Classroom activities | Institute for Fiscal Studies

These resources are intended to challenge students to think beyond the syllabus and analyse real world issues. They can be used as starter or plenary activities in lessons, or set as an enrichment homework. The questions cover a range of skills, from knowledge to evaluation and interpreting data to written justifications.

Advising on these is Will Haines, who is currently Head of Department in a school in the North West. Will has 10 years experience teaching economics.

Questions

Student loans

Link to syllabus: Externalities, supply-side policy

1) Using the chart above, describe which groups will make higher average repayments and which groups will make lower repayments under the 2023 student loan system compared to the 2022 system.

2) Evaluate the economic case for, and against, government providing higher education for free rather than providing student loans where lower earners pay back less than higher earners.

Housing

Note and source

1) Using the chart above, describe how different the homeownership rates of people born in the 1970s compares to younger and older generations, and how that has differed as this generation has aged.

2) One likely reason for falling levels of homeownership for younger generations is that the prices of houses have risen much faster than average earnings, particularly between the mid 1990s and 2007. Describe potential reasons for rising house prices and policies that a government could use to reduce house prices in order to boost homeownership.

Income inequality

Note and source

Link to syllabus: labour market

1) Compare average disposable household income growth from 2020-21 to 2021-22 with the growth from 2019-20 to 2020-21 for the bottom quartile (25th percentile and under), 50th percentile and top quartile (75th percentile and over).

2) If you were given this graph as Chancellor of the Exchequer, how would it inform your economic policy?

More questions

Click through to view the relevant report

Minimum wage

Link to syllabus: labour market

1) With reference to the Figure and the surrounding text, give one reason why more jobs might be lost if the minimum wage is increased significantly.

2) Evaluate the economic advantages and disadvantages of a significant increase in the minimum wage in the UK.

A-level / Post-16 resources

Health spending

Link to syllabus: Externalities, state provision of public goods, supply-side policy

1) With reference to figure 3 and the surrounding text, why has significantly increased health spending not delivered bigger increases in healthcare quality since 2009?

2) What are the key economic arguments in favour and against further increases in government spending on healthcare?

A-level / Post-16 resources

Sin taxes

Link to syllabus: Externalities, indirect taxation

1) With reference to figure 2.1 and the surrounding text, what happened to alcohol prices after the Scottish government introduced minimum unit pricing.

2) Evaluate the economic case for the government increasing taxes on alcohol.

A-level / Post-16 resources

Living standards and inequality

Link to syllabus: inequality, national income, labour market

1) With reference to the first paragraph of 2.1 (Trends in household incomes) and Figure 2.1, explain the reasons for median income only falling by 1.7% in the first year of the pandemic?

2) With reference to Figure 2.5, draw a Lorenz curve for the UK in 1961 and 2021 that reflects the change in the Gini coefficient.

3) 'One of the most widely discussed economic legacies of the pandemic has been a rise in economic inactivity' (line 1 section 2.3 Living standards of the recently inactive). Evaluate measures the government could adopt to prevent those close to the state pension age retiring and encouraging them to return to the labour market.

A-level / Post-16 resources

Intergenerational inequality

Link to syllabus: fiscal policy

1) ‘Right now, it is younger generations who are again bearing the brunt of economic failure.’ According to this article, what are the reasons for this?

2) The article suggests the possibility to ‘pare back some of the additional benefits — free travel, winter fuel payments and the like — enjoyed by the over-60s’.

To what extent do you agree with this idea?

A-level / Post-16 resources

Mortgage rates

Link to A-level syllabus: monetary policy

1) With reference to figure 2, describe how the average increase in mortgage payments impacts mortgage-holding households across different parts of the UK.

2) Overall, 60% of those with a mortgage (8.5 million; 19% of adults) are set to spend more than a fifth of their incomes on mortgage payments. Evaluate the impact of this on the UK economy.

A-level / Post-16 resources

Cost of living

Link to syllabus: Inflation, inequality, fiscal policy and monetary policy

1) CPI is used as a measure of inflation in this article. Explain how it is calculated.

2) With reference to Part 1, explain what has contributed to the inflation surge in the past 2 years

3) Using the information provided in the key findings and your knowledge of economics, explain why keeping inflation low and stable is a key macroeconomic goal for governments.

A-level / Post-16 resources

Public finances and spending

Links to syllabus: economic growth, inflation, government finances and fiscal policy

1) According to the graph on slide 4 (comparison of economic forecasts), describe the difference between the Bank of England (BoE) February 2023, Office for Budget Responsibility (OBR) March 2023 forecasts for real GDP compared to its level in 2019. Refer to the data in your answer.

2) With reference to slide 7 and 8, explain how the rise in nominal wages may keep inflation higher for longer.

3) The graph on slide 16 provides an illustration of potential changes to spending on different public services based on government announcements. Evaluate two possible impacts of these changes in real terms funding of public services on the UK economy.

A-level / Post-16 resources

Private schools

Link to syllabus: price elasticity of demand and taxation

1) According to key finding 2, the share of pupils across the UK in private schools has remained around 6–7% for at least the last 20 years (or about 560,000–570,000 pupils in England). This has occurred despite a 20% real-terms increase in average private school fees since 2010. Using this information, is private school education price elastic or price inelastic in demand?

2) According to key finding 4, if demand for private schooling falls as a result of increases in post-tax fees, the additional tax revenue raised would likely be unaffected. Explain why this is the case?

3) With reference to section 2, discuss the economic case for and against tax reliefs for private schools.

A-level / Post-16 resources

State school spending

Link to syllabus: positive externalities, government finances, fiscal policy and supply-side policy

1) With reference to figure 1 in section 2 (comparing spending per pupil across UK nations), how does school spending per pupil compare across England, Wales, Scotland and Northern Ireland since 2009-10?

2) Since 2018-19, spending per pupil has mostly recovered back to 2010 levels across England, Wales and Northern Ireland, with increases of about 8% in real terms in England and Wales between 2018–19 and 2022–23, and of 11% in Northern Ireland. Explain the private and external benefits that arise from greater school spending. Use an appropriate diagram in your answer.

3) All four nations are now expected to see falls in pupil numbers of about 6-8% over the next five years. Assess the potential macroeconomic impacts of this on the UK economy

A-level / Post-16 resources

Poverty

Link to syllabus - inequality and poverty

1) According to the first paragraph in this article, explain why the incomes of low-income households have been bolstered.

2) With reference to table 1 and the information below it, which of the benefit policies had the biggest impact on overall poverty and why?

A-level / Post-16 resources