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Peer correction refers to students correcting each other. This is an effective way to get students involved in the learning process and it allows a teacher to evaluate how many students are having difficulty with a particular language point.
It’s probably used most often in whole class work or when the teacher is monitoring group and pair work. If a student makes a mistake, invite another student to give the correct answer. Do this sensitively so that students aren’t embarrassed about their lack of knowledge in comparison to their peers. You can highlight the thing that was wrong and invite others to correct it. E.g. Student: I go there yesterday. Teacher: I go (in a questioning voice). Can anybody help?