STEPS TO WRITE ESSAY 💡MAIN POINTS💡OVERVIEW

I. Introduction
A. Background information on interest rates and economic growth
B. Thesis statement: This essay will discuss whether a rise in the rate of interest will reduce economic growth.

II. Reasons why a rise in the rate of interest might reduce economic growth
A. Discourages spending

Higher cost to borrow
More rewarding to save
Lowers total (aggregate) demand
Could reduce firms’ output
B. Discourages investment
More expensive to borrow
Firms decide to save money instead
C. Increases exchange rate
Discourages exports
Encourages imports
III. Reasons why a rise in the rate of interest might not reduce economic growth
A. Optimism about the future

People and firms may still be willing to borrow
Expect higher income in the future
B. Interest rates may still be low
May be below inflation rate
C. Reduces inflation
Makes domestic products more price-competitive
Increases exports
D. Government spending and increased exports
Offsets reductions in consumption and investment
Results in higher economic growth
IV. Analysis of the potential impact of a rise in the interest rate on economic growth
A. Evaluate the arguments presented in section II and III
B. Compare the strengths and weaknesses of each argument
C. Discuss the potential impact of a rise in the interest rate on economic growth

V. Conclusion
A. Restate thesis statement
B. Summarize key arguments presented in the essay
C. Provide a final evaluation on whether a rise in the interest rate will reduce economic growth or not.