The key to success

Evaluation Evaluation requires you to adopt a balanced approach, to reason out and explain your arguments and to demonstrate an awareness of different points of view

Evaluation Here’s a Mnemonic to help you

Evaluation W Wider context – consider the bigger picture and use it to weight your arguments E Efficiency – Does this achieve a more/less efficient allocation of resources? E Equality – Do some parties benefit more/less than others S Scope – How many people are effected by the point? Is it wide reaching or narrow? T Time – How long will it last, SR or LR or both? E Effectiveness – does it solve the issue that it was intended to solve? P Prioritisation – which of your points is the strongest and why. Be specific about the context of the question S Scale or Magnitude – where people are effected how strong is the effect?

WEESTEPS Wider context – consider the bigger picture and use it to weight your arguments e.g. China's increasingly developed workforce will result in improved standards of living for its citizens “However, there are further implications of a more developed workforce for China. As employment levels continue to rise, the pool of available workers may become increasingly scarce. As a result the bargaining strength of workers may rise such that they demand not only higher wages but also improvements in non wage factors such as better health and safety regulations. Should these costs begin to rise, China will risk losing its principal comparative advantage of low cost labour. ”

Efficiency Efficiency – Does this achieve a more/less efficient allocation of resources? E.g. Education as a merit good “Moreover, it is often argued that education, for example, is a merit good due to the fact that if left to the free market it would be underprovided. However, it could be argued that government subsidies - particularly in connection with tertiary education - are in fact a waste of scarce funds given the high level of unemployment we are currently seeing in the age bracket.”

Equality Equality – Do some parties benefit more/less than others (fairness) E.g. Impact of higher interest rates on the distribution of income. “Some people may benefit from a rise in interest rates. Savers (and, in particular, pensioners and others who are reliant on fixed incomes) will benefit from increased returns on their savings and, accordingly, their disposable income will rise. However, the savings ratio in the UK is low and borrowers tend to outnumber savers. As a result, there are likely to be more ‘losers’ than ‘winners’ due to a rise in interest rates.”

Scope Scope – How many people are effected by the point? Is it wide reaching or narrow? E.g. See previous example. Quantitative Easing- banks have benefited but has the man on the street (unemployment has not fallen)? Increases in levels of aid – what if most of the funds are appropriated by elites rather than distributed among the many

Time Time – How long will it last/take, SR or LR or both? E.g. Supply Side Policies “In theory government sponsored retraining programmes should equip the country's workforce with better skills and in turn lead to the economy becoming more efficient and productive and so shifting the LRAS to the right. However, as well as there being no guarantee of increased efficiency and productivity, it should also be recognised that such policies will only have an effect (if any) in the longer term and will not translate into the ‘quick fix’ which the economy so desperately needs at present.”

Effectiveness Effectiveness – does it solve the issue that it was intended to solve? (Good place to talk about trade- offs/opportunity costs) A fall in the value of the GBP should boost exports; however…. “….a depreciating currency runs the risk of turning from an advantage into something far more pernicious. A serious loss of confidence in GBP could lead to inflation getting out of control (draw cost push diagram). Given we are now a net importer of oil (a significant cost for many firms) we could see significantly higher input costs in relation to our exports thus undermining any exchange rate advantage we might otherwise have had.”

Prioritisation Prioritisation – which of your points is the strongest and why (essential for conclusions). Be specific about the context of the question “In conclusion, there are several policy options available to the government. Although the arguments are finely balanced, it could be argued that policy X is likely to be most effective in achieving the government’s objective in the long run. This is because …………..”

Scale or Magnitude Scale or Magnitude – where people are affected how strong is the effect? (n.b. an excellent opportunity to use ELASTICITY) E.g. Increase in interest rates in the UK (interest elasticity of demand) “The UK has a relatively high propensity for homeownership and because around 70% of all mortgages are on variable rates, a rise in interest rates is likely to have a significant effect on consumption levels in the UK. Consumption amounts to c. 65% of the UK’s aggregate demand. It is likely therefore that a rise in interest rates will have a significant impact on both output and employment in the UK.”

WEESTEPS Remember for A2 you need to demonstrate 'synopticity' Micro and macroeconomics are not separate subjects – there are many strong cross-linkages or inter-relationships between them, you need to demonstrate that you understand these links in order to achieve an A* - Elasticity is a great example of this. Finally, individual parts of WEESTEPS do not necessarily need to be applied in isolation. You can use combinations.

Over to You Let’s get evaluating!