Бюджетное учреждение профессионального образования

Ханты-Мансийского автономного округа – Югры

«Белоярский политехнический колледж»

Учебно-методическое пособие

по учебной дисциплине «Английский язык» для студентов заочного отделения

38.02.01 Экономика и бухгалтерский учет

Белоярский 2016

Одобрена на заседании

Кафедры иностранных языков

Составлена в соответствии с государственными требованиями к минимуму содержания и уровню подготовки выпускника специальности 38.02.01

Авторы: Боцвинова Е.А., старший преподаватель английского языка

1. Пояснительная записка

Учебно-методическое пособие предназначено для студентов экономических специальностей При составлении пособия, автором были учтены требования к зачету по английскому языку, состоящему из трех этапов:

- чтение оригинального текста (контроль точности и полноты понимания осуществляется посредством письменного перевода с использование словаря);

- грамматический перевод предложений с русского языка на английский), содержащих специализированную лексику;

- собеседование по материалам озвученных тем по специальности.

Часть 1 содержит тематический план по курсу «Английский язык» для студентов заочного отделения, описание структуры курса.

В части 2 пособия системно представлен комплекс контрольных заданий на 1, 2, 3 семестры. Каждый вариант контрольной работы состоит из трех частей. Условия выполнения задания традиционны , изложены в доступной форме и направлены на закрепление навыков работы с грамматическим и лексическим материалом (1-2 части). Третья часть работы включает адаптированные и оригинальные тексты по специальности. После заданий контрольных работ предлагаются методические указания знакомящие студента с требованиями кафедры к оформлению и выполнению контрольных работ, рекомендации к организации самостоятельной работы.

Часть 3 пособия состоит из грамматических заданий, которые могут использоваться в качестве тренировочных упражнений в ходе аудиторных занятий и предлагаться для самостоятельной работы по формировании. И совершенствованию навыков грамотного перевода с русского на английский, практическому применению знаний грамматических норм. С помощью предложенных заданий, студенты могут реально оценить свои знания во время индивидуальных консультаций, обнаружить и проанализировать типичные ошибки, тем самым, корректируя как теоретические знания, так и навыки их практического использования.

Заключительная часть пособия включает адаптированные и оригинальные тексты по экономическим проблемам.

Лексический материал текстов может широко использоваться при подготовке устных сообщений по темам специальностей.

Цель пособия - наиболее полно представить необходимый лексический и грамматический материал, тем самым, оказав необходимую помощь студентам в подготовке к зачетам и экзаменам.

Часть 1.

Тематический план по курсу «Английский язык»

(60 аудиторных часов)

п/п

Тема, подтемы

Кол-во часов

Грамматический материал

Часть 2.

Контрольные задания 1-3 семестры.

КОНТРОЛЬНАЯ РАБОТА № 1

Вариант № 1

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Учебное пособие: И.И. Воронцова "Английский язык для студентов экономических факультетов". Стр.4-8.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: Артикль. Имя существительное. Множественное число существительных. Выражение падежных отношений. Притяжательный падеж. Времена группы Simple. Времена группы Perfect. Страдательный залог. Условные предложения.

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык

the government and local authorities; Finns experience high sales; their sales fall; total spending declines as income falls; luxury items; the high street banks suffered badly; to earn interest on loans; so-called "bad debts"

Задание № 2. Замените слова, выделенные курсивом синонимами

The economy comprises millions of people; losses were incurred; the nation has dealings; changes in the state of the economy affect all types of business; Profits declined; losses amounted to over £100 million.

Задание № 3. Образуйте однокоренные слова от "econom" и вставьте подходящие по смыслу слова вместо пропусков.

ics

ist

1. Marx and Keynes are two famous __.

2. Those people arc studying the science of __.

3. We sometimes call a person's work his __ activity.

4. People should be very __ with the money they earn.

5. The __ system of a country is usually called the national __.

6. The people in that town live very __. Translate into English

Задание № 4. Найдите в тексте английские эквиваленты следующих словосочетаний:

играть заметную роль; формировать среду; сокращать расходы на... ; сократить размеры прибыли; переживать подъем; переживать тяжелые времена; прийти в упадок; нести убытки; состояние экономики; иметь большое значение для бизнеса в целом; не выполнять обязательств по уплате.

Задание № 5. Вставьте вместо пропусков подходящие по смыслу слова

need, profitable, converts, filled, pitfalls, a gap, goals, reality

GOING INTO BUSINESS

Owning a business is the dream of many Americans. Starting that business … your dream into reality. But, there is … between your dream and … that can only be … with careful planning. As a business owner, you will … a plan to avoid …, to achieve your … and to build a … business.

Часть 2 Грамматика

Задание № 1. Образуйте из следующих фрагментов законченные предложения, включив в их состав один или несколько подходящих по смыслу глаголов – сказуемых.

The typewriter with the broken return key.
Our annual office party.
My new office.
The company in the building next door.

Задание № 2. Образуйте из следующих фрагментов законченные предложения, включив в каждый из них один или несколько подходящих по смыслу подлежащих.

edits the company newsletter.
types several letters each morning.
files each account executive's report.
process each claim.

Задание № 3. Раскройте скобки, поставьте глагол в правильную форму.

We (to sell) a variety of software.
She (to run) the branch office.
In the morning he (to listen) to the answering.
Every day we (to read) the office mail.

Задание № 4. Выберите правильные формы глагола.

The Internal Revenue Service ________ tax returns by 5 o'clock.

a) audit b) audited c) had audited

The committee ________ policy changes.

a) recommends b) is recommending c) has recommended

The manager ________ all promotions.

a) had approved b) approved c) is approving

Задание № 5. Напишите предложение в страдательном залоге.

The manager plans each meeting.
The computer operator enters the data.
Managers hire many people each year.

Задание № 6. Переведите предложения с русского на английский язык.

Если бы Вы повысили его в должности, он бы не уволился.
Если они позволят, сообщите им о собрании торговых представителей.
Если бы мы приняли на работу несколько машинисток, мы не испытывали бы сейчас такие трудности.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 4 и 5 абзацев.

THE ECONOMIC ENVIRONMENT

The economy comprises millions of people and thousands of firms as well as the government and local authorities, all taking decisions about prices and wages, what to buy, sell, produce, export, import and many other matters. All these organizations and the decisions they take play a prominent part in shaping the business environment in which firms exist and operate.

The economy is complicated and difficult to control and predict, but it is certainly important to all businesses. You should be aware that there are times when businesses and individuals have plenty of funds to spend and there are times when they have to cut back on their spending. This can have. enormous implications for business as a whole.

When the economy is enjoying a boom, firms experience high sales and general prosperity. At such times, unemployment is low and many firms will be investing funds to enable them to produce more. They do this because consumers have plenty of money to spend and firms expect high sales. It naturally follows that the state of the economy is a major factor in the success of firms.

However, during periods when people have less to spend many firms face hard times as their sales fall. Thus, the economic environment alters as the economy moves into a recession. At that time, total spending declines as income falls and unemployment rises. Consumers will purchase cheaper items and cut expenditure on luxury items such as televisions and cars.

Changes in the state of the economy affect all types of business, though the extent to which they are affected varies. In the recession of the early 1990s the high street banks suffered badly. Profits declined and, in some cases, losses were incurred. This was because fewer people borrowed money from banks, thus denying them the opportunity to earn interest on loans, and a rising proportion of those who did borrow defaulted on repayment. These so-called "bad debts' cut profit ">No individual firm has the ability to control tills aspect of its environment. Rather, it is the outcome of the actions of all the groups who make up society as well as being influenced by the actions of foreigners with whom the nation has dealings.

Answer the questions:

1. What does the economy comprise?

2. What's a boom in the economy? What characterises the state of the economy at that time?

3. What happens when the economy moves into a recession?

4. What are "bad debts"?

5. What happened to some banks in the early 1990s and why?

КОНТРОЛЬНАЯ РАБОТА № 1

Вариант № 2

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Учебное пособие: И.И. Воронцова "Английский язык для студентов экономических факультетов". Стр. 9-12.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык

a prime example; the adverse effects; householders; statistics are available to show; available resources of labour; at full capacity; key industries; key data; the value of a nation's output; the Treasury; building societies.

Задание № 2. Замените слова, выделенные курсивом синонимами

a large number of, the operation of the world's major economies; headlines relate to; the implications for individuals and businesses; by highlighting the adverse effects on businesses; these resources are being under-utilised; figures give an indicator of, changes have great significance for; numerous; additionally;

economic statistics are presented in many forms

Задание № 3. Образуйте однокоренные слова от "produc" и вставьте подходящие по смыслу слова вместо пропусков.

produc

iv(e)

ity

ion

1. The company __ a new commodity every year.

2. The company's newest __ is a special blue soap powder.

3. The __ of soap powders met last year to discuss prices.

4. That factory is not as __ now as it was 5 years ago.

5. The __ of that factory has gone down over the last 5 years.

6. The manager of the factory has decided that they must increase their __ of packets of soap powder.

Задание № 4. Найдите в тексте английские эквиваленты следующих словосочетаний:

много (многочисленные); в этом отношении; средства массовой информации; подчеркивать, выделять; закладные; объем производства; сырье; не полностью используется; уровень занятости; валовой национальный продукт; опубликовать в каких-либо источниках

Задание № 5. Вставьте вместо пропусков подходящие по смыслу слова

washer, feasibility, crucial, fail, range, niche, entrepreneurs, required for

FINDING A NICHE

Small business … in size from a manufacturer with many employees and millions of dollars in equipment to the lone window … with a bucket and a sponge. Obviously, the knowledge and skills … these two extremes are far apart, but for success, they have one thing in common – each has found a business … and is filling it.

The most … problems you will face in your early planning will be to find your niche and determine the … of your idea. “Get into the right business at the right time” is very good advice but following that advice may be difficult. Many … plunge into a business venture so blinded by the dream that they … to thoroughly evaluate its potential.

Часть 2 Грамматика

The empty file cabinet.
Four desks in the typing room.
The man with the briefcase.
Your former employer.

collects the surveys from everyone in the office.
prepared the study for the committee.
take work home with them.
leaves the office every day.

Задание № 3. Раскройте скобки, поставьте глагол в правильную форму.

I (to prepare) a sales report four times a year.
It (to take) many dedicated people to run a company.
They (to type) the invoices for each customer.
She (to consider) several options before deciding.

Задание № 4. Выберите правильные формы глагола.

The personnel department ________ job applicants.

a) screens b) has been screening c) has screened

Bank tellers ________ thousand of dollars each day.

a) handle b) are handing c) have handled

The loan officer ________ credit references.

a) is checking b) checks c) has checked

Задание № 5. Напишите предложение в страдательном залоге.

Each of the representatives cover pert of the district.
The coordinator of the project schedules meetings.
Owners of the personal computers buy many kinds of software.

Задание № 6. Переведите предложения с русского на английский язык.

Если бы правление приняло решение, мы бы узнали об этом первыми.
Если бы г-н Кен уехал в Нью-Йорк сегодня, он бы успел на конференцию.
Если Ваши планы изменятся, позвоните мне.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 2, 3, 4 абзацев.

MEASURING ECONOMIC ACTIVITY

There are a large number of statistics produced regularly on the operation of the world's major economies. The UK's economy is no exception in this respect. You will probably have noticed that often the headlines in newspapers or important items on television news programmes relate to economic data and the implications for individuals and businesses. A prime example of this occurs when interest rates are increased: the media responds by highlighting the adverse effects on businesses with debts and householders with mortgages.

Data is provided on a wide range of aspects of the economy's operation. Statistics are available to show.

the level of unemployment
the level of inflation
a country's trade balance with the rest of the world
production volumes in key industries and the economy as a whole
the level of wages
raw material prices, and so forth.

The main statistics illustrating the economy's behaviour relate to the level of activity in the economy. That is, they tell us whether the economy is working at fall capacity using all or nearly all, available resources of labour, machinery and other factors of production or whether these resources are being under-utilized.

The unemployment figures for the economy give an indicator of the level of activity. As the .economy moves towards a recession and a lower level of prosperity it is likely that unemployment figures will rise. An alternative measure of the level of activity is national income statistics, which show the value of a nation's output during a year. Economists use the term Gross National Product to describe this data. Changes in the level or trends of such key data have great significance for businesses, as we shall see later.

There are numerous sources of data on the economy of which we can make use. The government publishes much through the Treasury, Department of Trade and Industry, the Bank of England and the Department of Employment. The Central Statistical Office, which was established during the Second World War, publishes about half of the government's economic data.

Much of this is contained in its annual publication, "The Annual Abstract of Statistics". It also publishes the equally valuable "Social Trends" annually. Additionally, private organizations, such as the banks, building societies and universities, publish figures on various aspects of the economy's performance.

Economic statistics are presented in many forms, the most common being graphs and tables. Although these statistics can be valuable in assisting managers, they should be treated with some caution when predicting the future trend of the economy and thus helping the business to take effective decisions.

Answer the questions:

1. Why does the media relate to economic data and the implications for individuals and businesses?

2. What aspects of the economy's operation are statistics available to show?

3. What do statistics show?

4. What are the sources of data on the economy in the UK? In Russia?

5. What is the GNP?

6. Why should statistics be treated with some caution?

КОНТРОЛЬНАЯ РАБОТА № 1

Вариант № 3

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Учебное пособие: И.И. Воронцова "Английский язык для студентов экономических факультетов". Стр. 21-24.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык

income is shared around; income doesn't just cover the necessities of life; to suggest an answer to the question; to direct the production towards the goods and services; individual governments

Задание № 2. Вставьте вместо пропусков подходящие по смыслу слова

1. You have __, that is what you earn in a year.

2. Your income doesn't just __ the necessities of life.

3. It includes __, whether that's sport or TV or a holiday.

4. __ is the sum total of the incomes of all the people living in that country.

Задание № 3. Найдите английские эквиваленты следующих словосочетаний:

распределение доходов; ежегодный доход; определенный уровень жизни; национальный доход; мировой доход; доля национального дохода; доход на душу населения; процент мирового населения; страны со средним уровнем дохода; неравное распределение доходов.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова

statistician, capturing, owner, gather, effort, determine, investing, analyse

MARKET ANALYSIS

For small business to be successful, the … must know the market. To learn the market, you must … it, a process that takes time and …. . You don’t have to be a trained … to analyse the market place nor does the analysis have to be costly.

Analysing the market is a way to … facts about potential customers and to … the demand for your product or service. The more information you gather, the greater your chances of … a segment of the market. Know the market before … your time and money in any business venture.

Часть 2 Грамматика

The important letter.
A large order from Japan.
The store at the corner.
The insurance agency.

Задание № 2. Образуйте из следующих фрагментов законченные предложения, включив в каждый из них один или несколько подходящих по смыслу подлежащих.

reads the Wall Street Journal.
travel to New York often.
prepares income tax returns.
programs the computer.

Задание № 3. Раскройте скобки, поставьте глагол в правильную форму.

He (to hire) several new employees each year.
She (to study) each proposal carefully.
The clerks (to file) the deeds.
The secretary (to type) all of our correspondence.

Задание № 4. Выберите правильные формы глагола.

Our training manuals ________ the latest information.

a) contains b) containing c) contain

Interoffice memos ________ valuable time.

a) are saving b) have saved c) save

The insurance agency ________ just each claim.

a) process b) has processed c) processed

Задание № 5. Напишите предложение в страдательном залоге.

The auditor from the finance department audits the books.
The editor in the acquisitions department edits manuscripts.
The board of governors sets the agenda.

Задание № 6. Переведите предложения с русского на английский язык.

Если бы наш отдел купил новый компьютер, у нас бы не было проблем.
Если Вы напечатаете это письмо сразу, я буду Вам очень благодарен.
Если Вы примите решение, позвоните нам.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 2 и 3 абзацев.

INCOME

The second of the three economic issues is the question of income, that is, income distribution, the way in which income - that's what people earn - is distributed or Shared around.

You, and your family, have an income. You have an annual income, that is what you earn in a year. This income allows you to enjoy various goods and services. It means you have a certain standard of living. Your standard of living, of course, includes what you think of as necessary to your life, things like food, water, somewhere to live, health and education. But your income doesn't just cover the necessities of life. It also includes recreation, whether that's sport or TV or a holiday. Your income will be less than some of your neighbours', but it will be more than some of your other neighbours'. Your neighbours mean not just people living in your own country, but also people living in other countries.

Just as you and your family have an income, so nations, different countries, also have an income - the national income, it's often called. A national income is not the money the government gets. The national income is the sum total of the incomes of all the people living in that country, in other words, everyone's income added together. In the same way one can think of world income as the total of all the incomes earned by all the people in the world.

Concerning the distribution of national and world income, some questions are to be asked: who, in the world, gets what share of these incomer The distribution of income, either in the world or in a country, tells us how income is divided between different groups or individuals. Table 1 shows the distribution of world income. There are three headings down the left-hand side of the table: income per head, percentage of world population and percentage of world income. In poor countries, like India, China and the Sudan, the income per head is only one hundred and fifty-five pounds per year. But at the same time, they have fifty point seven per cent of the world's population. These poor countries only have five per cent of the world's income.

In middle-income countries the income per head is eight hundred and forty pounds, that's in countries like Thailand and Brazil. In the major oil countries, like Kuwait and Saudi Arabia, it's seven thousand, six hundred and seventy. In industrial countries it's six thousand, two hundred and seventy.

Turning to middle-income countries again, they have twenty-five point one per cent of world population, with fourteen point two per cent of world income. The major oil countries have point four per cent of population, the industrial countries fifteen point six. The oil countries have one point five per cent of world income, the industrial countries sixty-four point eight.

The first economic question is for whom does the world economy produce? As the table shows, it produces essentially for the people living in the rich industrial countries. They get sixty per cent of the world's income, although they only have sixteen per cent of its population. This suggests an answer to the second question, that is of what is produced. The answer is that most of world production will be directed towards the goods and services that these same rich industrialised countries want.

The third question is haw goods are produced. In poor countries, with little machinery, not very much technical training and so on, workers produce much less than workers in rich countries. And poverty is very difficult to escape. It continues on and on. And this goes some way towards accounting for the differences in national incomes. It accounts for an unequal distribution of income, not just between countries but also between members of the same country, although there individual governments can help through taxation. In other words, governments can act to help distribute income throughout their population.

Заполнить таблицу сведениями из текста

Table 1. The distribution of world income

Poor countries

Middle-income countries

Major oil countries

Industrial countries

Soviet bloc

Income per head

% of world

population %

of world

income

КОНТРОЛЬНАЯ РАБОТА

Вариант № 4

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Учебное пособие: И.И. Воронцова "Английский язык для студентов экономических факультетов". Стр. 34-37.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык

ach factory is set a production target to meet; to divert resources to wherever it wants; new ideas rarely come forward; tend to be slow when responding to changes

Задание № 2. Замените слова, выделенные курсивом синонимами

obsolete products; it can ensure that...; it can. be very inefficient

There is no incentive for individuals to work hard in planned economies.

It led to many nations abandoning planned economies over recent years.

Задание № 3. Вставьте вместо пропусков подходящие по смыслу слова

1. An economic system is the way in which a country uses its __ to satisfy the demands of__ for goods and services.

2. The actual system employed planned economies have __.

3. There is no __ for individuals to work hard in planned economies.

4. Planners are likely __ some items as they cannot __ changes in demand.

Задание № 4. Найдите английские эквиваленты следующих словосочетаний:

имеющиеся в распоряжении ресурсы; управлять использованием ресурсов; управление экономикой; отказываться от плановой экономики; иметь высокий жизненный уровень; иметь общие черты; полученная прибыль; реагировать на изменения спроса.

Задание № 5. Вставьте вместо пропусков подходящие по смыслу слова

entrepreneurs, fail, sufficient, funds, reasons, dilemma, operate

FINANCES

A large number of small businesses ... each year. There are a number of … for these failures, but one of the main reasons is insufficient … . Too many … try to start-up and … a business without … capital (money). To avoid this … , you can review your situation by analyzing these three questions.

How much money do you have?
How much money will you need to start your business?
How much money will you need to stay in business?

Часть 2 Грамматика

The man next door.
The new sales representative.
The department's manager.
The expensive computer system.

runs for office.
sorts the office mail.
sells the most cars.
drive to work every day.

Задание № 3. Раскройте скобки, поставьте глагол в правильную форму.

He always (to check) the bulletin board for messages.
I (to like) taking the train to work.
He often (to enter) the figures into the computer.
They (to review) the budget every quarter.

Задание № 4. Выберите правильные формы глагола.

Accountants ________ our books every year.

a) review b) have reviewed c) are reviewing

Last morning the editor ________ each manuscript.

a) had revised b) revised c) had been revising

Recently trainees ________ three hours of instruction with the new software.

a) received b) receive c) had received

Задание № 5. Напишите предложение в страдательном залоге.

The leader of the group makes the decision.
This organization gathers the managers from various districts for a meeting once a year.
The representative in our office oversees the department.

Задание № 6. Переведите предложения с русского на английский язык.

Если бы управляющий принял на работу курьера, мы могли бы не испытывать трудностей.
Если Вы увидите торговых представителей на заседании, попросите их зайти ко мне в кабинет.
Если бы у меня было сейчас хоть немного свободного времени, я бы помог Вам.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 6, 7, 8 абзацев.

ECONOMIC SYSTEMS

There are a number of ways in which a government can organize its economy and the type of system chosen is critical in shaping environment in which businesses operate.

An economic system is quite simply the way in which a country uses its available resources (land, workers, natural resources, machinery etc.) to satisfy the demands of its inhabitants for goods and services. The more goods and services that can be produced from these limited resources, the higher the standard of living enjoyed by the country's citizens.

There are three main economic systems: planed economics, market economics, mixed economics.

Planned economics (Плановая экономика)

Planned economies are sometimes called "command economies" because the state commands the use of resources (such as labour and factories) that are used to produce goods and services as it owns factories, land and natural resources. Planned economies are economies with a large amount of central planning and direction, when the government takes all the decisions, the government decides production and consumption. Planning of this kind is obviously very difficult, very complicated to do, and the result is that there is no society, which is completely a command economy. The actual system employed varies from state to state, but command or planned economies have a number of common features.

Firstly, the state decides precisely what the nation is to produce. It usually plans five years ahead. It is the intention of the planners that there should be enough goods and services for all.

Secondly, industries are asked to comply with these plans and each industry and factory is set a production target to meet. If each factory and farm meets its target, then the state will meet its targets as set out in the five-year plans. You could think of the factory and farm targets to be objectives which, if met, allow the nation's overall aim to be reached.

A planned economy is simple to understand but not simple to operate. It does, however, have a number of advantages:

Everyone in society receives enough goods and services to enjoy a basic standard of living.
Nations do not waste resources duplicating production.

The state can use its control of the economy to divert resources to wherever it wants. As a result, it can ensure that everyone receives a good education, proper health care or that transport is available.

Several disadvantages also exist. It is these disadvantages that have led to many nations abandoning planned economies over recent years:

There is no incentive for individuals to work hard in planned economies.
Any profits that are made are paid to the government.
Citizens cannot start their own businesses and so new ideas rarely come forward.
As a result, industries in planned economies can be very inefficient. A major problem faced by command or planned economies is that of deciding what to produce. Command economies tend to be slow when responding to changes in people's tastes and fashions. Planners are likely to under produce some items as they cannot predict changes in demand. Equally, some products, which consumers regard as obsolete and unattractive, may be overproduced. Planners are afraid to produce goods and services unless they are sure substantial amounts will be purchased. This leads to delays and queues for some products.

Answer the questions:

1. What's an economic system?

2. What does a standard of living depend on?

3. What's a planned economy? What are its main features?

4. Give the advantages of a planned economy.

5. Give the disadvantages of a planned economy.

КОНТРОЛЬНАЯ РАБОТА

Вариант № 5

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов". Стр. 37 - 41

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: Модальные глаголы. Инфинитив. Образование форм инфинитива. Функции инфинитива. Оборот "объектный падеж с инфинитивом", " именительный падеж с инфинитивом", "For + сущ. (местоимение) + инфинитив".

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык.

New advanced products; products which are favoured; provide free or subsidized supplies; produce goods and then advertise heavily; a decline in the prosperity of the nation.

Задание № 2. Замените слова, выделенные курсивом синонимами.

Business owned and run by the state; products and services which are favoured ;at first view ; production alters swiftly.

Задание № 3. Найдите в тексте английские эквиваленты следующих словосочетаний.

Управление экономикой ; процветание нации ; принимать законы ; быстро меняться ; конкурирующие фирмы ; частные фирмы ; сокращать производство ; дорого платить за что-либо.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова.

Переписка по вопросам рекламы.

information placing readership opportunity reply advertisements offered advertising

Dear Sirs,

In your letter of 23^rd January, this year, you ……….us your services in ……… our clients' advertisements in magazines published in France.

Our clients welcome the ……… and should be glad to have full ………. about the magazines in which you intend to place their ……….. . In particular they want to know the …………, circulation and one-time ……….. rates.

A prompt ………will be appreciated.

Yours faithfully.

Часть 2 Грамматика

Задание № 1. Вставьте вместо пропусков модальные глаголы. Предложения переведите на русский язык.

I …… easily carry this trunk to the station.

a) can b) have to c) may

He said that he was not in the hall but he……… be in his study.

a) must b) might c) may

He said that he……… ship the goods in September.

a) has to b) could c) is to

Задание № 2. Переведите предложения с русского на английский язык.

Мне пришлось остаться дома вчера, так как у меня было очень много работы.
Делегация должна прибыть завтра.
Вам не следует брать кредит сейчас.

Задание № 3. Напишите следующие предложения в прошедшем и будущем времени.

We can offer you advertising materials and technical specifications.
They must be at the meeting at 5 p. m.

Задание № 4. Переведите следующие предложения на русский язык. Определите формы и функции инфинитива.

Procter & Gamble's controversial move to buy up shares from Novomoskovskbytkhim has attracted strong criticism.
It will give them control over the company, not to develop production but to eliminate all competition in the Russian market.

Задание № 5. Переведите следующие предложения на английский язык.

Никто не хочет, чтобы собрание откладывали.
Необходимо, чтобы документы были отосланы сегодня.
Говорят, что он очень опытный менеджер.

4. Он приказал секретарю тщательно проверить документы .

Часть 3.

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ECONOMIC SYSTEMS

There are a number of ways in which a government can organize its economy and the type of system chosen is critical in shaping environment in which businesses operate.

There are three main economic systems: planed economics, market economics, mixed economics.

Market economics

The best examples of this type of economy are to be found in small South-East Asian states like Hong Kong and Singapore, though even they are not pure examples of market economies. Even they contain some businesses owned and run by the state.

In a true market economy the government plays no role in the management of the economy, the government does not intervene in it. The system is based on private enterprise with private ownership of the means of production and private supplies of capital, which can be defined as surplus income available for Investment in new business activities. Workers are paid wages by employers according to how skilled they are and how many firms wish to employ them. They spend their wages on the products and services they need. Consumers are willing to spend more on products and services, which are favoured. Firms producing these goods will make more profits and this will persuade more firms to produce these particular goods rather than less favoured ones.

Thus, we can see that in a market economy it is consumers who decide what is to be produced. Consumers will be willing to pay high prices for products they particularly desire. Firms, which are privately owned, see the opportunity of increased profits and produce the new fashionable and favoured products.

 Such a system is, at first view, very attractive. The economy adjusts automatically to meet changing demands. No planners have to be employed, which allows more resources to be available for production. Firms tend to be highly competitive in such an environment. New advanced products and low prices are good ways to increase sales and profits. Since all firms are privately owned they try to make the largest profits possible. In a free market individual people are free to pursue their own Interests. They can become millionaires, for ^example. Suppose you invent a new kind of car. You want to make money out of it in your own interests. But when you have that car produced, you are in fact moving the production possibility frontier outwards. You actually make the society better-off by creating new jobs and opportunities, even though you become a millionaire in the process, and you do it without any government help or intervention.

Not surprisingly there are also problems. Some goods would be under purchased if the government did not provide free or subsidised supplies. Examples of this type of good and service are health and education. There arc other goods and services, such as defence and policing, that are impossible to supply individually in response to consumer spending. Once defence or a police force is supplied to a country then everyone in this country benefits.

A cornerstone of the market system is that production alters swiftly to meet changing demands. These swift changes can, however, have serious consequences. Imagine a firm, which switches from labour-intensive production to one where new technology is employed in the factory. The resulting unemployment could lead to social as well as economic problems.

In a market economy there might be minimal control on working conditions and safety standards concerning products and services. It is necessary to have large-scale government intervention to pass laws to protect consumers and workers.

Some firms produce goods and then advertise heavily to gain sufficient sales. Besides wasting resources on advertising, firms may also duplicate one another's services. Rival firms, providing rail services, for example, could mean that two or more systems of rail are laid.

Finally, firms have to have confidence in future sales if they are to produce new goods and services. At certain times they tend to lack confidence and cut back on production and the development of new ideas. This decision, when taken by many firms, can lead to a recession. A recession means less spending, fewer jobs and a decline in the prosperity of the nation.

Answer the questions:

1. What's a market economy?

2. What's the main difference between a market economy arid a planned economy?

3. Do changing demands affect production? In what way?

4. What's the mechanism of producing goods and services in a market economy?

КОНТРОЛЬНАЯ РАБОТА

Вариант № 6

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов". Стр. 41 – 44.

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык.

An intermediate system has developed; to supply essential items ; the government controls a share of the output.

Задание № 2. Замените слова, выделенные курсивом синонимами.

Significant faults; a range of products; whilst others are used in response to the demands of consumers.

Задание № 3. Найдите в тексте английские эквиваленты следующих словосочетаний.

Избегать недостатков; частный сектор; налогообложение; централизованно принимать экономические решения; пользоваться благами.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова.

Переписка по вопросам страхования

delivered indemnified suggested risks discuss draw terms

Dear Sirs,

We have received your letter of March 3, this year, in which you ask us to change the …….. of insurance of equipment, ………… by us in the draft contract for the delivery of the equipment for the machinebuilding plant. You suggest that contract should provide insurance of the equipment against any kinds of ……. .

We …… your attention to the fact that Ingosstrakh does not insure equipment ………. to your ports against any kinds of risks. We know that insurance against different kinds of risks can be done with the LONDON INSURANCE COMPANY.

As to insurance against definite risks losses are …………. depending on the term of an insurance contract.

We are ready to ……. once again the terms or insurance.

Yours faithfully.

Часть 2 Грамматика

Задание № 1. Вставьте вместо пропусков модальные глаголы. Предложения переведите на русский язык.

Such defects…… easily lead to a serious breakdown of the machine.

a) must b) may c) can

Why did you stop at a hotel? You……. have spent the night at my home.

a) may b) could c)can

The expert pointed out that the goods…….. already have been in a bad condition at the time of dispatch.

a) can b) must c) may

Задание № 2. Переведите предложения с русского на английский язык.

Нам придется проверить счета еще раз.
Пароход должен был придти в Одессу 15 сентября, но из-за шторма он вынужден был зайти в Новороссийск и поэтому прибыл в Одессу на два дня позже.
Этот вопрос следовало обсудить на прошлом собрании.

Задание № 3. Напишите следующие предложения в прошедшем и будущем времени.

They can't fulfill terms of the contract.
We must walk fast to get to the station in time.

Задание № 4. Переведите следующие предложения на русский язык. Определите формы и функции инфинитива.

The town will go into decline, there will be less competition to help raise standards.
This "instruction into the Russian market" may have to be fought by the company's lawyers whom the federation will support in order to protect the interests of the workers.

Задание № 5. Переведите следующие предложения на английский язык.

Я хочу, чтобы вы отправили факс сейчас.
Нам очень трудно получить эти сведения.
Сообщают, что фирма С & D разорилась.
Представитель фирмы просил послать документы электронной почтой.

Часть 3.

Прочитайте и переведите текст. Дайте письменный перевод отмеченных абзацев.

Письменно ответьте на вопросы.

ECONOMIC SYSTEMS

There are a number of ways in which a government can organize its economy and the type of system chosen is critical in shaping environment in which businesses operate.

There are three main economic systems: planed economics, market economics, mixed economics.

Mixed economics

Command and market economies both have significant faults. Partly because of this, an intermediate system has developed, known as mixed economies.

A mixed economy means very much what it says as it contains elements of both market and planned economies. At one extreme we have a command economy, which does not allow individuals to make economic decisions, at the other extreme we have a free market, where individuals exercise considerable economic freedom of choice without any government restrictions. Between these two extremes lies a mixed economy. In mixed economies some resources are controlled by the government whilst others are used in response to the demands of consumers.

Technically, all the economies of the world are mixed: it is just the balance elements between market and planned elements that alters. Some countries are nearer to command economies, while others are closer to free market economies. So, for example. Hong Kong has some state-controlled industry, while Cuba has some privately owned and controlled firms.

The aim of mixed economies is to avoid the disadvantages of both systems while enjoying the benefits that they both offer. So, in a mixed economy the government and the private sector Interact in solving economic problems. The state controls the share of the output through taxation and transfer payments and intervenes to supply essential items such as health, education and defence, while private firms produce cars, furniture, electrical items and similar, less essential products.

The UK is a mixed economy: some services are provided by the state (for example, health care and defence) whilst a range of privately owned businesses offers other goods and services. The Conservative government under Margaret Thatcher switched many businesses from being state-owned and controlled to being privately owned as part of its privatisation programme. This has taken the UK economy further away from the planned system.

Answer the questions:

1. Are there really pure examples of planned and market economies in the world?

2. What's a mixed economy? What's its aim?

3. What type of economy is the UK? Is Russia now?

КОНТРОЛЬНАЯ РАБОТА

Вариант № 7

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов". Стр. 44 –49.

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык.

1. a single living entity with a single conscious mind ; a shorthand expression ; to be reconciled by adjustment of smth ; a suitable part – time job; to offer high wages.

Задание № 2. Замените слова, выделенные курсивом синонимами.

at a distance; of the neighbourhood; carried out ; buy ; managing ; put up .

Задание № 3. Найдите в тексте английские эквиваленты следующих словосочетаний.

Поведение рынка; рынок ценных бумаг; проводить сделку; прибыльно продавать; неквалифицированная работа ; распределять ресурсы посредством системы цен.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова.

Переписка по вопросам медицинского обслуживания

Dear Sirs,

In your letter of 15 July, this year, you write that our …….as Contractor will include ………….all personnel on the construction site with medical services.

In view of this we would like to …….the matter up as follows.

We are prepared to provide all personnel on the construction site, including local labour, with first aid. For this we will …………a first - aid dispensary at the construction site staffed with the required personnel and ……….with modern facilities.

As to medical treatment of Russian specialists and their dependents we believe that all………., including the cost of medicines and hospitalization expenses should be borne by the Customer.

We look ………to your letter confirming these point.

Yours faithfully.

Часть 2 Грамматика

Задание № 1. Вставьте вместо пропусков модальные глаголы. Предложения переведите на русский язык.

The expert admits that the goods…….. have been damaged in transit.

a) could b) may c) can

I said that the manager…….. not have missed the train.

a) must b) could c) may

The goods were packed in strong boxes so that they……. withstand oversea transport.

a) have to b) might c) must

Задание № 2. Переведите предложения с русского на английский язык.

Эти документы следовало послать в министерство вчера.
Согласно контракту, товары должны быть доставлены не позже 1 сентября.
Я должен был закончить эту работу вчера, но не смог этого сделать. Мне придется закончить ее сегодня.

Задание № 3. Напишите следующие предложения в прошедшем и будущем времени.

We can discuss terms of payment.
Our department must work out a new project.

Задание № 4. Переведите следующие предложения на русский язык. Определите формы и функции инфинитива.

We are implementing a $ 50 million investment programme in order to modernize and expand production.
Russian companies are hard pushed to compete with the experience, quality and standard of service demonstrated by their western counterparts.

Задание № 5. Переведите следующие предложения на английский язык.

Мы хотим, чтобы вы сообщили нам свои условия.
Вам необходимо быть здесь завтра в 5 часов вечера.
Вероятно, компания нашла нового дистрибьютора.
Они попросили сообщить им о прибытии груза.

Часть 3.

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Письменно ответьте на вопросы

MARKETS

The Role of Market

Reports in the press tend to say "the market did this" or "the market expected good news on the economic front", as if the market were a single living entity with a single, conscious mind. This is not, of course, the case. To understand reports of market behaviour you have to bear in mind the way the market works.

A market is simply a mechanism, which allows individuals or organizations to trade with each other. Markets bring together buyers and sellers of goods and services. In some cases, such as a local fruit stall, buyers and sellers meet physically. In other cases, such as the stock market, business can be transacted over the telephone, almost by remote control. There's no need to go info these details. Instead, we use a general definition of markets.

 A market is a shorthand expression for the process by which households' decisions about consumption of alternative goods, firms' decisions about what and how to produce, and workers' decisions about how much and for whom to work are all reconciled by adjustment of prices.

Prices of goods and of resources, such as labour, machinery and land, adjust to ensure that scarce resources are used to produce those goods and services that society demands.

Much of economics is devoted to the study of how markets and prices enable society to solve the problems of what, how and for whom to produce. Suppose you buy a hamburger for your lunch. What does this have to do with markets and prices? You chose the cafe because it was fast, convenient and cheap. Given your desire to eat, and your limited resources, the low hamburger price told you that this was a good way to satisfy your appetite. You probably prefer steak but that is more expensive. The price of steak is high enough to ensure that society answers the "for whom" question about lunchtime steaks in favour of someone else.

Now think about the seller's viewpoint. The cafe owner is in business because, given the price of hamburger meat, the rent and the wages that must be paid, it is still possible to sell hamburgers at a profit. If rents were higher, it might be more profitable to sell hamburgers in a cheaper area or to switch to luxury lunches for rich executives on expense accounts. The student behind the counter is working there because it is a suitable part-time job, which pays a bit of money. If the wage were much lower it would hardly be worth working at all. Conversely, the job is unskilled and there are plenty of students looking for such work, so owners of cafes do not have to offer very high wages.

Prices are guiding your decision to buy a hamburger, the owner's decision to sell hamburgers, and the student's decision to take the job. Society is allocating resources — meat, buildings, and labour — into hamburger production through the price system. If nobody liked hamburger's, the owner could not sell enough at a price that covered the cost of running the cafe and society would devote no resources to hamburger production. People's desire to eat hamburgers guides resources into hamburger production. However, if cattle contracted a disease, thereby reducing the economy's ability to produce meat products, competition to purchase more scarce supplies of beef would bid up the price of beef, hamburger producers would be forced to raise prices, and consumers would buy more cheese sandwiches for lunch. Adjustments in prices would encourage society to reallocate resources to reflect the increased scarcity of cattle.

There were several markets involved in your purchase of a hamburger. You and the cafe owner were part of the market for lunches. The student behind the counter was part of the local labour market. The cafe owner was part of the local wholesale meat market and the local market for rented buildings. These descriptions of markets are not very precise. Were you part of the market for lunches, the market for prepared food or the market for sandwiches to which you would have turned if hamburgers had been more expensive? That is why we have adopted a very general definition of markets, which emphasizes that they are arrangements through, which prices influence the allocation of scarce resources.

Answer the questions:

1. What example is given of a market where sellers and buyers actually meet?

2. How are households' decisions on what to buy reconciled?

3. Why do prices adjust?

4. What problems do markets and prices solve for society?

КОНТРОЛЬНАЯ РАБОТА

Вариант 8

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов". Стр. 85 –88.

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: Модальные глаголы. Инфинитив. Образование форм инфинитива. Функции инфинитива. Оборот "объектный падеж с инфинитивом", " именительный падеж с инфинитивом", "For + сущ. (местоимение) + инфинитив".

Часть 1 Лексика

Задание № 1. Переведите словосочетания на русский язык.

withdrawals which are not passed on as spending as UK firms; job security ; generations placed great store by saving; will remove those funds from the domestic circular flow and will cause a decrease; the tax revenue.

Задание № 2. Замените слова, выделенные курсивом синонимами

decisions are taken in response to economic uncertainty; consume durable goods; will cause a decrease on the level of economic activity; earnings from export have been insufficient.

Задание № 3. Найдите в тексте английские эквиваленты следующих словосочетаний.

доходы от сбережений; в конце концов; на том основании; налог на добавленную стоимость; акцизный сбор; восполнять.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова.

Переписка по вопросам поставки запасных частей.

suit technology produced contract started advantages consider deliver

Dear Sirs,

This is to advise you that we will no longer be able to …… you spare parts № 0376.The point is that these spare parts are no longer…… . The manufacturing plant has …….the production of a more updated type which is in full conformity with the latest…… .

The spare parts to be supplied in the future have a number of……. . One of them is the fact that the offered model is more reliable in operation.

We ask you to…… our offer and if you have any remarks we will be ready to discuss them.

We hope that our proposal will ……you. We will adjust the cost of the spare parts under the present ……on the basis mutually agreed upon.

Yours faithfully.

Часть 2 Грамматика

Задание № 1. Вставьте вместо пропусков модальные глаголы. Предложения переведите на русский язык.

When he was in a business trip he…….. solve this question.

a) had to b) could c) must

Your department……… have fulfilled this work in time.

a) must b) might c) could

The steamer……. arrive tomorrow morning.

a) must b) may c) has to

Задание № 2. Переведите предложения с русского на английский язык.

Нам надо будет зафрахтовать еще один пароход.
Я должен встретиться с представителем фирмы Intell.
Вам следует отослать письмо сегодня.

Задание № 3. Напишите следующие предложения в прошедшем и будущем времени.

We can discuss prices
The agent must be at work at 9 a. m.

Задание № 4. Переведите следующие предложения на русский язык. Определите формы и функции инфинитива.

I will give them control over the company, not to develop production but to eliminate all competition in the Russian market.
The town will go into decline, there will be less competition to help raise standards.

Задание № 5. Переведите следующие предложения на английский язык.

Я хочу, чтобы вы пошли в офис и поговорили с директором.
Очень трудно разработать новый вид товара в короткий срок.
Кажется, он взял кредит в банке.
Он просил показать ему образцы товаров

Часть 3.

Прочитайте и переведите текст. Выполните письменный перевод отмеченных абзацев.

Письменно ответьте на вопросы.

WITHDRAWALS

Withdrawals (or leakages) are that part of the circular flow, which are not passed on as spending with UK firms. This is income, which individuals, firms or governments take out of the circular flow with the likely result that the level of economic activity in the economy declines. The three forms that withdrawals can take are:

Savings
Imports
Taxation

 Savings.

Both businesses and individual citizens can take the decision not to spend all of the income that they receive. A number of factors are thought to determine the level of savings at any one time. Interest rates obviously influence the saver's decision since they represent the return on his or her savings. Many economists believe that decisions to save are taken in response to periods of economic uncertainty: the more worried people are about interest rates, job security and so on, the more they are likely to save. Alternatively, there is evidence that when money is losing value quickly, as in a period of inflation, people tend to purchase consumer durable goods such as televisions and washing machines.

Another factor is social change. Previous generations placed great store by saving in order to carry out major purchases; this is less common today perhaps due to the ready availability of credit.

Imports.

You will know that expenditure by UK inhabitants on goods and services imported from abroad -will remove those funds from the domestic circular flow and will cause a decrease in the level of economic activity. Periodically, the UK has spent too freely on imports and earnings from exports have been insufficient to cover this. Many factors encourage us to purchase imports: some are favourable to the economy in the long term, whilst others are harmful. If imports of raw materials increase due to the growth of a domestic industry, then this indicates an expanding economy, which should sell more exports in the future in order to pay for the increased expenditure. However, if the imports are the consequence of UK citizens preferring foreign goods on grounds of, for example, price or quality, then the impact may be harmful as jobs are lost in domestic industries.

Answer the questions:

1. What are withdrawals? Name their forms.

2. When do people decide to save?

3. What is the reason for purchasing imports?

4. Why can buying imports be harmful?

5. What are direct and indirect taxes?

6. Why did the Conservative government reduce direct taxes in the 1980s and increase indirect ones?

КОНТРОЛЬНАЯ РАБОТА

Вариант 9

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов".

Грамматика: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: " Герундий", " Причастие".

Часть 1 Лексика

I. Дайте русские эквиваленты английским словосочетаниям:

inflation varies considerably in its extent and severity; mild inflation of a few%; rate of inflation; insurmountable problems: demand-pull inflation

II.Замените слова, выделенные курсивом синонимами

a persistent rise; hence; may pose few difficulties; at length; inflation occurs when; firms face increasing costs; owing to trade union militancy

III. Найдите в тексте английские эквиваленты следующих словосочетаний:

повышение спроса (покупательной способности); гиперинфляция; запросы опережают возможности экономики; предложить товары и услуги

IV. Вставьте вместо пропусков подходящие по смыслу слова:

1. No matter how much work a man can do, no matter how engaging his personality may be, he will not _____ far in business if he cannot ______ through others. ( advance, run, work, rest )

2. A good idea that is not shared with others will gradually fade away and bare no _____, but when it is shared it lives forever because it is passed on from one _____ to another and grows as it goes. ( fruit, sweets, person, director)

3. Every young man would do well to remember that all successful business_____ on the foundation of _____.

( stands, hangs, morality, money)

Часть 2 Грамматика

Допишите предложения, употребляя герундий.

I couldn't help………… .

I am tired of ………….. .

He left the room without ………. .

2. Замените придаточные предложения оборотами с герундием, поставив, где требуется , соответствующий предлог.

1. When I received a telegram, I started home at once.

2. You may avoid many mistakes if you consult the specialist.

3. When he entered the room he greeted everybody.

3. Переведите предложения на русский язык, укажите форму причастия и определите, в какой функции оно употреблено:

1. The article on agriculture published in this magazine was written by me.

2. While examining the cases discharged from the ship, he noticed that some of them were broken.

3. The man speaking over the telephone is the manager of this firm.

4. Переведите предложения с русского на английский язык.

1. Я еще не просмотрел всех каталогов, присланных нам из Англии.

2. Машины, заказанные на московском заводе, прибудут через несколько дней.

3. Машинистка уже напечатала все письма, написанные менеджером.

5. Напишите заключительную часть делового письма:

Dear Mr. Nikitin:

Mr. P. Brown, Managing Director of SNOW AND ICE INTERNATIONAL, and I are planning a small dinner party in honor of John White, Chairman of the Board and James Green, Executive Vice President and Chief Financial Officer of the American ICE AND SNOW COMPANY. The dinner will be held at the INTERICE INN, Los Angeles, beginning at 7.30 p.m. for 8.00 p.m. on Friday, June 25, and dress will be informal business attire.

……………………

With warm regards,

Simon Snow

Manager

Часть 3

Текст

Прочитайте и переведите текст. Дайте письменный перевод абзацев: "Demand-pull Inflation, Cost-push Inflation".

INFLATION

Inflation is generally defined as a persistent rise in the general price level with no corresponding rise in output, which leads to a corresponding fall in the purchasing power of money.

In this section we shall look briefly at the problems that inflation causes for business and consider whether there are any potential benefits for an enterprise from an inflationary period.

Inflation varies considerably in its extent and severity. Hence, the consequences for the business community differ according to circumstances. Mild inflation of a few per cent each year may pose few difficulties for business. However, hyperinflation, which entails enormously high rates of inflation, can create almost insurmountable problems for the government, business, consumers and workers. In post-war Hungary, the cost of living was published each day and workers were paid daily so as to avoid the value of their earnings falling. Businesses would have experienced great difficulty in costing and pricing their production while the incentive for people to save would have been removed.

Economists argue at length about the causes of, and "cures" for, inflation. They would, however, recognize that two general types of inflation exist:

* Demand-pull inflation

* Cost-push Inflation

Demand-pull Inflation.

Demand-pull inflation occurs when demand for a nation's goods and services outstrips that nation's ability to supply these goods and services. This causes prices to rise generally as a means of limiting demand to the available supply.

An alternative way that we can look at this type of inflation is to say that it occurs when injections exceed withdrawals and the economy is already stretched (i.e. little available labour or factory space) and there is little scope to increase further its level of activity.

Cost-push Inflation.

Alternatively, inflation can be of the cost-push variety. This takes place when firms face increasing costs. This could be caused by an increase in wages owing to trade union militancy, the rising costs of imported raw materials and components or companies pushing up prices in order to improve their profit ">

КОНТРОЛЬНАЯ РАБОТА

Вариант 10

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов".

Грамматика: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: " Герундий", " Причастие".

Часть 1 Лексика

I. Дайте русские эквиваленты английским словосочетаниям:

a steady rise in money profits produces favourable expectations; this cost will be falling in real terms; this viewpoint has gained in credence in government circles.

II.Замените слова, выделенные курсивом синонимами

a steady rise in money profits induces investment as firms seek to expand; rates are not considered to be ...; the conclusion must be drawn

III. Найдите в тексте английские эквиваленты следующих словосочетаний:

стимулировать капиталовложения; устанавливать цену; брать взаймы крупные суммы; настаивать, утверждать

IV. Вставьте вместо пропусков подходящие по смыслу слова:

Bank: an institution where you can _____ money if you can present sufficient evidence that you don't_____ it.

( borrow, steal, need, have)

2. Whatever you have, you must either____ or ____. (use, buy, lose, sell )

3. You cannot climb the _____ of success with your ____ in your pockets. ( ladder, building, hands, head )

Часть 2 Грамматика

Допишите предложения, употребляя герундий.

At last we succeeded in ……… .

She was prevented from ……. .

You should avoid ………. .

1. After they had sat there a few minutes, they continued their journey.

2. While the typist was copying the text, she made a few mistakes.

3. I am thankful that I have been stopped in time.

1. What do you call a ship built for the transportation of timber?

2. You can get the book recommended by our tutor in the library.

3. He asked her to go on with her story, promising not to interrupt her again.

4. Переведите предложения с русского на английский язык.

1. Все студенты, принимающие участие в этой работе, должны прийти в университет сегодня в 3 часа.

2. Имея много времени, он пошел на вокзал пешком.

3. Переходя через мост, я встретил менеджера по продажам фирмы DIOS.

5. Напишите заключительную часть делового письма:

Dear Mrs. Rain:

Mr. Nikitin, Manager of EXPORTSNOW, thanks you very much for the invitation to a dinner party at the INTERICE INN on July 25, in honor of the senior management of the American ICE AND SNOW COMPANY.

……………………………………………..

Yours sincerely,

Secretary to Mr. S. Nikitin.

Часть 3 Текст

Прочитайте и переведите текст. Дайте письменный перевод 2 и 3 абзацев.

CAN INFLATION BE BENEFICIAL

We would be simplifying the impact of inflation on business if we suggested that all effects were unfavourable. There is a school of thought, which argues that a low and stable rate of increase in the price level can be beneficial. It believes that a steady rise in money profits produces favourable expectations and induces investment as firms seek to expand. This action expands the economy as a whole. Paradoxically, inflation can also reduce the costs of businesses in the short run. Many enterprises incur costs, which are fixed for some period of time - for example, the rent of a factory may be fixed at a particular figure for a few years. At a time when the selling price of the firm's product, and hence its sales income, is rising this cost will be falling in real terms and thus stimulating the business.

There is a further argument that firms may be persuaded to borrow heavily in a period of inflation since the burden of repaying loans is reduced by inflation. If inflation is running annually at 10 per cent, for example, then the real value of the repayments of the loan will fall by approximately that amount each year. This may serve to encourage investment which, since it is an injection into the circular flow, will promote the level of activity. However, in these circumstances interest rates are likely to be high.

Government will accept that low rates of inflation are likely to exist in many economies. Inflation rates of 5 per cent or below are not considered to be too great a problem, especially if competitor nations are suffering similar rates.

In spite of the above, the conclusion must be drawn that inflation is, in general, harmful to business and its environment. Indeed, many economists would contend that inflation is the fundamental evil as its presence leads to lack of competitiveness and therefore relatively high unemployment and low rates of growth. This viewpoint has gained in credence in government circles over the last few years. It is for this reason that its control has been a major objective of government economic policy throughout the 1980s and early 1990s.

КОНТРОЛЬНАЯ РАБОТА

Вариант 11

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов".

Грамматика: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: " Герундий", " Причастие".

Часть 1 Лексика

I. Дайте русские эквиваленты английским словосочетаниям:

exchange labour services for money; a double coincidence of wants; spend a lot of time and effort; make mutually satisfactory swaps

II.Замените слова, выделенные курсивом синонимами

the vital feature of money; its purchasing power is worn away; the money is without value; time and effort are rare resources; private production of money is against the law

III. Найдите в тексте английские эквиваленты следующих словосочетаний:

средство платежа; средство обращения; мера стоимости; средство сбережения; обмениваться товарами и услугами;

покупательная способность

IV. Вставьте вместо пропусков подходящие по смыслу слова:

1.Business is always _____ with pleasure – but it ____ other pleasures possible. ( interfering, receiving, makes, shows)

2. Wealth is not only what you _____ but it is also what you ___ . (have, buy, are, must)

3. To my mind the best investment a young man starting out in business could possibly make is to ____ all his time , all his ____ to work , just plane , hard work. ( give, idle, energies , money)

Часть 2 Грамматика

Допишите предложения, употребляя герундий.

He read the report before……….. .

She has no intention of ………… .

He started ………….. .

1. I remember that I have read this article.

2. I don’t remember that I have ever come across his name before.

3. You can improve your knowledge of economics if you read more.

1. Not receiving any documents from the firm SUNRISE, she sent them a telegram.

2. The textile goods produced by the factory are in great demand.

3. He left the office at three o'clock, saying he would be back at five.

4. Переведите предложения с русского на английский язык.

1. Мы долго сидели в кабинете, разговаривая о предстоящей поездке.

2. В его статье есть много цифр, иллюстрирующих развитие нашей промышленности.

3. Он показал нам список товаров, экспортируемых этой фирмой.

4. Напишите заключительную часть делового письма:

Gentlemen:

In reply to your advertisement in today's "Moscow Magazine", I am interesting in becoming a salesman for your company.

As you can see from the enclosed curriculum vitae, I have some previous selling experience in various and very competitive fields. However I would like to charge to dealing with Snow making machines since I believe they offer a grater potential both in Europe and America.

……………………………………..

Yours faithfully,

Tom S. Star

Часть 3

Текст

Прочитайте и переведите текст. Дайте письменный перевод абзацев:1 и 2.

MONEY AND BANKING

Money and its Functions.

Although the crucial feature of money is its acceptance as the means of payment or medium of exchange, money has other functions. It serves as a standard of value, a unit of account, a store of value and as a standard of deferred payment. We discuss each of the functions of money in turn.

The Medium of Exchange.

Money, the medium of exchange, is used in one-half of almost all exchange. Workers exchange labour services for money. People buy and sell goods in exchange for money. We accept money not to consume it directly but because it can subsequently be used to buy things we do wish to consume. Money is the medium through, which people exchange goods and services.

To see that society benefits from a medium of exchange, imagine a barter economy.

A barter economy has no medium of exchange. Goods are traded directly or swapped for other goods.

In a barter economy, the seller and the buyer each must want something the other has to offer. Each person is simultaneously a seller and a buyer. In order to see a film, you must hand over in exchange a good or service that the cinema manager wants. There has to be a double coincidence of wants. You have to find a cinema where the manager wants what you have to offer in exchange.

Trading is very expensive in a barter economy. People must spend a lot of time and effort finding others with whom they can make mutually satisfactory swaps. Since time and effort are scarce resources, a barter economy is wasteful. The use of money - any commodity generally accepted in payment for goods, services, and debts - makes the trading process simpler and more efficient.

Other Functions of Money.

Money can also serve as a standard of value. Society considers it convenient to use a monetary unit to determine relative costs of different goods and services. In this function money appears as the unit of account, is the unit in which prices are quoted and accounts are kept.

In Russia prices are quoted in roubles; in Britain, in pounds sterling; in the USA, in US dollars; in France, in French francs. It is usually convenient to use the units in which the medium of exchange is measured as the unit of account as well. However there are exceptions. During the rapid German inflation of 1922 - 1923 when prices in marks were changing very quickly, German shopkeepers found it more convenient to use dollars as the unit of account. Prices were quoted in dollars even though payment was made in marks, the German medium o/exchange.

The situation in Russia nowadays reminds o/"that of in Germany.

Money is a store of value because it can be used to make purchases in the future.

To be accepted in exchange, money has to be a store of value. Nobody would accept money as payment for goods supplied today if the money was going to be worthless when they tried to buy goods with it tomorrow. But money is neither the only nor necessarily the best store of value. Houses, stamp collections, and interest-bearing bank accounts all serve as stores of value. Since money pays no interest and its real purchasing power is eroded by inflation, there are almost certainly better ways to store value.

Finally, money serves as a standard of deferred payment or a unit of account over time. When you borrow, the amount to be repaid next year is measured in pounds sterling or in some other hard currency. Although convenient, this is not an essential function of money. UK citizens can get bank loans specifying in dollars the amount that must be repaid next year. Thus the key feature of money is its use as a medium of exchange. For this, it must act as a store of value as well. And it is usually, though not invariably, convenient to make money the unit of account and standard of deferred payment as well.

КОНТРОЛЬНАЯ РАБОТА

Вариант 12

Прежде, чем приступить к выполнению контрольной работы, изучите материал учебника.

Лексика: И.И.Воронцова "Английский язык для студентов экономических факультетов".

Грамматика: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Разделы: " Герундий", " Причастие".

Часть 1 Лексика

I. Дайте русские эквиваленты английским словосочетаниям:

the distinguishing feature of money; in a monetary economy; the time and effort involved in undertaking transactions; a capital loss

II.Замените слова, выделенные курсивом синонимами

give rise to, to take advantage of the opportunity, to meet contingencies, to foresee, a more predictable rate of return

III. Найдите в тексте английские эквиваленты следующих словосочетаний:

наличность в обращении; денежные обязательства банка; текущий счет; трансакционный мотив накопления денег; получать доходы и производить платежи; портфель ценных бумаг

IV. Вставьте вместо пропусков подходящие по смыслу слова:

People forget how ___ you did a job – but they remember how ___ you did it . ( fast, long, well, good)
People are lonely because they build ____ instead of _____ . ( walls, buildings, bridges, tents )

3. Don't learn the _____ of the trade - learn the ____. ( tricks, enemies, trade, world)

Часть 2 Грамматика

Допишите предложения, употребляя герундий.

Have you finished ……….. ?

I couldn't prevent him from ….. .

He began his working day by…….. .

1. When I spoke over the telephone, I started home at once.

2. You can improve he situation if you consult the lawyer.

3. I remember that I have ordered these goods.

1. The steamship "Clyde", belonging to Smith & Co., was chartered by "Exportkhleb" for the transportation of wheat sold to a British firm in Liverpool.

2. Signing the letter the manager gave it to the secretary asking her to send it off at once.

3. Informed of the arrival of the vessel, they sent their agent to the port.

4. Переведите предложения с русского на английский язык.

1. Он сидел за столом, просматривая корреспонденцию, полученную накануне.

2. Человек, сидевший у окна, заполнял анкету.

4. Напишите заключительную часть делового письма:

Dear Mr. Nikitin:

I am writing in connection with your recent advertisement in MOSCOW MAGAZINE.

We are a small company making snow in California. At the moment we make snow using our own system but we would be interested in hearing more about your snow making machine SMM.

……………………………………

Sincerely,

Simon Snow

Manager

Часть 3

Текст

Прочитайте и переведите текст. Дайте письменный перевод абзацев: 2,3 и 4 .

THE MONEY SUPPLY AND THE DEMAND FOR MONEY

The Bank and the Money Supply.

The narrowest measure Ml of the money supply is currency in circulation outside the banking system plus the sight deposits of commercial banks against, which the private sector can write cheques. Thus the money supply is partly a liability of the Bank (currency in private circulation) and partly a liability of commercial banks (checking accounts of the general public).

The Demand for Money.

The demand for money is the quantity of liquid assets people are willing to have in hand at any given moment. It depends on the income they gain and the opportunity costs connected with the interest rate. But why do people hold money at all?

Money is a stock. It is the quantity of circulating currency and bank deposits held at any given time. Holding money is not the same as spending money when we buy a meal or go to the cinema. We hold money in order to spend it later.

The distinguishing feature of money is its use as a medium of exchange, for which it must also serve as a store of value. It is in these two functions of money that we must seek the reasons why people wish to hold it.

The Transactions Motive for holding money. In a monetary economy we use money to purchase goods and services and receive money in exchange for the goods and services we sell. Without money, making transactions by direct barter would be costly in time and effort. Holding money economizes on the time and effort involved in undertaking transactions. We need to hold money between receiving payments and making subsequent purchases.

How much money we need to hold depends on two things, the value of the transactions we wish to make and the degree of synchronization of our payments and receipts. We do not know how much $100 will buy until we know the price of goods. If all prices double, we will need to hold twice as much money to make the same transactions as before.

The demand for money is a demand for real money. We need a given amount of real money to undertake a given quantity of total transactions.

The Precautionary Motive for holding money. Thus far we have assumed that people know exactly when they will obtain receipts and make payments. But of course we live in an uncertain world. This uncertainty about the precise timing of receipts and payments gives rise to a precautionary motive for holding money. Suppose you decide to buy a lot of interest-earning bonds and try to get by with only a small amount of money holdings. You are walking down the street and spot a great bargain in a shop window. But you do not have enough money to take advantage immediately of this opportunity. By the time you have arranged for some of your interest-earning bonds to be sold off in exchange for money, the sale may be over. Someone else may have snapped up the video recorder on sale at half-price. This is the precautionary motive for holding money. In advance, we decide to hold money to meet contingencies the exact nature of which we cannot foresee.

Together, the transactions and the precautionary motives provide the main reasons for holding the medium of exchange. They are the motives most relevant to the benefits from holding money.

The Asset Motive for holding money. Suppose we forget all about the need to transact. We think of a wealthy individual or a firm deciding in which assets to hold wealth. At some distant date there may be a prospect of finally spending some of that wealth, but in the short run the objective is to earn a good rate of return.

Some assets, such as industrial shares, on average pay a high rate of return but are also quite risky. Some years their return is very high, but in other years it is negative. When share prices fall, shareholders can make a capital loss, which swamps any dividend payment to which they are entitled. Other assets are much less risky, but their rate of return tends to be much lower than the average return on risky assets. Since people dislike risk, they will not put all their eggs in one basket. As well as holding some risky assets, they will keep some of their wealth in safe assets. Although on average this portfolio will earn a lower rate of return, it will help avoid absolute disaster at hard times.

The asset motive for holding money arises because people dislike risk. People are prepared to sacrifice a high average rate of return to obtain a portfolio with a lower but more predictable rate of return.

ЧАСТЬ 3

THREE ECONOMIC ISSUES

Three economic issues

Economics is the study of how people choose to allocate scarce resources to satisfy their unlimited wants. The main problem in economics is the question of allocating scarce resources between competing uses. In this section three economic issues are discussed to show how society allocates its scarce resources between competing uses. In this connection the question what, how and for whom to produce is of great significance.

The oil price shocks

Oil is an important commodity in modem economies. Oil and its derivatives provide fuel for heating, transport, and machinery, and are basic inputs for the manufacture of industrial petrochemicals and many household products ranging from plastic utensils to polyester clothing. From the beginning of this century until 1973 the use of oil increased steadily. Over much of this period the price of oil fell in comparison with the prices of other products. Economic activity was organized on the assumption of cheap and abundant oil.

In 1973 - 74 there was an abrupt change. The main oil-producing nations, mostly located in the Middle East but including also Venezuela and Nigeria, belong to OPEC — the Organisation of Petroleum Exporting Countries. Recognizing that together they produced most of the world's oil, OPEC decided in 1973 to raise the price at which this oil was sold. Although higher prices encourage consumers of oil to try to economize on its use, OPEC countries correctly forecast that cutbacks in the quantity demanded would be small since most other nations were very dependent on oil and had few commodities available as potential substitutes for oil. Thus OPEC countries correctly anticipated that a substantial price increase would lead to only a small reduction in sales. It would be -very profitable for OPEC members.

Oil prices are traditionally quoted in US dollars per barrel. Fig. 1 shows the price of oil from 1970 to 1986. Between 1973 and 1974 the price of oil tripled, from $2,90 to $9 per barrel. After a more gradual rise between 1974 and 1978 there was another sharp increase between 1978 and 1980, from $12 to $30 per ban-el. The dramatic price increases of 1973 - 79 and 1980 - 82 have become known as the OPEC oil price shocks, not only because they took the rest of the world by surprise but also because of the upheaval they inflicted on the world economy, which had previously been organized on the assumption of cheap oil prices.

People usually respond to prices in this or that way. When the price of some commodity increases, consumers will try to use less of it but producers will want to sell more of it. These responses, guided by prices, are part of the process by which most Western societies determine what, how and for whom to produce.

Consider first how the economy produces goods and services. When, as in the 1970s, the price of oil increases six-fold, every firm will try to reduce its use of oil-based products. Chemical firms will develop artificial substitutes for petroleum inputs to their production processes; airlines will look for more fuel-efficient aircraft; electricity will be produced from more coal-fired generators. In general, higher oil prices make the economy produce in a way that uses less oil.

[pic]

Figure 1. The price of oil. 1970 - 86

How does the oil price increase affect what is being produced? Firms and households reduce their use of oil-intensive products, which are now more expensive. Households switch to gas-fired central heating and buy smaller cars. Commuters/arm car-pools or move closer to the city. High prices not only choke off the demand for oil-related commodities; they also encourage consumers to purchase substitute commodities. Higher demand for these commodities bids up their price and encourages their production. Designers produce smaller cars, architects contemplate solar energy, and research laboratories develop alternatives to petroleum in chemical production. Throughout the economy, what is being produced reflects a shift away from expensive oil-using products towards less oil-intensive substitutes. The for whom question in this example has a clear answer. OPEC revenues from oil sales increased from S35 billion in 1973 to nearly $300 billion in 1980. Much of this increased revenue was spent on goods produced in the industrialised Western nations. In contrast, oil-importing nations had to give up more of their awn production in exchange for the oil imports that they required. In terms of goods as a whole, the rise in oil prices raised the buying power of OPEC and reduced the buying power of oil-importing countries such as Germany and Japan.

The world economy was producing more for OPEC and less for Germany and Japan. Although it is the most important single answer to the for -whom' question, the economy is an intricate, interconnected system and a disturbance anywhere ripples throughout the entire economy.

In answering the 'what' and 'how' questions, we have seen that some activities expanded and others contracted following the oil price shocks. Expanding industries may have to pay higher wages to attract the extra labour that they require. For example, in the British economy coal miners were able to use the renewed demand for coal to secure laige wage Increases. The opposite effects may have been expected if the 1986 oil price slump had persisted.

The OPEC oil price shocks example illustrates how society allocates scarce resources between competing uses.

A scarce resource is one for which the demand at a zero price would exceed the available supply. We can think of oil as having become more scarce in economic terms when its price rose.

VOCABULARY NOTES

to allocate resources - распределять ресурсы

scarce resources - ограниченные, скудные ресурсы

scarcity - дефицит

to satisfy unlimited wants - удовлетворять неограниченные потребности

competing uses - конкурирующие сферы использования

to be of great significance - иметь большое значение

commodity (syn. good) - товар, предмет широкого потребления

modem economy - современная экономика

oil and its derivatives - нефть и нефтепроизводные

to provide fuel for heating and transport - обеспечивать топливом системы теплоснабжения и транспорт

basic inputs - основные составляющие

to range from... to... - от... до...

plastic utensils - изделия из пластика

polyester clothing - одежда из синтетических тканей

to increase [-z], v. steadily - постоянно увеличиваться

increase [-s], n. - увеличение

over much of this period - большая часть этого периода

in comparison with (syn. as compared with) - по сравнению с

on the assumption of - исходя из предположения (допущения)

abundant oil - нефть, имеющаяся в изобилии, избытке

an abrupt change - резкое изменение

oil-producing nations - страны, производящие нефть

to be located in - располагаться в

to belong to - принадлежать

OPEC (the Organization of Petroleum Exporting Countries) - ОПЕК (Организация стран - экспортеров нефти)

to raise the price - повышать цену

to encourage consumers - побуждать, поощрять потребителей

to economize on its use - экономить на использовании

to forecast correctly - правильно прогнозировать

cutbacks in quantity demanded - сокращения требуемого количества

to be dependent on oil - быть зависимым от нефти

to be available (syn. to be in stock; ant. to be out of stock) - иметься в наличии

potential substitutes - потенциальные (возможные) заменители

to anticipate - предсказывать, предвидеть, прогнозировать

substantial price increase [-s] - существенное, значительное повышение цен

to lead (led, led) to (syn. to cause, to entail, to result in) - привести к

reduction in sales - сокращение продаж

to be profitable for - быть прибыльным, выгодным

OPEC members — страны - члены ОПЕК

to quote prices in US dollars per barrel - назначать, котировать цены в долларах США за баррель

to triple I'tripl] - возрастать в три раза, утраивать

a gradual rise - постепенное увеличение

sharp, dramatic increase - резкое повышение

to take by surprise - застать врасплох

upheaval [i:] - переворот

to inflict upheaval on the world economy - наносить удар по (причинять ущерб) мировой экономике

to respond to prices - реагировать на цены

a producer - производитель

to determine what, how and for whom to produce - определять что, как и для кого производить

to increase six-fold - возрастать в шесть раз

oil-based products - нефтепродукты

artificial substitutes for petroleum - искусственные заменители бензина

production processes - производственные процессы

fuel-efficient aircraft - самолет с экономичным расходом топлива

oil-intensive products - продукты с высоким содержанием нефти

switch to - переключиться на

commuters - жители пригорода, регулярно приезжающие в город на работу или учебу

car-pools - группа людей, договорившихся по очереди обслуживать друг друга автомашиной

to choke off the demand - задушить спрос

substitute commodities - товары-заменители

to bid up the price - наращивать цену

to encourage production - стимулировать производство

to contemplate solar energy - рассматривать (обдумывать) вопрос об использовании солнечной энергии

to reflect a shift away from... towards (to)... - отражать переход (смену, замену) от... к...

OPEC revenues - доходы стран - членов ОПЕК

nearly $300 billion - почти 300 миллиардов долларов

industrialized Western nations - индустриальные (промышленные) западные страны

in contrast - по контрасту

oil-importing nations - страны, импортирующие нефть

to give up the production - отказаться (прекратить) от производства

in exchange for - в обмен на

to require - требовать

the buying (syn. purchasing, spending) power - покупательная способность

an intricate interconnected system - сложная взаимосвязанная система

a disturbance - нарушение равновесия, отклонение, срыв

to ripple throughout the entire economy - прокатиться волной через всю экономику

some activities expanded/contracted - некоторые виды деятельности расширились/сократились

to pay higher wages to attract the extra labour - платить более высокую зарплату для привлечения дополнительной рабочей силы

to renew - восстанавливать, возобновлять

demand for - спрос на

to secure wage increases - добиваться повышения зарплаты

price slump - резкое снижение цен

to persist - сохраняться, продолжать существовать

to exceed - превышать

the available supply - имеющееся предложение

to become more scarce in economic terms - стать более скудным, недостаточным в экономическом смысле

Answer the questions:

1. What are the three main questions of the economy?

2. What do you need in order to understand economics?

3. What happened to the price of oil from 1900 to 1973?

4. What did OPEC decide in 1973?

5. Why was there only a small reduction in oil sales?

6. What is an oil price shock? What did the oil price shocks lead to?

7. How do people respond to a higher price for a commodity?

8. What effect do higher oil prices have on the economy?

9. What happens throughout the economy when there are high oil prices?

10. What 2 effects did high prices have on oil-importing countries?

11. When did oil become scarce?

12. What is a scarce resource?

THE ROLE OF GOVERNMENT

Having mentioned the effect of government tax policy on the income distribution, it's necessary to examine in greater detail the role of the government in society. In every society governments provide such services as national defence, police, public education, firefighting services, and the administration of justice. In addition, governments through budget make transfer payments to some members of society.

Transfer payments are payments made to individuals without requiring the provision of any service in return. Examples are social security, retirement pensions, unemployment benefits, and, in some countries, food stamps. Government expenditure, whether on the provision of goods and services (defence, police) or on transfer payments, is chiefly financed by imposing taxes, although some (small) residual component may be financed by government borrowing. Tabl. 2 compares the role of the government in four countries.

Tabl. 2. Government Spending as a Percentage of National Income

Country

Purchase of goods and services

Transfer payments

Debt interest

Total

23,0

17,2

5,1

45,3

Japan

USA

Italy

14,9

20,1

27,0

12,7

12,2

23,0

4,6

4,8

9,2

32,2

37,1

59,4

In each case, we look at four measures of government spending as a percentage of national income: spending on the direct provision of goods and services for the public, transfer payments, interest on the national debt, and total spending.

Italy is a "big-government" country. Its government spending is large and it needs to raise correspondingly large tax revenues. In contrast, Japan has a much smaller government sector and needs to raise correspondingly less tax revenue. These differences in the scale of government activity relative to national income reflect differences in the way different countries allocate their resources among competing uses.

Governments spend part of their revenue on particular goods and services such as tanks, schools and public safety. They directly affect what is produced. Japan's low share of government spending on goods and services in Tabl. 2 reflects the very low level of Japanese spending on defence.

Governments affect for whom output is produced through their tax and transfer payments. By taxing the rich and making transfers to the poor, the government ensures that the poor are allocated more of what is produced than would otherwise be the case; and the rich get correspondingly less.

The government also affect how goods are produced, for example through the regulations it imposes. Managers of factories and mines must obey safety requirements even where these are costly to implement, firms are prevented from freely polluting the atmosphere and rivers, offices and factories are banned in attractive residential parts of the city.

The scale of government activities in the modem economy is highly controversial. In the UK the government takes nearly 40 per cent of national income in taxes. Some governments take a larger share, others a smaller share. Different shares will certainly affect the questions what, how and/or whom, but some people believe that a large government sector makes the economy inefficient, reducing the number of goods that can be produced and eventually allocated to consumers.

It's commonly asserted that high tax rates reduce the incentive to work. If half of all we earn goes to the government, we might prefer to work fewer hours a week and spend more time in the garden or watching TV. That is one possibility, but there is another one: if workers have in mind a target after-tax income, e.g. to have at least sufficient to afford a foreign holiday every year, they will have to work more hours to meet this target when taxes are higher.

Whether on balance high taxes make people work more or less remains an open question. Welfare payments and unemployment benefit are more likely to reduce incentives to work since they actually contribute to target income. If large-scale government activity leads to important disincentive effects, government activity will affect not only what, how, and for whom goods are produced, but also how much is produced by the economy as a whole.

This discussion of the role of the government is central to the process by which society allocates its scarce resources. It also raises a question. Is it inevitable that the government plays a prominent part in the process by which society decides how to allocate resources between competing demands? This question lies at the heart of economics.

VOCABULARY NOTES

having mentioned - упомянув, рассмотрев

government tax policy - налоговая политика государства

to examine in greater detail - рассмотреть более подробно

to provide service - оказать услугу

national defence - национальная оборона

nrefighting service - противопожарная служба

administration of justice - отправление правосудия

to make transfer payments - осуществлять трансфертные шютежи

without requiring the provision of any service in return - не требуя ответных услуг

social security - социальное обеспечение (за счет государственных налогов)

retirement pensions - пенсии за выслугу лет

unemployment benefit (syn. dole) - пособие по безработице

to be, live on the dole - жить на пособие по безработице

food stamps - талоны на продовольствие

to impose taxes - облагать налогами

residual component - остаточная часть

to be financed by government borrowing - финансироваться правительственными займами

direct provision of goods and services for the public - прямое (непосредственное) снабжение (обеспечение) граждан товарами и услугами

interest on the national debt - проценты по национальному долгу

correspondingly - соответственно

the scale of government activity - размах (масштаб) государственной деятельности

relative to - в отношении чего-либо

to renect differences - отражать различия

to affect directly - непосредственно влиять

low share - низкая (малая) доля

to affect through tax and transfer payments - оказывать воздействие через систему налогообложения и трансфертные платежи

to ensure that - обеспечивать такое положение, при котором...

than would otherwise be the case - как было бы в противном случае

to impose regulations - издавать административные положения, постановления, распоряжения

to obey safety requirements - соблюдать требования безопасности

to be costly to implement - использование (применение) обходится дорого

to pollute freely - безнаказанно загрязнять

to ban (syn. to prohibit) - запрещать

residential parts of the city - жилые части города

to be highly controversial - быть крайне неоднозначным

a large/small share - большая/малая доля, часть

to share - делить, разделять с кем-либо, e.g. I) to share smb's views, 2) to share a room with a classmate

to make the economy inefficient - снижать эффективность экономики, делать экономику неэффективной

eventually (syn. at last) - в конце концов, в конечном счете

it's commonly asserted - принято считать, по всеобщему утверждению

the incentive to work - стимул, мотивация к работе

to earn (money) - зарабатывать (деньги)

to earn one's living - зарабатывать на жизнь

a target after-tax income - целевой, базовый, чистый доход (после выплаты налогов)

at least sufficient to afford a foreign holiday - быть достаточным, по крайней мере, для того, чтобы провести отпуск за границей

to meet a target - достичь цели

on balance - с учетом всего вышесказанного, в конечном счете

welfare payments - государственные пособия (напр., по безработице, по ^рахованию)

since (syn. as, for, because) - поскольку, так как

to contribute to - вносить вклад в

large-scale government activity - широкомасштабная деятельность правительства

to raise (syn. to bring np) a question " поднять вопрос

to be inevitable - неизбежно

to lie at the heart of economics - быть в самом центре экономики

Answer the questions

1. What are transfer payments? Give some examples.

2. Using Tabl. 1 compare the UK and the USA on the same basis.

3. In what way can governments affect what and for whom is produced?

4. Why does a large government sector make the economy inefficient?

5. What are the two possibilities of responding to high tax rates on the part of workers?

6. What is the possible outcome of large-scale government activity?

7. Summarise in your own words the arguments for and against high taxes.

THE PRODUCTION POSSIBILITY FRONTIER

Let's turn to the most important tool for an economist - the production possibility frontier. This frontier shows the maximum combinations of output that the economy can produce, if it uses all its available scarce resources.

The easiest way to explain it is to complete a figure. First, the vertical axis or line, is labelled "food output. The units of food output run from nought at the bottom to 25 at the top, entering the units of food output in fives: 0, 5, 10, etc. Along the horizontal axis (or the bottom line) we have units of film output. Let's enter in the units of film output in fives again, this time up to 30.

Suppose we have an economy with only food and film industries. Now, if we put all the workers into producing food, we shall produce 25 units of food, but no units of film. We can mark this on the diagram with point A - no film, 25 units of food. It means point A comes on the vertical line at the number 25. Now, at the other extreme, if the economy puts all its workers into producing film, it will produce 30 units, but it will not produce any food. So, the next point is on the bottom, horizontal line, at 30 units. Let's label it as point E.

These two points, A and E, are the two extreme points of the production possibility frontier. Let's put in three more points. Point В is where the economy is producing 22 units of food and 9 units of film. Point С is where the economy is producing 17 points of both film and food. And, finally, point D is where we have 10 units of food and 24 units of film. Now draw a line joining all these points together, from A to E. The line drawn is not a straight line, it's a concave curve. It is this concave curve that is called the production possibility frontier.

The production possibility frontier represents a trade-off. More of one commodity, food or film, means less of the other, and this is because of the law of diminishing returns. It states that if, in the production of a commodity, one factor of production is increased by stages while the other factors are kept, unchanged, the stage will sooner or later be reached where each further addition to the increasing factor will produce a smaller and smaller increase in output.

In our example, movements from A to B, to С and so on along the curve | involve the transfer of one or more workers from one industry to the other, say,⁾from food production to film production. The number of workers in the film industry increases, and so does the film output, but on the whole each additional worker produces less additional film. That is to say, each transfer reduces output per person in the film industry. At the same time a decrease in the food industry can be observed. So with each transfer we get less additional film output and have to give up increasing amounts o/food output. That's why a society faces the problem of choosing between different products, as the scarcity of available resources does not allow it to increase the production of one good without decreasing the production of the other. As all the resources are scarce, points outside the frontier (point F in the example) represent the level of production unattainable at the given stage of development. On the contrary, it is inefficient to produce -within the frontier (point G in the example), as it means poor management of production. By moving on to the frontier, society could have more of some goods without having less of any other good.

VOCABULARY NOTES

a tool - инструмент

output - объем производства

a figure - чертеж, рисунок

the vertical axis (line) - вертикальная ось

to label - обозначить

food output - количество произведенных (объем производства) продовольственных товаров

nought- ноль

the horizontal axis (the bottom line) - горизонтальная ось

film output - количество произведенной (объем производства) пленки

at the other extreme - на другом полюсе

to draw a line joining all these points together - провести линию, соединяющую все эти точки

a straight line - прямая линия

a concave curve - вогнутая кривая (ant, convex - выпуклый)

a trade-off - альтернатива, выбор

the law of diminishing returns - закон сокращающейся доходности

the production of a commodity - производство товара

by stages - постепенно

each further addition - каждое последующее дополнение

an increase in output - увеличение объема производства

to involve the transfer - включать в себя, подразумевать перемещение

to reduce output per person - сокращать выработку на одного человека

additional output - дополнительный объем производства

amounts of output - объем производства, количество произведенной продукции

good - зд. благо

outside the frontier - за пределами границы

the level of production unattainable - уровень производства, недостижимый...

on the contrary - напротив

within the frontier - внутри границы

poor management of production - плохая организация производства

POSITIVE AND NORMATIVE ECONOMICS

In studying economics it is important to distinguish two branches of the subject. The first is known as "positive economics", the second as "normative economics".

Positive economics deals with objective or scientific explanations of the working of the economy. The aim of positive economics is to explain how society makes decisions about consumption, production, and exchange of goods. The purpose of this investigation is twofold: to satisfy our curiosity about why the economy works as it does, and to have some basis for predicting how the economy will respond to changes in circumstances.

Normative economics is very different. Normative economics offers prescriptions or recommendations based on personal value judgements.

In positive economics, we hope to act as detached scientists. Whatever our political persuasion, whatever our view about what we would like to happen or what we would regard as "a good thing", in the first instance we have to be concerned with how the world actually works. At this stage, there is no scope for personal value judgements. We are concerned with propositions of the form: if this is changed then that will happen. In this regard, positive economics is similar to the natural sciences such as physics, geology or astronomy.

Here are some examples of positive economics in action. Economists of widely differing political persuasions would agree that, when the government imposes a tax on a good, the price of that good will rise. The normative question of whether tills price rise is desirable is entirely distinct. Similarly, there would be substantial agreement that the following proposition of positive economics is correct: favourable weather conditions will increase wheat output, reduce the price of wheat, and increase the consumption of wheat. Many propositions in positive economics would command widespread agreement among professional economists.

Of course, as in any other science, there are unresolved questions where disagreement remains. These disagreements are at the frontiers of economics. Research in progress will resolve some of the issues but new issues will arise and provide scope for further research.

Although competent and comprehensive research can in principle resolve many of the outstanding issues in positive economics, no corresponding claim can be made about the resolution of disagreement in normative economics.

Normative economics is based on subjective value judgements, not on the search for any objective truth. The following statement combines positive and normative economics: "The elderly have very high medical expenses compared with the rest of the population, and the government should subsidize health bills of the aged." The first part of the proposition — the claim that the aged have relatively high medical bills - is a statement in positive economics, it is a statement about how the world works, and we can imagine a research programme that could determine whether or not it is correct. Broadly speaking, this assertion happens to be correct.

The second part of the proposition — the recommendation about what the government should do - could never be "proved" to be correct or false by any scientific research investigation. It is simply a subjective value judgement based on the feelings of the person making the statement. Many people might happen to share this subjective judgement, for example those people who believe that all citizens alive today should be able to purchase roughly equal amounts of luxury and recreational goods after paying for the necessities of life. But other people might reasonably disagree. You might believe that it is more important to devote society's scarce resources to improving the environment.

There is no way that economics can be used to show that one of these normative judgements is correct and the other is wrong. It all depends on the preferences or priorities of the individual or the society that has to make this choice. But that does not mean that economics can throw no light on normative issues. We can use positive economics to spell out the detailed implications of making the choice one way or the other. For example, we might be able to show that failure to subsidize the medical bills of the elderly leads middle-aged people to seek a lot of unnecessary medical check-ups in an attempt to detect diseases before their treatment becomes expensive. Society might have to devote a great deal of resources to providing check-up facilities, leaving less resources available than had been supposed to devote to improving the environment. Positive economics can be used to clarify the menu of options from which society must eventually make its normative choice.

VOCABULARY NOTES

to distinguish two branches of the subject - разграничивать два аспекта предмета

positive economics deals with objective explanations - позитивная экономическая теория предлагает объективные объяснения

the working of the economy - действие экономики

exchange of goods - обмен товаров

the purpose of the investigation is twofold - цель исследования двояка

to satisfy curiosity - удовлетворять любопытство

circumstances - обстоятельства

prescriptions or recommendations - предписания или рекомендации

based on - основанный на

personal value judgements - субъективные оценки ценностей

detached scientists - беспристрастные, независимые ученые

whatever our political persuasion - независимо от политических убеждений

whoever - кто бы ни

whenever - когда бы ни

wherever - где бы ни

in the first instance - прежде всего

actually - в действительности

at this stage - на этом этапе

there is no scope for - нет места

on a large scope - широкомасштабно

to be concerned with - интересоваться чем-либо, заботиться о чем-либо

propositions of the form - формальные утверждения, суждения

in this regard - в этом отношении

to be similar to - быть похожим на

natural sciences - естественные науки

liberal arts, humanities - гуманитарные науки

in action - в действии

to be desirable - быть желательным

to be entirely distinct - быть совершенно несхожим

substantial agreement - принципиальное единомыслие

favourable weather conditions - благоприятные погодные условия

wheat output - производство пшеницы

to command widespread agreement - привести к общей согласованности во взглядах

unresolved questions - неразрешенные вопросы

where disagreement remains - где разногласия продолжают существовать

research in progress - исследования, проводимые в настоящее время

new issues will arise (arose, arisen) - возникнут новые проблемы

to provide scope for further research - создать фундамент, базу, основу для дальнейших исследований

competent and comprehensive research - квалифицированная и всеобъемлющая исследовательская работа

outstanding issues - спорные, остающиеся неразрешенными вопросы

corresponding claim - аналогичное заявление

to claim - притязать на что-либо

search for objective truth - поиск объективной истины

in search of smth - в поисках чего-либо

the elderly (syn. aged) - пожилые люди

medical expenses - расходы на здравоохранение

to subsidize health bills - субсидировать расходы на здравоохранение

statement (syn. assertion) - заявление

to determine whether or not it's correct- определить, правильно ли это

broadly speaking - в широком значении, в общем понимании

assertion (syn. statement) - утверждение, заявление

to assert - утверждать, заявлять

to share one's judgement (view) - разделять чьи-либо суждения, взгляды

roughly equal amounts - приблизительно равные количества

luxury and recreational goods - предметы роскоши и товары для отдыха

to disagree reasonably - приводить разумные возражения

to improve the environment - охранять окружающую среду

the preferences or priorities of the individual or the society - предпочтения или приоритеты отдельных лиц или общества в целом

to make a choice - делать выбор

to throw light on - пролить свет на

to spell out - точно, обстоятельно объяснить

the detailed implications - скрытый смысл, значение

failure - провал, неудача

to fail smth - терпеть неудачу в чем-либо

to fail an exam - провалиться на экзамене

to seek (sought, sought) - искать что-либо

medical check-ups - медицинские осмотры

an attempt - попытка

to attempt (syn. to try) - пытаться

to detect smth - выявить, обнаружить

check-up facilities - оборудование для медосмотров

to suppose to do smth - предполагать сделать что-либо

to clarify smth (syn. to clear up) - пояснить что-либо

the menu of options - набор вариантов

Answer the questions:

1. What are two branches of economics?

2. What does the positive economics deal with?

3. What is the aim of normative economics?

4. What is the difference between positive and normative economics in regard to the role of research?

5. What are the global consequences of the government's failure to subsidize the medical bills of the elderly?

MICROECONOMICS AND MACROECONOMICS

Many economists specialize in a particular branch of the subject. For example, there are labour economists, energy economists, monetary economists, and international economists. What distinguishes these economists is the segment of economic life in which they are interested. Labour economics deals with problems of the labour market as viewed by firms, workers, and society as a whole. Urban economics deals with city problems: land use, transport, congestion, and housing. However, we need not classify branches of economics according to the area of economic life in which we ask the standard questions what, how and for whom. We can also classify branches of economics according to the approach or methodology that is used. The very broad division of approaches into microeconomic and macroeconomic cuts across the large number of subject groupings cited above.

Microeconomic analysis offers a detailed treatment of individual decisions about particular commodities.

For example, we might study why individual households prefer cars to bicycles and how producers decide whether to produce cars or bicycles. We can then aggregate the behaviour of all households and all firms to discuss total car purchases and total car production. Within a market economy we can discuss the market for cars. Comparing tills with the market for bicycles, we may be able to explain the relative output of these two goods. The sophisticated branch of microeconomics known as general equilibrium theory extends this approach to its logical conclusion. It studies simultaneously every market for every commodity. From this it is hoped that we can understand the complete pattern of consumption, production, and exchange in the whole economy at a point in time.

If you think this sounds very complicated you are correct. It is. For many purposes, the analysis becomes so complicated that we tend to lose track of the phenomena in which we were interested. The interesting task for economics, a task that retains an element of art in economic science, is to devise judicious simplifications, which keep the analysis manageable without distorting reality too much. It is here that microeconomists and macroeconomists proceed down different avenues.

Microeconomists tend to offer a detailed treatment of one aspect of economic behaviour, but ignore interactions with the rest of the economy in order to preserve the simplicity of the analysis. A microeconomic analysis of miners' wages would emphasize the characteristics of miners and the ability of mine owners to pay. It would largely neglect the chain of indirect effects to which a rise in miners' wages might give rise. For example, car workers might use the precedent of the miners' pay increase to secure higher wages in the car industry, thus being able to afford larger houses^ which burned more coal in heating systems. When microeconomic analysis ignores such indirectly induced effects it is said to be partial analysis.

In some instances, indirect effects may not be too important and it will make sense for economists to devote their effort to very detailed analyses of particular industries or activities. In other circumstances, the indirect effects are too important to be swept under the carpet and an alternative simplification must be found.

Macroeconomics emphasizes the interactions in the economy as a whole. It deliberately simplifies the individual building blocks of the analysis in order to retain a manageable analysis of the complete interaction of the economy.

For example, macroeconomists typically do not worry about the breakdown of consumer goods into cars, bicycles, televisions, and calculators. They prefer to treat them all as a single bundle called "consumer goods" because they arc more interested in studying the interaction between households' purchases of consumer goods and firms' decisions about purchases of machinery and buildings.

VOCABULARY NOTES

a labour economist - специалист по экономике труда

an energy economist - специалист по экономике (электро) энергии

a monetary economist - специалист по монетарной экономике

an international economist - специалист по мировой экономике

congestion - перенаселенность

to cut across - не соответствовать

a detailed treatment - детальный, подробный анализ

an individual household - отдельное домашнее хозяйство

to aggregate, v - собирать в одно целое

aggregate, n - совокупность

in the aggregate - в совокупности

aggregate, adj - совокупный

the relative output - относительный объем производства

general equilibrium theory - теория общего равновесия

to study simultaneously - одновременно изучать

the complete pattern - полная структура, система, схема

to lose track of the phenomena - потерять след явлений

to devise judicious simplifications - выработать разумные упрощения

to keep the analysis manageable - позволять проводить анализ

to distort reality - искажать реальность

to preserve the simplicity of the analysis - сохранить простоту анализа

to neglect the chain of indirect effects - пренебрегать косвенным воздействием, совокупностью (цепочкой) косвенных результатов, эффектов

to secure higher wages - получить более высокую заработную плату

indirectly induced effects - воздействие, вызванное косвенными причинами

partial analysis - частичный (неполный) анализ

to sweep under the carpet - прятать, маскировать (доел. замести под ковер)

to simplify deliberately - намеренно упрощать

to retain a manageable analysis - сохранить возможность анализа (выполнимый, поддающийся выполнению анализ)

the breakdown of consumer goods - классификация (подразделение) товаров потребления

a single bundle - отдельная единица, величина (доел. набор)

Answer the questions:

1. What distinguishes an energy economist from an urban economist?

2. Are the same questions asked in each area of economic life?

3. What is needed before total car purchases and production can be discussed?

4. What does the general equilibrium theory examine?

5. What can be understood from such a study?

6. What happens when an analysis becomes too complicated?

7. What can keep an analysis manageable?

8. What do most microeconorrusts leave out of their analysis?

9. What does partial analysis ignore?

10. Why wouldn't most macroeconomists make a breakdown of consumer goods?

PRICE AND DEMAND

The following text will introduce you to the topic of the effect of price and income on demand quantities.

The Price Responsiveness of Demand

Tabl. 3 presents some hypothetical numbers for the relation between ticket price and quantity demanded, other things equal.

Tabl. 3. The Demand for Football Ticket

Quantity of tickets demanded (thousands/game)

12,50 10,00 7,50 5,00 2,50 0

0 20 40 60 80 100

Fig. 2 plots the demand curve, which happens to be a straight line in this example.

Ticket price (£)

[pic]

Quantity of tickets

Figure 2. The Demand for Football Tickets

For given prices of related goods and consumer Incomes, higher ticket prices reduce the quantity of tickets demanded.

How should we measure the responsiveness of the quantity of tickets demanded to the price of tickets? One obvious measure is the slope of the demand curve. The downward slope of the demand curve shows that quantity demanded increases as the price of a good falls. Each price cut of £ 1 leads to 8000 extra ticket sales per game.

Suppose, however, that we wish to compare the price responsiveness of football ticket sales with the price responsiveness of the quantity of care demanded: clearly, £1 is a trivial cut in the price of a car and will have a negligible effect on the quantity of cars demanded.

When commodities are measured in different units it is often best to examine the percentage change, which is unit-free. This suggests that we think about the effect of a 1 per cent price cut on the quantity of cars and football tickets demanded. Similarly, it is not the absolute number of cars or tickets we should examine but the percentage change in quantity demanded. Not only does this solve the problem of comparing things measured in different quantity units, it also takes account of the size of the market. Presumably an extra sale of 8000 tickets is more important when ticket sales are 4000 than when they number 40000.

Thus we reach the definition of the price elasticity of demand, which economists use to measure responsiveness to price changes.

The price elasticity of demand is the percentage change in the quantity of a good demanded divided by the corresponding percentage change in its price.

Although we shall shortly introduce other demand elasticities - the cross price elasticity and the income elasticity — the (own) price elasticity is perhaps the most frequently used of the three. Whenever economists speak of the demand elasticity they mean the price elasticity of demand as it has been defined above.

If a 1 per cent price increase reduces the quantity demanded by 2 per cent, the demand elasticity is — 2. Because the quantity falls 2 per cent, we express this as a change of — 2 per cent, then divide by the price change of 1 per cent (a price rise) to obtain - 2. If a price fall of 4 per cent increases the quantity demanded by 2 per cent, then the demand elasticity is — 1/2, since the quantity change of 2 per cent is divided by the price change of — 4 per cent. Since demand curve slopes down, we are either dividing a positive percentage change in quantity (a quantity rise) by a negative percentage change in price (a price fall) or dividing a negative percentage change in quantity (a quantity fall) by a positive percentage change in price (a price rise). The price elasticity of demand tells us about movements along a demand curve and the demand elasticity must be a negative number.

For further brevity, economists sometimes omit the minus sign. It is easier to say the demand elasticity is 2 than to say it is -2. Whenever the price elasticity of demand is expressed as a positive number, it should be understood (unless there is an explicit warning to the contrary) that a minus sign should be added. Otherwise, we should be implying that demand curves slope upwards, a rare but not unknown phenomenon.

VOCABULARY NOTES

to introduce smb to the topic of - познакомить кого-либо с темой

the effects of smth on smth - воздействие чего-либо на что-либо

hypothetical numbers - вымышленные, гипотетические числа

the relation between - соотношение между

quantity demanded - требуемое количество

to plot the demand curve - вычерчивать кривую спроса

for given price - для данной (приведенной) цены

to measure the responsiveness of smth to smth - измерять способность, реагировать (реакция) на

obvious measure - очевидная, наглядная мера

the slope of the curve - покатость кривой

the downward slope - движение кривой вниз

ticket sales per game - продажа билетов на игру

trivial (syn. minor, slight) - незначительный

a negligible effect - мелкий, незначительный эффект

to examine smth - рассмотреть, проанализировать

the percentage change - процентное изменение

unit-free - независящий от характера единиц (в которых измеряются товары)

this suggests (syn. to imply) - это предполагает

similarly - подобным образом

to take account of (syn. to take into account, consideration) - учитывать, принимать во внимание

presumably (syn. probably) - возможно, вероятно

extra sale - дополнительные продажи

to number - насчитывать

to reach the definition - подвести к определению

the price elasticity of demand - ценовая эластичность спроса

to divide by - разделить на

shortly - зд. вскоре

cross price elasticity - перекрестная эластичность цен

income elasticity - эластичность по доходу

the (own) price elasticity - собственно ценовая эластичность

the most frequently used - наиболее часто используемый

as it has been denned above - согласно определению, приведенному вьппе

to express smth - выражать что-либо

to obtain (syn. to get) - получить, e.g. to obtain a diploma

a positive percentage change - положительное (плюсовое) процентное изменение

a negative percentage change - отрицательное (минусовое) процентное изменение

movements along a demand curve - движения вдоль кривой спроса

for further brevity - для краткости

to omit the minus sign - опускать знак минуса

it's easier to say - легче сказать

unless there is an explicit warning to the contrary - если только не имеется точного указания на обратное

to add - добавить, сложить

adding, addition - сложение, дополнение

addendum - дополнение, приложение

to imply (syn. to suggest) - предполагать, подразумевать

a rare but not unknown phenomenon - редкое, но встречающееся явление

Answer the questions:

1. What does the downward slope of the demand curve show?

2. Give the definition of the price elasticity of demand. Explain it in your own words.

3. Name the three types of the demand elasticity as mentioned above.

4. Explain in your own words how to calculate demand elasticity.

5. Explain why economists sometimes omit the minus sign and how negative and positive numbers should be distinguished.

PRICE, INCOME AND DEMAND

In this chapter we're going to investigate the price elasticity of demand for football tickets. Let's start by looking at Table 4. It reproduces the demand data from Tabt. 3, that is to say, it reproduces it in columns one and two.

Tabl. 4. The Price Elasticity of Demand for Football Tickets

PRICE

(£/ticket)

Quantity of tickets demanded (thousands/game)

Price elasticity of demand

12,50

10,00

7,50

5,00

2,50

100

-4

-1,5

-0,67

-0,25

We have to look at column one. As you can see, this shows price cuts of two pounds fifty. By considering the effects of price cuts of two pounds fifty we can calculate the price elasticity of demand at each price. This price is shown in column three. But how have we calculated this? Let's, as an example, take the price of ten pounds, which you can see in the table. There is a corresponding quantity of twenty thousand tickets demanded. If we consider a price cut to seven pounds fifty, there is a price change here of- 25%, from ten pounds to seven pounds fifty. Now look at the corresponding change in the quantity of tickets demanded, in the next column, column two. The change in the quantity of tickets demanded is a 100%, from 20,000 tickets to 40,000 tickets.

There is a 100% change in demand, and a 25% change in price. So we divide a 100 by - 25, which gives the answer - 4. So we say the demand elasticity at ten pounds is - 4. You calculate other elasticities in the same way, that is by dividing the percentage change in quantity by the corresponding percentage change in price.

Notice one thing here in the table. That is when we begin from the price of twelve pounds fifty the demand elasticity is minus infinity. It's simply because the percentage change looks like this. Any positive number divided by zero yields plus infinity. When we then divide by the minus twenty per cent change in price, that's from twelve pounds fifty to ten pounds, we obtain or get, minus infinity as the demand elasticity at this price.

There's one more thing to be said at this stage. We say demand elasticity is high, when it is a large negative number. And we say demand elasticity is low, when it is a small negative number, and when the quantity demanded is relatively insensitive to price. It follows from this that the words high and low refer to the magnitude of the elasticity ignoring the minus sign. The demand elasticity falls when it becomes a smaller negative number and quantity demanded becomes less sensitive to price.

VOCABULARY NOTES

to investigate - исследовать, рассматривать

to reproduce the data - представлять данные

price cuts - сокращения цены

a corresponding quantity - соответствующее количество

a corresponding change in the quantity - соответствующее изменение количества

infinity - бесконечность

to yield - приносить, давать

magnitude - величина, размер

. Answer the questions

1. How is the demand elasticity calculated?

2. Why is the demand elasticity minus infinity in the example?

3. In what case can we speak of high/ low demand elasticity?

4. What does the insensitivity of the quantity demanded to the price mean?

5. When does the demand elasticity fall?

ELASTIC AND INELASTIC DEMAND

Although elasticity typically falls as we move down the demand curve, an important dividing line occurs at the demand elasticity of-1.

Demand is elastic if the price elasticity is more negative than -1. Demand is inelastic if the price elasticity lies between -1 and 0.

In Tabl. 4 demand is elastic at all prices of £7,50 and above and inelastic at all prices of £5,00 and below. If the demand elasticity is exactly -1, we say that demand is unit-elastic.

Later in this section we'll see that a cut in prices raises revenue from football ticket sales if demand for football tickets is elastic but lowers revenue if demand is inelastic. Whether or not demand is elastic is the key piece of information required in setting the price of football tickets in this example.

Although the price elasticity of demand typically changes as we move along demand curves, economists frequently talk of goods with high or low demand elasticities. For example, they will say that the demand for oil is price-inelastic (price changes have only a small effect on quantity demanded) but the demand for foreign holidays is price-elastic (price changes have a large effect on quantity demanded). Such statements refer to parts of the demand curve corresponding to prices (adjusted for inflation) that are typically charged for these goods and services. They do not necessarily describe the demand elasticity at points on the demand curve corresponding to real prices, which have never been observed historically.

The Determinants of Price Elasticity. Основные факторы ценовой эластичности спроса

What determines whether the price elasticity of demand for a good is high (say, -5) or low (say, -0,5)? Ultimately, the answer must be sought in consumer tastes. If it is considered socially essential to own a television, higher television prices may have little effect on quantity demanded. If televisions are considered a frivolous luxury, the demand elasticity will be much higher. Psychologists and sociologists may be able to explain more fully than economists why tastes are as they are. Nevertheless, as economists, we can identify some considerations likely to affect consumer responses to changes in the price of a good. The most important consideration is the ease with which consumers can substitute another good that fulfils approximately the same junction.

Consider two extreme cases. Suppose first that the price of all cigarettes is raised 1 per cent, perhaps because the cigarette tax has been raised. Do you expect the quantity of cigarettes demanded to fall by 5 per cent or by 0,5 per cent? Probably the latter. People who can easily quit smoking have already done so. A few smokers may try to cut down but this effect is unlikely to be large. In contrast, suppose the price of one particular brand of cigarettes is increased by 1 per cent, all other brand prices remaining unchanged. We should now expect a much larger quantity response from buyers. With so many other brands available at unchanged prices, consumers will switch away from the more expensive brand to other brands that basically fulfil the same function of nicotine provision. For a particular cigarette brand the demand elasticity could be quite high.

Ease of substitution implies a high demand elasticity for a particular good. In fact this example suggests a general rule. The more narrowly we define a commodity (a particular brand of cigarette rather than cigarettes in general or oil rather than energy as a whole), the larger will be the price elasticity of demand.

Measuring Price Elasticities. Измерение ценовой эластичности

To illustrate these general principles we report estimates of price elasticities of demand in Tabl. 5.

Tabl. 5. Estimates of Price Elasticities of Demand in the UK

Demand elasticity

Fuel & light

Food

Alcohol

Durables

Services

-0,47

-0,52

-0,83

-0,89

-1,02

Dairy produce

Bread & cereals Entertainment

Expenditure abroad Catering

-0,05

-0,22

-1,40

-1,63

-2,61

The table confirms that the demand for general categories of basic commodities, such as fuel, food or even household durable goods, is inelastic. As a category, only services such as haircuts, the theatre, and sauna baths, have an elastic demand. Households simply do not have much scope to alter the broad pattern of their purchases.

In contrast, there is a much wider variation in the demand elasticities for narrower definitions of commodities. Even then, the demand for some commodities, such as dairy produce, is very inelastic. However, particular kinds of services such as entertainment and catering have a much more elastic demand. Small changes in the relative price of restaurant meals and theatre tickets may lead households to switch in large numbers between eating out and going to the theatre, whereas the demand for getting out of the house on a Saturday evening may be relatively insensitive to the price of all Saturday night activities taken as a whole.

VOCABULARY NOTES

typically falls - обычно снижается

a dividing line - разделительная черта

unit-elastic (unitary-elastic) demand - спрос с единичной эластичностью, единичная эластичность спроса

to raise/to lower revenue - повышать/снижать доходы

the key piece of information - ключевая информация

to set the price (syn. to quote) - устанавливать, назначать цену

foreign holidays - отдых за границей

to refer to - относиться к

parts of the curve corresponding to prices - участки кривой спроса, относящиеся к ценам

adjusted for inflation - с учетом инфляции

prices typically charged - цены, обычно назначаемые

be observed historically - встречаться в истории

determinants - основные факторы, определители, показатели

the answer must be sought in - ответ следует искать в

socially essential - существенно, значимо в общественном мнении

a frivolous luxury - бездумная роскошь

why tastes are as they are - почему вкусы именно таковы

nevertheless (syn. however) - тем не менее

to identify some considerations - выявить некоторые соображения, моменты, факторы

the ease - легкость, простота

to substitute smth for smth - заменить одно другим

a substitute - заменитель

substitution - замена

to fulfil approximately the same function - выполнять примерно аналогичную функцию

extreme cases - экстремальные случаи

the latter (ant. the former) - последний (упомянутый)

to quit (syn. to give up) smoking - бросить курить

one particular brand of cigarettes - один конкретный сорт сигарет

to fulfil basically - в основном выполнять

nicotine provision - насыщение никотином

the more narrowly we define - чем более узкое определение мы даем

to illustrate general principles - для иллюстрации общих принципов

to report estimates in a table - приводить оценки в таблице

durables - товары долговременного пользования

dairy produce - молочные продукты

cereals - крупы

entertainment - развлечения, досуг

catering - поставка продуктов и обслуживание церемоний

the table confirms - из таблицы следует

as a category - как категория

haircuts - стрижка, зд. парикмахерские услуги

sauna baths - посещение сауны

to alter the broad pattern - изменить широкий ассортимент

a much wider variation - большая вариативность

whereas (syn. while, whilst) - в то время как

to be relatively insensitive - быть относительно нечувствительным

taken as a whole - в целом

Answer the questions:

1. Explain when demand is elastic, inelastic or unit-elastic.

2. How do consumer tastes determine the demand elasticity?

3. What considerations are likely to effect consumer responses to changes in the price of a good?

4. Illustrate the consideration of the demand elasticity according to the case of substitution on the part of buyers by the example of cigarettes.

5. State the interdependence between the scale of definition a commodity and the price elasticity of demand.

6. Think why the demand for going out Saturday nights may be relatively inelastic to the price of the activities.

7. Give your own examples of an elastic and inelastic demand.

A MODEL OF THE ECONOMY

Economists spend a lot of time trying to develop models of the working of the economy. The London Business School, like many universities and also the Treasury, has a model of the economy which it has entered into a computer. The reason for this is that much of its work is concerned with forecasting future economic trends so as to aid decision-making by business and government. The London Business School's model can be fed with economic information, such as changes in tax rates, and it will then predict how the economy will behave. Such predictions are an invaluable aid to business decision-making because, for example, businesses can find out whether people's incomes are likely to rise or not.

The complete economy comprises many millions of economic units. There are households, as one kind of unit. There are also firms, and the departments of both central and local government. These units together decide the economy's total spending. They also decide its total income and its total level of production of goods and services. But in order to develop a simple model of the economy we need to ignore the government sector and the possibility of transactions between households and foreigners. Suppose we are dealing -with an isolated economy, one which has no government. Let's assume that there are two main sectors in the economy: households and firms. Households supply firms with the factors of production that firms need to carry on their concerns.

Thus, households provide labour services, both skilled and unskilled, in return for the payment of wages. They may also supply land for which they are paid rent. Finally, they might supply the finance, which is essential to the business. If the finance is in the form of a loan they receive interest payments, but if they have purchased shares in the business they may be entitled to a share of the profits. Most households provide some factor services or services of productive factors, to a public or private business. Anyone at work is providing labour, and if you or someone in your family has bought shares in the privatization programme (in, for example, British Gas, British Telecom or the water authorities) then they have supplied share capital. Households receive payments for these factor services, that is to say, they earn factor incomes, such as wages, rents and profits.

The other part of our simple model portrays firms supplying households with all the goods and services that they require. In return for these the households pay the firms. These two sets of actions create the model of the circular flow of money, which is shown in Fig. 3.

In fact, there are two flows. One which is monetary and one comprising goods and services. A flow of factor services from households to firms for which there is an opposite stream of factor payments and a flow of goods and services, which households pay firms. It is this monetary flow in which we are most interested.

What does the figure suggest? It suggests that there are three ways of measuring the amount of economic activity in the economy. First, we can measure the value of goods and services produced, second, we can measure the level of factor earnings. These factor earnings represent the value of factor services supplied. Third, we can measure the value of spending on goods and services. Then, economists refer to the size of the monetary circular flow as the level of national income.

If we assume that all the goods and services, which are produced are in fact sold and that households spend all their income, then we have arrived at what economists call a neutral equilibrium. The level of income, which is spent and received by the two groups will not alter since as one group receives it, they spend it with the other.

[pic]

Figure 3. The Circular Flow of Income

The fact that the economy is in a neutral equilibrium means simply that the level of national income, and hence the level of economic activity, are stable and unchanging. (An equilibrium is a point of balance in which there is no inherent tendency to change). If the economy was in equilibrium it does not mean that everyone who wants a job has one or that the country is importing exactly the same value of goods and services as it is exporting.

VOCABULARY NOTES

to aid decision-making - помогать, содействовать в принятии решений

the model can be fed with economic information - в модель можно внести экономическую информацию

total income - общий, суммарный доход

total level of production of goods and services - общий уровень производства товаров и услуг

to deal with an isolated economy - иметь дело с изолированной экономикой

to carry on their concerns - продолжать свое дело

to provide labour services - предоставлять рабочую силу (труд)

to receive interest payments - получать платежи в виде процентов

shares - акции

to be entitled to a share of the profits - иметь право на долю прибыли

factor services or services of productive factors - факторы производства

the water authorities - управление водного хозяйства

to supply share capital - предоставить акционерный капитал

factor incomes - доход на факторы производства

to portray - отображать

a monetary flow - денежный поток

an opposite stream - противоположный поток (доел. течение)

factor payments - выплаты (доход) на факторы производства

to measure the amount of economic activity - измерять уровень экономической активности

the value of goods and services produced - стоимость произведенных товаров и услуг

the level of factor earnings - уровень доходов на факторы производства

the value of factor services supplied - стоимость предоставленных факторов производства

the value of spending on goods and services - размер расходов на товары и услуги

a neutral equilibrium - общее равновесие

the circular flow of income - круговой поток (круговорот) доходов

an inherent tendency to change - внутренняя тенденция к изменению

Answer the questions:

1. What units does the economy comprise? What do they decide?

2. What are the two main sectors in the economy?

3. What sets of actions create the model of the circular flow of income?

4. Dwell on the monetary flow. How is the level of national income connected with it?

5. Dwell on the flow of goods and services.

6. What does the figure suggest?

7. How can the amount of economic activity be measured?

8. What's an equilibrium? a neutral equilibrium?

INJECTIONS

An Injection is simply an addition to the circular flow of income, which does not arise from the spending of households. It was unrealistic to assume earlier that there would be no such additions. These additions or injections will, of course, increase the size of the circular flow and thus the level of activity in the economy. There are three recognised ways in which funds can flow into an economy. They can be generated through'.

* Investment

* Government spending

* Export sales

[pic]

Figure 4. Additions to the Circular Flow of Income

Investments. Инвестиции

Investment is expenditure on productive capital goods. That is, goods which can be used to produce other goods and services. Thus, investment is usually held to be expenditure on factories, machinery and other physical assets. It is important to realize that economists use the word investment in a different context to the layman. An economist referring to investment does not mean the purchase of paper financial assets such as stocks or shares. Clearly, if the ownership of a company's shares is transferred from one UK citizen to another there is no overall impact on the economy.

Investment can be categorized into net investment and gross investment. Net investment is investment, which actually increases the nation's stock of capital goods. It is such investment that enables the economy to grow. However, some investment is necessary to replace capital stock that is worn out or obsolete. This loss of value of assets is called depreciation. When this replacement is added to the net investment the total achieved is termed gross investment.

You should note that investment increases the circular flow since it comprises extra spending that has not originated in the circular flow. The main influences on the amount of investment that takes place are:

* the rate of interest since firms often have to borrow to undertake the investment

* the firm's expectation about the future behaviour of the economy. If they believe the economy will boom and the level of economic activity will increase, then they are more likely to enjoy increased sales. They may well decide to invest in new machinery or in a new factory. On the other hand, if the level of investment declines then there will be less injections than previously into the economy and the rate of growth of economic activity (or the national income) will fall. Economic statistics show us that over the last few decades the level of gross investment in the UK economy has fluctuated. This will have been one of the factors affecting the level of national income and the environment in which businesses operate.

Government Expenditure. Расходы государства

Government expenditure takes many forms and, particularly over the last 50 years or so, has been a very substantial total. This heading covers spendings by both central government and local authorities. Government spending results in an injection of funds into the circular flow.

Let us take as an example a decision by the Department of Transport to build a new motorway. This will lead to a variety of spending, which would not have taken place otherwise. The authorities will have to employ surveyors, lawyers, accountants and construction workers and will have to purchase large quantities of construction materials. All of the spending generated in this way will be an addition or an injection to the circular flow.

Government spending can, of course, take many other forms. Major financial items are the provision of health and social security benefits. The latter tends to put money directly into the hands of people who need it badly and who are, therefore, likely to spend all or most of it in the near future. If it so wishes the government can use its own .expenditure to rapidly affect the level of injections and thus the circular flow. Pursuing such policies, however, can have undesirable side-effects

Exports. Экспорт

Exports are an injection because they result in income entering the UK's circular flow as a result of the spending decisions of foreign households, firms and governments. Notice that this spending by foreign households is a loss (or withdrawal from) their domestic circular flows.

Britain is a major trading nation and, as such, can be described as an open economy. It exports approximately one-third of all the goods and services it produces. The amount of the UK imports varies but over time will be roughly the same proportion. The UK's trade is recorded in the balance of payments figures, which are published monthly and then collected into annual accounts. If you look at the UK's trade figures you will see that rarely, if ever, does the value of exports equal the value of imports.

The balance of payments accounts are split into two broad sections: the current account, which records imports and exports of goods and services; and the capital account, which records international monetary flows in and out of the UK, such as foreign loans and investment in the UK.

Exports have always been important to the UK economy and are sndisputably an engine of economic growth. They provide domestic employment not only in the exporting industry but also in the industries, which supply components and raw materials to that industry. Exports bolster the circular flow and promote employment in a range of industries. They also stimulate innovation and competition and generate a satisfying standard of living. Most of the world's most prosperous economies are successful exporters, notably Japan and Germany. Few isolated economies have been economically successful.

VOCABULARY NOTES

injection - инъекция, вливание (напр., денег в экономику)

to arise from - проистекать, являться результатом

to assume - предполагать, считать

thus - таким образом

they can be generated through - это может происходить посредством...

assets - имущество, активы

layman - непрофессионал, неспециалист

an economist referring to investment - говоря о вложениях, экономист...

paper financial assets - имущество, вложенное в ценные бумаги

stock - акция, ценная бумага; запас, ассортимент

there is no overall impact on the economy - большого влияния на экономику это не окажет

net investment - чистые инвестиции

gross investment - валовые капиталовложения

worn out - изношенный

depreciation - обесценение (денег), снашивание (в результате износа и морального устаревания)

total - целое, сумма, итог

to term (syn. to call) - называть

rate of interest - процентная ставка

rate of growth - скорость роста

decade - десятилетие

the level... has fluctuated - уровень колебался

has been a very substantial total - составило очень значительную сумму

this heading covers - под этим заголовком рассказывается

to result in (syn. to lead to, to cause, to entail) - приводить к чему-либо;

иметь своим результатом

this will lead to a variety of spending - это повлечет за собой самые разнообразные затраты

surveyor - землемер, топограф

major financial items - основные статьи расходов

social security benefits - льготы социального обеспечения

to tend to - иметь тенденцию

rapidly - быстро, скоро

pursuing such policies - проведение такой политики

undesirable side-effects - нежелательные побочные явления

as a result of the spending decisions - как результат решения покупать или нет

withdrawal - утечка, изъятие

the amount ... varies — количество ... бывает различным

over time - иногда, время от времени

roughly - приблизительно

the UK's trade is recorded in the balance of payments figures - торговля Великобритании отображена в данных платежного баланса

annual accounts - ежегодные отчеты

rarely, if ever - редко или почти никогда

the balance of payments accounts are split into - статьи (разделы) платежного баланса разделяются на

current account - счет текущих операций

capital account - счет движения капиталов

indisputably - бесспорно

to bolster - поддерживать, укреплять

promote employment in a range of industries - обеспечивают занятость в ряде отраслей

innovation - новшество, нововведение

notably - особенно

Answer the questions:

1. What is an injection?

2. What is expenditure?

3. What are net and gross investments?

4. What are the main influences on the amount of investment? Can you add anything else?

5. Speak on government expenditure and its forms

6. What have you learnt about the UK's exports and imports?

7. Why are exports an engine of economic growth?

THE IMPACT OF INFLATION ON BUSINESS

Inflation can adversely affect business in a number of ways:

1. Accounting and financial problems. Трудности бухгалтерского учета и финансирования

Significant rates of inflation can cause accounting and financial problems for businesses. They may experience difficulty in valuing assets and stocks, for example. Such problems can waste valuable management time and make forecasting, comparisons and financial control more onerous.

2. Falling sales. Снижение объема продаж

Many businesses may experience falling sales during inflationary periods for two broad reasons. Firstly, it may be that saving rises in a time of inflation. We would expect people to spend more of their money when prices are rising to avoid holding an asset (cash), which is falling in value. However, during the mid-1970s, when industrialized nations were experiencing high inflation rates, savings as a proportion of income rose! It is not easy to identify the reason for this, but some economists suggest that people like to hold a relatively high proportion of their assets in a form which can be quickly converted into cash when the future is uncertain. Whatever the reason, if people save more they spend less and businesses suffer falling sales. The economic model predicts that if savings rose the level of activity in the economy would fall. Clearly, if this happened we would expect businesses to experience difficulty in maintaining their levels of sales.

Businesses may be hit by a reduction in sales during a time of inflation for a second reason. As inflation progresses, it is likely that workers' money wages (that is, -wages unadjusted for inflation) will be increased broadly in line with inflation. This may well take a worker into a higher tax bracket and result in a higher percentage of his or her wages being taken as tax. This process, known as fiscal drag, will cause workers to have less money available to spend on firms' goods and services. The poverty trap has a similar impact. As money wages rise, the poor may find that they no longer qualify for state benefits to supplement their incomes and at the same time they begin to pay income tax on their earnings. Again, this leaves less disposable income to spend on the output of firms. Finally, it may be that the wages of many groups are not index-linked and so they rise less quickly than the rate of inflation, causing a reduction in spending power and demand for goods and services.

Once again, the economic model can be used to predict that increases in the level of taxation will increase withdrawals, lowering the level of economic activity and depressing firms' sales.

Not all businesses will suffer equally from declining demand in an inflationary period. Those selling essential items, such as food, may be little affected whilst others supplying less essential goods and services, such as foreign holidays, may be hard hit.

3. High interest rates. Высокие процентные ставки

Inflation is often accompanied by high interest rates. High interest rates tend to discourage investment by businesses as they increase the cost of borrowing funds. Thus, investment may fall. Businesses may also be dissuaded from undertaking investment programmes because of a lack of confidence in the future stability and prosperity of the economy. This fall in investment may be worsened by foreign Investment being reduced as they also lose some confidence in the economy's future.

Such a decline in the level of investment can lead to businesses having to retain obsolete, inefficient and expensive means of production and cause a loss of international competitiveness. Finally, a fall in investment can lower the level of economic activity, causing lower sales, output and so on. Thus, to some extent, businesses can influence the economic environment in which they operate.

4. Higher costs. Рост издержек производства

During a bout of inflation firms will face higher costs for the resources they need to carry on their business. They will have to pay higher wages to their employees to compensate them for rising prices. Supplies of raw materials and fuel will become more expensive as will rents and rates. The inevitable reaction to this is that the firm has to raise its own prices. This will lead to further demands for higher wages as is called the wage-price spiral. Such cost-push inflation may make the goods and services produced by that enterprise internationally less competitive in terms of price. An economy whose relative or comparative rate of inflation is high may find that it is unable to compete in home or foreign markets because its products are expensive. The economic model tells us that a situation of declining exports and increasing imports will lower the level of activity in the economy with all the consequent side-effects.

VOCABULARY NOTES

impact - удар, влияние, воздействие

waste valuable management time - может уходить много драгоценного времени

make more onerous - сделать более затруднительным

to avoid holding an asset - чтобы избавиться от наличности

whatever the reason - какова бы ни была причина

businesses may be hit by - фирмы (предприятия) могут пострадать от...

wages unadjusted for inflation - заработная плата без учета уровня инфляции

a higher tax bracket - следующая группа, категория (напр., при группировке налогоплательщиков по доходу)

fiscal drag - финансовый тормоз экономического роста с помощью налоговых изъятий

they no longer qualify for - они больше не подпадают под...

to supplement their incomes - что является дополнением к их доходу

this leaves less disposable income - из-за этого остается меньше средств

index-linked - индексированный

a reduction in spending (syn. buying, purchasing) power - снижение покупательной способности

declining demand - падение спроса

tend to discourage investment - не способствуют инвестированию

may also be dissuaded from - могут также отказаться от...

a lack of confidence - недостаток (отсутствие) уверенности

this fall in investment may be worsened by foreign investment being reduced - это падение уровня инвестирования может стать еще сильнее, если сократятся иностранные инвестиции

can lead to businesses having to retain - может привести к тому, что фирмам (предприятиям) придется сохранить

a bout (syn. period, spell) of inflation - период инфляции

less competitive in terms of price - менее конкурентоспособный в смысле цены

THE ROLE OF BANKS

The following story is going to explain the role of banks. In the past most societies used different objects as money. Some of these were valuable because they were rare and beautiful, others- because they could be eaten or used. Early forms of money like these were used to buy goods. They were also used to pay for marriages, fines and debts. But although everyday objects were extremely practical kinds of cash in many ways, they had some disadvantages, too. For example, it was difficult to measure their value accurately, divide some of them into a wide range of amounts, keep some of them for a long time, use them to make financial plans for the future. For reasons such as these, some societies began to use another kind of money, that is, precious metals.

People used gold, gold bullion, as money. Those were dangerous times, and people wanted a safe place to keep their gold. So they deposited it with goldsmiths, people who worked with gold for jewellery and so on and also had a guarded vault to keep it safe in. And when people wanted some of their gold to pay for things with, they went and fetched it from the goldsmith.

Two developments turned these goldsmiths into bankers. The first was that people found it a lot easier to give the seller a letter than it was to fetch some gold and then physically hand it over to him. This letter transferred some of the gold they had at the goldsmith's to the seller. This letter we would nowadays call a cheque. And, of course, once these letters or cheques, became acceptable as a way of paying for goods, people felt that the gold they had deposited with the goldsmith, was just as good as gold in their own pockets. And as letters or cheques, were easier to carry around than gold, and a lot less dangerous, people started to say that their money holdings were what they had with them plus their deposits. So a system of deposits was started. The second development was that goldsmiths realized they had a great deal of unused gold lying in their vaults doing nothing. This development was actually of greater importance than the first.

Now let's turn to the first bank loan ever and see what happened. A firm asked a goldsmith for a loan. The goldsmith realized that some of the gold in his vault could be lent to the firm, and of course he asked the firm to pay it back later with a little interest. Of course, at that moment the goldsmith was short of gold, it wasn't actually his gold, but he reckoned it was unlikely that everyone who had deposited gold with him would want it back at the same time, at any rate — not before the firm had repaid him his gold with a little interest. He thought it safe enough.

To understand what actually happened in this simple transaction let's consider the following table.

Tabl. 6. Goldsmiths as bankers

Assets

Liabilities

1. Old-fashioned goldsmith

2. Gold lender

3. Deposit lender: Step 1

4. Deposit lender: Step 2

Gold $100

Gold $90+loan $10 Gold $100+loan $10 Gold $90+loan $10

Deposits $100

Deposits $110

Deposits $100

The first row shows what the goldsmith did before he made this loan. He had a hundred dollars of gold, which he owed to the people who had deposited it with him, so his assets and liabilities were the same. But when he lent, say, S10 of gold to the firm, he actually had only $90 of gold in his vault plus the value of his loan. His assets still equalled his liabilities, but he was going to get some interest.

It so happened that the firm, that took out the loan, didn't really want to carry that $10 of gold around, so it asked the goldsmith if, instead of actually taking the gold, it could be given a deposit. The third row of Tabl. 6 shows what happened then. Although the goldsmith's assets and liabilities were the same, but were then -worth $110, not $100. When the firm wrote a cheque for $10, and that person came in to collect his $10 worth of gold, the goldsmith's assets failed, but so did his liabilities (the fourth row of the table). The important point to notice here is that it made no difference to the goldsmith whether his initial loan was in actual gold or in a form of a deposit.

Now let's turn to the question of reserves. Reserves are the amount of gold that is immediately available in the vault to meet depositors' demands. People originally deposited $100 of gold with the goldsmith. The goldsmith lent $10, leaving himself with $90. As a banker he was relying on the fact that not everyone would want their gold back at the same time. If they had done, he couldn't have paid out. His reserves of $90 were not enough.

The goldsmith in the table has a 100% reserve ratio. The reserve ratio is the ratio of reserves to deposits. Once he has made his loan, he has a 90% deposit ratio. This is a small risk with a small profit. How much dare he lend out in order to make a profit through his interest charges^ What are the risks involved"! Suppose the goldsmith took too much of a risk. He lent 80% of the gold he had. This panicked people. They doubted he could pay them all back, he was bound to lose some of the gold he had lent, so they rushed to get their gold back before it was too late. That was what we would now call a run on the bank, a financial panic. And the financial panic leads to exactly what people fear. the bank cannot pay them, goes bankrupt, and they go bankrupt as well.

VOCABULARY NOTES

rare - редкий

fines - штрафы

to measure their value accurately - точно измерить их стоимость (ценность)

to divide into a wide range of amounts - разделить на много частей (маленьких или больших)

precious metals - драгоценные металлы

gold bullion - золотой слиток

to deposit with - хранить, вкладывать

a goldsmith - золотых дел мастер

worked with gold for jewellery - делал золотые украшения

a guarded vault - охраняемый подвал, хранилище

to fetch - приносить, доставать

to transfer - переводить, передавать

once these letters or cheques, became acceptable as a way of paying for goods - как только (когда) эти письма, или чеки, стали приниматься при оплате товаров

their money holdings - деньги, которые им принадлежали, которыми они владели

a bank loan - банковская ссуда, заем

a little interest - небольшой процент

the goldsmith was short of gold - у мастера не было достаточно золота

to reckon - полагать, считать

at any rate - во всяком случае

a transaction - сделка

to owe - быть должным

assets and liabilities - активы и пассивы

the value of Ms loan - стоимость ссуды, которую он дал

to equal - равняться, быть равным

the firm didn't really want to carry that gold around, so it asked the goldsmith if, instead of actually taking the gold, it could be given a deposit - фирма не хотела держать золото при себе (носить золото с собой) и вместо того, чтобы на самом деле его забрать, попросила мастера принять это золото на хранение в виде вклада

(they) were worth $110- их стоимость составляла, они оценивались (имели ценность) в 110 долларов

to write (syn. to draw, to issue, to make out) a cheque - выписать чек

his assets failed - зд. его активы снизились to fail - (о банках) обанкротиться

initial loan - первоначальная ссуда

reserves - резервы

the amount of gold that is immediately available in the vault - запасы (количество) золота, которое всегда находится (и может быть немедленно получено) в хранилище банка

depositors' demands - требования вкладчиков

leaving himself with $90 - оставив себе только 90 долларов

to rely on - рассчитывать, надеяться на что-либо the reserve ratio - резервная норма dare - осмеливаться

to make a profit through his interest charges - получить прибыль за счет платежа процентов

What are the risks involved? - Чем он рискует?

to panic (panicked) - пугать, приводить в панику

to doubt - сомневаться

he was bound to lose some of the gold - он непременно должен был потерять часть золота

a run on the bank - натиск вкладчиков на банк

the financial panic - финансовая паника

to fear - опасаться, страшиться

to go bankrupt - обанкротиться

Answer the questions:

\. What did people use as money? Give some examples.

2. What were the reasons that made some societies start using precious metals as money?

3. Who were the original bankers? Where did they keep gold?

4. What are the 2 developments that turned the goldsmiths into bankers? Which of them is of greater importance?

5. What kind of letter did people give to the seller as a payment? What's it called nowadays?

6. Why did people start to say that their money holdings were what they had with them plus their money deposits?

7. How was the system of deposits started?

8. What did a firm ask a goldsmith for? Did he agree to it? On what terms?

9. Explain the information in the first and in the second rows of the table.

10. What did the firm want to do with the gold it had borrowed from the goldsmith? What would we call a deposit today?

11. Explain the information in the third and the fourth rows of the table.

12. What was the goldsmith relying on as a banker?

13. What is reserves and a reserve ratio? What is the goldsmith's reserve ratio after making the loan?

14. Why is it said that the goldsmith took too much of a risk? How much did he lend? What did people do? What is it called nowadays?

MODERN BANKING

The goldsmith bankers were an early example of a financial intermediary.

A financial intermediary is an institution that specializes in bringing lenders and borrowers together.

A commercial bank borrows money from the public, crediting them with a deposit. The deposit is a liability of the bank. It is money owed to depositors. In turn the bank lends money to firms, households or governments wishing to borrow.

Banks are not the only financial intermediaries. Insurance companies, pension funds, and building societies also take in money in order to relend it. The crucial feature of banks is that some of their liabilities are used as a means of payment, and are therefore part of the money stock.

Commercial banks are financial intermediaries with a government licence to make loans and issue deposits, including deposits against, which cheques can be written.

Let's start by looking at the present-day UK banking system. Although the details vary from country to country, the general principle is much the same everywhere.

In the UK, the commercial banking system comprises about 600 registered banks, the National Girobank operating through post offices, and a dozen trustee saving banks. Much the most important single group is the London clearing banks. The clearing banks are so named because they have a central clearing house for handling payments by cheque.

A clearing system is a set of arrangements in which debts between banks are settled by adding up all the transactions in a given period and paying only the net amounts needed to balance inter-bank accounts.

Suppose you bank with Barclays but visit a supermarket that banks with Lloyds. To pay for your shopping you write a cheque against your deposit at Barclays. The supermarket pays this cheque into its account at Lloyds. In turn, Lloyds presents the cheque to Barclays, which will credit Lloyds' account at Barclays and debit your account at Barclays by an equivalent amount. Because you purchased goods from a supermarket using a different bank, a transfer of funds between the two banks is required. Crediting or debiting one bank's account at another bank is the simplest way to achieve this.

However on the same day someone else is probably writing a cheque on a Lloyds' deposit account to pay for some stereo equipment from a shop banking with Barclays. The stereo shop pays the cheque into its Barclays' account, increasing its deposit. Barclays then pays the cheque into its account at Lloyds where this person's account is simultaneously debited. Now the transfer flows from Lloyds to Barclays.

Although in both cases the cheque writer's account is debited and the cheque recipient's account is credited, it does not make sense for the two banks to make two separate inter-bank transactions between themselves. The clearing system calculates the net Hows between the member clearing banks and these are the settlements that they make between themselves. Thus the system of clearing cheques represents another way society reduces the costs of making transactions.

The Balance Sheet of the London Clearing Banks. Балансовый отчет лондонских клиринговых банков

Tabl. 7 shows the balance sheet of the London clearing banks. Although more complex, it is not fundamentally different from the balance sheet of the goldsmith-banker shown in Tabl. 6. We'll begin by discussing the asset side of the balance sheet.

Assets

£b

Liabilities

£b

Sterling: Cash

Bills & market loans

2,9

34,7

Sterling: Sight deposits

Time deposits

54,1

59,9

Advances

83,0

CDs

8,1

Securities

Lending in other currencies Miscellaneous assets

TOTAL ASSETS

9,4

54,6

15,5

200,1

Deposits in other currencies Miscellaneous liabilities TOTAL LIABILITIES

46,2

31,8 200,1

Cash assets are notes and coin in the banks' vaults. However, modem banks' cash assets also include their cash reserves deposited with the Bank of England. The Bank of England (usually known as the Bank) is the central bank or banker to the commercial banks.

Apart from cash, the other entries on the asset side of the balance sheet show money that has been lent out or used to purchase interest-earning assets. The second item, bills and market loans, shows short-term lending in liquid assets.

Liquidity refers to the speed and the certainty with which an asset can be converted back into money, whenever the asset-holders desire. Money itself is thus the most liquid asset of all.

The third item, advances, shows lending to households and firms. A firm that has borrowed to see it through a sticky period may not be able to repay whenever the bank demands. Thus, although advances represent the major share of clearing bank lending, they are not very liquid forms of bank lending. The fourth item, securities, shows bank purchases of Interest-bearing long-term financial assets. These can be government bonds or industrial shares. Although these assets are traded daily on the stock exchange, so in principle these securities can be cashed in any time the bank wishes, their price fluctuates from day to day. Banks cannot be certain how much they will get when they sell out. Hence financial investment in securities is also illiquid.

The final two items on the asset side of the balance sheet show lending in foreign currencies and miscellaneous bank assets. Total assets of the London clearing banks were £200,1 billion. We now shall examine how the equivalent liabilities were made up.

Deposits are chiefly of two kinds: sight deposits and time deposits. Whereas sight deposits can be withdrawn on sight whenever the depositor wishes, a minimum period of notification must be given before time deposits can be withdrawn. Sight deposits are the bank accounts against, which we write cheques, thereby running dawn our deposits without giving the bank any prior warning. Whereas most banks do not pay interest on sight deposits or cheque (checking) accounts, they can afford to pay interest on time deposits. Since they have notification of any withdrawals, they have plenty of time to sell off some of their high- interest investments or call in some of their high-interest loans in order to have the money to pay out deposits.

Certificates of deposit (CDs) are an extreme form of time deposit where the bank borrows from the public for a specified period of time and knows exactly when the loan must be repaid. The final liability items in Tabl. 7 show deposits in foreign currencies, miscellaneous liabilities, such as cheques, in the process of clearing.

VOCABULARY NOTES

a financial intermediary - финансовый посредник

to bring together - соединять, сводить вместе

insurance companies - страховые компании

pension funds - пенсионные фонды

the money stock - денежная масса, деньги в обращении

to issue deposits - открывать вклады

the National Girobank - англ. Национальный жиробанк

trustee saving banks - доверительные сберегательные банки

London clearing banks - лондонские клиринговые банки (банки - члены расчетной палаты)

a central clearing house - центральная расчетная палата

inter-bank accounts - межбанковские счета

Barclays - Барклайз банк (Великобритания)

Lloyds - Ллойдз банк (Великобритания)

to credit - кредитовать

to debit - дебетовать

cheque recipient - получатель чека

cash assets - денежные активы

the Bank of England - Банк Англии, Английский банк

interest-earning (syn. interest-bearing) assets - активы, приносящие процентный доход

bills and market loans - векселя и рыночные займы

short-term lending - краткосрочное кредитование

liquid (ant. illiquid) assets - ликвидные активы

liquidity - ликвидность

advances - ссуда в виде аванса

a sticky period - трудный период

securities - ценные бумаги

interest-bearing long-term financial assets - долгосрочные финансовые активы, приносящие процентный доход

government bonds - государственные облигации

industrial shares - промышленные акции

the stock exchange - фондовая биржа

miscellaneous bank assets - прочее имущество банка

sight deposit - депозит до востребования; бессрочный вклад

time deposit - срочный вклад

to withdraw - отзывать (вклад}

to run down a deposit - уменьшать вклад

cheque (checking) accounts - текущий (чековый) счет

to sell off - распродавать

catt in high-interest loans - требовать возврата займов (требовать уплаты процентов)

certificates of deposit - депозитные сертификаты

miscellaneous liabilities - прочие (другие) пассивы

Answer the questions:

1. What's a financial intermediary? Name different financial intermediaries.

2. What's a deposit?

3. What's a bank liability? In what way are the bank liabilities part of the money stock?

4. What's a commercial bank?

5. What's a clearing bank?

6. What's a clearing system? How does it work? Draw a scheme showing how the system works.

7. What's the role of the Bank of England?

8. What do assets include? Dwell on each item.

9. What's liquidity? Why is money itself the most liquid asset? Why aren't advances very liquid forms of bank lending?

10. What do liabilities include? Dwell on each item.

MONEY AND THE RETURN IT EARNS

Fundamental to all financial markets is the idea of earning a return on money. Money has to work for its owner. Here are some of the ways it can do so:

1. You deposit S1,000 with a bank, which pays you, say, 10 per cent a year interest. In other words, your $1,000 of capital earns you $100 a year, which is the return on your money. When you want your $1,000 back you get $1,000, plus any accumulated interest, not more or less. Provided your bank does not go bust, your $1,000 of capital is not at risk, except from inflation, which may reduce its purchasing power each year.

2. You buy gold bullion to a value of $1,000 because you think the price of gold will rise. If the price of gold has risen by 20% after a year, you can sell your gold for $1,200. You have made a profit or a capital gain, of $200 on your capital outlay of $1,000. In other words you have a return of 20% on your money. If the price of gold fails to move, you've earned nothing because commodities like gold do not pay interest.

3. You use your $1,000 to buy securities that are traded on a stockmarket. Usually these will be government bonds (known as gilt-edged securities or gilts in the UK) or ordinary shares in a company. The former always provide an income; the latter normally do. Traditional gilt-edged securities pay a fixed rate of interest. Ordinary shares in companies normally pay a dividend from the profits the company earns. If the company's profits rise, the dividend is likely to be increased; but there Ls no guarantee that there will be a dividend at all. If the company makes losses, it may have to cease paying a dividend.

But when you buy securities that are traded on a stockmarket, the return on your $1,000 is not limited to the interest or dividends you receive. The prices of these securities will also rise and fall, and your original $1,000 investment accordingly becomes worth more or less. So you are taking the risk of capital gains or capital losses.

Suppose you buy $1,000 worth of ordinary shares, which pay you a dividend of $40 a year. You are getting a return or dividend yield of 4% a year on your investment ($40 as a percentage of $1,000). If after a year the market value of your $1,000 of shares has risen to $1,100, you can sell them for a capital gain of $100 (or a 10% profit on your original outlay). Thus your overall return over a year consists of the $40 income and the $100 capital gain:

a total of $140 or a 14% overall return on your original $1,000 investment.

Investors are generally prepared to accept much lower initial yields on shares than on fixed-interest stocks because they expect the income to rise in the future. Most investors in ordinary shares are seeking capital gains at least as much as income. Note that if you are buying a security, you are taking the risk that the price may fall whether it Ls a government bond or a share. But with the government bond the income is at least guaranteed by the government. With the share there is a second layer of risk: the company may not earn sufficient profits to pay a dividend.

To summarize: money can be deposited to produce an income; it can be used to buy commodities or goods, which are expected to rise in value; or it can be invested in stockmarket securities, which normally produce an income but show capital gains or losses as well. Of course, there are many variations on each of these items.

VOCABULARY NOTES

an accumulated interest - накопленный процент

provided (syn. providing) - при условии

to go bust (syn. to go bankrupt) - обанкротиться

a capital gain - доход от прироста капитала (как результат роста рыночной стоимости активов; может быть получен при продаже активов)

capital outlay - капиталовложения

gilt-edged securities (guts) - первоклассные (особо надежные) ценные бумаги (доел. с золотым обрезом)

ordinary shares - обыкновенные акции

a fixed rate of interest - фиксированная процентная ставка

pay a dividend - приносить дивиденд

to cease - прекращать

a capital loss - капитальный убыток (потери от понижения рыночной стоимости активов)

a yield - доход по ценным бумагам (особенно облигациям)

я dividend yield - доход на акцию

overall return - общий, суммарный доход

a second layer of risk - дополнительный риск

a layer - слой

Answer the questions:

1. What are the ways of earning a return on money?

2. What are gilt-edged securities? Who issues them? Why are they considered to be of the highest class?

3. In what cases does the investor take the risk of capital gains? Capital losses?

4. Which way of earning a return do you consider the safest and most profitable other things being equal?

INTEREST RATES AND BOND PRICES

The change in interest rates has important implications for the stockmarket prices of bonds, which pay a fixed rate of interest: fixed-interest securities, of which the traditional gilt-edged securities issued by the government are the most familiar though companies also issue fixed-interest bonds. It works like this.

Gilt-edged securities are a form of IOU (I owe you) or promissory note issued by the government when it needs to borrow money. The government undertakes to pay so much a year in interest to the people who put up the money and who get the IOU in exchange. Normally the government agrees to redeem the stock at some date in the future, but to illustrate the interest rate mechanism it is easiest initially to take an irredeemable or undated stock, which does not have to be repaid.

The original investors who lend the money to the government do not have to hold on to the lOUs. They can sell them to other investors, who then become entitled to receive the interest from the government. Suppose the government needs to borrow money at a time when investors would expect an 11% yield on a gilt-edged security. It offers $11 a year interest for every $100 it borrows. The investor is prepared to pay $100 for the right to receive $11 a year interest, because this represents an 11% return on his outlay.

Then suppose that interest rates rise to a point where an investor would expect a 12,5% return if he bought a gilt-edged security. He will no longer pay $100 for the right to $11 a year in income. He will only be prepared to pay a price that gives him a 12,5% return on his outlay. The "right" price in this case is $88, because if he pays only $88 to receive $11 a year in income, he is getting a 12,5% return on his investment. So in the stockmarket the price of the gilt-edged security that pays $11 a year interest will have to fall to $88 before investors are prepared to buy it. The original investor who paid $100 thus sees the value of his investment fall because of the rise in interest rates. Conversely, the value of his investment would have risen if interest rates had fallen.

To summarize: If interest rates on securities go down, bond prices or prices for securities go up, and vise versa.

VOCABULARY NOTES

a promissory note - долговое обязательство

to put up the money - вкладывать деньги

to redeem - погашать (ценные бумаги)

irredeemable stock - непогашаемые ценные бумаги

undated stock - ценные бумаги без указания даты погашения

to hold on (to smth) - сохранять что-либо, держаться за что-либо

vise versa - наоборот

Answer the questions:

1. What does the government do when it needs to borrow money?

2. What are the implications of the change in interest rates for the stockmarket prices of bonds? Explain how it works.

THE MONEY MARKET

The money market comprises the demand for money and the money supply. The equilibrium in the money market is such a state of balance when the demand for money from households and businesses is satisfied by the quantity of the money supplied. The equilibrium in the money market is reached by changing bond prices.

People can hold their wealth in various forms — money, bonds, equities, and property. For simplicity we assume that there are only two assets: money, the medium of exchange that pays no interest, and bonds, which we use to stand for all other interest-bearing assets that are not directly a means of payment. As people earn income, they ad to their wealth. As they spend, they deplete their wealth. How should people divide their wealth at any instant between money and bonds to gain the best profits possible and not to incur losses?

There is an obvious cost of holding money. The opportunity cost of holding money is the interest one would have gained if he (she) had held bonds. It naturally follows that people will hold money rather than bonds only if there is a benefit to offset this cost, only if holding money is more profitable than holding bonds. It may happen only when interest rates on bonds are too low to make it profitable to hold bonds.

Suppose the money market is in equilibrium when the interest rate on interest-bearing assets (e.g. Treasury bills and other securities) is 6% and the amount of money demanded is $200 min. Now suppose the interest rate goes down, say, to 4%. In this case interest-bearing assets are no longer profitable as they can't earn a sufficient return. Hence the demand for money will rise and will lead to a temporary lack of money in the money market. If they lack money, households and businesses are likely to sell bonds they possess for cash. That will cause an increase in the bond supply, which lowers bond prices and rises interest rates on interest-bearing assets. With a higher interest rate the amount of money people are willing to have in hand will decrease again. Consequently, the money supply will adjust to a current demand to reflect a new higher interest rate.

Conversely, the increase in the money supply creates its temporary surplus, which results in the demand for bonds and bond prices going up. The interest rate falls thus restoring balance in the money market, but at a new lower interest rate.

VOCABULARY NOTES

equities (syn. ordinary shares, equity shares, ordinary stocks) - обыкновенные акции

to deplete - истощать, исчерпывать

obvious - очевидный

to offset – возмещать

Treasury bills - казначейские векселя

consequently - следовательно, поэтому

conversely - наоборот

temporary surplus - временный избыток, излишек

Answer the questions:

1. Explain in your own words the term "opportunity costs". What is the opportunity cost of holding money?

2. What's the equilibrium in the money market? How can it be reached?

3. How does the money market work?

MARKETS AND INTEREST RATES

For each type of investment and for many of their derivatives there is a market. There is a market in money in London. It is not a physical marketplace: dealings take place over the telephone, and the price a borrower pays for the use of money is the interest rate. There are markets in commodities. And there is a market in government bonds and company shares: the stockmarket. The important thing is that no market is entirely independent of the others. The linking factor is the cost of money (or the return an investor can get on money). If interest rates rise or fall there is likely to be я ripple of movement through all the financial markets. Money will gravitate to where it earns the best return, commensurate with the risk the investor is prepared to take and the length of time for which he can tie up his money. This is the most important mechanism in the financial sphere. As a general rule:

* The more money you have to invest, the higher the return you can expect.

* The longer you are prepared to tie your money up, the higher the return you can expect.

* The more risk you are prepared to take, the higher the return you can expect if all goes well.

In either type of market, the buyers and the sellers may deal direct with each other or they may deal through a middleman known as a marketmaker. If they deal direct, each would-be buyer has to find a corresponding would-be seller. If there is a marketmaker, a seller will sell instead to the marketmaker, who buys on his own account in the hope that he will later be able to find a buyer to whom he can sell at a profit. Marketmakers make a book in shares or bonds. They are prepared to buy shares in the hope of finding somebody to sell to or sell shares (which they may not even have) in the expectation of finding somebody from whom they can buy to balance their books. Either way, they make their living on the difference between the prices at which they buy and sell. Marketmakers (in practice there will normally be a number of them competing with each other) lend liquidity - fluidity - to a market. A potential buyer can always buy without needing to wait until he can find a potential seller, securities can readily be turned into cash.

VOCABULARY NOTES

derivatives - производные

the linking factor - связующий фактор, звено

a ripple of movement through all the financial markets - движение, волнение на всех финансовых рынках

to gravitate - стремиться

commensurate with - соразмерный

to tie up - вкладывать (капитал)

a middleman – посредник

a marketmaker - "делатель рынка"; брокерская фирма, постоянно котирующая ценные бумаги, товар

on one's own account - на свой страх и риск; самостоятельно

fluidity - подвижность

Answer the questions:

1. What are different types of investment and what are the corresponding markets? Dwell on each item.

2. What is a marketmaker? How does he make the market?

PRIMARY AND SECONDARY MARKETS

Fixed-interest securities and ordinary shares are the main stock-in-trade of the securities markets and the Stock Exchange is the main securities market in the UK (and the New York Stock Exchange is the largest in the USA). By buying one or the other, investors are helping - directly or indirectly - to provide the finance that government or industry needs. Why "directly or indirectly"? Because the stockmarket is two markets in one: a primary market and a secondary market.

A primary market is one in which the government, companies or other bodies can sell new securities to investors to raise cash.

A secondary market is a market in which the investors can buy and sell these securities among each other. The buying and the selling in the secondary market does not directly affect the finances of government and companies. But if investors did not know they could buy and sell securities in the secondary market they might well be reluctant to put up cash for the government or -companies by buying securities in the primary market when they were first issued. And the prices established by the buying and selling by investors in the secondary market help to determine the price that government and companies will have to pay next time they need to issue further securities for cash in the primary market. A reasonably liquid secondary market is normally considered vital for a healthy primary market.

VOCABULARY NOTES

stock-in-trade - товарная наличность; товар

the Stock Exchange - Лондонская фондовая биржа

to be reluctant to do smth - неохотно делать что-либо

Answer the questions

1. What is a primary market?

2. What is a secondary market?

3. How are they interconnected?

MONETARY POLICY

Monetary policy is one of the main instruments of macroeconomics. It is based on the ability of the Central bank to control the money supply, which leads to changes in interest rates and the exchange rate, and therefore in the amount of investment, which influences directly the national output. This method of controlling the economy centres on adjusting the amount of money in circulation in the economy and so the level of spending and economic activity. Monetary policy was first employed as a means of control in the 1950s, but has been more widely used since the 1970s. The Central Bank plays a major role in the implementation of a nation's monetary policy. In some countries (for example, Germany) the Central Bank operates monetary policy independent of government policy. However, the UK's Central Bank, the Bank of England, implements monetary policy on behalf of' the government. Monetary policy has three main aspects'.

* Controlling the money supply

* Controlling interest rates

* Managing the exchange rate

In this section we study the ways in which a central bank can control the supply of money in the economy. The aim of the authorities when controlling the money supply is to limit the amount borrowed, and hence spent, by businesses and individuals during a inflationary period. It is hoped in this way to limit the level of overall demand in the economy and thus to remove or reduce inflationary pressure. During a recession monetary policy is aimed at increasing the money supply to encourage spendings. We now describe the three most important instruments available to affect the money supply: open market operations, reserve requirements and the discount rate.

Open Market Operations. Операции на открытом рынке

Open market operations are the most important way of controlling the money supply. It refers to the Bank trading government bonds in the open market - that is when they are bought from and sold to commercial banks and

individuals.

When the Bank sells government bonds in the open market, the Bank withdraws the money from population and reduces the money supply. When the Bank buys government bonds in the open market, it increases the amount of money in circulation and hence the money supply.

Reserve Requirements. Резервные требования

To understand the way a central bank can influence the money supply we should consider the creation of money by commercial banks and in this connection introduce the money multiplier.

Banks have to hold a proportion of their assets as a reserve in case customers demand repayment of their deposits. This required reserve has to be in a liquid form, that is easily convertible into cash. Many banks indeed hold a significant proportion of this reserve as notes and coin either in their vaults or at the central bank. A required reserve ratio (%) is a minimum ratio of cash reserves to deposits that the central bank requires commercial banks to hold. Commercial banks can hold more than the required cash reserves (this amount of money is called excess reserves and is used to create new money), but they cannot hold less. If their cash falls below the required amount, they must immediately borrow cash, usually from the central bank, to restore their required reserve ratio.

Commercial banks can make loans, i.e. they can create money and increase their excess reserves. Suppose somebody deposited $100 with bank A. If a required reserve ratio is 20%, the bank has $20 as required reserves and $80 as excess reserves, which can be lended. If a borrower draws a cheque for this whole sum and deposits it with bank B, then bank В gets $80 as its assets. Bank В is to hold 20% of this sum (that is $16) as required reserves. It means it has $64 of excess reserves, which it can lend to somebody. Tabl. 8 illustrates the process with banks C, D, E, etc. being involved.

Tabl. 8. The expansion of the money supply by a system of commercial banks

Required Reserves,

Excess Reserves,

Created Money (the amount of money to lend), $

Bank A

Bank В

Bank С

BankD

Other banks

100,00

80,00

64,00

51,20

204,80

20,00

16,00

12,80

10,24

40,96

80,00

64,00

51,20

40,96

163,84

80,00

64,00

51,20

40,96

163,84

The total amount of the money created

400,00

The money multiplier (m) shows the maximum amount of money, which can be created by one dollar of excess reserves, the required reserve ratio given. The money multiplier is Inversely proportional to the required reserve ratio, or

m = 1 / R, where

m - a money multiplier

R — a required reserve ratio

So we can see that the larger the required reserve ratio is the smaller the money multiplier is; the less money can be created and the less the money supply is.

Now suppose the commercial banking system has $1 million in cash and for strictly commercial purposes would normally maintain cash reserves equal to 5% of sight deposits. Since sight deposits will be 20 times cash reserves, the banking system will create $20 million of sight deposits against its $1 million cash reserves:

cash reserves $1 min - 5%

sight deposits x - 100%

x = $1 mm x 100% : 5% = $20 min.

Suppose the Bank now imposes a reserve requirement that banks must hold cash reserves of at least 10% of sight deposits. Now banks can create only $10 million sight deposits against their cash reserves of $1 million. Thus a reserve requirement acts like a tax on banks by forcing them to hold a higher fraction of their total assets as bank reserves and a lower fraction as loans earning high interest rates.

Thus, when the central bank imposes a reserve requirement in excess o/the reserve ratio that prudent banks would anyway have maintained, the effect is to reduce the creation of bank deposits, reduce the value of the money multiplier, and reduce the money supply. Similarly, when a particular reserve requirement is already in force, any increase in the reserve requirement will reduce the money supply.

The Discount Rate. Учетная ставка

The second instrument of monetary control available to the central bank is the discount rate.

The discount rate is the interest rate that the Bank charges when the commercial banks want to borrow money.

Suppose banks think the minimum safe ratio of cash to deposits is 10%. Say their cash reserves are 12% of deposits. How far dare they let their cash reserves fall towards the minimum level of 10%?

Banks have to balance the interest rate they will get on extra lending with the dangers and costs involved if there is a sudden flood of withdrawals, which push their cash reserves below the critical 10% figure. This is where the discount rate comes in. Suppose market interest rates are 8% and the central bank makes it known it is prepared to lend to commercial banks at 8%. Commercial banks may as well lend up to the hilt and drive their cash reserves down to the minimum 10% of deposits. The banks are lending at 8% and, if the worst comes to the -worst and they are short of cash, they can always borrow from the Bank at 8%. Banks cannot lose by lending as much as possible.

Suppose however that the Bank announces that, although market interest rates are 8%, it will lend to commercial banks only at the penalty rate of 10%. Now a bank with cash reserves of 12% may conclude that it is not worth making the extra loans at 8% interest that would drive its cash reserves down to the minimum of 10% of deposits. There is too high a risk that sudden withdrawals will then force the bank to borrow from the Bank at 10% interest. It will have lost money by making these extra loans. It makes more sense to hold some excess cash reserves against the possibility of a sudden withdrawal.

Thus, by setting the discount rate at a penalty level in excess of the general level of interest rates, the Bank can induce commercial banks voluntarily to hold additional cash reserves. Since banks have to hold more cash as reserves, the money multiplier is reduced, less money can be created and the money supply is lower.

VOCABULARY NOTE

instruments of macroeconomics - макроэкономические инструменты

to control the money supply - контролировать предложение денег

the exchange rate - обменный (валютный) курс

the amount of investment - размер капиталовложений

to adjust the amount of money in circulation - корректировать количество денег в обращении

implementation of a nation's monetary policy - осуществление, проведение в жизнь национальной денежно-кредитной политики

to implement - выполнять, осуществлять, обеспечивать выполнение

the Bank of England - Банк Англии (Английский банк). The Bank of England is the UK's central bank. Established in 1694, it plays a key part in implementing the government's monetary policy. It ensures that interest rates are at the level desired by the government of the day and oversees the printing of notes and coin. It has wider responsibilities in managing the nation's debt and holding its reserves of foreign currency and gold. Thus, it holds responsibility for the country's monetary policy and its financial relations with other countries.

on behalf of - от имени

reserve requirements - резервные требования

a discount rate - учетная ставка

the money multiplier - денежный мультипликатор

required reserves - требуемые резервные фонды

easily convertible into cash - легко обратимый в наличные (напр., депозиты, ценные бумаги) j a required reserve ratio - требуемая резервная норма

cash reserves - кассовые резервы

excess reserves - избыточные резервы

to draw (syn. to write out, to make out, to issue) a cheque - выписать чек

created money - созданные деньги

inversely proportional (ant. directly proportional) - обратно пропорциональный

to maintain - поддерживать

to impose a reserve requirement - налагать (вводить) резервное требование

fraction - часть, доля

in excess of smth - сверх чего-либо

prudent - расчетливый, предусмотрительный

in force - в силе

to charge - назначать, начислять

to lend up to the hilt - зд. продолжать предоставлять ссуды

up to the hilt - полностью, целиком

drive their cash reserves down to... - довести (снизить) свои кассовые резервы до...

if the worst comes to the worst - если случится самое худшее

they are short of cash - у них не хватит наличных денег

the penalty rate - повышенная (штрафная) ставка

it is not worth making the extra loans - не стоит предоставлять дополнительных займов

to induce smb to do smth (syn. to cause smb to do smth) - заставить кого-то сделать что-то

voluntarily - сознательно, осознанно

Answer the questions:

1. What is the aim of monetary policy?

2. Why is it important to control the money supply?

3. Dwell on open market operations.

4. Explain the creation of money by commercial banks. What does a money multiplier show?

5. Why does the Bank impose a reserve requirement? What's the effect of the Bank imposing a reserve requirement?

6. Why does a reserve requirement act like a tax on banks?

7. What is a discount rate? How does it work?

VOCABULARY NOTES

TEXT: THE ECONOMIC ENVIRONMENT

to comprise - включать в себя, составлять

local authorities - местные органы власти

to take (syn. to make) decisions - принимать решения

to play a prominent part - играть заметную (значительную) роль

to shape the environment - формировать обстановку, среду, окружение

to predict (syn. to forecast) - предсказывать

to be aware - осознавать, знать

to cut back on spending - сокращать расходы

enormous implications - большое значение, смысл, влияние

general prosperity - всеобщее процветание

to enable smb to do smth - делать возможным для кого-то, позволять кому-либо что-либо делать

consumers - потребители

to alter - изменяться

a recession - упадок

total spending - общие, суммарные расходы

to decline - снижаться

income - доход

unemployment - безработица

to purchase (syn. to buy) - покупать

to cut expenditure - сокращать расходы

luxury items - предметы роскоши

to affect (syn. to influence smb, smth) - влиять

the extent - степень

to some extent - в некоторой степени

the high street banks - центральные банки

to suffer badly - сильно пострадать

profits - прибыль

to incur (syn. to bear, to suffer) losses - нести убытки, потери

to borrow from - занимать, брать взаймы

to deny the opportunity - лишать возможности

to deny - отрицать

to earn interest - получать процентный доход

loans - ссуды, займы

to default on repayment - не выполнять обязательств по выплате (долгов, процентов и т. п.)

a debt - долг

profit "> the outcome of the actions - результат действий

to make up society - составлять общество

to have dealings - иметь торговые (деловые) связи

TEXT: MEASURING ECONOMIC ACTIVITY

to measure - измерять, рассчитывать, оценивать

economic activity - экономическая деятельность

is no exception in this respect - в этом отношении не является исключением

important items - важные вопросы, проблемы

to relate to - относиться к чему-либо, иметь отношение; рассказывать

by highlighting the adverse effects on... - в первую очередь освещая неблагоприятное влияние на...

householder - домовладелец, домохозяин

household - домашнее хозяйство

mortgage - закладная

data - данные

on a wide range of aspects - по самым разнообразным аспектам

statistics are available to show - статистика показывает

trade balance - торговый баланс

key industries - основные отрасли промышленности

wages - заработная плата (рабочих)

salary - оклад, жалованье (служащих)

raw material prices - цены на сырье

at full capacity - на полную мощность

available resources - доступные, имеющиеся в наличии ресурсы

labour - труд

machinery - оборудование

factors of production - производственные факторы, факторы производства (труд, земля, природные ресурсы, капитал)

to be under-utilized - не использоваться полностью

unemployment figures - количество безработных

indicator — показатель

national income - национальный доход

the value of a nation's output - оценка объема производства страны

Gross National Product (GNP) - валовой национальный продукт (ВНП)

trend - направление, тенденция, тренд

the Tresuary - Государственное казначейство, Министерство финансов (в Великобритании)

the Department of Employment - Министерство по вопросам занятости (в Великобритании)

the Central Statistical Office - Центральное статистическое управление

to contain - содержать

equally valuable - такой же важный

building societies - англ. строительные общества (специализированные сберегательные учреждения)

graphs and tables - графики и таблицы

to assibt - помогать, оказывать помощь

they should be treated with some caution - к этим данным следует относиться с некоторой осторожностью

TEXT: INCOME

income distribution - распределение дохода

an annual income - годовой доход

a certain standard of living - определенный уровень жизни

to cover the necessities of life - охватывать основные жизненные потребности

recreation - отдых, досуг

national income - национальный доход

share of income - доля, часть дохода

income per head - доход на душу населения

percentage of world population - процент мирового населения

percentage of world income - процент мирового дохода

essentially - в основном, большей частью

world production - мировое производство

rich industrialised countries - богатые промышленные страны

not very much technical training - недостаточное техническое обучение

to escape - зд. избежать

to account for (syn. to explain) - объяснять

the differences in national incomes - различия в национальных доходах

unequal distribution of income - неравное распределение дохода

throughout population - среди населения

TEXT: PLANNED ECONOMICS

inhabitants - жители, население

to own - владеть

natural resources - природные ресурсы

a large amount - большой объем

central planning and direction - центральное планирование и руководство

consumption - потребление

obviously - очевидно

complicated - сложный

to have a number of common features - иметь ряд общих черт

intention - намерение

to comply with - подчиняться

a production target to meet - производственная задача (задание), которую надо выполнить

an objective - цель, задача

an overall aim - общая цель

to enjoy a basic standard of living - иметь основной уровень жизни

to duplicate production - дублировать производство

to divert - отвлекать (напр., ресурсы на другие цели)

to abandon - отказываться от чего-либо

a major problem faced by command or planned economies - основная проблема, стоящая перед командной или плановой экономикой

changes in tastes and fashions - изменения вкусов и моды

to underproduce - недопроизводить

to regard smth as - воспринимать что-либо, относиться к чему-либо как...

obsolete (syn. out of date) - устарелый, вышедший из употребления

to overproduce - перепроизводить

delays and queues - зд. перебои (с товарами) и очереди

TEXT: MARKET ECONOMICS

to own and run (syn. to manage, to operate) businesses - владеть и управлять бизнесом

to intervene - вмешиваться

private enterprise (syn. entrepreneurship) - частное предпринимательство

private ownership (syn. property) of the means of production - частная собственность на средства производства

public property, common ownership - общественная собственность

personal property - личная собственность

state-owned property, state ownership - государственная собственность

private supplies of capital - частный капитал

surplus income available for investment in new business activities - дополнительный доход (излишек дохода), который можно вложить (инвестировать) в новое дело (бизнес)

to employ - использовать; предоставлять работу, нанимать

employer - работодатель

employee - служащий

employment - занятость

unemployment - безработица

to persuade - убеждать

at first view (syn. at first sight) - на первый взгляд

to adjust automatically - автоматически приспосабливаться; приводиться в соответствие

competitive - конкурентоспособный

to make the largest profits possible - получить наибольшую возможную прибыль

to pursue one's own interests - преследовать свои интересы

to make money out of it - заработать деньги на этом

to move the production possibility frontier outwards - продвинуть вперед предел производственных возможностей

to make the society better-off - сделать общество более состоятельным

to create new jobs and opportunities - создать новые рабочие места, новые возможности

to underpurchase (ant. to overpnrchase) - недостаточно раскупать

to provide free or subsidized supplies - обеспечить бесплатное или субсидированное (дотированное) предоставление (товаров, услуг)

in response to (syn. in answer to) - в ответ на

a cornerstone - краеугольный камень

to alter swiftly - быстро меняться

consequences - последствия

labour- intensive production - трудоемкое производство

working conditions - условия работы

safety standards - нормы техники безопасности

large- scale intervention - широкомасштабное вмешательство

to pass laws - принимать законы

to gain sufficient sales - добиться достаточного объема продаж

rival firms - фирмы-конкуренты, соперники

to have confidence - иметь уверенность

to lack confidence - не хватать уверенности

TEXT: MIXED ECONOMICS

significant faults - значительные недостатки

at one extreme... at the other extreme - на одном полюсе... на другом

to exercise considerable economic freedom of choice - иметь значительную экономическую свободу выбора

restriction - ограничение

whilst [wailst] (syn. while) - в то время как, пока

state- controlled industry - промышленность, контролируемая государством

to avoid disadvantages - избегать недостатков

to enjoy the benefits - иметь преимущества, пользоваться преимуществами

to interact - взаимодействовать

to solve economic problems - решать экономические проблемы

a share of the output - доля в объеме производства

essential items - товары и услуги первой необходимости

a range of businesses - зд. ряд компаний, фирм

TEXT: MARKETS

to bear in mind (syn. to keep in mind) - иметь в виду

a local fruit stall - фруктовый ларек

stock market - фондовая биржа, рынок акций

to transact business (syn. to make a deal) - совершать сделку

by remote control - при помощи дистанционного управления

to go into details - вдаваться в подробности

a general definition - общее определение

a shorthand expression - краткое, рабочее выражение (определение)

households' decisions - решения домохозяйств

to reconcile - приводить в соответствие, согласовывать

by adjustment of prices - посредством корректировки цен

to demand - требовать

given (syn. taking into account, consideration) - при условии, что..., учитывая

limited resources - ограниченные ресурсы to satisfy one's appetite - удовлетворять аппетит

to answer the question in favour of smb else - решать вопрос в пользу кого-либо другого

the seller's viewpoint - точка зрения продавца

the cafe owner - владелец кафе

the rent - арендная плата

to switch to luxury lunches - переключиться на дорогие обеды

rich executives - состоятельные служащие

behind the counter - за прилавком

suitable - подходящий

to suit - подходить

part-time job (ant. full-time job) - работа с неполной занятостью

a bit of money {ant. scads of money) - немного денег

it would hardly be worth working at all - вряд ли вообще имеет смысл работать

conversely (syn. on the opposite, on the contrary) - наоборот, напротив

unskilled Job - неквалифицированная работа

to guide one's decision - влиять на чье-либо решение

through the price system - через систему цен

to cover the cost - покрывать расходы

to run the cafe - содержать кафе

to devote resources - выделять ресурсы

to guide resources into hamburger production - направить ресурсы на производство гамбургеров

cattle - крупный рогатый скот

to contract a disease - подхватить болезнь

thereby - следовательно, таким образом

to reduce the economy's ability - снижать возможности экономики

competition - состязание, конкуренция

to purchase scarce supplies - скупать дефицитные ресурсы

to reallocate resources - перераспределять ресурсы

to reflect the scarcity - отражать дефицит

to be involved in - быть задействованным в

the local labour market - локальный рынок труда

the local wholesale market - локальный оптовый рынок

the local market for rented buildings - локальный рынок аренды помещений

precise descriptions of markets - точные описания рынков

to adopt a definition - принять определение

to adopt a child in a family - принять ребенка в семью, усыновить

to emphasize - подчеркнуть, выделить

arrangements through, which prices influence smth - структуры (механизмы), посредством которых цены влияют на что-либо

TEXT: WITHDRAWALS

leakage - утечка

which are not passed on as - которые рассматриваются не как...

with the likely result that - в результате чего может; результатом чего может

savings - сбережения, накопления

a number of factors are thought to determine - считается, что ряд факторов определяет

the return on his or her savings - отдача, процент, доход от... сбережений

there is evidence that - очевидно, что

to place great store by - придавать большое значение

due to - благодаря, из-за

to remove from - удалить, изъять

insufficient to cover - недостаточный для покрытия (расходов)

to encourage smb to do smth - побуждать кого-то сделать что-то

in the long term (ant. in the short term) - в (отдаленном) будущем

domestic industry - национальная промышленность

to withdraw - изымать, выводить, удалять

to levy - взимать, облагать (о налогах}

direct (indirect) taxes- прямые (косвенные) налоги

income tax - подоходный налог

corporation tax (on profits) - налог с прибыли (доходов) корпораций

VAT (value added tax) - НДС (налог на добавленную стоимость)

customs duty - таможенная пошлина

excise duty - акцизный сбор

and then fail to spend this tax revenue - а затем не могут распорядиться (потратить) этими налоговыми поступлениями

has been substantially altered - была значительно изменена

and so dampens the spirit of enterprise - и таким образом подавляет дух предпринимательства

to make up for - компенсировать, восполнять tax burden - бремя налогов

TEXT: INFLATION

a persistent rise - неуклонный, постоянный подъем

with no corresponding rise in output - не сопровождающийся подъемом производства

briefly - коротко, кратко potential benefits - потенциальные выгоды

varies considerably in its extent and severity - бывает разной по длительности и остроте

hence - следовательно

mild inflation - мягкая, низкая инфляция

may pose few difficulties - особых проблем не представляет

entails enormously high rates of inflation - означает (ведет к) громадный рост инфляции

insurmountable - неисчислимые, колоссальные

at length - и сейчас

to pull - тянуть

demand-pull inflation - инфляция, вызванная превышением спроса над предложением, инфляция спроса

to push - толкать

cost-push inflation - инфляция, вызванная ростом издержек производства, инфляция издержек

to occur - происходить

to outstrip - обгонять, опережать, превосходить

to stretch - натягивать, напрягать

little available labour - мало рабочей силы

there is little scope - мало возможностей

owing to trade union militancy - благодаря воинственности профсоюзов

in order to improve their profit ">

TEXT: CAN INFLATION BE BENEFICIAL

beneficial - выгодный, приносящий доход

unfavourable (ant. favourable) - неблагоприятный

there is a school of thought, which argues that - существует мнение, что...

and induces investment as firms seek to expand - и способствует росту капиталовложений, так как фирмы (предприятия) расширяются

in the short run - очень быстро

incur costs, which are fixed for some period of time - несут расходы, ко- | торые в течение какого-то периода являются неизменными

a further argument - еще один аргумент

to borrow heavily - брать взаймы большие суммы

repaying loans - выплата займов

to contend - настаивать, утверждать

this viewpoint has gained in credence - эта точка зрения получила большое распространение

a major objective - главная цель

TEXT: MONEY AND BANKING

the means of payment - средство платежа

medium of exchange - средство обращения

a standard of value - мера стоимости

a unit of account - единица учета

a store of value - средство сбережения (сохранения стоимости)

a standard of deferred payment - средство погашения долга

subsequently - впоследствии

a barter economy - бартерная экономика

to swap (also swop; syn. to exchange, to barter) - обменивать, менять

to hand over in exchange - передать, вручить в обмен

a double coincidence of wants - двойное совпадение потребностей

a monetary unit - денежная единица

to remind of - напоминать

to be worthless - обесцениваться

an interest-bearing bank account - счет в банке с вьшлатой процентов

to pay interest - приносить процентный доход

to erode - зд. фактически уменьшать

hard currency - твердая (конвертируемая) валюта

soft currency - неконвергируемая валюта

invariably - неизменно, постоянно

prisoner-of-war camp - лагерь военнопленных

commodity money — деньги - товар

token money - символические деньги (дензнаки)

inch - дюйм (равен 2,5 см)

to melt down - расплавить

tiny costs - мизерные затраты

legal tender - законное платежное средство

to supplement - дополнять

IOU money - I owe you - я вам должен; деньги - долговое обязательство

a bank deposit - вклад в банке

TEXT: THE MONEY SUPPLY AND THE DEMAND FOR MONEY

currency in circulation - наличность в обращении

the opportunity costs - альтернативные издержки владения деньгами

the transactions motive for holding money - трансакционный мотив накопления денег (категория кейнсианского анализа)

to undertake transactions - проводить, совершать сделки

receipts [risi:ts] pi. - денежные поступления

the precautionary motive for holding money - мотив накопления денег на непредвиденные цели (категория кейнсианского анализа)

the precise timing - точное время

to get by - прожить, сводить концы с концами

to spot - разг. увидеть, заметить

a great bargain - хорошая вещь, которая предлагается по специальной (сниженной) цене; удачная покупка

to take advantage of - воспользоваться

to snap up - подхватить, перехватить

contingencies - случайности, непредвиденные обстоятельства

to foresee - предвидеть

the asset motive for holding money - мотив накопления денег в качестве активов (категория кейнсианского анализа)

on average - в среднем to swamp - поглощать, сводить на нет

risky assets - неликвидные активы (долгосрочные инвестиции и ссуды;^ ценные бумаги с колеблющимся курсом)

a portfolio - портфель (напр., ценных бумаг)

disaster - бедствие, крах

to sacrifice - жертвовать, приносить в жертву

predictable rate of return - предсказуемая норма прибыли

Часть 4

Вместо точек вставьте, где требуется, артикли “a”, “an”, “the”

On … 12^th of … August, 1935, … Russian foreign trade organization concluded … contract with … foreign firm for … sale of … cargo of 6,000 tons of … wheat. … sellers chartered … vs. “Martha” for … transportation of … wheat. About ten days before … expected arrival of … vessel at … port of loading, … ship owners informed … sellers that … vs. “Martha” had been in collision with another boat during … dense fog in … Mediterranean Sea and would not be able to arrive at … port of loading before … end of … September. … sellers had at their disposal … larger vessel of 6,500 tons. Therefore they sent … telegram to … buyers asking them to accept 6,500 tons of … wheat instead of 6,000 tons. … buyers agreed, but requested … sellers to ship … wheat in … first of … October. … sellers consented to postpone … shipment of … cargo in accordance with … desire of … buyers and … cargo was shipped on … 10^th of October.

Напишите следующие существительные во множественном числе.

Week, clock, ship, library, watch, country, day, party, mass, language, place, key, man, woman, text-book, passer-by, editor-in-chief.

Напишите существительные, выделенные жирным шрифтом, во множественном числе, сделав, где необходимо, соответствующие изменения в предложении.

Put the file on the shelf. He called the chief. This factory has a good laboratory. The speech was very interesting. Where is the report? I like my new office. A copy of the contract was sent to the USA. The cargo of the steamer consists of various raw materials.

Поставьте глаголы, стоящие в скобках, в Present и Past Simple.

1)He often (to meet) Mr. Brown at his office. 2) You manager (to speak) English? – Yes, he (to do). 3) Our secretary usually (to come) at 7.30. 4) Ms. Smith (to be) the best economist in our fir. 5) We (to know) about this case.

5.Поставьте глаголы, стоящие в скобках, в требуемом по смыслу времени.

1) Wait a minute while the superior (to come) 2) These authors often (to type) articles on the subject of microeconomics. 3) We (to enlarge) the production of automobiles every month. 4) I (to recommend) you to consult a lawyer. 5) This firm (to violate) the law. 6) You (not to obey the law). 7) If we (to prove) his guilty, he will be sentenced for recovering some debts. The manager (to come) in our town on Monday.

6. Поставьте вместо точек правильную форму глагола.

If we … the letter tomorrow I’ll phone you.

a) shall receive b) received c) receive

The manager of the firm “Gold Star” often … to us.

a) come b) has come c) comes

Every day we … a lot of complaints.

a) receive b) receives c) have receive

She always … a loud voice during the meeting.

a) speak b) will speak c) speaks

7.Замените, где возможно, существительное с предлогом of существительным в форме притяжательного падежа.

1. The new club of the workers. 2. The computer of the bookkeeper.

3. The voice of the manager. 4. The orders of the Commander-in-Chief. 5. The pages of the report. 6. The opinion of the companion. 7. The signature of Mr. Brown. 8. The offer of the seller. 8 The conclusion of the expert.

8. Переведите на английский язык.

1. На днях мы заключили контракт с известной фирмой. 2. Час назад пришел факс. 3. Летом начальник нашего отдела несколько раз ездил в командировку. 4.Во время семинара мы обсуждали важные вопросы. 5.

9. Поставьте глаголы, стоящие в скобках, в Past Simple, Past Continuous, Past Perfect или Past Perfect Continuous.

1. He not (to see) me as he (to read) when I (to come) into the study.

2. The telegram (to arrive) five minutes after you (to leave) the office.

3. When I (to call) the manager, his secretary (to tell) me that he (to leave) half an hour before. 4. Large crowds (to wait) at the station when the delegation (to arrive). 5. He (to thank) me for what I (to do) for him.

6. When I (to go) to the study the next day, I (to find) the diskettes exactly where I (to leave) them.

Учебно-методическое пособие по учебной дисциплине «Английский язык» для студентов заочного отделения специальности 38.02.01 Экономика и бухгалтерский учет

Учебно-методическое пособие

1. Пояснительная записка

Часть 2.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 5. Вставьте вместо пропусков подходящие по смыслу слова

Часть 2 Грамматика

Задание № 4. Выберите правильные формы глагола.

Задание № 5. Напишите предложение в страдательном залоге.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 4 и 5 абзацев.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 5. Вставьте вместо пропусков подходящие по смыслу слова

FINDING A NICHE

Часть 2 Грамматика

Задание № 4. Выберите правильные формы глагола.

Задание № 5. Напишите предложение в страдательном залоге.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 2, 3, 4 абзацев.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова

Часть 2 Грамматика

Задание № 4. Выберите правильные формы глагола.

Задание № 5. Напишите предложение в страдательном залоге.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 2 и 3 абзацев.

Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 5. Вставьте вместо пропусков подходящие по смыслу слова

Часть 2 Грамматика

Задание № 4. Выберите правильные формы глагола.

Задание № 5. Напишите предложение в страдательном залоге.

Часть 3

Прочитайте и переведите текст. Дайте письменный перевод 6, 7, 8 абзацев.

Planned economics (Плановая экономика)

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 2. Замените слова, выделенные курсивом синонимами.

Переписка по вопросам рекламы.

Часть 2 Грамматика

Часть 3.

Прочитайте и переведите текст. Дайте письменный перевод отмеченных абзацев.

Market economics

Answer the questions:

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Часть 2 Грамматика

Часть 3.

Прочитайте и переведите текст. Дайте письменный перевод отмеченных абзацев.

ECONOMIC SYSTEMS

Mixed economics

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 2. Замените слова, выделенные курсивом синонимами.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова.

Часть 2 Грамматика

Часть 3.

Прочитайте и переведите текст. Выполните письменный перевод отмеченных абзацев.

Письменно ответьте на вопросы

The Role of Market

Грамматика: Учебник по грамматике: К.Н.Качалова, Е.Е. Израилевич "Практическая грамматика Английского языка"

Часть 1 Лексика

Задание № 3. Найдите в тексте английские эквиваленты следующих словосочетаний.

Задание № 4. Вставьте вместо пропусков подходящие по смыслу слова.

Переписка по вопросам поставки запасных частей.

Часть 2 Грамматика

Часть 3.

Прочитайте и переведите текст. Выполните письменный перевод отмеченных абзацев.

Письменно ответьте на вопросы.

WITHDRAWALS

Imports.

Часть 1 Лексика

Часть 2 Грамматика

Допишите предложения, употребляя герундий.

Часть 3

Текст

Часть 1 Лексика

People forget how _ you did a job – but they remember how _ you did it . ( fast, long, well, good)