What are microeconomics and macroeconomics ?

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ВАРИАНТ 1

What does economics study?

What do you think of when you hear the word economics? Money, certainly, and perhaps more complicated things like business, inflation and unemployment. The science of economics studies all of these, but many more things as well. Perhaps you think that economics is all about the decisions that governments and business managers take. In fact, economists study the decisions that we all take every day.

Very simply, economics studies the way people deal with a fact of life: resources are limited, but our demand for them certainly is not. Resources may be material things such as food, housing and heating. There are some resources, though, that we cannot touch. Time, space and convenience, for example, arc also resources. Think of a day. There are only 24 hours in one, and we have to choose the best way to spend them. Our everyday lives are full of decisions like these. Every decision we make is a trade-off. If you spend more time working, you make more money. However, you will have less time to relax. Economists study the trade-offs people make. They study the reasons for their decisions. They look at the effects those decisions have on our lives and our society.

What are microeconomics and macroeconomics ?

Economists talk about microeconomics and macroeconomics. Microeconomics deals with people, like you and me, and private businesses. It looks at the economic decisions people make every day. It examines how families manage their household budgets. Microeconomics also deals with companies - small or large - and how they run their business. Macroeconomics, on the other hand, looks at the economy of a country - and of the whole world. Any economist will tell you, though, that microeconomics and macroeconomics are closely related. All of our daily microeconomic decisions have an effect on the wider world around us.

Another way to look at the science of economics is to ask, 'what's it good for?' Economists don't all agree on the answer to this question. Some practise positive economics. They study economic data and try to explain the behaviour of the economy. They also try to guess economic changes before they happen. Others practise normative economics. They suggest how to improve the economy. Positive economists say, 'this is how it is'. Normative economists say, 'we should ..'

So what do economists do? Mainly, they do three things: collect data, create economic models and formulate theories. Data collection can include facts and figures about almost anything, from birth rates to coffee production. Economic models show relationships between these different data. For example, the relationship between the money people earn and unemployment. From this information, economists try to make theories which explain why the economy works the way it does.

Переведите на английский язык:

1. Наука экономика изучает бизнес, производство, торговлю, инфляцию, безработицу, решения, которые каждый день принимают правительства, компании и мы все.

2. В то время как микроэкономика изучает то, как ведут свои дела компании и домашние хозяйства, макроэкономика рассматривает экономику страны в целом.

3. Экономические ресурсы включают в себя как материальные ресурсы, такие как сырьё, здания и другие, так и нематериальные ресурсы, например, время.

4. Каждый день мы принимаем много решений, и каждое решение — это обмен одного ресурса на другой.

5. Экономисты собирают данные и на их основе создают экономические модели.

6. Экономические модели показывают взаимосвязь между различными процессами в экономике.

7. Адам Смит, «отец современной экономической науки», считал, что богатство страны зависит от её способности производить товары.

What does economics study?

History of economic thought

Economic thought goes back thousands of years. The ancient Greek, Xenophon, used the word oikonomikos (from oikos, meaning family, household, estate, and nomos, for usage, law). He was talking about skilful or clever ways to manage land and households. We could call many of Aristotle's political writings economics, although he did not use the word. The English word economics first appeared in the 19th century -two and a half thousand years after Xenophon.

Early economic thought was all about the meaning of wealth or being rich. These early thinkers asked, 'what makes a state or a country wealthy?' For nearly 2,000 years, the answer was very simple: gold. A country or nation's wealth depended on its owning precious metals. This simple view of the economy remained until medieval times.

During medieval times - roughly the period between 1100 and 1500 AD, trading between nations grew, and a new social class appeared. These were merchants, people who made their money through the buying and selling of goods, and they began to write their own thoughts on the economy. They saw the economy as a way to make the state strong. For them, the nation's wealth depended on stocks of gold and the size of the population. More people meant bigger armies and a stronger state.

These were still simple ideas. However, daily experience had also taught people many basic economic concepts. For example, they understood the importance of trade with other states. They realised that scarcity makes things more expensive and abundance makes them cheaper.

Modern economics was really born in the 19th century. At this time, thinkers like Adam Smith wrote down ideas that are still important today. Adam Smith is often called the Father of Modern Economics, although the science was called political economy then. Smith realised that a nation's wealth depended on its ability to produce goods. The value of these goods depended on the cost of production. The cost of production depended on the cost of workers, raw materials and land. This was really the first example of macroeconomics.

Smith and other classical economists were writing at a time of great change. The industrial revolution had begun. Paper money began to replace precious metals. The middle classes were growing stronger. Economists' theories echoed these changes. They wrote about the division of labour (each worker taking their part in the production process). They discussed the problems of population growth. They influenced thinking about social classes.

For classical economists, the value of goods depends on the cost of production. However, the price of goods is not always the same as their real cost. Later economists developed new theories to explain this 'weakness in classical economics. These are known as the neoclassical economists and they were writing at the end of the 19th and early 20th centuries.

In neoclassical economics, supply and demand make the economy work. In other words, the price of goods depends on how much people want them and how easily they can be found. Consumers want satisfaction from their resources (time and money). Firms want profit. In neoclassical economics, this is the basic relationship in the economy. These ideas are still the basis of economic thinking today.

Переведите на английский язык:

4. Каждый день мы принимаем много решений, и каждое решение — это обмен одного ресурса на другой.

5. Экономисты собирают данные и на их основе создают экономические модели.

6. Экономические модели показывают взаимосвязь между различными процессами в экономике.

Econometrics

Economists like to make theories. They theorise about why inflation happens, for example, or what causes unemployment. But theories are not useful if you cannot test them. This is true for all sciences, and the same for economics.

To test a theory, you first need to gather what scientists call empirical evidence. That's evidence that can be measured, like money spent or babies born. When you have collected the evidence, you're ready to do the maths and statistics to test your theory. Economists call their maths econometrics.

Let's take an example. Imagine that you want to find out why some people save more money than others. You may think that this depends on two things: how much money they earn (their income) and how happy they generally are about saving money. We can express your theory as an econometric formula: amount someone saves = their income x their happiness to save

Of course, we can't measure happiness to save exactly, but with econometric mathematics we can give it a value. Then we can see how that value differs between groups of people or cultures. Econometrics is about finding relationships between variables - in other words relationships between values that change. Economists try to find out if variable A changes every time value B changes. They want to find out if variable A is dependent on variable B. This is called analysis, and there are two main kinds of econometric analysis: time-series analysis and cross-sectional analysis.

Time-series analysis shows how variables change over a period of time. How salaries increased over the last century, for example. Gross-sectional analysis compares variables at one point in time. The salaries of men compared to women right now, for example. Of course, economists like to make things more complicated than that. Sometimes they combine cross-sectional with time-series analysis, and this is called panel data analysis.

As we said earlier, econometrics is good for testing economic theories. However, there is also a practical side to econometrics. The same maths and statistics are used by governments and business managers, as well as academics. Econometrics can help governments and companies find out how well they are doing. With the data from all this mathematics, they can make better decisions and plan better for the future.

Econometrics

Choose the correct word.

1. Prices usually increase/save from one year to the next.

2. People work in order to measure/earn money.

3. My grandmother's only income/ salary is her pension.

4. Einstein is famous for his theory/analysis of relativity.

5. The police search for evidence/ variables to help them find the criminal.

6. If you increase/combine blue with red you got purple.

7. Government statistics / evidence show that crime is rising.

8. People save/increase their money in bank accounts.

9. You can use a ruler to measure/ earn the size of things.

10. A person's income/salary is the money they earn each month from work.

11. His theory/analysis of the problem is very good.

12. In experiments, scientists try to find out what makes a variable/evidence change.

13. An expert in a subject who works and teaches at a university is known as an individual/academic.

The law of demand

Economics can often be very confusing. Econometric formulas and impressive charts are sometimes impossible to understand. Thankfully though, some economic ideas are completely obvious. One of these ideas is the law of demand. Economists are always disagreeing with each other, but the law of demand is the only thing they all agree on. They all agree on it because it makes sense even to non-economists like you and me.

Demand is how much of the same good or service people would like to buy. The law of demand says that demand for something falls as its price rises. Economists show this concept with the demand curve.

The reason why the law of demand works is quite obvious: the money we have is limited. If something becomes more expensive, we will have less money available to spend on our other needs. If the product or service is not a necessity, we will decide to buy less of it.

Most rules have exceptions, but economists agree that there are very few exceptions to the law of demand. It even applies to basic necessities like water. When water becomes more expensive, people find ways to use less. When the government put higher taxes on petrol, people try not to use their cars so often. The fall in demand might be very small, but it is real.

So price has an effect on demand, but the strength of the effect varies. The strength of the price / demand relationship is called price elasticity. Economists use a simple econometric formula to measure price elasticity for a certain product in a particular market. This helps governments and companies set prices at the correct level for a particular time and plan price increases.

Don't forget, though, that other things affect demand apart from price. For example, during a very cold winter, demand for heating fuel like gas or coal will rise at any price. If the winter is unusually warm, then demand for fuel will fall. Economists say that these situations cause a shift in the demand curve.

The curve is still the same shape because price still has the same effect on demand. However, something else has caused a general increase in demand at all prices. A rise or fall in people's incomes, fashion, climate and many other things can influence demand in this way.

Переведите на английский язык:

1. Экономисты проверяют теории, используя эмпирические доказательства. Это доказательства, которые можно собрать и измерить.

2. Эта теория рассматривает такие факторы как инфляция, налоги, зарплата и безработица.

3. Правительства, компании и учёные используют эконометрику, чтобы принять верное решение, выявить взаимосвязи между переменными величинами и т. п.

4. Некоторые переменные величины рассматриваются за отдельный период времени. Такой анализ называется анализом временных рядов.

5. Согласно закону спроса при росте цены на товар, спрос на этот товар падает.

6. Ценовая эластичность, взаимоотношение между ценой и спросом, помогает устанавливать правильный уровень цен на данном рынке в определённый момент времени.

7. Некоторые другие факторы кроме цены оказывают влияние на спрос, что вызывает сдвиг кривой спроса.

The law of demand

ВАРИАНТ 2

The traditional economy

It's hard to imagine our lives without coins, banknotes and credit cards. Yet for most of human history people lived without money. For thousands of years human societies had very simple economies. There were no shops, markets or traders. There were no employers, paid workers or salaries. Today, we call this kind of economy the traditional economy, and in some parts of Asia, South America and Africa this system still exists.

People who live in a traditional economy don't have money because they don't need it. They live lives of subsistence. That means they hunt, gather or grow only enough food to live. There is almost no surplus in the traditional economy, and there is almost no property. Families may own simple accommodation, but land is shared by all the tribe. Economic decisions are taken according to the customs of the tribe. For example, every family may need to give some of the crops they grow to the tribal leader, but keep the rest for themselves. They don't do this because it makes economic sense. They do it because the tribe has always done it. It's simply a custom.

Custom, also, decides what jobs people do in the traditional economy. People generally do the jobs that their parents and grandparents did before them. Anyway, there aren't many jobs to choose from in the traditional economy. Men are hunters, farmers or both. The woman's place is at home looking after children, cooking and home-making. This division of labour between men and women is another characteristic of the traditional economy. Whatever the work is, and whoever does it, you can be sure it's hard work. This is because traditional economies have almost no technology. Physical strength and knowledge of the environment are the tools for survival.

Like any other economic system, the traditional economy has its benefits and drawbacks. Probably the biggest benefit is that these are peaceful societies. People consume almost everything they produce and own practically nothing. They are equally poor. For all these reasons, war is almost unknown in these societies.

However, people who live in traditional societies are among the poorest people in the world. Because custom decides what people do, nothing in these societies ever changes. Because there is no technology, people depend on nature to survive. They have no protection from environmental disasters like droughts and floods. They are always in danger of hunger and disease.

But the traditional economy is in danger itself. There are only a few examples left on the planet. In 100 years from now, it may have disappeared forever.

Переведите на английский язык:

1 Для того, чтобы получить высокую прибыль, продавец должен повысить цену и снизить издержки производства.

2. В рыночной экономике компаниям приходится конкурировать друг с другом за долю рынка.

3. Сегодня в нашей жизни и экономике деньги, монеты, банкноты и кредитные карточки играют важную роль.

4. В традиционной экономике люди занимались охотой, собирательством, не имели собственности. Земля использовалась всеми членами племени. Там же впервые появилось разделение труда.

5. Любая экономическая система имеет свои преимущества и недостатки. Самым большим недостатком традиционной экономики является то, что люди потребляют почти всё, что производят.

6. Рыночная экономика не контролируется государством. На свободном рынке существует конкуренция, которая позволяет управлять ценами и качеством.

7. Подлинно рыночная экономика не может существовать, поскольку все правительства каким-либо образом контролируют экономику, вводя ограничения.

The traditional economy

The market economy

Have you ever walked through a busy street market? People push their way through crowds of others in order to reach the stalls first. The air is full of deafening shouts. Stall owners yell to advertise their goods. Buyers cry out their orders. It's hard to imagine, but behind this noisy confusion is a very logical economic theory: the market economy.

The market economy is sometimes called the free market. A free market is not controlled in any way by a government. It is also free from the influence of custom or tradition. In a free market, the only reason why things are bought and sold is because there is a demand for them. Prices for goods and services arc simply what people are prepared to pay. The market economy is not really controlled by anyone. It controls itself.

The street market where we began has many of the characteristics of the free market. Customers arrive at the market with a shopping list of things they need. They also come with an idea of how much they are prepared to pay. Stall owners sell what customers demand, and try to get the highest price they can for it. Supply and demand control what is on the market and how much it sells for. In the wider economy, we are all customers, and the stall owners are like companies.

The role of the company in the free market is to supply what people want. However, companies need an incentive. The incentive is profit. There are two ways for companies to make a profit. The first way is to raise their prices. The second way is to reduce their production costs. And this brings us to two more features of the market economy: competition and technology.

Competition exists in a free market because, theoretically, anyone can be a producer. This means that companies have to compete with each other for a share of the market. Competition is good for consumers because it helps to control prices and quality. If customers aren't happy with a product or service, or if they can't afford it, they will go to a competitor.

Technology exists in a free market because producers need ways to reduce their costs. They cannot buy cheaper raw materials. Instead, they must make better use of time and labour. Technology is the use of tools and machines to do jobs in a better way. This helps companies produce more goods in less time and with less effort. The result: more profit.

People often think that most economies are free markets. However, at the macroeconomic level, a truly free market economy does not exist anywhere in the world. This is because all governments set limits in order to control the economy. Some governments set many limits, other governments set very few, but they all set some. For this reason, a true market economy is only theoretical. Nevertheless, many of the features of the market economy do exist in most societies today.

Переведите на английский язык:

1 Для того, чтобы получить высокую прибыль, продавец должен повысить цену и снизить издержки производства.

2. В рыночной экономике компаниям приходится конкурировать друг с другом за долю рынка.

3. Сегодня в нашей жизни и экономике деньги, монеты, банкноты и кредитные карточки играют важную роль.

The market economy

The planned economy

In many ways, the planned economy is the direct opposite of the market economy. In the market economy, the forces of supply and demand decide everything: what is produced, how much is produced, the methods of production and the price. In the planned economy, all of this is decided by the government. In every way that the market economy is free, the planned economy is controlled.

Unfortunately, no economic system is perfect. If there was a perfect system, economists wouldn't have anything to argue about! Market economies have their strengths, but they have their problems, too. Planned economies try to provide solutions to these problems. For example, the free market supplies the things that people want. However, what people want and what they need are not always the same: Fast food is always in demand, but it's bad for us. In a planned economy, the government could decide to stop fast food restaurants operating in the market.

A second problem with free markets is that producers always want the highest price. Often the poor can't afford things. In a planned economy, the government sets prices. They make sure that everyone can afford basic commodities. This is one way that planned economies try to share things equally. Another is to control how much people get paid.

In a planned economy, workers' wages depend on the service they provide to society. If people can live without their service, you get paid less. This is very different from the free market. In the free market, someone's salary mostly depends on the demand for his or her work. If people like what you do, you get paid more.

Before 1900, there were few examples of planned economies. During the 20th century, however, the planned economy became the standard for socialist governments like the USSR and China. These countries experienced amazing economic growth in a very short time. In a market economy, it takes a long time for big industries to grow from small companies. In a planned economy, however, huge industries can grow overnight. The government simply decides to spend money on factories and factories appear. Britain, for example, took centuries to develop her steel industry in a free market economy. China developed hers in a few decades.

But, as we said, no economic system is perfect. The planned economy has many drawbacks. One of these drawbacks is problems with supply. It is difficult for governments of planned economies to know exactly how much to produce to meet demand. In a market economy, when the price of a commodity rises, this indicates a rise in demand. Companies then supply more to the market. This warning system doesn't work in a planned economy because price is controlled by the government. The result is shortages.

When shortages happen, governments can do two things: ration goods or raise prices. In this situation, people then start to hoard things, and the problem gets even worse. As the population gets bigger, shortages like this become more common. For this reason, China - once the world's biggest planned economy - is rapidly moving towards another system: the mixed economy.

Переведите на английский язык:

1. В рыночной экономике спрос и предложение решают всё, а её полной противоположностью является плановая экономика.

2. При плановой экономике правительство решает, что производить, сколько и как производить, по какой цене продавать.

3. В мире нет совершенной экономической системы. Рыночная экономика имеет свои сильные стороны, но у неё есть и недостатки. В странах с плановой экономикой правительства могут создать условия для того, чтобы все могли купить товары первой необходимости.

4. У стран с плановой экономикой есть проблемы с предложением, поскольку трудно вычислить, сколько нужно произвести и какой будет спрос. Люди вынуждены накапливать и хранить разные товары, повсеместным становится дефицит товаров.

5. Во многих странах наряду с государственными отраслями существуют частные предприятия, которым для развития нужна защита от рыночной конкуренции.

6. Уменьшение вмешательства государства в экономику ведёт к росту конкуренции и более свободному действию рыночных сил.

7. Правительства могут ограничивать свободное предпринимательство, вводя запреты на торговлю различными товарами, предотвращая создание монополий, защищая потребителей и окружающую среду.

The planned economy

The mixed economy

Most economists would say that there are no examples in the world today of a completely free market or a completely controlled economy. Instead, every country operates a mixture of the two systems. Even in the freest economies, like the USA, there is some government control; even in the strictest planned economy there is some free enterprise.

Economies mix government control and free market values in different ways. One way is to let privately owned businesses exist alongside state run industries. The economy becomes divided between the state sector and the private sector. The state sector often includes industries that the government thinks are important and need protection from the risks of the free market. These could include public transport, hospitals, schools and the postal service. The state sector can also include large industries that are important for a country's economic health, such as oil, steel or agriculture. These are sometimes called primary industries because they provide basic materials to manufacturers.

These state sector industries use money that the government collects in taxes. Often, they do not need to compete with other companies because no other company is allowed to provide the same product or service. However, many countries have recently started a process called deregulation.

Deregulation means freeing up the economy to allow private businesses to compete with state-run industries. The state sector should then run more efficiently in order to compete in the free market and because it now has less government protection.

Deregulation of services like telecommunications, transport and banking has happened in many countries in recent years. People have generally accepted these changes. However, generally the public is less happy when governments start talking about deregulation in education and health services. Many people feel that profit motivation will harm these services rather than improve them.

Another way in which economies today are mixed is that governments put limits on free enterprise. For example, governments may decide to ban trade in certain goods if they are dangerous. They may also create laws to make sure companies trade honestly or to prevent monopolies. If a company has a monopoly, normal market forces do not affect it. This is bad for consumers and the economy in general. Governments may also regulate methods of production. They do this to guarantee that products are safe for consumers and to protect the environment.

Many economists would argue that the mixed economy is the best system for consumers. This is because consumers have two ways to control the economy: by choosing to buy a company's goods or services and by choosing to give political parties their votes.

Переведите на английский язык:

The mixed economy

ВАРИАНТ 3

Consumer choices

It's a hot summer day. You've been out walking all morning and you're getting thirsty. It's also about lunchtime, and you're feeling pretty hungry, too. What luck! Here's a kiosk selling snacks. You've got six euros to spend. You can buy bars of chocolate or bottles of water ... or a combination of both. Now you've got another problem: consumer choice.

If you're a neoclassical economist, however, there's nothing to worry about. Neoclassical economists believe that consumers make rational choices. Before a consumer buys something, they think about the cost and the amount of satisfaction the purchase will give them. They then compare the price and satisfaction of possible alternative purchases. In the end, they buy what gives them maximum satisfaction at the lowest cost.

So, what will you buy from the kiosk? An important deciding factor is the amount you have to spend. Economists call this your budget constraint. Your total budget is six euros. Bottles of water are two euros each, chocolate bars are one euro each. You could buy three bottles of water, or you could buy six chocolate bars. Or, you could buy any combination that adds up to your total budget. We can put all of this information on a budget line, like the one in figure 1. The budget line shows what combinations of goods are possible. Economists call these combinations of goods bundles. But which is the best bundle? This depends on something called utility. Utility is the economists' word for the satisfaction we get from a purchase. Each good has its own utility value for the consumer. The utility of a bundle depends on two things: the utility of the goods in the bundle, and how much of each good is in the bundle. Figure 2 shows the bundles of chocolate and water that give the same level of utility. This kind of chart is called an indifference curve. Any point on the curve has the same utility value as any other point. For example, two bottles of water and two chocolate bars has the same utility as one bottle of water and four chocolate bars.

In figure 2, we assume that chocolate and water have the same utility value for the consumer. But if water had a higher utility value than chocolate, the curve would be a different shape. Many things can affect the utility of a good. These include the cost of the good, the consumer's income and something called marginal utility.

To understand marginal utility, just think about chocolate bars. Every time you consume a bar of chocolate, the satisfaction you get from the next bar will be less. In other words, you get less utility every time you eat another bar. This decrease in utility is called the marginal utility. The marginal utility is the one of an additional item. For example:

Bars of Marginal Total

chocolate Utility Utility

0 - 0

1 10 10

2 9 19

3 8 27

4 7 34

Put very simply, budget, price and level of utility will all affect your choice at the kiosk. The neoclassical theory of consumer choice says that it is possible to calculate demand for products if we know this kind of information. However, not all economists agree!

Переведите на английский язык:

1. Если у вас много денег, и вы хотите что-нибудь купить, вы всегда сталкиваетесь с ограничением имеющихся средств.

2. Полезность товаров в наборе определятся полезностью каждого товара и их количеством.

3. Предельная полезность — это полезность от потребления дополнительной единицы блага.

4. Издержки — это деньги, которые тратятся, чтобы произвести товары или предоставить услуги. Например, это арендная плата, проценты по кредитам, стоимость электричества и сырья.

5. Постоянные издержки не меняются ни в краткосрочном периоде, ни при росте объёмов производства.

6. Переменные издержки меняются в зависимости от размеров производства. Примером таких издержек может быть сырьё, необходимое для производства товаров.

7. Экономия, обусловленная ростом масштабов производства, — это ситуация, при которой переменные издержки растут гораздо медленнее, чем растёт объём производства.

Consumer choices

Costs and supply

Companies have to spend money in order to make money. The money they spend to manufacture their goods or provide their services are called costs. Costs are important. Any company that doesn't keep track of costs will soon be in trouble. And there are many different kinds of costs to keep track of such as fixed costs and variable costs.

Why are costs important? Well, for two reasons: Firstly, there is a relationship between costs and profit. Profit is overall revenue minus costs. Secondly, there is a relationship between costs and supply. To understand this relationship, we need to look at some types of cost.

One type is fixed costs. Fixed costs are costs that don't change. They are costs that the company has to pay each month, for example, or each year. The value of fixed costs will not rise or fall in the short term. Examples include the rent the company pays, the interest they have to pay each month on any loans and the salaries they have to pay for permanent employees. The good news about fixed costs is that they don't change with increases in production. For example, imagine a company produces 1,000 pens in January and 2,000 pens in February. The rent for the factory remains the same for both months. Variable costs, however, change (vary) with the size of production. The more pens the company produces, the more these costs increase. Examples of variable costs are the raw materials needed for production, the cost of electricity and the cost of maintaining machines that are working more. Also, the company may need to get more part-time employees. Their hourly pay is another variable cost. In unit 1 we said that the price of a product or service increases as supply increases. Variable costs are the reason why.

In a perfect world, variable costs will increase steadily as production increases. This is called constant return to scale and it is shown in figure 3. However, this is not a perfect world! Sometimes, variable costs rise at a faster rate than production. This nasty situation, which is called a dis-economy of scale, is shown in figure 4. On the other hand, companies sometimes get lucky. Variable costs can rise at a much slower rate than production. This is called an economy of scale, and is shown in figure 5 below.

Переведите на английский язык:

2. Полезность товаров в наборе определятся полезностью каждого товара и их количеством.

3. Предельная полезность — это полезность от потребления дополнительной единицы блага.

5. Постоянные издержки не меняются ни в краткосрочном периоде, ни при росте объёмов производства.

Costs and supply

Monopolies

In a monopoly, one company has a much larger market share than any other company. In fact, their share is so big that other companies cannot really compete. When there is a monopoly, the normal laws of supply and demand do not always work. Monopolies come in different kinds, but a pure monopoly is when there is only one company in the market providing a particular product or service. This situation, in fact, is the exact opposite of perfect competition. How do pure monopolies happen?

Some monopolies occur naturally. This happens when a company manages to create an economy of scale. An economy of scale is when variable costs of production increase more slowly than increases in supply. Every company would like to be in this situation. Unfortunately, it's not easy to achieve. Economies of scale are possible for companies which need a lot of money to set up but much less money to run.

A telephone company is a good example. Telephone companies have to spend millions of pounds laying cables. However, once they have made the network, running the system does not cost so much. Any other company that wants to compete will have to make their own network. Not surprisingly, not many bother!

However, the world of business is a jungle, and there are more aggressive ways to create a monopoly. One of these is by making takeovers. This means that a more powerful company buys a smaller one in the same industry. Takeovers happen vertically or horizontally. In a vertical takeover, a company buys companies that supply it with materials or services. For example, a publishing company might buy a printing business. In a horizontal takeover, a company buys its competitors. The competitors then become part of the first company.

One final way a monopoly occurs is for the government to make it happen. This is called a legal monopoly, but not because other monopolies are illegal! It is called a legal monopoly because it is created by law. The government may decide that a competitive market is not good for a certain industry. In this case, it can make one company the only legal supplier. Sometimes, it provides the service itself. This is called a state monopoly. The postal service in many countries is an example of a state monopoly.

Generally, monopolies are not good for consumers. This is because in a monopoly, the laws of supply and demand do not work in the same way. A company with a monopoly becomes a price maker. They have much more power to set the price for their product or service. Also, they don't usually spend money on innovation because they don't need to. The bottom line, as they say, is that monopolies mean less choice for consumers.

Переведите на английский язык:

1. Структура рынка связана с конкуренцией. Она оказывает влияние на цену.

2. Рынок совершенной конкуренции имеет ряд особенностей. На нём должно быть много конкурирующих компаний, поставляющих один и тот же товар или оказывающих одну и ту же услугу; все потребители и компании должны обладать полной информацией о рынке; не должно быть барьеров на пути выхода на рынок новых компаний.

3. Если мы говорим о рынке совершенной конкуренции, важно, чтобы все компании имели доступ к технологии и ресурсам.

4. На рынке совершенной конкуренции существует много компаний, но ни одна из них не может оказывать влияние на цену.

5. При монополии доля одной из компаний настолько велика, что остальные не могут конкурировать с ней.

6. Как правило, монополий не выгодны для потребителей, поскольку монополии определяют цену.

7. В отличие от естественных монополий некоторые монополии часто образуются более агрессивным методом — путём поглощения других компаний.

Monopolies

1. Complete each sentence with a word from the box.

aggressive cables illegal innovation

legal naturally network occurs

printing publishing takeover

l. A … is a set of connections.

2. When one company gains control of another company it is called a … .

3. Raw materials are things like wood or oil that exist … .

4. Electricity travels along … to reach our houses.

5. … people get what they want by violence and force.

6. … companies are responsible for the writing and pictures in books, etc.

7. … companies make books.

8. … is inventing and thinking of new solutions to problems.

9. If something is … it is allowed by law.

10. When something is … it is not allowed by law.

11. If a problem … you will have to deal with it.

ВАРИАНТ 4

The labour market

In many ways the relationship between employers and workers is similar to the relationship between consumers and producers: workers offer a service (the labour they provide), employers buy that service at a price they can afford (the wages they pay). As you can see, it's a kind of market. In economics, it's called the labour market.

In any market for products and services, consumers try to get the maximum utility, or satisfaction, from their purchase. This is the same in the labour market. What do companies want from their purchase of labour? What utility do they get? The answer is increased output. Output is how much of the product or service the company produces. If there is an increase in demand for their product, they will need to increase output. One way to do this (but not the only way) is to take on more staff. Another is to ask staff they already have to work more hours. In both cases, the company is buying more labour.

Just like any other market, the labour market obeys the laws of supply and demand. The demand is the employers' need for labour. Supply is the labour workers provide. Just like any other commodity, there is a relationship between price and demand. As the price of labour increases, the demand decreases. You can see this shown in figure 1.

The suppliers in the labour market are workers. Just like suppliers in other markets, they want a higher price for greater supply. In other words, as supply of labour increases, they want higher wages. Again, you can see this shown in figure 1. The wage that workers get for their labour is a compromise between what they want and what companies will pay. This is the point where the lines cross in figure 1.

However, there can be shifts in demand. These shifts can cause the overall demand for labour to increase or decrease at any wage rate. For example, if there is an increase in the demand for the end product or service, there will be an overall increase in demand for labour (the demand curve shifts to the right). However, if new technology can replace workers, then there will be an overall decrease in demand for labour (the demand curve shifts to the left).

One more thing which affects demand for labour is workers' productivity. The productivity of a worker is how much they produce in a certain time. For example, imagine that a worker makes ten pencils an hour one day, and only eight pencils an hour the next day. This is a fall in productivity. When worker productivity falls, companies will pay less for labour. They are also less likely to employ new workers.

Переведите на английский язык:

1. Рынок, где работодатели приобретают услуги рабочих за заработную плату, называется рынком труда.

2. Увеличение выпуска продукции — это та полезность, которую получают работодатели от приобретения труда.

3. Любой рынок, включая рынок труда, подчиняется закону спроса и предложения.

4. Кривая спроса на труд может сдвигаться право, если спрос увеличивается, например, в результате роста производства, или влево, если спрос уменьшается из-за внедрения какой-либо новой технологии, которая может заменить рабочих.

5. Один из компромиссов, на который мы идём в нашей жизни, — это поиск правильного соотношения между рабочим временем и временем отдыха.

6. Природные ограничения, такие как сон и отдых, сокращают возможное количество рабочих часов. Нам нужно время, чтобы отключиться от работы, что также укорачивает рабочее время.

7. При росте почасовой оплаты люди хотят работать больше — это называется эффект замещения. Но этот эффект также имеет предел.

The labour market

1. Match the words with the definitions.

1. take on A employees

2. obey B satisfaction or usefulness

3. utility C be able to buy

4. output D follow

5. compromise E amount produced in a certain time

6. productivity F employ more staff

7. afford G both sides give up something in order to agree

8. staff H what a company produces

Supply of labour

Why do people work? To make money, of course. However, nothing in economics is ever that simple. The economist will ask a further question: how much are people prepared to work? The answer to this question is much more complex. Finding the right balance between work time and leisure time is one of the trade-offs we have to make in life. The balance each person chooses depends on a number of things.

First of all, there are natural limits. There are only 24 hours in a day, and we can't spend all of them working. Most people need eight hours sleep. That brings the number of hours we can spend on work or leisure down to 16. None of us are robots, so we all need some time to rest and switch off from work. This also brings down the possible number of working hours.

Then, of course, money plays a role. The way money influences working hours, though, is quite complicated. It can be separated into two effects: the income effect and the substitution effect.

The income effect works like this: People's time is a resource. If they give up that resource for work, they need compensation. This is usually in the form of a wage for hours worked. The more compensation they get for each hour worked, the less they will need to work. People with higher rates of pay (wages) can afford to have more leisure time than people on lower rates of pay.

So far, so good. However, are people happy just sitting at home and enjoying themselves? It depends on what they'll lose. In other words, it depends on the opportunity cost of not working. As the hourly rate for work increases, the cost of not working also increases. This means that as the wage rate increases, people want to work more hours. This is called the substitution effect. But the substitution effect also has a limit. Eventually, people will not work more hours, no matter how good the compensation is.

A good wage rate clearly attracts more workers, and encourages them to work longer hours. However, the strength of this relationship depends on how elastic the labour supply is. Sometimes it is difficult for companies to find a certain kind of worker. Perhaps there are not many people with the necessary skills. Or perhaps the company is in a place where there are not many available workers. In these situations, even if employers double the wage rate, they will only attract a small number of extra workers. The labour supply is inelastic. In the opposite situation, when it is easy for companies to find workers, the labour supply becomes elastic.

Переведите на английский язык:

1. Рынок, где работодатели приобретают услуги рабочих за заработную плату, называется рынком труда.

2. Увеличение выпуска продукции — это та полезность, которую получают работодатели от приобретения труда.

3. Любой рынок, включая рынок труда, подчиняется закону спроса и предложения.

Supply of labour

1. Complete each sentence with a word or phrase from the box.

balance compensation complex

influences leisure play a/an rate

role skills substitution switch off

1. At the weekend everyone needs to relax and … from school or work.

2. Employers … important … in the economy.

3. … is what you receive if you are badly affected by something.

4. … means replacing one thing with another.

5. Most people's … time is at the weekend and in the evenings.

6. It can be difficult to get the right … between work and free time.

7. The money you can earn … people's choice of job.

8. Some economic problems are very … .There is no easy solution.

9. The hourly … for this job is seven pounds an hour.

10. The ability to speak foreign languages is one of the … needed for this job.

Factors of production

One morning you wake up with a great idea. You've thought of a product that no one else has, and you're certain there's demand for it. But how will you turn your idea into reality? First of all you'll need raw materials to manufacture from - probably oil and metal, but also paper for packaging. You can't produce it by yourself, so you'll need people to help you make it, package it and market it. Finally, your staff will need a factory and machines to produce with. In short, you need the factors of production: land, labour and capital.

The factors of production are the starting point for all economies. No economy can exist without them. The most basic of the factors is land. When economists talk about land, however, they don't just mean space to build on or fields to grow crops. Land means everything that nature provides and we can use for production. The land factor includes raw materials like coal, metals, oil and timber. It also includes things like water, fish and salt. So, although it seems illogical, land also means the sea!

The second factor is labour. Raw materials will just stay in the ground unless people dig them out and do something with them. Similarly, factory machines will sit doing nothing without people to operate them. Labour can mean the physical effort such as lifting, digging and building. This is called manual work. Labour also includes mental work like thinking, writing, communicating and designing. Industries that need many workers working long hours are called labour intensive industries. However, the quality of labour is as important as the quantity. An educated, skilled and fit workforce is more productive than an uneducated, unskilled and unhealthy one. This characteristic of the labour factor is called human capital. Some countries have large labour forces, but are poor in human capital because the economy lacks education and health care.

The third factor is capital. Capital includes buildings such as factories for production and warehouses for storage. It also includes the tools and equipment that workers use in the manufacturing process. In heavy industries such as shipbuilding or steel making, capital usually involves big machinery and mechanical equipment. In high-tech industries, on the other hand, capital generally means computers and complex laboratory apparatus. These days, industry tends to be more capital intensive than labour intensive.

When companies make investments, they buy new capital. There are two types of investment that companies need to make. The first is to buy new equipment so that they can expand their production. This is called net investment. Net investment is essential for economic growth. However, equipment gets old and needs repairing or replacing. The money spent on this kind of maintenance is called replacement investment.

Land, labour and capital are the three factors of production identified by Adam Smith and the classical economists. However, more recent economists have identified one more factor: entrepreneurship. This means people like you, with great business ideas that set the economy in motion.

Переведите на английский язык:

1. Для производства товаров необходимы факторы производства, которыми являются земля, труд и капитал.

2. Земля как фактор производства включает в себя всё, что даёт природа и может быть использовано для производства.

3. Образованная, квалифицированная и здоровая рабочая сила имеет большую производительность, поэтому важную роль в экономике играют образование и здравоохранение.

4. Капитал — это заводы, склады, оборудование, инструменты, компьютеры, т. е. всё, что используется в производственном процессе.

5. В настоящее время промышленность становится более капиталоёмкой и менее трудоёмкой.

6. Разделение труда и специализация делают процесс производства более эффективным и продуктивным.

7. Рабочие выполняют операции автоматически, не задумываясь, что повышает производительность труда и улучшает качество их работы.

Factors of production

1. Choose the correct word.

1. All machines need maintenance / replacement so that they keep working well.

2. Scientists' laboratories are usually full of packaging / apparatus for experiments.

3. When a machine gets very old you need to buy a maintenance / replacement.

4. It's illogical / mental to take an umbrella out on a sunny day.

5. Plastic and cardboard are used a lot for the packaging / apparatus around products.

6. Some people enjoy doing illogical / mental activities like crosswords and board games.

7. Wood that hasn't been made into anything yet is called timber / crops.

8. A storage / warehouse is a large building for storing things.

9. The things that farmers grow in their fields are called timber / crops.

10. An industry that needs many workers is known as a factor / labour intensive industry.

11. If you don't need furniture or equipment for some time, you can put it into storage / warehouse.

12. The price of a product is a factor / labour which influences our decision to buy it.

Division of labour

Without the factors of production, companies cannot get started. To be successful, however, they need to make good use of those resources. To make best use of labour, you need to organise it. The division of labour is one way to achieve this.

Let's take making shirts as an example. What do you need to do to make a shirt? You need to design it, find the right material, cut the material, sew the pieces together, dye the shirt and sew on the buttons. One person working on their own could probably do all these tasks. This is one way to organise labour. Another way is for a number of workers to share the job. Each worker is responsible for one task in the process. This is an example of the division of labour.

The division of labour isn't a new idea. Even very early societies had some form of labour specialisation. For example, in some societies men were hunters and gatherers of food, while women were responsible for child rearing. However, as societies became industrialised, the division of labour increased. Factories became the main means of production, and each factory worker became responsible for smaller and smaller stages in the process.

As each worker gets more and more experience at doing their particular task, they get better and better at it. This should improve the quality of their work. With smaller tasks to do, workers can do things automatically, without thinking about them. This will speed up their productivity, and speed up the whole production process. Finally, small tasks are easier to learn. As the division of labour increases, the amount of time needed to train each worker decreases. All of this means a more efficient and productive workforce ... at least, in theory.

There is, however, a human factor to consider. Workers are not machines. Their physical and emotional health has an impact on their productivity. Repeating the same simple task over and over again is very boring. Bored workers can't concentrate easily, and their mistakes will reduce the quality of their output. In addition, there is the problem of ownership. Many workers take pride in their work. They don't just work for wages, but also because they get satisfaction from doing a good job or from creating something useful or beautiful. If you only add buttons to a shirt, you don't feel that the shirt is your work. You can't take pride in a job that does not need skill to do. In this situation, workers become careless and their work becomes sloppy. Overall, this has a negative impact on productivity.

Thankfully, robots and machines can now do many of the mindless tasks that factory workers used to do. Nevertheless, the theory of the division of labour is still fundamental to all modern economies.

Переведите на английский язык:

1. Для производства товаров необходимы факторы производства, которыми являются земля, труд и капитал.

5. В настоящее время промышленность становится более капиталоёмкой и менее трудоёмкой.

6. Разделение труда и специализация делают процесс производства более эффективным и продуктивным.

Division of labour

1. Complete each sentence with a word or phrase from the box.

automatically child rearing dye

emotional fundamental means

mindless sew sloppy

specialisation take pride in

1. … of transport are the methods we use to get from one place to another.

2. … work is work that is not very good quality.

3. To make clothes you have to know how to … the material together.

4. Having a … means that you deal with one particular area of any field.

5. You may visit a doctor if you have problems with your … health.

6. Competition is … to the idea of the free market.

7. People who … their work do it very carefully and enjoy the results.

8. Mothers and fathers both have important roles to play in … .

9. Some people regard factory work as a … job but it isn't necessarily boring.

10. When you do something … you do it without thinking.

11. When manufacturers … clothes, they add colour.

ВАРИАНТ 5

Surplus

In a free market, price is decided by the laws of supply and demand. The market price is the price that sellers are happy to take and consumers are happy to pay. It's a compromise, but in the end everyone is happy, right? Well, not quite everyone. Some sellers will think the market price is not a good enough reward for their efforts. They will continue to sell at a higher price, even if almost no one walks through their shop door. Similarly, some people will walk away from the market, moaning about the price and refusing to pay. You can't please everyone!

However, there will be some people who are more than happy with the market price. What makes them so cheerful? These are the people who had expected to pay a higher price, but found that the market price was actually lower. These people feel that, by paying the market price, they have got a bargain. In the jargon of economics, they have got consumer surplus. Consumer surplus is the difference between the price consumers are prepared to pay and the price they really do pay.

The idea of consumer surplus is shown in figure B l on page 47. M is the market price. You can see that the demand line carries on above the market price. This means that there are consumers who are prepared to pay above the market price.

Each of these consumers will gain a different amount of consumer surplus by paying the market price. Together, all the surplus they gain is called the aggregate consumer surplus. This is the grey area shown in figure 1.

Consumers aren't the only ones who enjoy surplus. There is producer surplus, too. Remember that the law of supply says supply rises as price rises. This is because smaller amounts cost less to produce than larger amounts. For this reason, producers would have been happy to sell some of their output below market price. However, once the market price is set, they can sell all their produce at that price.

Think about wine producers for example. The first 50 litres of their wine cost two euros per litre to produce. The next 50 litres cost three euros per litre to produce. At the market, however, they can sell all their wine at the price of three euros per litre. The extra money they make on the first 50 litres is the producer surplus. The higher the market price is, the bigger the producer surplus will be. The total is called the aggregate producer surplus. This is the pink area in figure 1.

Surplus is an important concept. In one way it is a measure of the utility that consumers gain from their purchase. It is also a measure of the profit that producers make. Moreover, consumer and producer surplus together are a measure of the benefit everyone gains from the economic transaction. In economist jargon, surplus is a measure of economic welfare.

Переведите на английский язык:

1. Рыночная цена является вознаграждением за усилия производителя.

2. Если цена на рынке ниже, чем ожидалось, покупатель может сделать выгодное приобретение.

3. Избыток измеряет ту полезность, которую извлекает из покупки потребитель, или ту прибыль, которую получает производитель.

4. Разница между той ценой, которую потребители готовы заплатить, и ценой, которую они действительно платят, называется избытком потребителя, что является важным экономическим понятием.

5. Компании используют много уловок при ценообразовании, что помогает им повышать прибыль. Цены могут быть установлены выше или ниже рыночной цены, иногда компании используют ценовую дискриминацию.

6. Всё более популярными становятся интернет-аукционы. Участники аукциона делают ставки, и самая высокая ставка выигрывает.

Surplus

1. Choose the correct answer A, B, or С from the list below.

1. Children often complain and … when they don't get what they want.

2. A cheerful person is … .

3. Parents are responsible for their children's … until they become adults.

4. If you get a bargain, you get something … .

5. The police are offering a … for any information about the robbery.

6. If you work faster you … more money or more free time.

7. You cant always get everything you want. Sometimes you have to … .

8. Every profession has its own … - special words and phrases that are only used in that profession.

9. The total spending by a government is sometimes called … spending.

10. If you have a … of something, you have more than you need.

1. A bargain B compromise С moan

2. A happy В sad С strange

3. A rewards B welfare C jargon

4. A for nothing В at a high price С at a good price

5. A reward В salary C compromise

6. A bring B reward C gain

7. A moan В compromise C bargain

8. A moan В compromise С jargon

9. A whole В aggregate С complete

10. A shortage В surplus C quantity

Price discrimination

The market price for a product is like a signpost for companies. It shows them more or less what people are prepared to pay. Nevertheless, companies can set their prices just above or just below the market price if they want. They can even choose to ignore the market price completely. In the real world of business, setting prices involves skill, guesswork and risk-taking. Companies have lots of pricing tricks which help to increase profits. One of these tricks is price discrimination.

Price discrimination means charging a different price for the same product to different customers. For example, you walk into a shop and buy a CD for ?15. A few minutes later, I walk into the same shop and buy another copy of exactly the same CD. This time, the shopkeeper charges me ?20! That's price discrimination.

There are different types, or degrees, of price discrimination. First degree price discrimination is when almost every consumer pays a different price for the same product. How can this happen? Remember that the demand curve slopes downward. In theory, every consumer has their own point on the curve. In other words, each person values the product differently. You may think that an Elton John CD is worth ?20, whereas I think it's only worth 50 cents! We are on different points on the demand curve. With first degree discrimination, each consumer will pay what he or she thinks the product is worth, and sellers charge each person accordingly.

This all sounds great, but it is not usually practical in the real market place. Nevertheless, it is sometimes possible. An auction, for example, works in this way. In an auction, each consumer makes a bid for the product, and the highest bid wins. In this way, the product is sold at a price that the buyer thinks is right. Auctioning is becoming more and more common on the World Wide Web, and auctioning websites have become very big business.

Second degree price discrimination is more common than first degree discrimination. It involves changing price according to how much of the product is sold. For example, if a customer buys three pencils, they pay one euro per pencil. If they buy 300 pencils, they pay only 75 cents per pencil. This is a kind of reward for buying large amounts. This kind of discrimination is important for retailers. It allows shopkeepers to buy goods in bulk from wholesalers at lower prices. Shopkeepers then add a markup price when they sell the goods on to ordinary customers.

What about third degree price discrimination? This is when certain types of customer are charged different prices. For example, pensioners and students often get discounts on public transport or for arts events. These people cannot afford the normal market price. By offering discounts, companies widen their market share but still make a profit.

Переведите на английский язык:

1. Рыночная цена является вознаграждением за усилия производителя.

2. Если цена на рынке ниже, чем ожидалось, покупатель может сделать выгодное приобретение.

Price discrimination

Welfare economics

Behind the numbers, charts and formulas of economics, there are people. This is sometimes easy to forget. Economics isn't only about profits, losses and utility. It's about society. Economic ideas and theories often seem to be issues that are far removed from people's everyday lives. Welfare economics, however, tries to correct this. It looks at how economic policies affect society, families and the individual.

One of the big issues in welfare economics is equity. Equity means fairness, and welfare economists are interested in measuring how fair our economic systems are. One way they do this is to look at how income and wealth arc distributed among the population. Welfare economists also investigate the effects of government policy on equity.

Governments' main weapon to fight inequity (unfairness) is taxation. Welfare economists try to find out how taxation affects vertical equity and horizontal equity, which are two ideas that taxation systems can be based on. The idea behind vertical equity is that people with more income will pay more than those with less income. The idea behind horizontal equity is that people with the same income will pay the same amount of tax. Ideally, a tax system will have both vertical and horizontal equity.

However, some economists feel that any kind of taxation on people's earnings is unjust. They believe it is unfair to penalise entrepreneurs and hard-workers. Why should people who are less able or less hard-working be supported by others? In this view of welfare economics, inequity is a natural feature of every economic system. Trying to create equity, they say, is just a waste of time. Instead, it is better to make economic systems more efficient. A more efficient economy grows faster and everyone in society benefits.

Welfare economics isn't only about the fairness of economic systems. It's also about the impact that economic choices have on our lives. Economic transactions often affect other people who are not directly involved in those transactions. Economists call these results externalities. Externalities are sometimes good and sometimes bad for society. For example, pollution is a negative externality of the car industry. But cars give people better mobility, which is a positive externality of the same industry.

Production is not the only cause of negative externalities for society. Many are due to our use or consumption of goods. People's litter in parks and on beaches is one example; noisy neighbours playing their CD player loudly is another. These are both examples of externalities causing pollution. However, health problems from smoking and drinking alcohol are also externalities from economic transactions. These have a cost for individuals, but also for society as a whole.

Переведите на английский язык:

1. Хотя многие из экономических законов, формул, теорий и понятий часто кажутся далекими от повседневной жизни, экономическая политика затрагивает жизнь общества, семьи и отдельных людей. Экономика благосостояния рассматривает вопросы справедливости.

2. Экономисты анализируют, как распределяются доход и богатство среди населения. А справедливость в экономике благосостояния реализуется через налогообложение.

3. По мнению экономистов, разделяющих концепцию экономики благосостояния, любая экономическая система несправедлива.

4. Правительства получают доходы из разных источников, главным из которых является налогообложение.

5. При помощи налогов правительства достигают различных целей: уменьшают разрыв в доходах между бедными и богатыми, препятствуют потреблению людьми вредных продуктов, контролируют совокупные спрос и предложение на рынке.

6. Большая часть налоговых поступлений идёт на общественные блага, т. е. на национальную оборону, уличное освещение, здравоохранение, образование и пр.

7. Те воздействия, которые экономическая деятельность оказывает на людей, называются внешними эффектами или экстерналиями. Они могут быть положительными или отрицательными. Например, промышленность может причинять вред окружающей среде.

Welfare economics

1. Match the words and phrases with the

Definitions.

1. vertical A an exchange such as buying and selling

2. horizontal B idea of being the same / equal

3. equity C level, for example from left to right

4. distribute D going straight up and down

5. to be fair E someone who sets up a new business of their own

6. investigate F punish

7. an individual G income

8. issue H to treat people reasonably and in the right way

9. to be unjust I to treat people unreasonably or in the wrong way

10. penalize J look into

11. entrepreneur K share out

12. economic transaction L effect

13. impact M a person

14. earnings N something important that people talk about

15. externality O something that happens without being expected

16. taxation P system of taking part of people's earnings to give governments an income

17. policy Q the amount of a product people buy or use

18. consumption R rule made by government, and/or the course it follows

ВАРИАНТ 6

Poverty

Without a doubt poverty is a huge problem in the world today. Figures suggest that three billion people or half the world's population live in poverty. However, although we associate poverty with developing countries, poverty of some kind also exists in industrialised nations. For example, it is now thought that quite possibly one in every ten Americans lives in poverty. However, poverty means different things to different people. How do economists define poverty?

One measure of poverty is absolute poverty. People live in absolute poverty when they live on or below the poverty line. This is a level of income that is so low that people cannot afford the basic necessities to live, such as food, clothing and shelter. According to the World Bank, these are people who are living on two dollars a day.

However, there are one billion people in the world who live on less than one dollar a day. The World Bank defines this as extreme poverty.

Few people in industrialised countries live in absolute poverty, but many live in relative poverty. This measure of poverty takes into account the differences that exist in a population between the rich and the poor. For example, some economists say that people who earn less than half the average income live in relative poverty. In Britain, this means 14 million people.

Why does poverty still exist? There is no single answer to this question. In developing countries, causes of absolute poverty include natural disasters like droughts and floods, political corruption and war. However, in many cases people - and whole populations - are caught in a trap: the poverty trap.

People on a low income spend everything they have on daily necessities. They save almost nothing. In order to raise themselves out of poverty, they need education. This costs money. Even when governments provide free schooling, the poor may not send their children because they need them to work. These families cannot afford the cost of sending a child to school. Without education, the children cannot find better paid work. In this way, generations of the same family remain poor.

The same cycle that traps individuals can trap a whole population. Economic growth depends on investment. Investment money comes from savings. A nation that has almost no savings cannot grow economically. This keeps wages low, so again people cannot save and the cycle continues.

Переведите на английский язык:

1. Богатство может включать в себя ценные вещи, деньги, золото, акции, произведения искусства, землю, собственность, драгоценные камни.

2. Кроме зарплаты или пособия по безработице, есть и другие источники дохода. Например, проценты по сбережениям в банке или рента с имущества.

3. Распределение богатства во многих странах остаётся практически без изменений в течение многих лет. Значительная часть богатства концентрируется в руках небольшой части населения. Неравенство трудно искоренить.

4. Кривая Лоренца показывает соотношение между доходами и населением, т. е. иллюстрирует распределение доходов в условиях рыночной экономики. По ней можно судить о степени неравенства в распределении доходов.

5. Бедность — одна из глобальных проблем. Хотя она ассоциируется, в первую очередь, с развивающимися странами, бедность до некоторой степени существует и в развитых странах.

6. Когда мы говорим об абсолютной бедности, мы имеем в виду людей, которые живут за чертой бедности.

7. Люди, имеющие низкий доход, тратят все деньги на товары первой необходимости. Они не могут сберегать.

Poverty

Macroeconomics

In the 1930s one of the world's strongest economies suffered a devastating collapse. It was the American economy, and the disaster was the Great Depression. The effects of the Great Depression were felt all around the world, and it brought about a change in economic thinking. Economists began to realise that looking at the behaviour of individual consumers and suppliers in the economy was not enough. Economists and governments had to understand how the whole economy worked. In other words, they had to have an understanding of macroeconomics.

Microeconomics looks at how the details of the economy work. Macroeconomics takes a few steps back and looks at the whole picture. While microeconomics looks at supply and demand for a single product or industry, macroeconomics follows supply and demand patterns for the whole economy. Whereas microeconomics is about economic events at home, macroeconomics looks at how the domestic economy interacts with the economics of other countries.

However, macroeconomics isn't only about knowing what's happening in the economy. After the shock of the Great Depression, governments realised that an economy needs to be managed. Most governments aim to have steady economic growth, to control inflation and to avoid recessions. Just managing an individual business is a hard enough task. How do you manage a whole economy? Governments have certain mechanisms which help them to do this.

The first of these mechanisms is fiscal policy. Fiscal policy refers to the tax system and to government spending. By increasing or decreasing the amount of tax people must pay, the government can affect how much money people have available to spend (disposable income). This, in turn, has an effect on demand in the market. By increasing or decreasing their own spending, governments can have a huge effect on the growth of the economy.

The second mechanism is monetary policy. With its monetary policy, a government sets interest rates and also controls the amount of money that circulates in the economy. The interest rate the government sets influences the rate that commercial banks set when they lend money to customers. Interest rates have a big impact on the economy. For example, they can affect people's decisions about saving or spending money.

The third mechanism is administrative approach. This is a range of things that governments do to increase the supply of goods and services to the economy but without increasing prices. There are a number of ways governments try to do this. For example, improvements in education and training can make the workforce more productive. Investment in technology can make industry more efficient. Governments can also change employment and business laws to make the market more competitive.

With a combination of these methods, governments try to steer or guide the economy on a steady and predictable path. They aim for gradual economic growth and to avoid disasters like the Great Depression.

Переведите на английский язык:

1. Разрушительным крахом для американской экономики стала Великая депрессия, воздействие которой ощущалось практически во всех странах мира. Депрессия изменила отношение к экономической науке.

2. После депрессии 1930-х годов главными целями любого правительства, во избежание серьёзных спадов в экономике, стали устойчивый экономический рост и контроль над инфляцией.

3. Налогово-бюджетная политика связана с налоговой системой и бюджетом страны. Посредством этой политики правительство может воздействовать на располагаемый доход, спрос и экономический рост.

4. Главным инструментом кредитно-денежной политики являются процентные ставки.

5. Совокупный спрос — это спрос в экономике в целом. Он включает спрос со стороны потребителей, компаний, правительства и потребителей за рубежом.

6. Стоимость всех услуг и товаров, произведённых экономикой в целом, образует реальный национальный продукт.

7. Тенденция роста или снижения предложения и совокупного предложения в краткосрочном периоде одинакова, но в долгосрочном периоде рост совокупного предложения зависит не от цены, а от имеющихся в экономике факторов производства.

Macroeconomics

ВАРИАНТ 7

Money

The cash we use every day is something we take for granted, but for thousands of years people traded without it. Before money was invented, people used a system called bartering. Bartering is simply swapping one good for another. Imagine that you have milk, for example, and you want eggs. You simply find someone who has eggs and wants milk - and you swap! However, you can see that this isn't a very convenient way to trade.

First of all, you can't be sure that anyone will want what you've got to offer. You have to hope that you'll be lucky and find someone who has what you want and that he or she wants what you've got. The second problem with bartering is that many goods don't hold their value. For example, you can't keep your milk for a few months and then barter it. Nobody will want it!

After some time, people realised that some goods held their value and were easy to carry around and to trade with. Examples were metals like copper, bronze and gold and other useful goods like salt. These are examples of commodity money.

With commodity money, the thing used for buying goods has inherent value. For example, gold has inherent value because it is rare, beautiful and useful. Salt has inherent value because it makes food tasty. If you could buy things with a bag of salt, it meant you could keep a store of salt and buy things anytime you needed them. In other words, commodity money can store value.

Using commodity money was much more convenient than ordinary bartering, but it still had drawbacks. One of these drawbacks is that commodity money often lacks liquidity. Liquidity refers to how easily money can circulate. There is obviously a limit to how much salt you can carry around! There's another problem with commodity money: not everyone may agree on the value of the commodity which is used as money. If you live by the sea, salt may not be so valuable to you. Money needs to be a good unit of account. In other words, everyone should know and agree on the value of a unit. This way, money can be used to measure the value of other things.

The solution is to create a kind of money that does not have any real intrinsic value, but that represents value. This is called fiat money. The coins and notes that we use today are an example of fiat money. Notes don't have any inherent value - they are just paper. However, everyone agrees that they are worth something. More importantly, their value is guaranteed by the government. This is the reason why pounds and dollars and the world's other currencies have value.

Переведите на английский язык:

1. До того как появились наличные деньги, которые сегодня люди принимают как должное, основной системой расчётов была система обмена, или бартера.

2. Первыми товарными деньгами были металлы, соль и другие ценные товары. Такие деньги не обладали ликвидностью, т.е. способностью свободно циркулировать, но сохраняли стоимость.

3. Бумажные деньги не обладают внутренней стоимостью, а только представляют стоимость.

4. Если вы сберегаете деньги, то можно хранить их под кроватью в коробке, что небезопасно и неразумно, или положить их на счёт в банке. Деньги на счету приносят проценты.

5. Главная услуга, которую любой банк оказывает своим клиентам, — предоставление кредита. Банки — самые надёжные кредиторы.

6. Если клиент не возвращает кредит, банк использует проценты для покрытия убытков. Хотя большинство клиентов возвращает кредиты, процент служит формой защиты.

7. Клиенты банков могут в любое время снять деньги со счетов, поскольку любой банк держит часть сбережений, полученных от клиентов, в качестве резерва.

Money

Banks

If you work, you've probably got a bank account. You could keep the money you earn each month in a box under your bed, but it wouldn't be very sensible. One reason is that it's not very safe. If your house gets burgled, you'll lose everything you've saved. Another reason is that your money will lose value.

As prices rise, the money in a box under your bed will be able to buy fewer and fewer things. Money in a bank savings account, however, will earn interest. The interest will help compensate for the effect of inflation. But banks are more than just safe places for your money. What other services do they offer?

The other main service is lending money. Individuals and businesses often need to borrow money, and they need a lender that they can trust. This is exactly what banks are - reliable lenders. In fact, most of the money that people deposit in their bank accounts is immediately lent out to someone else.

Apart from storing and lending money, banks offer other financial services. Most of these are ways of making money more accessible to customers. For example, banks help people transfer money securely. They give customers cheque books and credit cards to use instead of cash. They provide ATM machines so that people can get cash any time of the day or night.

But how do banks make a living? Basically, they make a living by charging interest on loans. Of course, when you make a deposit into a bank savings account, the bank pays you interest on that money. However, the rate they pay savers is less than the rate they charge borrowers. The extra money they make by charging interest on loans is where banks earn most of their money.

For banks, interest is also a kind of security. Sometimes people do not pay back money they borrow. This is called defaulting on a loan. When someone defaults on a loan, the bank uses money earned from interest to cover the loss.

All of this means that most of the money people have saved in the bank is not there at all! A small amount of the total savings is kept by the bank so that customers can make withdrawals. The rest, however, is made available for loans. The amount that is kept is called the reserve. The reserve must be a certain percentage of all the savings received from customers - for example 20 per cent. This figure is set by the central bank, and this is one of the ways that governments can control the amount of money circulating in the economy.

Переведите на английский язык:

3. Бумажные деньги не обладают внутренней стоимостью, а только представляют стоимость.

Banks

1. Complete each sentence with a word or phrase from the box.

accessible ATM compensate deposit

make a living reliable security

sensible transfer withdrawal

1. As … against possible burglaries, they installed alarms.

2. Some people aren't very … with their

money and they waste it on useless things.

3. If you are injured at work, you may get money to … for losing your salary.

4. If something is … you can trust it to work properly.

5. … things are easy to reach or to get.

6. When you … things you move them from one place to another.

7. An … is a machine that gives customers money when the bank is closed.

8. Most people have to work m order to … .

9. When you make a … you put money into your account.

10. When you make a … you take money out of your account.

Fiscal policy

As we saw in unit 12, fiscal policy is one of the tools that governments have to keep the economy on a steady path. The two main components of fiscal policy arc changes to the tax system and changes in government spending. But what changes can governments make in these two areas, and how do changes affect the growth of the economy?

Let's look first at the tax system, and in particular at income tax. Income tax is one of the biggest sources of income for a government. Many governments operate a system called progressive taxation. This means that the more you earn, the more tax you pay. People are usually allowed to keep some of their income without paying any tax. This is called the personal allowance. The rest of their income is then taxed using the progressive system. For example:

Income Personal Tax to pay

before tax allowance after allowance

£0-£1,999 10%

£2,000 - £29,999 £5,000 22%

£30,000 and over 40%

Governments can decide to change the size of the personal allowance, or change the percentage that each income group has to pay. If the economy is growing too fast, and demand for goods and services is more than the economy can supply, the government will want to slow down spending.

To do this, they can decrease the personal allowance, or they can increase the percentage to pay in tax. This will mean people have less disposable income, and spending will slow down. If the economy is slowing down too much, governments can do the opposite.

What about government spending? How does that affect economic growth? The key to this is something called the multiplier effect. To understand how this works, let's look at an example. Imagine that the economy is not growing. This will make aggregate demand fall. In turn, productivity falls. This situation means that the nation's resources are not all being used. In other words, there are surplus raw materials, machines are not being used and workers are unemployed. What the economy needs is a pull in demand for goods and services.

The government can provide this pull by spending a large amount of money on public projects. For example, imagine that the transport department decides to spend £200 million on building a new motorway. This will give work to building companies and jobs to unemployed workers. In other words, more resources are being used and the nation's productivity is increased.

Companies and workers on the motorway project will save some of the money they earn, but also spend some. The money they spend will be income for others in the economy. If half of the £200 million is spent, then the total national income has grown by this much:

£200 million + (0.5 x £200 million)

Each time a proportion of the income is passed on, the economy grows again:

£200 million + (0.5 x £200 million) + (0.5 x £100 million), etc.

In theory, the multiplier effect will continue until there is full employment and the nation's resources are being used to their fullest extent.

Переведите на английский язык:

1. Налогово-бюджетная политика регулирует функционирование налоговой системы и государственные расходы. И то и другое оказывает воздействие на экономический рост.

2. Во многих странах мира действует прогрессивная система налогообложения. Чем больше человек зарабатывает, тем больший налог он платит.

3. Государственные расходы могут воздействовать на экономический рост посредством так называемого эффекта мультипликатора.

4. Кредитно-денежная политика влияет на изменение процентных ставок и регулирует деньги, обращающиеся в экономике.

5. Процентная ставка обычно устанавливается центральным банком страны, который также служит кредитором для коммерческих банков.

6. При покупке домов многие люди берут в коммерческих банках ипотечные кредиты. Если растёт процентная ставка, ипотека становится дороже.

7. Если процентная ставка низкая, компании инвестируют и расширяют свой бизнес, стоимость национальной валюты падает, а товары и услуги дешевеют для покупателей за рубежом. Экспорт начинает расти, и в экономику страны поступает больше денег.

Fiscal policy

Monetary policy

Monetary policy is another tool that governments use to control the economy. Monetary policy mainly involves making changes to the interest rate. It can also involve changing the amount of money that circulates round the economy. However, this second kind of monetary policy isn't used very often because it can lead to inflation. Changing interest rates, on the other hand, is a method that is used quite frequently for slowing down or speeding up the economy. So how does it work?

Basically, commercial banks - the ones that you and I use to keep our savings in and to borrow from - borrow their money from the country's central bank. This is the national or government bank, and it has the power to set interest rates. The interest rate of the central bank will influence the rates commercial banks set for their customers. When interest rates go up, borrowing money becomes more expensive. When they go down, it becomes cheaper.

People get loans from banks for all sorts of reasons, but the biggest loan most people take out is to buy a house. This kind of loan is called a mortgage. When interest rates increase, mortgages become more expensive. People who already have a mortgage will need to pay more on their repayments, and will have less money to spend on other things. Fewer people will want to buy new houses and house prices will fall.

In turn, home owners will feel less confident about their own wealth and will spend less. As a result, the economy slows down. A fall in interest rates will have the opposite effect on the house buying chain.

Consumers also buy other things using borrowed money. This is called buying on credit, and interest rates will also affect how much people spend on credit. Purchases made using credit cards are now a huge proportion of total spending in many countries. This means that interest rate changes have a big impact on consumer spending and the economy as a whole.

Companies, too, are affected by interest rate changes. When interest rates are low, they feel more confident about investing in order to expand their business. Low interest rates will encourage them to take out loans in order to build factories, buy machines and increase production. All of this increases the size of national output. Again, higher interest rates will have the opposite effect.

Finally, interest rates can have an effect on the amount of exports a country sells. This is because the value of a currency (the exchange rate) often falls when the interest rate falls. When the value of a currency falls, a nation's products and services become cheaper for customers from other countries. This increases export sales, and more money comes into the economy. And, of course, a rise in interest rates will mean a rise in the exchange rate. This will reduce export sales, and reduce the total output of the economy.

Переведите на английский язык:

Monetary policy

1. Complete each sentence with a word or phrase from the box.

central bank commercial banks

confident credit exchange rate

expand frequently impact

mortgage proportion repayments

1. We have to pay our bills too … in my opinion!

2. A country's … is the government bank.

3. The … are the high street banks that everyone uses.

4. When a loan is taken out usually each month … have to be made.

5. A … is a special loan for people who want to buy a house.

6. When you feel …, you fool sure that what you are doing is safe.

7. Many people these days buy things on … instead of paying in cash.

8. A large … of people use banks to deposit their savings.

9. The … compares the values of different currencies.

10. If a company wants to …,to move info new markets for example, it mil need to borrow money.

11. High interest rates have an … on the consumer's ability to buy a new home.

ВАРИАНТ 8

Economic shocks

Governments try their best to control economic growth, but there are some things that nobody can control. For example war, political unrest in another country or simply a change in the weather can all affect an economy in unexpected ways. Sometimes the effect of these events will cause a sudden shift in aggregate demand or aggregate supply. This is an economic shock.

The causes of demand-side shocks may be events in the local economy (domestic demand) or events abroad (external demand). An example of domestic demand was when house prices in the UK dropped suddenly in the late 1980s. Because a home is one of the largest assets most people have, homeowners suddenly felt that they were not as wealthy as they had been. As a result, people started to spend less. This had a knock-on effect on the rest of the economy. Aggregate demand fell sharply and the gross national product fell with it.

External demand-side shocks happen when a country relies heavily on exports or on foreign investment. The Great Depression in the 1930s is a classic example of this. At the time of the Great Depression, many countries exported their goods to the USA, and many other countries relied on American money for investments to help their industries grow. When the American economy collapsed, it had disastrous effects for other economies, too.

Supply-side shocks occur when the supply of goods is disrupted. If the commodity is an important raw material for many industries, then the supply from these industries will drop dramatically. When raw materials are in short supply, they become more expensive. This will cause an increase in manufacturers' variable costs. Manufacturers will then have to increase their prices.

Imagine, for example, that miners in the iron industry went on strike. The supply of iron and steel to manufacturers would be disrupted. This would mean a drop in supply of all sorts of goods, from teaspoons to aeroplanes. As you can see from figure 2 below, the sudden drop in supply will cause a shift in the supply curve. As a result, prices rise even though aggregate demand stays the same. This unfortunate situation is called stagflation.

The good news, however, is that sometimes positive supply-side shocks happen. These occur when there is a sudden increase in supply while demand stays the same. This can happen when new technology makes the production of materials or products much easier or more efficient. The result - prices fall and output grows.

Переведите на английский язык:

1. Слишком быстрые темпы экономического роста могут вызвать инфляцию. Более предпочтителен устойчивый рост, на который нацелена как кредитно-денежная, так и налогово-бюджетная политика.

2. Процентная ставка определяется уровнями спроса и предложения на денежном рынке.

3. Денежная масса — это деньги в обращении, включающие наличность, деньги на счетах, резервы и т. д.

4. Не контролируемые правительствами события, такие как войны, природные бедствия и пр., могут повлиять на экономику неожиданным образом.

5. Нарушения экономического равновесия, вызванные со стороны спроса, могут происходить в странах, сильно зависящих от экспорта.

6. Нарушения экономического равновесия могут происходить как со стороны спроса, так и со стороны предложения. Они могут иметь «эффект домино» для национальной экономики или экономики других стран.

7. При нарушении равновесия со стороны предложения происходит нарушение поставок сырья или комплектующих, а при ограниченных запасах товара растёт его цена, а также растут переменные издержки производителей и их цены.

Economic shocks

1. Complete each sentence with a word or phrase from the box.

disrupt go on strike

gross national product knock-on effect

miner sharply stagflation unrest

1. The total value of a country's goods and services consumed in one year is called the … .

2. If something done affects something else, which then again affects something else, we call this a … .

3. If people are not happy with their government, there may be political … .

4. Being a … and digging underground to bring out minerals, must be very dangerous.

5. Some people … as a way of showing their unhappiness with work conditions or pay.

6. If we have … there is a sharp drop in production of some goods causing their price to rise.

7. A fallen tree can … the electricity supply to thousands of homes.

8. Prices have risen … but unfortunately wages haven't.

Inflation

Inflation is an overall increase in prices over a certain period of time. It's also a worry for anybody who's trying to make ends meet, and a headache for many governments. The rate of inflation is often in the headlines. However, inflation isn't really news. In most of Europe, for example, prices have risen year after year for at least the last 50 years. Deflation (overall decrease in prices) docs happen occasionally, but the trend is mostly for the cost of living to increase.

There are lots of ways to measure inflation. One of the most popular ways is the retail price index. This is calculated by recording increases in price for a range of goods and services. This is sometimes called a basket of goods. Some of the goods are weighted more heavily than others because they are more important. For example, food will be weighted more than the cost of a cinema ticket, because a 5% increase in food is more important than a 10% increase in the cost of seeing a film. Inflation is worked out from an average of all the price increases in the basket.

Inflation can happen for a number of reasons, but economists say there are two main culprits. These are demand-pull inflation and cost-push inflation. Demand-pull inflation can happen when the economy is growing fast. Aggregate demand begins to grow faster than suppliers can cope with. This causes a shortage, and prices rise. At first, customers may be able to pay the higher prices, and demand grows again. This forces prices up even more, and the cycle continues.

One of the characteristics of demand-pull inflation is that there is often too much money going round the economy. This is explained by the quantity theory of money. This theory uses the following equation:

money supply x velocity = average price x transactions

Velocity is the speed that money is passed on from one person to another. Some economists say that velocity and the number of transactions don't really change. The only things that change in this equation are the money supply and average prices. This means that when the money supply increases, prices will increase too. For this reason, printing money is rarely a solution for economic crises.

Cost-push inflation, on the other hand, occurs when prices rise without an increase in demand. This happens when suppliers' variable costs increase sharply. For example, workers may demand higher wages or raw materials may become more expensive. Producers then pass these increases on to consumers by raising prices. So, as usual, we are the ones who pay!

Переведите на английский язык:

1. Один из способов измерения уровня инфляции — это индекс розничных цен, который рассчитывается для корзины товаров.

2. Инфляция издержек происходит, когда цены растут без роста спроса, что бывает при резком увеличении переменных издержек производителей.

3. Среди других причин роста инфляции — рост денежной массы в обращении, что объясняет количественная теория денег.

4. Больше всех страдают от роста инфляции люди с фиксированными доходами.

5. Безработица может быть циклической или структурной. Циклическая безработица меняется с ростом или спадом в экономике. Структурная безработица зависит от низкого спроса на труд в какой-либо отрасли.

6. Есть и другие типы безработицы. Например, фрикционная безработица, когда люди ищут новую работу, а также сезонная безработица, когда отрасль работает сезонно.

7. Ситуация, когда все, кто может работать, имеют работу, называется полной занятостью.

Inflation

1. Choose the correct word.

1. When something is in the headlines / articles, it is an important story in the news.

2. When parents are unemployed it is difficult for a family to make ends touch/ meet.

3. The cost / price of living m cities like London and Tokyo is very high.

4. People prefer to shop in supermarkets because they find a wide range / amount of goods there.

5. The retail/shopping industry includes shops, supermarkets and department stores.

6. In statistics, when a number is valued / weighted it is multiplied by another number to show its importance.

7. The victim / culprit is the person or thing that is responsible for doing something bad.

8. It is difficult for old people to manage / cope with living on a small pension.

9. In maths, a/an equation / formula is a sum which is equal on both sides.

10. The speed that something travels at is called velocity / capacity.

2. Now read the text again and match each paragraph with the correct heading.

PARAGRAPH 1

PARAGRAPH 2

PARAGRAPH 3

PARAGRAPH 4

PARAGRAPH 5

A Measuring inflation

B Too much cash

C The effect of aggregate demand on inflation

D Production cost changes

E Inflation is a fact of life

Unemployment

There will always be a certain amount of unemployment in the economy. When economists talk about full employment they mean that everyone who can work and wants to work has got a job. Able workers who are not working are simply not happy with the salaries that are offered - or just can't be bothered!

However, economies rarely reach full employment. There are a number of reasons for this, and a number of different types of unemployment. One of these is cyclical unemployment. This type of unemployment varies with the growth and recession cycle of the economy. As the economy grows, demand for labour grows and unemployment falls. As the economy contracts, unemployment grows.

A second kind of unemployment is structural unemployment. This occurs when changing public tastes or advances in technology cause a fall in demand for some types of work. For example, computer technology has revolutionised the printing industry, and many traditional printers' jobs have become obsolete. Sometimes whole regions of a country suffer from high structural unemployment. The north-east of England, for example, was famous for many years for its shipbuilding industry. Competition from abroad forced many shipyards to close. This caused huge unemployment in the region.

How long structural unemployment lasts will depend on two things. Firstly, how easily the workforce can retrain for new jobs. This may be difficult for older workers who find it hard to learn new skills. There is also the question of who pays for the training. The second issue is mobility. Workers who are able to relocate easily to another part of the country will find new jobs more quickly.

There are two other kinds of unemployment which we should mention here. These are less serious, perhaps, but they are still difficult for governments to get rid of. The first is frictional unemployment. This is a natural kind of unemployment that occurs when someone leaves a job and is looking for another one that suits them. Frictional unemployment often happens because people want to leave their job in order to change careers. Few people walk straight into another job. However, when the economy is in recession, frictional unemployment will be more common because jobs are harder to find.

The second kind is seasonal unemployment. Some industries have busy periods and periods where there is no work at all. Some freelance farm workers, for example, get most of their work in the spring and summer. Like structural unemployment, seasonal unemployment can affect whole regions of a country. Areas that rely on summer tourism, for example, suffer serious unemployment during the autumn and winter months.

Переведите на английский язык:

4. Больше всех страдают от роста инфляции люди с фиксированными доходами.

7. Ситуация, когда все, кто может работать, имеют работу, называется полной занятостью.

Unemployment

ВАРИАНТ 9

Economic growth

Many millions of people enjoy a quality of life today that previous generations could not have dreamed of. Home ownership, private cars and holidays are now standard for most families in industrialised countries. And yet at the same time, billions of people in other countries live without even clean drinking water. How can this be? The answer is that the fortunate few live in countries with sustained economic growth.

An economy is growing when the gross national product is increasing year after year. When economists calculate economic growth, though, they must take into account the effects of inflation. For example, imagine that the gross national product of a country increased from $500 billion to $510 billion from one year to another. That's an increase of two per cent in output. Very impressive! However, if the rate of inflation was two per cent, then there has been no real growth at all.

The other thing to remember about economic growth is that not all growth is good. Governments want steady, sustainable growth. Sudden, sharp increases in growth - a boom - can cause the economy to overheat and fall into recession. For many economies, the long run growth over many years is steady, but the short run is a roller-coaster ride of boom and depression. For instance, the long run growth of the UK economy since 1950 has been a steady 2.5% per year. However, if you look closely at any decade you'll see that there is a cycle of growth, recession and recovery. The truth is, steady growth in the short term is very hard to achieve.

Nevertheless, many countries are still struggling to achieve any kind of growth at all. Why is this? What is necessary for growth to happen? Many economists have tried to find the answer to this question, and there are plenty of theories to choose from. However, most economists agree that three things are essential for economic growth to occur: capital growth, savings and technological progress.

Capital refers to the factories and machinery that the labour force uses to turn raw materials into products. More workers and more raw materials will only lead to a certain amount of growth. Eventually, the economy needs more capital for the labour to use. Capital growth can also include training and education for the labour force. This makes the workforce more efficient, creative and productive.

Of course, someone has to pay for the new machines and training. In other words, capital growth needs investment. Money for investment needs to be borrowed from banks. Banks can only lend if customers make savings. This is why savings are so important for growth. However, the economy will not grow if everyone is saving and no one is spending. Getting the right balance between consumption and saving is another part of the challenge of economic growth.

But above all, technology is the real miracle worker of economic growth. An advance in technology can increase productivity from the same amount of capital and resources: just what the chancellor ordered!

Переведите на английский язык:

1. При подсчете экономического роста учитывается инфляции.

2. Резкий, неожиданный экономический рост может вызвать перегрев экономики. Такой рост называется бумом.

3. Жизненно важными условиями экономического роста считаются сбережения, рост капитала и технологический прогресс.

4. Технологический прогресс ведёт к росту производительности без увеличения капиталовложений и ресурсов.

5. Долгосрочный экономический рост часто сменяется спадом экономической активности. Такой цикл называется промышленным или экономическим. Он включает четыре стадии: бум, спад, рецессию и оживление.

6. Когда устойчиво растёт спрос на товары и услуги, компаниям приходится брать на работу больше сотрудников, доверие потребителей растёт, поскольку растут их доходы.

7. При замедлении деловой активности экономический рост продолжается, но более медленными темпами. Начинает расти инфляция, доверие потребителей падает.

1. Choose the correct answer А , В or С from the list opposite.

1. In many ways life for previous … was much more difficult.

2. Home … has increased m many parts of Europe.

3. When the economy grows dangerously fast, we say it … .

4. A … is when the economy is growing quickly.

5. … are fairground rides like trams that go up and down very fast.

6. … in technology in the last 30 years has been incredible.

7. … is when you get better after something bad like an illness - or economic depression.

8. When you … you fight or work hard for something.

9. Don't buy anymore milk. We've got … in the fridge.

10. A fortunate person is very … .

11. Mountain climbers are people who enjoy a … .

12. The … is the government minister responsible for the economy.

13. … growth is growth that can continue for a long time.

1. A people B generations C family

2. A ownership B having C belonging

3. A boils over B overheats C warms up

4. A bang B boom C balloon

5. A roller-coasters B big wheels C bumper cars

6. A growth B increase C progress

7. A discovery B recovery C slump

8. A overheat B recover C struggle

9. A plenty B a shortage C none

10. A hardworking B rich C lucky

11. A challenge B race C boom

12. A economist B prime minister С chancellor

13. A sustainable B sustained C sustaining

The business cycle

In the long term, over many years, an economy will grow at a steady rate. However, the climb up the hillside of economic growth is actually quite rocky. Long-term growth is made up of many short-term steps. Each short-term step may last for five or ten years. Over this short-term period the economy goes through a cycle of growth and recession. This is called the trade or business cycle, and it has four stages: boom, slump, recession and recovery.

During a boom, everything is good. Demand for goods and services is high and business is going well. To meet demand, companies need to take on more staff, so unemployment is low. Confidence is in the air! Consumers feel confident about spending because their jobs seem secure. What's more, interest rates are reasonable, so people take out loans and use their credit cards. Low interest rates also encourage companies to invest in new capital, and businesses grow. Governments are happy too, because tax revenues are increasing. However, the government has to be careful. Boom economies are always in danger of overheating. Demand-pull or cost-push inflation will eventually bring the good times to an end.

When the slump comes, the economy continues to grow, but not so fast. Once inflation starts to rise, confidence falls. The government have probably put up interest rates to slow down borrowing. People with mortgages have to spend more money to pay off their debt, so they have less to spend on other things. Higher interest rates discourage business investment. Things are moving slowly, and people just hope that the economy will improve again. But will it?

If the government have not acted quickly enough, its fiscal and monetary policy changes may be too late. In this case, recession is inevitable. Some economists say a recession exists when the current rate of growth falls below the long-term rate of growth. Others say a recession is when there is no growth at all, and the economy actually shrinks. Whatever it is, a recession is bad news. Companies have to reduce costs because turnover is so low. The first thing they do is to lay off staff. If the recession is very bad, some companies may even go bankrupt and close. When this happens, thousands of workers may lose their jobs. As unemployment rises, the government needs to spend more on providing unemployment benefit for those who are out of work. In the worst recessions, these conditions can last for a number of years.

Eventually, with good government policy and a demand for goods or services from healthier economies abroad recovery will come. Slowly, confidence returns, investment grows and the cycle begins again.

Переведите на английский язык:

1. При подсчете экономического роста учитывается инфляции.

2. Резкий, неожиданный экономический рост может вызвать перегрев экономики. Такой рост называется бумом.

4. Технологический прогресс ведёт к росту производительности без увеличения капиталовложений и ресурсов.

The business cycle

The open economy

All through history, people from one society have been trading with people from another. Three thousand years ago, for example, the Phoenicians of the Mediterranean built an economy almost completely on foreign trade. In the jargon of economics, the Phoenicians had an open economy, and almost every economy since theirs has been open too.

When an economy is open, this basically means that it imports and exports goods and services. What are the benefits of doing this? First of all, if you trade with other economies, you can import goods that do not exist in your economy. These may be products that your economy cannot manufacture, but they may also be raw materials. With a wider range of raw materials, an economy is able to use its capital and labour to produce a wider range of products. In this way, importing can actually help an economy grow. What's more, if you allow imports from other countries, then you will have trading partnerships. This means that you can export to countries. If you have customers all over the world, your economy will grow faster.

Open economies are good for consumers, too. If the economy allows imports from abroad, there will be a greater variety of goods available locally. When products are available locally, imports of the same products should help to keep prices down and quality high. This is because local companies will have to compete with foreign companies, and more competition will mean better quality and greater value for money.

Economists describe imports and exports of material products as visible - because you can really see and touch them. Examples of visible exports and imports are food stuffs, furniture and electronic equipment. However, there are also invisible imports and exports. These are mainly services, but can include all sorts of things. Examples of invisible exports and imports include banking services, insurance products, educational courses and tourism.

Opening up economies, however, does bring problems. One of the main difficulties is keeping a good balance of trade. Every time a country manages to sell a product or service abroad, this means money will flow into the economy. On the other hand, every time someone buys from abroad, money flows out of the country. Over time, if the flow of money out of the economy is greater than the flow of money into the economy, then there is a trade deficit. This is not a good situation to be in. The challenge for governments is to keep the flow of trade equal in both directions, or to achieve a trade surplus. This is when total exports are greater than total imports.

Переведите на английский язык:

1. В течение всей мировой истории люди и страны торговали друг с другом. В современном мире экономика считается открытой, когда страна импортирует и экспортирует товары и услуги.

2. Экспорт и импорт товаров определяется как «видимый» в отличие от «невидимого» экспорта и импорта услуг.

3. Торговый баланс является составной частью платёжного баланса. Если объём импорта превышает объём экспорта, страна имеет торговый дефицит. Если ситуация противоположная, страна имеет положительное сальдо торгового баланса.

4. Почти каждая страна в мире имеет свою национальную валюту Некоторые страны используют общую валюту, например, страны-члены Европейского Союза. Все 13 стран используют евро.

5. Обменный курс — это цена валюты. Как и любая цена, она определяется спросом и предложением на рынке.

6. Валютный курс — это равновесие между спросом на валюту и её предложением.

7. Изменение обменного курса валюты всегда имеет воздействие на экономику страны. Например, если курс валюты растёт, товары этой страны становятся дорогими, спрос на них за рубежом падает. В результате может уменьшиться объём экспорта страны.

1. Match the words and phrases with the definitions.

1. balance of trade

2. imports

3. wide range

4. trading partnerships

5. value for money

6. deficit

7. insurance

8. flow

A the movement of something, like water in a river

B big variety

C financial protection

D when you receive less money than you pay out

E when something is worth the amount you pay for it

F the difference between the total amount of exports and imports for a country in one year

G people, companies or countries that do business together

H goods and services a country buys from abroad

Exchange rates

The UK has sterling, the USA has dollars and Russia has the rouble. Almost every country has its own currency. Some countries in an economic zone share a currency, for example the 13 European countries that share the euro, but this is quite rare. If I live in a Eurozone country and I want to buy something from the UK, I must buy it using UK sterling. To do this I need to exchange my euros for sterling. The amount of sterling I can swap for each euro depends on the exchange rate.

For example, if the exchange rate is £1 = ?1.50 and the camera I want to buy is worth £100, then to buy the camera I must spend 100 x 1.5 = ?150. Similarly, if someone in the UK wants to buy something from a Eurozone country, they must exchange their sterling for euros. If the computer they want to buy costs ?500, then they must spend 500 x 0.75 = £375.

Most exchange rates, however, do not stay the same. They are changing all the time. Imagine that a few days later the exchange rate changes to £1 = ?1.45. This would make the camera cheaper for me, but the computer more expensive for the buyer in the UK. In other words, sterling has got weaker against the euro and the euro has got stronger against sterling.

But what makes the exchange rate change? To understand this, just think of the exchange rate as the price of the currency. Just like any other commodity, the price of a currency is decided by supply and demand in the market. The rate set will be the equilibrium point where supply and demand meet.

Where does demand for a currency come from? Let's take the euro, for example. Exports from the Eurozone need to be paid for in euros. This means the buyers of those exports need to buy euros to make their purchases. So the demand for euros increases. Also, investors from outside the Eurozone may want to invest their money there because they think they will make a profit. To do this, they must buy euros, and again the demand for euros increases. The supply of euros on the international money markets comes from people who want to sell euros. If people want to buy imports from countries outside the Eurozone, or if they want to invest in countries outside the Eurozone, they must sell their euros to buy other currencies. So the supply of euros increases.

A change in the exchange rate of a currency can have a big impact on the economy. For example, it can have a big impact on the economy's balance of payments. As we saw in the example earlier, when a currency gets stronger, imports become cheaper. But at the same time, exports to overseas customers get more expensive. This will probably mean that more money will flow out of the economy than in.

Переведите на английский язык:

2. Экспорт и импорт товаров определяется как «видимый» в отличие от «невидимого» экспорта и импорта услуг.

5. Обменный курс — это цена валюты. Как и любая цена, она определяется спросом и предложением на рынке.

6. Валютный курс — это равновесие между спросом на валюту и её предложением.

Exchange rates

ВАРИАНТ 10

Exchange rate mechanisms

If you're planning a holiday abroad, one of the things you won't forget to do is to buy some of the local currency. You'll probably visit a few banks to see which one offers the best exchange rate. But holidaymakers aren't the only ones who are interested in exchange rates. Governments are watching them all the time. This is because a change in the exchange rate of the national currency can affect the whole economy. Interest rates, balance of payments and economic growth will all feel the effects of a change in exchange rates.

But can governments do anything about exchange rates apart from watch them? Well, yes, they can. They can use something called exchange rate mechanisms. These are ways to control the value of the national currency against other currencies. There are different types of mechanism, but they are all variations on two extreme mechanisms: free floating exchange rate and fully fixed exchange rate.

When a currency's exchange rate is free floating, the government doesn't try to control the price of the currency. Remember that, just like any other price, the exchange rate changes when demand and supply change. When governments allow the currency to be free floating, they are saying, 'let the market decide the price of our currency'. In contrast, a fully fixed exchange rate is strictly controlled by the government. For example, the UK government might decide that they want sterling to remain at a constant exchange rate against the euro of £1 = ?1.50. This is sometimes called pegging. In this example, sterling is pegged against the euro at that rate, although in actual fact sterling is a free floating currency.

However, there is a problem. If demand on the money market rises for sterling, then the exchange rate will rise also. How can the government maintain the exchange rate they want? The only way is to change the level of supply of sterling on the money market. The government can increase the amount of sterling on the international market by selling it. This means they buy foreign currencies and sell sterling. Alternatively, if they want to increase demand for sterling, the government needs to reduce the supply on the money market. To do this, they sell their reserves of foreign currencies and buy sterling. This way, they keep the exchange rate (the price) of sterling at a constant rate.

So which system is best - fixed or floating? It depends on lots of things. Each system has its benefits and drawbacks. A free floating mechanism often makes it easier to keep a steady balance of payments. Also, the government can make any changes it wants to interest rates without worrying about the exchange rate (the market looks after that). On the other hand, a fixed rate mechanism makes industry feel more secure. They know what the value of their exports will be, and so they can plan for the future more easily. This is good for the local economy and for international trade.

Переведите на английский язык:

1. Валютный курс может воздействовать на экономику в целом: на процентные ставки, платёжный баланс и экономический рост.

2. При свободном плавании валюты правительство не регулирует её курс, а цену валюты определяет рынок.

3. Когда правительство хочет, чтобы национальная валюта изменялась вместе с другой валютой, например, долларом или евро, оно привязывает свою валюту к ней.

4. Если правительство хочет поддержать курс своей национальной валюты, оно вынуждено продавать или покупать её и другие валюты на международном валютном рынке.

5. Любая страна имеет абсолютные и сравнительные преимущества. Если страна может производить товары с более низкими издержками, чем другие страны, или имеет ресурсы, которых нет у других стран, то страна обладает абсолютными преимуществами.

6. Страна имеет сравнительные преимущества, когда может производить что-либо при более низких издержках упущенных возможностей, чем другие страны.

7. В некоторых случаях страны вынуждены вводить ограничения на торговлю с другими странами. Например, правительство может повышать тарифы на импорт или вводить импортные квоты.

Exchange rate mechanisms

1. Match the words and phrases with the definitions.

exchange A unchanging mechanism

variations В different types of the same thing

floating C stay

fixed exchange rate D system for buying money

extreme E supplies

reserves F free

constant G stable currency price fixed by the government

remain H most absolute

peg I keep two currencies at same level

International trade

There are plenty of incentives for a country to have an open economy. Exports increase the size of the market for producers. Imports stimulate competition in local markets and provide a wider choice for consumers. These are good reasons for international trade. However, another important reason for trading is to exploit advantages. Economists talk about two types of advantage that an economy can have over others: absolute advantage and comparative advantage.

An economy has absolute advantage when it can produce goods at a lower cost than other economies can, or they have resources that others don't have. For example, warm Mediterranean countries have an absolute advantage in the production of olive oil. Many countries in Asia have an absolute advantage in manufacturing electronic goods. Clearly, it makes sense for countries with absolute advantages to trade with each other.

The second kind of advantage is comparative advantage. This happens when an economy can produce something at a lower opportunity cost than other economies can. Remember that the opportunity cost of something is what you have to give up in order to have it. For example, imagine that country A makes two things with its resources: clothes and furniture. If it wants to increase production of clothes, it must decrease its production of furniture. This loss is the opportunity cost.

Now imagine that country B also makes clothes and furniture, but it makes less of both than country A. In other words, country A has an absolute advantage over country B in clothes and furniture. However, country B can increase its production of clothes with only a small opportunity cost in furniture. This means that country B has a comparative advantage over country A in the production of clothes.

But why would country A want to trade with country B? What benefit would they gain? In fact, both countries can benefit by specialising. If country A produces only furniture, and country B produces only clothes, both countries will be making best use of their available resources. By trading in this way, production of both products increases. In turn, this increases the economic welfare of both countries.

Despite all the advantages of having an open economy, countries sometimes restrict trade with other countries. For example, governments may charge tariffs on imports. These are taxes which make imports more expensive than locally produced products. Governments may also restrict the amount of imports entering the country. This kind of restriction is called an import quota. Since international trade has so many benefits, why would countries want to restrict trade in this way? There must be some very good reasons!

Переведите на английский язык:

2. При свободном плавании валюты правительство не регулирует её курс, а цену валюты определяет рынок.

International trade

1. Complete each sentence with a word from the box.

comparative exploit incentive

quota restrict specialises stimulate tariffs

1. All countries try to … the natural resources that they have.

2. … are a kind of tax that the government puts on imported goods.

3. Low interest rates can help to … the economy and make it grow.

4. Arise m salary is an … to make people work harder.

5. The UK economy … in services such as banking and insurance.

6. Governments sometimes need to … the flow of imports and exports.

7. The opposite of absolute is … .

8. They have a … which must be fulfilled if they want to keep the contract.

Less developed countries

What do we mean when we say a country is developed? The United Nations uses three measures: life expectancy, education and real individual income. If we use these measures to describe the world, we quickly understand that only a privileged few live in developed countries. Poverty, for instance, causes the deaths of about 30,000 children every day. Over a billion people cannot read or write. Half the world earns less than $2 a day. Clearly, most of the world's population live in less developed countries. But why is development so difficult for these nations?

There are many reasons. Some countries lack the raw materials and capital needed for growth. Others regularly suffer from natural disasters such as droughts and floods. Diseases such as cholera and AIDS are widespread in many less developed countries. This causes suffering to millions of individuals and families, but it is also disastrous for the economies of these nations. Lack of education also holds back development. This may be because governments cannot afford to provide schools and colleges. However, millions of families in these nations are caught in a poverty trap. This prevents their children from getting a basic education even when it is available. Without quality human capital, these economies cannot grow.

Political insecurity is another reason for underdevelopment. Many of these countries belonged to colonies in the past. When the foreign powers finally left, these countries often fell into years of political instability and war. Even when peace comes to these countries, political corruption makes development difficult as there is still a climate of political instability. Foreign companies do not want to invest in a country which suffers from corruption. Similarly, foreign governments are reluctant to give aid when they see that their money is spent badly or simply disappears.

All of these problems make it very difficult for less developed countries to improve their economies. However, there are other more complex issues which hamper development. The first of these is debt. The second is unfair trading. Many people believe that these two problems are the cause of all the other problems that developing countries face.

Many of the world's poorest countries are trapped in a cycle of debt. This is because they need to borrow money in order to pay the interest on debts they already have. The poorest 60 countries owe many hundreds of billions of dollars. However, they spend more money paying off debts than they receive in aid. Unless these debts are cancelled, these countries will never escape the cycle.

After years of slow development, it is hard for poorer countries to compete with developed countries for international trade. Without mature industries of their own, they must rely on exports of primary goods. These primary goods do not earn as much money as the products that developed countries export. What's more, because poor countries rely on grants from rich countries, they are often forced to spend the money on manufactured imports. This means they cannot buy the things they really need: capital goods to help their economies grow.

Переведите на английский язык:

1 Существует несколько критериев, которые определяют степень развития страны. Это прежде всего продолжительность жизни, уровень образования и реальный доход населения.

2 В неразвитых странах мира много людей умирают от голода и из-за бедности, миллионы людей не умеют ни читать, ни писать.

3. Население беднейших стран страдает от стихийных бедствий, распространены также серьёзные болезни, такие как СПИД и холера.

4. Российская империя простиралась от Польши на западе до Тихого океана на востоке. У России была самая большая территория, но экономически она значительно отставала от ведущих держав мира.

5. Российской империи сохранялись феодальная экономическая система и натуральное хозяйство, большую часть населения до 1861 года доставляли крепостные.

6. Промышленная база России была плохо развита, население в основном было неграмотно и неквалифицированно. В стране было мало заводов. Машиностроение в то время практически не развивалось.

7. Освобождение крепостных, рост зарубежных инвестиций позволили России развить отрасли обрабатывающей промышленности. Быстро росла сталелитейная промышленность, строилась сеть железных дорог, росла добыча полезных ископаемых.

Choose the correct word.

1. Many African countries were nations / colonies of European countries until the 20th century.

2. If your debt is stopped / cancelled, you don't need to pay the money back.

3. A privileged / reluctant person is able to have things that others cannot have.

4. Political stability / instability happens when a country's political system does not work properly.

5. A grant / loan is money given to someone (or a country) without them having to pay it back.

6. If you are reluctant / willing to do something, you don't really want to do it.

7. Another word for help is aid / hamper.

8. When something aids / hampers you, it stops you from doing what you want to do.

9. Capital / Primary goods are goods which are used in order to produce other goods, or things which can be consumed without being processed.

10. Mature / Reluctant means fully developed.

11. Capital / Primary goods are the factories and machinery that an economy needs in order to produce other goods.

12. Human aid / capital is the educational level and the health of the working population.

ВАРИАНТ 11

Russia's foreign trade

Through most of the 20th century, Russia's, or the USSR as it was known for most of that century, trade with the outside world was mostly limited to trade with other members of the Socialist Bloc. It was self-sufficient in energy resources and primary goods. Its manufacturing industry was for domestic consumption only. Foreign consumer goods simply didn't exist. Investment from abroad was not encouraged because the government wanted full control of production and prices. But things have changed.

The Russia of the 21st century is much more open to business with the rest of the world. In the first six months of 2005, its total international trade turnover was worth about $150 billion. Both exports and imports have grown in recent years, but exports are growing more rapidly in value. This is mainly through the sale of oil and gas. In fact, energy resources make up over two thirds of Russia's exports. The growing price of these commodities on world markets has brought huge amounts of foreign currency into the Russian economy. Metals are also important for the Russian economy. Russia's steel industry, for example, is one of the world's biggest. Other primary goods such as timber, minerals and fish are also important.

The value of trade isn't the only thing that has changed. There have been changes in Russia's trading partnerships, too. In the old Soviet days, and even in the vears that followed the fall of communism, Russia's main trading partners were other communist countries that used to be known as the COMECON (Council for Mutual Economic Assistance) countries. In the early 1990s, for example, Russia still had trade agreements to export energy resources to many former Soviet republics. As oil prices increased, however, many of these countries found it difficult to pay for Russian oil, and exports fell. At the same time, trade with other parts of the world, especially the European Union began to grow. Communist ties have not all been broken, though. One of Russia's most important trading partners is China.

But what does the future hold for the economy? The danger for Russia is that it relies very heavily on exports of oil, gas and minerals. Prices for these commodities can change suddenly on the world markets. What does Russia have to fall back on? At the moment, not very much. Its industrial sector is mostly run down and uncompetitive. During the Soviet years, a large part of the country's industrial strength was used to produce arms. Today, military equipment and weapons are still the biggest manufactured exports from Russia. It has to import almost all other manufactured goods.

Many economists believe that Russia must spend its oil money on investing in capital and infrastructure for industry. Doing this will encourage foreign investment and further economic growth. In turn, this will help to spread the benefits of growth to everyone in Russia, not just a privileged elite.

Переведите на английский язык:

1. В 1990-е гг. в Москве государственные магазины с немногочисленными товарами сменились дорогими торговыми центрами, город стал одним из самых дорогих городов мира.

2. В начале 1990-х гг. российское правительство использовало «шоковую терапию». Были введены жёсткие меры бюджетно-налоговой и кредитно-денежной политики. Было отменено государственное регулирование цен на все товары кроме цен на основные продукты питания.

3. В период перед кризисом были повышены налоги и процентные ставки, а субсидии государственным отраслям сокращены. События в банковской системе стали причиной безудержного роста денежной массы.

4. Советский Союз торговал преимущественно со странами, входящими в Совет экономической взаимопомощи. Торговля сырьём и энергоресурсами происходила при полном контроле над внешнеторговыми ценами.

5. В последние годы внешнеторговый товарооборот России растёт, при этом объёмы экспорта по стоимости растут более быстрыми темпами, чем объёмы импорта.

6. Россия экспортирует сырьё: нефть, природный газ, древесину, металлы, сталь, рыбу. На нефть и газ приходится около двух третей всего объёма российского экспорта.

7. Большая часть отраслей обрабатывающей промышленности неконкурентоспособна и полуразрушена, поэтому необходимо инвестировать «нефтяные» деньги в инфраструктуру и капитал.

1. Complete each sentence with a word or phrase from the box.

arms broke ties with domestic consumption

fall back on infrastructure open to

privileged elite run down Socialist Bloc

the future holds turnover

1. Factories become … if management don’t look after buildings and invest in new equipment.

2. Nobody really knows what … but you should make plans anyway.

3. Many countries make lots of money selling … like tanks and guns to foreign armies.

4. In the West, the communist countries of the USSR were salted the … .

5. When he left the company, he … all his old colleagues.

6. It's good to have some savings to … daring hard times.

7. The company was very … my proposal for a new range of products.

8. Most of the wealth in modern industrial counties is owned by a small … .

9. Products for … are only sold in the country where they are made.

10. The … means the roads, railways, power and communication networks that industry needs.

11. The … of our new products has been very high and we have gamed a good income from them.

What does economics study?

History of economic thought

Переведите на английский язык:

4. Каждый день мы принимаем много решений, и каждое решение — это обмен одного ресурса на другой.

5. Экономисты собирают данные и на их основе создают экономические модели.

6. Экономические модели показывают взаимосвязь между различными процессами в экономике.

ВАРИАНТ 1

What does economics study?

What are microeconomics and macroeconomics ?

Переведите на английский язык:

4. Каждый день мы принимаем много решений, и каждое решение — это обмен одного ресурса на другой.

5. Экономисты собирают данные и на их основе создают экономические модели.

6. Экономические модели показывают взаимосвязь между различными процессами в экономике.

What does economics study?

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