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Comprehensive Guide To Writing Economics Essays

The Complete Guide To Writing A State Ranking HSC Economics Essay

In this guide I will be addressing the essay component of the HSC Economics Exam, specifically the key criteria which markers use to judge the comprehensiveness of your essay.

Post written by Chloe Segal (10th in the state Economics, 11th in the state Business Studies and 4th in the state English Advanced 2015). See all articles first and personally get in touch with our state rankers here

Crafting a holistic response

Crafting a holistic response requires you to acknowledge that economic indicators are interdependent, so a movement in one indicator will cause a chain reaction.

So how does this affect your writing?

It simply requires you to analyse multiple topics in your response rather than sticking to a narrow explanation of one topic. This will be clarified in the example below, where a question focusing on exchange rates incorporates an analysis of other indicators such as inflation, economic growth and international competitiveness.

Key features of an HSC Economics essay

I know it can sometimes be difficult to know what to include in an essay so here are the key features HSC markers are looking for:


  • Definitions of the key words in the question
  • Current statistic relevant to the topic
  • One sentence explanation providing background to the statistic (explain why the economic indicator has increased or decreased recently)

Body paragraphs

  • Diagrams
  • Examples related to current affairs
  • Quotes from reports or economists
  • Frequent reference to the question
  • Sound theoretical knowledge
  • Direct reference to the stimulus material
  • Statistics
  • Definitions


  • Summarise your points
  • Discussion of future implications

Let’s look at an example

Sample question:

‘Discuss some of the factors for the recent depreciation of the $A. Analyse some of the impacts of this depreciation on different sectors of the economy.’

1. Break down the question and identify key components

It is clear that there are two parts to this section — factors causing the depreciation, and impacts. In your essay you must address both sections explicitly.

2. Crafting an introduction

Scroll up if you need a refresher on the key elements which go in an introduction in the ‘Key features of an economics essay’ section.

Here is a sample introduction:

An exchange rate is the price of one currency quoted in terms of another. It is a measure of relative value or purchasing power, and provides a basis for conversion between domestic and foreign currencies for exporters and importers who engage in foreign trade. An appreciation occurs when the value of one currency increases in relation to another currency. This may be caused by a decrease in supply or an increase in demand. Depreciation occurs when the value of one currency decreases in relation to another currency.
This may be caused by an increase in supply or a decrease in demand. Australia’s exchange rate peaked at $US 1.10 in 2011, during the Resources Boom, however, due to a range of global and domestic factors, has recently depreciated to $US 0.75.

The first part of the introduction provides a definition. The second part is a short explanation for the recent movement in the exchange rate and the third part offers a current statistic.

3. Brainstorm causes of the depreciation

When examining causes of movements in an economic indicator it is useful to consider internal (domestic) and external (global) catalysts for change.

Internally, consider what is happening in the Australian economy (e.g. changes in business and consumer sentiment, government policy), and externally, consider what is happening abroad (e.g. changes in foreign governments policies and economic growth patterns).

Secondly, consider the two mechanisms by which a depreciation can occur: a decrease in demand for the $A or an increase in supply of the $A. If you are finding it difficult to brainstorm causes think about both the supply and demand side. Often students focus solely on demand and neglect to discuss supply side factors.

External influences (global factors):

  • China’s economic slowdown
  • US Federal Reserve policy of tapering and subsequent capital flight
  • Expectations of an increase in US interest rates
  • Internal influences (domestic factors)
  • Decline in Australia’s terms of trade
  • RBA’s implementation of expansionary monetary policy through lowering the cash rate to 1.75% (this is outdated so be sure to familiarise yourself with the most relevant statistics)
  • Australia’s narrow export base and lack of a comparative advantage in the production of STM’s, consumer and capital goods

4. Brainstorm impacts of the depreciation

When I was writing my economics essay I often struggled to identify impacts to discuss.

To address this issue I thought about the key components of aggregate demand. Using the equation AD = C + I + G + X — M, it is easy to identify at least 5 potential impacts.

A change in Australia’s exchange rate will influence consumption patterns, domestic and foreign investment, government expenditure, exports and imports.

Once I had discussed these five points I would then consider the economic issues section of the syllabus.

Many students restrict their analysis to the above factors. To provide a holistic examination of the impacts of a depreciation of the $A it is useful to consider factors outlined in the issues section of the syllabus, notably external stability, the distribution of income and wealth and the allocation of resources.

Since these topics are more abstract and may be indirectly linked to exchange rates, including them in your essay will help your response stand out.

5. Diagrams

Examples of diagrams you can include:

  • Increase in supply for the $A causing a depreciation
  • Decrease in demand for the $A showing a depreciation
  • Keynesian Diagram
  • J Curve
  • Cash Rate Diagram

During HSC I was often frustrated due to the lack of consensus of requirements regarding diagrams.

Some markers are pedantic and will mark you down if diagrams are not ruled and labelled appropriately, whilst others are more lenient in their marking.

Although it takes up more time I would encourage you to use a ruler and label diagrams meticulously.

Place diagrams in the centre of the page, draw large diagrams and avoid writing on the side of the diagram.

Most importantly, directly reference the diagram in your writing. Here is an example how to do so for the cash rate diagram:

As shown in the diagram above, the RBA’s decision to loosen monetary policy involved increasing the supply of loanable funds in the overseas cash market.
This shift in supply from S1 to S2 was achieved by buying bonds and depositing money into exchange settlement accounts, resulting in a movement to the right along the demand curve.
This resulted in a lower cash rate which fell from R1 to R2. Through the transmission mechanism, the RBA can indirectly affect the structure of other interest rates in the short, medium and long term, and therefore in general, interest rates in the Australian economy have fallen. This has reduced interest rate differentials resulting in capital flight as investors seek higher returns from overseas financial assets.
As foreign investors represent a portion of demand for the $A, a decline in foreign direct investment directly reduces the demand for the $A (at this point you could continue with a diagram showing a decrease in demand for the $A and the subsequent depreciation, again directly referencing the diagram in the subsequent paragraph).

6. Incorporate one or more quotes and a link to stimulus material

A lot of students don’t realise you can incorporate quotes in economic essays.

I know I didn’t utilise quotes until I started studying for HSC, which is something I regret because quotes are a powerful tool that can definitely boost your marks!

The hardest part is finding relevant quotes that are short and easy to memorise. My advice is to go to the RBA website and read the short monetary policy statements from Glenn Stevens, the Governor of the RBA.

Pick out one or two sentences that could easily be incorporated into an essay. Other good sources for quotes are newspapers such as the Economist, the Conversation, Financial Times or Financial Review.

It is not necessary to purchase a subscription to any newspaper, rely mainly on free newspapers or else read the number of free articles available per month.

Here are two examples:

‘Inflation is forecast to remain within the target even with a lower exchange rate’ — Glenn Stevens (Governor of the RBA).

This quote can be used to support your discussion of impacts of a depreciation on the general level of prices in the economy.

‘Since floating Australia has demonstrated considerable resilience in the face of external shocks’ — Christopher Kent (Assistant Governor of the RBA).

This quote can be used to support an argument that the exchange rate acts as an automatic stabilizer and thus, a depreciation is likely to stabilize Australia’s economic growth by boosting export consumption and improving trade flows.

It is important to provide context to your quotes. If you are directly quoting an economist, make sure you mention their role/job so that the marker knows the quote is reliable and accurate.

If you are having trouble remembering a quote, try to shorten it. You can also paraphrase a quote.

Unlike English quotes, you don’t have to learn economics quotes word for word. Rather, your quote should express the viewpoint of the economist and capture their forecasts for future economic trends.

Lastly, make sure you explicitly reference the stimulus material (e.g. as highlighted by the stimulus material above it is evident that China’s slowdown has been a primary factor influencing the depreciation of Australia’s exchange rate) and include relevant statistics.

From the above example it is clear how a response to this sample question requires you to draw upon knowledge from multiple areas of the syllabus. Whilst it is important to place emphasis on the topic of exchange rates, as it is the focus of the question, a holistic response will include a discussion of theory related to Australia’s balance of payments and monetary policy.

Thus, my number one tip for essays in economics is to integrate references to any topic which is relevant to the question rather than being narrow and focusing explicitly on the key topic outlined in the question.

Practice essays and timing

I strongly encourage you to complete timed practice essays and give them to your teacher for feedback.

Due to time constraints I found I didn’t have enough time to complete a practice for every topic in the syllabus. To address this issue I have the following four tips:

1. Brainstorming

Spend some time thinking about different questions and brainstorming ideas about what you could possibly write about.

Often students waste a lot of time in the exam thinking about what they should write. If you have already completed this stage it allows you to jump straight into the writing phase during the exam, saving you quite a lot of time!

2. Scaffolds

Another alternative to writing out a full response is to create scaffolds with points under introduction, body paragraphs and conclusion.

3. Predict the question

This approach is definitely riskier but can reduce your workload significantly. Try to take a look at past essay questions for trials and HSC and focus your study on questions that haven’t come up for a while.

4. Timing in the exam

When writing your trial exam try to allocate at least 50 minutes to each essay. Take a similar approach when conducting your practice responses. Many students ignore time constraints when doing practice tasks and then struggle during the exam.

Post written by Chloe Segal (10th in the state Economics, 11th in the state Business Studies and 4th in the state English Advanced 2015)

To get in touch with our talented state rankers and access all articles first, just join our community by clicking the picture below:

As the government begins its crackdown on essay mill websites, it’s easy to see just how much pressure students are under to get top grades for their coursework these days. But writing a high-scoring paper doesn’t need to be complicated. We spoke to experts to get some simple techniques that will raise your writing game.

Tim Squirrell is a PhD student at the University of Edinburgh, and is teaching for the first time this year. When he was asked to deliver sessions on the art of essay-writing, he decided to publish a comprehensive (and brilliant) blog on the topic, offering wisdom gleaned from turning out two or three essays a week for his own undergraduate degree.

“There is a knack to it,” he says. “It took me until my second or third year at Cambridge to work it out. No one tells you how to put together an argument and push yourself from a 60 to a 70, but once you to get grips with how you’re meant to construct them, it’s simple.”

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Poke holes

The goal of writing any essay is to show that you can think critically about the material at hand (whatever it may be). This means going beyond regurgitating what you’ve read; if you’re just repeating other people’s arguments, you’re never going to trouble the upper end of the marking scale.

“You need to be using your higher cognitive abilities,” says Bryan Greetham, author of the bestselling How to Write Better Essays. “You’re not just showing understanding and recall, but analysing and synthesising ideas from different sources, then critically evaluating them. That’s where the marks lie.”

But what does critical evaluation actually look like? According to Squirrell, it’s simple: you need to “poke holes” in the texts you’re exploring and work out the ways in which “the authors aren’t perfect”.

“That can be an intimidating idea,” he says. “You’re reading something that someone has probably spent their career studying, so how can you, as an undergraduate, critique it?

“The answer is that you’re not going to discover some gaping flaw in Foucault’s History of Sexuality Volume 3, but you are going to be able to say: ‘There are issues with these certain accounts, here is how you might resolve those’. That’s the difference between a 60-something essay and a 70-something essay.”

Critique your own arguments

Once you’ve cast a critical eye over the texts, you should turn it back on your own arguments. This may feel like going against the grain of what you’ve learned about writing academic essays, but it’s the key to drawing out developed points.

“We’re taught at an early age to present both sides of the argument,” Squirrell continues. “Then you get to university and you’re told to present one side of the argument and sustain it throughout the piece. But that’s not quite it: you need to figure out what the strongest objections to your own argument would be. Write them and try to respond to them, so you become aware of flaws in your reasoning. Every argument has its limits and if you can try and explore those, the markers will often reward that.”

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Fine, use Wikipedia then

The use of Wikipedia for research is a controversial topic among academics, with many advising their students to stay away from the site altogether.

“I genuinely disagree,” says Squirrell. “Those on the other side say that you can’t know who has written it, what they had in mind, what their biases are. But if you’re just trying to get a handle on a subject, or you want to find a scattering of secondary sources, it can be quite useful. I would only recommend it as either a primer or a last resort, but it does have its place.”

Focus your reading

Reading lists can be a hindrance as well as a help. They should be your first port of call for guidance, but they aren’t to-do lists. A book may be listed, but that doesn’t mean you need to absorb the whole thing.

Squirrell advises reading the introduction and conclusion and a relevant chapter but no more. “Otherwise you won’t actually get anything out of it because you’re trying to plough your way through a 300-page monograph,” he says.

You also need to store the information you’re gathering in a helpful, systematic way. Bryan Greetham recommends a digital update of his old-school “project box” approach.

“I have a box to catch all of those small things – a figure, a quotation, something interesting someone says – I’ll write them down and put them in the box so I don’t lose them. Then when I come to write, I have all of my material.”

There are a plenty of online offerings to help with this, such as the project management app Scrivener and referencing tool Zotero, and, for the procrastinators, there are productivity programmes like Self Control, which allow users to block certain websites from their computers for a set period.

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Look beyond the reading list

“This is comparatively easy to do,” says Squirrell. “Look at the citations used in the text, put them in Google Scholar, read the abstracts and decide whether they’re worth reading. Then you can look on Google Scholar at other papers that have cited the work you’re writing about – some of those will be useful. But quality matters more than quantity.”

And finally, the introduction

The old trick of dealing with your introduction last is common knowledge, but it seems few have really mastered the art of writing an effective opener.

“Introductions are the easiest things in the world to get right and nobody does it properly,” Squirrel says. “It should be ‘Here is the argument I am going to make, I am going to substantiate this with three or four strands of argumentation, drawing upon these theorists, who say these things, and I will conclude with some thoughts on this area and how it might clarify our understanding of this phenomenon.’ You should be able to encapsulate it in 100 words or so. That’s literally it.”

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