Semester 4, Lesson 2 (47)
ECONOMIC SYSTEMS
I. Read the following words and word
combinations and learn their meanings by heart:
poverty [`povqti] бідність; inflation [in'fleiSn] інфляція;
unemployment [Anim'plOimant] безробіття; a growth [grouT] приріст; increase [`inkri:s] зростання; to
increase [In'krJs] зростати; an economic [ikq'nPmik]
growth - економічне зростання;
Gross Domestic Product [grous do'mestik
prodAkt] валовий національний продукт; decline [di'klain] занепад, спад; laws of supply and
demand – закони пропозиції
і попиту, to ban an import – заборонити
імпорт, merchandise [`mWCqndaIz] – товар, provision [prq`vIZqn] – резерви, запаси, забезпечення,
to earn the living – заробляти на прожиття
II. 1. Read and translate text 4
2. Ask as
many questions as you can to the underlined sentences.
TEXT 4 THE FUNCTIONS OF EVERY ECONOMIC SYSTEM
There are
many economic problems - poverty, inflation, unemployment, etc. People in different modern societies solve
these problems in different ways.
The great
American economist Paul Samuelson said that every economic society has to
answer three main questions:
l. What to
produce? 2. How to produce? 3. Who gets the product?
The way in
which a society goes about answering these fundamental questions is known as
its economic system. So a social and institutional order which is developed by people to solve
major economical problems can be defined
as an Economic System. Thus, these questions are universal and true for any
economic system that has the three functions.
The first
function is to make a right decision what goods we are going to produce
with the given resources — clothes, food, cars, television sets, books,
etc.
The second
function is to decide how we are going to produce goods and services
with the basic recourses of labour, land, etc. What methods are best and the
most effective is an important question here.
Once we have
produced goods and services we now have to decide how these will be divided,
distributed among the people in the economy. So, it is the third function.
Economic
system may be classified as traditional, command or market one. Resources are
allocated (distributed) in a traditional economy in accordance with traditions
and in a command economy by government planners. Resources in a market economy are allocated in accordance with the
laws of supply and demand.
When we
speak of economic growth we mean an increase in the GDP of a nation. The
Gross Domestic Product is the total value of all production in an economy in a
year. The GDP is the basic indicator of how well a country's economy
performs. The main features that cause such growth are the
following: 1) increases in natural resources; 2) increases in the production of
goods and services; 3) improvements in technology; 4) improvements in human
resource.
However,
there is a difference between real and nominal increases.
For example,
between 1968 and 1989 the GDP of the UK increased from $ 38 billion to 439
billion. It means an increase of 1045 per cent. But if we take into
account inflation an increase is only about 60 per cent. Many examples of
this kind may be given concerning Eastern European countries during their transition
period.
The GDP is
also affected by the indicator of population growth. They say, the GDP
grows at 5 per cent and the population grows at 10 per cent. In this case the
GDP is declining.
III. Retell the text according to the following
questions:
1. What are the main economic
problems of nowadays? 2. What are three questions true for any economic system?
3. Name three functions of an economic system. 4. What is the Gross Domestic
Product? 5. What does it show? 6. What causes economic growth? 7. Why is there
the difference between real and nominal increases? 8. What is the GDP affected
by?
IV. Learn the following groups of:
a) synonyms:
Increase—growth, to take into
account—to take into consideration, country—state—nation, to grow—to increase,
product—goods—merchandise, percent – percentage-interest, to go about – to tackle
(a problem or task), profit- income
b) antonyms:
Employment - unemployment,
best - worst, universal - local, poverty- wealth, growth-decline, to lend – to
borrow,
V. Give
3 forms of the verbs:
to
sell, to say, to produce, to develop, to define, to make, to go, to decide,
to divide, to distribute, to classify,
to speak, to buy, to provide, to face, to earn, to show, to think, to lend
VI. Try to repeat a tongue twister several
times, as quickly as possible, without stumbling or mispronouncing
1. I can think
of six thin things and of six thick things too.
2. Irish wristwatch.
VII. Read and translate the meanings of the following terms. Translate the
sentences with them.
Proprietor - is an owner, especially of a business or
hotel.
1. All complaints should be made to the proprietor.
Property - 1) is a thing or things owned, whether
material or abstract; 2) is land and buildings; 3) is a house, factory, etc.
and the land around it.
1. Please take care of personal property. 2. The site was bought by a property developer. 3. He has
bought a property in the south of France.
Loan - is something lent, usually money, on the condition it will be paid back
after an agreed period with interest.
1. He asks the bank for a loan. 2. I'm only asking for a loan. - I'll pay
you back. 3. We're repaying the loan over a three-year period.
Import - 1) is an item, a service, an idea or a person that is brought into
one country from another; 2) is the action of importing goods.
1. The government eventually banned the import of all electrical goods. 2.
An increase in food imports is obvious. 3. The country increases tariffs on the
import of manufactured goods. 4. We import tea from India. 5. A provision
closely connected with the taxing power is the import-export Clause. 6. Import
revenues were to be the major source of revenue of the federal government and
should not be reverted to the states.
Export - 1) is an item, an idea or a person that is
sent from one country to another to be sold; 2) is the action of exporting
goods.
1. There is a ban on the export of ivory. 2. This size is made specifically
for export. 3. We export merchandise of all kinds to many countries. 4. Great
Britain exports machinery in return for food stuffs. 5. Export-Import Clause
prohibits both the federal and state governments from directly taxing exports.
VIII. Give English equivalents of the following words:
заробляти на прожиття, заборона на експорт,
за умови, у відповідності з законом, забудовник (власності), піклуватися про, cтаття експорту – імпорту, «битися над відповіддю», прийняти рішення, економічні стимули, перехідний період, досягнення мети, зробити вибір, задовільняти чиїсь потреби, ресурси, витрачати гроші, cтикнутися з проблемою, виробляти товари
IX. Translate the following extract in
written form:
Human wants are unlimited, but
the resources necessary to satisfy those wants are limited. Thus, every society
is faced with the identical problem, the problem of scarcity. Since there is
not enough of everything to go around, everyone - individuals, business firms,
and government - needs to make choices from among the things they want. In the
process they will try to economize, to get the most from what they have. With
this in mind we can define economics as the social science that describes and analyzes choices from among scarce resources to satisfy its
wants. The need to choose is imposed on us by our income, wealth and ability to
borrow.
X. Fill in the blanks using verbs in brackets:
1. Although Economics ... a
vast subject and precise definitions ...
usually very complex, it... not a
difficult matter to give a simple answer to the basic question (to be).
2. Economics ... itself to the
study of the material aspects of life (to limit).
3. We must examine how people have solved or ... to solve this problem (to try).
4. It... little attention from
those of us fortunate enough to live in these areas (to attract).
5. A large percentage of human race still ... in small self-sufficient communities (to live).
XI. Read, translate text 5 and pay
attention to the underlined words:
TEXT 5
ECONOMIC SYSTEMS
The way that
a country handles three main questions is based on their economic
system. An economic system is basically the decision making that is done to
answer these questions.
There are
four main types of economic systems present in the world: the traditional
economy, the market economy, the command economy, and the mixed economy. But
there are also unlimited amounts of variations of these systems.
A traditional economy is an economy that answers
the three questions based on their social customs and how the society
has dealt with these questions in the past. A country's customs can differ
greatly to that of a neighboring country so
traditional economies vary from one another.
A market economy is the type of economy in
which these questions are answered in the marketplace by the interaction of
buyers and sellers. For example, the question of what to produce may be based
on what trend is popular right now. The producer would create a product
that they think would sell well to the public in hopes to make a
profit. The question of how to produce is usually based on the producer's
choice. They might decide to produce a product with more workers or they might
decide to produce it more with machines and computers to save on labor costs. The question involving for whom to produce
is based on the buyer who decides what they want or need and what price they
are willing to pay for it. A market
economy is great for motivating workers to work harder because they are
only paid based on what they do. A worker can increase their income or
profit by working harder and this chance to profit motivates them.
A command economy is an economy where these
questions are all answered by the government. Rather than giving
individuals the chance to decide what they want or need, the government decides
these questions for the country. This type of economy is difficult for the
individual because it is impossible for the government to know exactly what is
best for each and every citizen. Also, command economies don't help with their
workers' motivation because everyone is given the same amount of goods
and the same standard of living. A hard working citizen would not be
given a chance to benefit from their extra work because they
cannot increase their standard of living any greater than it currently
is and they will make just as much as a person who exerts little or no effort.
A mixed economy is an economic system that
answers the three questions both in the marketplace and in the government. For
example, although the United States government plays a role in this
economy, a mixed economy usually involves producers working closer with the
government than they do in the United States so the US economic system is still
a market economy.
The economic
system a country has is based on what is best for the country. One person might
feel a market economy is best for one country but it may not suit
another. Determining how an economy works can help you make better
decisions as an individual and participate more in issues involving the
economy as a whole.
Answer the
questions:
1. What one
more type of economic system is described in this text?
2. What type
of economic system does Ukraine have? Prove it.
3. Why is a
command economy difficult for an individual? Do you agree with the explanation
in the text?
4. What is
the economic system of a country based on?
5. What type
of economic system does the USA have?
XII. Grammar: 1. Learn what tense is used when we change a sentence from Direct
into Reported Speech.
Tense |
Direct Speech |
Reported Speech |
present simple |
“I like ice cream” |
She said (that) she liked ice cream. |
present continuous |
“I am living in London” |
She said (that) she was living in London. |
past simple |
“I bought a car” |
She said (that) she had bought a car OR She said
(that) she bought a car. |
past continuous |
“I was walking along the street” |
She said (that) she had been walking along the
street. |
present perfect |
“I haven't seen Julie” |
She said (that) she hadn't seen Julie. |
past perfect* |
“I had taken English lessons before” |
She said (that) she had taken English lessons
before. |
will |
“I'll see you later” |
She said (that) she would see me later. |
would* |
“I would help, but..” |
She said (that) she would help but... |
can |
“I can speak perfect English” |
She said (that) she could speak perfect English. |
could* |
“I could swim when I was four” |
She said (that) she could swim when she was four. |
shall |
“I shall come later” |
She said (that) she would come later. |
should* |
“I should call my mother” |
She said (that) she should call her mother |
might* |
"I might be late" |
She said (that) she might be late |
must |
"I must study at the weekend" |
She said (that) she must study at the weekend OR She
said she had to study at the weekend |
* doesn't change.
Occasionally, we don't need to change the present
tense into the past if the information in direct speech is still true (but this
is only for things which are general facts, and even then usually we like to
change the tense):
2. Write down these sentences
in reported speech. Begin with “The teacher said…..”
1. Adam Smith describes the
principal elements of the economic system in his book "The Wealth of
Nations".
2. Everything concerning the
American economic system interests me.
3. They consider Adam Smith
"the father of modern economics".
4. Economic incentives
influence our decisions in the world of business.
5. Prices direct market
economies.
XIII. Individual work: read and translate text 6.
TEXT 6
Market
Economy
In a free market economy, the ‘invisible
hand’ of supply-and-demand market forces defines what is produced, in what
quantity, and at what price.
A market economy is a type of
economic system in which the trading and exchange of goods, services and information
takes place in a free market. A market economy may therefore also be known as a
free market economy. The phrase is typically applied to countries or
administrative regions that follow this approach.
Since free markets are
governed by the law of supply and demand, the market itself will determine
the price of goods and services, and this information will be made
available to all participants. Businesses can decide which goods to produce and
in what quantity, and consumers and businesses can decide what they want to
purchase and at what price.
The opposite of a market
economy is a planned economy, where the government decides what to produce, in
what quantity, and to be sold at what price.
Mixed economies blend
market and planned economies, meaning that the government will have some
role in regulating the market, but all other activity will be driven by
the decisions of buyers and sellers.
Since the government will always have some level of regulatory control,
no country operates as a free market in the strict sense of the word,
but we generally say that market economies are those in which governments
attempt to intervene as little as possible, while mixed economies include
elements of both capitalism and socialism.
The main characteristics of a market economy are its flexibility and
decentralized nature. This type of economic system is more apt to cope
up with ever-changing market trends, making it faster and more reactive.
The role of the national and state governments in the market economy is
debatable, although it has been found that government interventions are
sometimes necessary. In these cases, the government mainly deals with the
formation and implementation of rules and regulations and ensures that
monopolistic behavior does not obstruct competition
in the marketplace.
Regardless of the government’s role, decisions made in a free market
economy are primarily made by the ‘invisible hand’ of market forces - and not
mandates issued by the government.
XIV.
The Game. Email abbreviations:
Recognizing common abbreviations used in emails.
Procedure
You have three minutes to
write down the meaning of as many of the abbreviations as possible.
am e.g. NB qty
asap etc. pcs re
btw FYI Pls ref
Bw i.e. pm RSVP cc IMO PS tbc |