1. The … department of the government looks alter roads, railways and airports.

2. The government hopes its … will help reduce unemployment.

3. The parts that something is made of are sometimes called… .

4. … employment is when everyone who can work has a job.

5. The money that you have alter you've paid taxes is called your … income.

6. The part of a persons salary that is not taxed is called their personal … .

7. The government plans many new … projects, such as building new hospitals and schools.

8. Another word for extra goods that are not needed is … .

9. When the economy is working at full … it is using all its resources for production.

10. A … is a large, fast road which connects cities.

11. A … is a plan for achieving something.

12. In …. tax system, people who earn more pay more tax than people who earn less.

1. A transport        B education С defence

2. A components   B allowance C policy

3. A income           В components С capacity

4. A absolute         B complete C full

5. A full                 B disposable С spending

6. A allowance      B public     C capacity

7. A personal         B public     C disposable

8. A surplus           B shortage С allowance

9. A employment   В income   C capacity

10. A path             B motorway C railway

11. A component   В project    С scheme

12. A surplus         B progressive С public

Now read the text again and answer these questions in your own words.

1. What axe the two tools of fiscal policy?

2. What is someone's personal allowance?

3. What will the government do to taxes if the economy is slowing down?

4. How can the government create more demand in the economy?

5. When does the multiplier effect stop working?

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:

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.

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.