas for the variety and availability of products for consumers is…
  • One impact of protectionist policies on the efficiency and innovation of domestic industries is…

INCREASE IN PROTECTIONIST POLICIES

EXCHANGE RATES

  • One impact of a strengthening national currency on the export sector is…
  • One advantage of a stable exchange rate for foreign investors is…
  • One disadvantage of a rapidly fluctuating exchange rate for international trade agreements is…
  • One impact of devaluation of a currency on a country’s trade balance is…
  • One advantage of a strong domestic currency for consumers purchasing imported goods is…
  • One disadvantage of a persistent strong domestic currency for the manufacturing export sector is…
  • One impact of exchange rate policies on inflation levels is…
  • One advantage of competitive devaluation for a country’s trade deficit is…
  • One disadvantage of fixed exchange rates for monetary policy autonomy is…
  • One impact of foreign exchange reserves accumulation on currency stability is…