PARAGRAPH 1  A Economic growth does not happen everywhere. B Economic growth did not happen in the past.

C Economic growth happens only in industrialised countries.

PARAGRAPH 2

A GNP and economic growth are the same thing.

B An increase in GNP always means the economy is growing.

C An increase in GNP may not show economic

growth.

PARAGRAPH 3              A All growth is good.

B Fast growth is good.     C Steady growth is good.

PARAGRAPH 4

A The majority of economists believe three factors positively influence economic growth.

B Economists are sure about what causes economic growth.

C Economists have no idea about what causes economic growth.

PARAGRAPH 5

A The economy needs more raw materials to grow.

B The economy needs more machines and factories in order to grow.

C The economy needs more labour to grow.

PARAGRAPH 6              A For economic growth there needs to be more spending and less saving.

B For economic growth there needs to be more saving and less spending.

C For economic growth there needs to be the right amount of saving and spending.

PARAGRAPH 7

A Technology creates more raw materials with less labour.

B Technology creates greater output from the same amount of capital, labour and materials.

C Technology creates more labour with fewer

raw materials.

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.

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.

The business cycle