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Presidents, policy-makers, TV pundits, editorial writers, leaders of business and labour, and taxpayers talk about economy. That is natural and good. Much of our lives centers on the economic issues. A great deal of this talk proceeds in ignorance of basic facts about economy or, what is worse, makes assumptions about it that are not so – or at least are highly doubtful.
Listening to TV or reading the newspapers raises a long list of questions whose answers would be relevant to the discussion but are commonly unknown, ignored or, misunderstood, such as:
1. What causes periods of decline and periods of growth?
2. How serious have recessions been?
3. What are the world economy’s general trends?
4. How is the global economic situation held in check?
Since people are generally interested in the behavior of the “real” economy, we recognize that much about the global economy cannot be measured, expressed in numbers and presented in charts. After all, as Adam Smith said, the economy is governed by an “invisible hand”.
Still, the kinds of facts presented here are important: they say much about economic conditions and change we live with and constantly discuss.
The first alarm bell rang in March 2000, when a slump in share prices of Internet-related companies proved a rude awakening for many. Hopes were also dashed when the theory of continuous growth in the context of globalization fell short of reality.
Prior to that, in the 1990s, the United States had enjoyed economic growth for more than 10 years – the longest growth phase in its history. But in the business cycle every growth period is bound to give way to a period of decline. Decline has continued for two years after the period 1997 to early 2000, in which Internet companies flourished.
A sharp drop in the share prices of telecommunication operators came hard on the heels of Internet companies’ decline; the next to see falling share prices were computer manufactures.
As a result high tech companies saw the prices of their shares on the worlds’ leading stock exchanges drop by half with stockholders losing hefty sums in the United States alone, their loses already add up to 4$ trillion (every other family is a shareholder in the U. S.).
Quite a few economists have predicted that the stock market turmoil will lead to a severe slump comparable to America’s Great Depression of the 1920s-1930s. This, however, is unlikely to happen.
The economic situation is held in check by the overwhelming strength of the world banking system. The top banks are not burdened by debts, and they possess solid reserves. The companies hardest hit by the recession are insurers that eagerly introduced new schemes to insure high-tech securities deals during com booms days. And now they have to pay enormous sums in insurance benefits. The situation in the insurance business went from bad to worse after September 11 terror attacks on New York.
Because the current worldwide stock-exchange crisis is the first one to occur in times of globalization, it does not lend itself to traditional methods of analysis. Still, it is already clear today that globalization has stabilizes the world economy boosting its ability to counter crises tendencies.
Another point that has to be noted is that the world economy’s general trends are determined by the state of the U. S. economy. The dependence is so great today that it has increased the world economy’s controllability several times. Moreover, that dependence has added to the world economy a political aspect that could be decisive in restoring confidence in the world markets.
As for the outlook for the world’s major stock markets, most Western analysts agree that the share price slump will last another three to six months, and that Wall Street could see the share price index drop by another 20% or so.
With all this doom and gloom prospects are not utterly bleak for stockholders. Should banks continue to maintain low discount rate and companies guarantee a dividend of 4,5% for their stockholders stocks will remain the most lucrative purchase for investors. It has been the policy of the head of the Federal Reserve System to keep the discount rate low and this should induce investors to go back to the stock market.
3. Answer the questions
1. Why are people interested in economic issues?
2. Do you agree with Adam Smith who said “the economy is governed by an “invisible hand”?
3. Why did hopes for continuous growth fall short of reality?
4. Is every growth period bound to give way to a period of decline?
5. How can you characterize the 1990s for the national economy of the USA?
6. What industries mentioned here saw hard times?
7. Why is Great Depression of the 1920-1930s unlikely to happen?
8. What is the world economic situation held in check by?
9. What facts are the global economic trends determined by?
10. What can make investors go back to the stock market?
4. Match the words on the lefts with the definitions on the right.
1. pundit a) the recorded owner of shares of stock in a corporation
2. chart b) a state or condition of extreme, upset or confusion
3. stockholder c) to guarantee against risk of loss or harm
4. turmoil d) someone who puts money or capital into some type of
property with the purpose of getting a profitable return
5. burden e) a sheet on which information is exhibited in a methodical
or tabulated form
6. insure f) certificated of stocks, bonds or notes
7. securities g) a learned man
8. confidence h) to oppress with anything grievous
9. dividend i) full belief or reality
10. investor j) proportion of profit or gain
5. Find the synonyms of the following words in the text.
1. before 6. supposition
2. development 7. as
3. not come up to 8. numerals
4. prosper 9. disorder
5. to oppose 10.to control
6. Translate the following sentences from Russian into English.
1. Экономические вопросы интересуют не только специалистов, но и широкую публику.
2. Известно, что после каждого периода расцвета неизбежно следует период упадка.
3. Маловероятно, что сегодняшний спад в экономике может привести к событиям равными по своим последствиям с Великой депрессией.
4. Сегодня мировая экономика контролируется ведущими банками.
5. Следует также отметить, что глобальное экономическое развитие определяется состоянием экономики США.
7. Look through the text and suggest a headline.
One of five Americans leaves his or her job each year. One in ten Americans changes occupations each year, and many will have four to five careers in a lifetime. While most job switching probably occurs early in one’s career, we live in a rapidly changing world where new jobs and careers are being created every day. The personal questions involved in finding and keeping a job are likely to be a regular part of life.
Financing New Business. The number of new businesses and the amount of money necessary for them to operate and expand is staggering. There are 1,3 million new enterprises formed each year. Approximately half of these incorporate. If each of the 1,3 million new firms requires $25.000 of financial capital to begin, over $30 billion is needed to finance the start-ups each year. Another half a million firms need an additional $100.000 to continue to grow. Capital requirements for these total roughly $80 billion dollars.
Where do these funds come from? Business people called “venture capitalists”, who specialize in investing in new firms, provide about $2 billion a year. One quarter of the capital comes from overseas. Stock markets, where new common stock is sold, provide an additional $15-20 billion. Banks and other financial institutions will also provide funds. A large portion of funds needed for start-up and expansion, however, comes from entrepreneurs risking their personal savings or property. This may mean taking a second mortgage on a house, depleting savings and retirement funds, and coaxing investors (primarily friends, neighbors, and family) to make loans or buy ownership in the new firm.
State Financing of New Business. States interested in stimulating economic growth compete for jobs and new business in a variety of ways. They provide tax incentives and special funds to lure foreign or domestic companies to move to their state. They emphasize the quality of their schools, roads and highways, the availability of skilled workers, and their clean air and beautiful scenery – whatever business they will find attractive. Governors will even travel to other countries in an effort to secure new investment.
Michigan provides a good example of the variety of things a state can do to stimulate economic growth. Between 1979 and 1983, Michigan had lost 283,000 manufacturing jobs. For four years running, the state had the highest unemployment rate in the nation. Its budget was in deficit, and it had to borrow from the Japanese to keep the public schools open. Out of this crisis came a commitment to rebuild basic manufacturing by relying on the skilled labor force of the state.
Under the leadership of its governor, Michigan tried to assist old business to retrain workers or restructure their operations. It also became one of the most aggressive states in its assistance of start-up businesses. Its reforms included an overhaul of the regulations governing franchise businesses, state social security laws, and workers’ compensation. In addition, a 1983 law allowed the state to invest 5 percent of a $15 billion public employee pension fund in new businesses. As a result, the state could encourage start-up businesses through a variety of state loans – even to businesses that could not get bank loans.
As a result of this effort, established firms are recognizing, new firms are moving to the state and Michigan’s economy is improving dramatically. For example, a fiberglass boat builder converted to making fiberglass coffins. A new firm began to manufacture tape drivers for microcomputers and now employs 450 workers. In addition, 245 firms have been advised by the Modernization Service of the state government on ways to revamp operations and retrain workers.
What Jobs Are Available? The creation of new businesses and new jobs can mean new opportunities for you. What jobs are fading in importance? National statistics indicate the service sector is providing the lion’s share of new jobs. Opportunities are available in medical care, retailing, and business services such as law, consulting and accounting. The Bureau of Labor statistics estimates that the fastest growing jobs will be in the areas of high-skill service occupations such as engineering, medical technology, computer programming and systems analysis.
8. Find the key words in each paragraph of the text and translate them into Russian.
9. Find the English equivalents of the following word combinations in the text and translate the sentences with them into Russian (in writing).
1. смена работы
2. новая компания
3. фондовая биржа
4. предприниматель
5. пенсионный фонд
6. ссуда на покупку дома
7. инвесторы, которых можно уговорить
8. налоговые стимулы
9. привлечь компании
10. уровень безработицы
11. пересмотр постановлений
12. банковский заем
10. Give the summary of the text in Russian using the key words and word combinations from exercises 8 and 9.
11. Read the following text.
Supermarket Economics
Consumers buy millions of different products (including services) in different places and in different stores. So consumers pay millions of different prices. No one can collect these prices. Products change in quality from time to another, and it is hard to tell what people spend their money on. The behavior of hundreds of millions of individuals is beyond the comprehension. Still, supermarkets offer valuable economic lessons. The modern supermarket illustrates in a small way how the market system operates in the economy as a whole. Each supermarket has tens of thousands of items of various sizes and brands. Store owners and managers compete for the customers’ dollars by trying to offer the best service and the greatest variety of goods possible at prices their customers are willing to pay. The modern supermarket provides everything from basic foods to gourmet items from any place in the world. Customers can shop in the supermarket’s deli or make their own lunch at a soup-and-salad bar. Supermarkets also sell cosmetics, toys, small appliances and even videos of recent movies. They attempt to maintain a bright and cheerful atmosphere that will make shopping pleasant for large numbers of customers.
Information about consumer preferences in this huge mix of products is generated by a simple procedure. Consumers take their selection to the checkout line. Checkout clerks enter information about the sale on the store’s computer by passing the product’s bar code across a scanner.
The store responds to differing consumer preferences for health, economy, convenience, and vanity by stocking the goods consumers prefer. Products that fail to satisfy are replaced by more attractive products. “Winners” are selected and the “losers” gradually lose shelf space. Ultimately producers either improve their products or pass from the scene. The consumer is really king. The market registers their preferences and reconciles supply with demand.
12. Combine the following sentences to make one complete statement. Make any changes you think necessary, but do not change the sense of the original. Refer to the passage when you have finished the exercise.
Store owners and managers compete for the customer’s dollars. They try to offer the best service and the greatest variety of goods possible. They sell at prices their customers are willing to pay. (paragraph 1)
13. Find in the text sentences with: a) ing forms after prepositions, b) alternative introduced by “either…or…”, c) passive voice. Analyze them and suggest different ways of their translation.
14. Translate the text in writing.
15. Before translating the text from Russian into English translate the following words.
1. occupy, occupation, occupancy, occupational.
2. compete, competence, competition, competitive,
3. operate, operating (adj), operation, operational, operative
4. expand, expansion, expansionism
5. advertise, advertisement, advertising, advertiser
6. employ, employee, employment, employer, employable, unemployment
7. commit, commitment, committal
8. emphasize, emphasis, emphatic
9. attract, attraction, attractive, attractiveness
10. qualify, qualification, qualifier
16. Match word combinations on the left with the English equivalents on the right.
1. розничная торговля a) employee rotation
2. поддерживать стандарты обслуживания b) minimize employee turnover
3. свести к минимуму текучесть кадров c) performance-related payment
4. индивидуальные выплаты d) create corporate culture
(в зависимости от выполненной
работы)
5. повышение заработной платы d) retail
6. ротация кадров e) foster commitment to one’s
company
7. формировать корпоративную культуру f) pay rise
8. воспитать преданность к своей компании j) maintain service standards
9. штрих код h) social insurance
10. социальное страхование i)bar code
17. Translate the following sentences into English (using the Subjunctive Mood).
1. Если бы не была разрушена советская система подготовки работников торговли то, возможно, сегодня качество обслуживания было бы выше.
2. Необходимо. чтобы в торговой сети вводили новые виды оплаты труда.
3. Специалисты настаивают на том, что снижение качества обслуживания покупателей – временное явление.
4. На Вашем месте я бы не спешил обращаться в агентство по трудоустройству – бурный экономический рост создает много возможностей.
5. Жаль, что не всегда удается решить в организации проблему текучести кадров.
18. Translate the text in writing.
Дата: 2019-04-23, просмотров: 289.