How do I answer an evaluation question?

E.g. Evaluate how would a fall in interest rates effect economic growth.Start by defining the key terms - economic growth, possibly interest rates very briefly.Draw a diagram showing Aggregate Demand shifting to the right and label it.Analyse the transmission mechanism: impact on business investment, saving rate, consumer expenditure, employment. Always link to how this will impact economic growth.Could give examples of fall in interest rate from 2008 downturn.Evaluate as you go: why might impact on consumer confidence be limited, perhaps people still not confident in economy and so continue to save.In conclusion, weigh up the likely impact: this may depend on context (if there is a recession) and on other factors like th size of the fall in interest rates, and how high they were to begin with.

Answered by Tutor21256 D. Economics tutor

6219 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What are barriers to entry?


What is price elasticity of demand and how does it affect equilibrium prices and quantities?


Explain why, in theory, a perfectly contestable market results in an efficient allocation of resources


What is an economic recovery and how is it related to unemployment?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences