Study carefully the meaning of the following phrases and word combinations to avoid any difficulty in understanding the following text.

 

household – дом, хозяйство

account – счет

to take into account – брать в расчет

to allocate – размещать, распределять

scarce – недостаточный, скудный

scarcity – дефицит

to satisfy unlimited wants – удовлетворять неограниченные потребности

goods and services – товары и услуги

commodity - товар, предмет широкого потребления

resource – запасы, ресурсы, средства; природные богатства

to invest – вкладывать

investment – вложение

income – доход

national income – национальный доход

personal income – личный доход

personal disposable income - личный доход после уплаты налогов

facet – аспект

to recur – повторяться, возвращаться

fraction - доля, порция, часть

total production – общая производительность

total employment – общая занятость

the rate of change of overall prices – коэффициент изменений предельных цен

rate of economic growth – темпы экономического роста

layoff – увольнение

economic activity – экономическая активность

determinants – показатели, определители

values – ценности

meaningful totals – значительные итоги

gross domestic product (GDP) – валовой внутренний продукт (ВВП)

attainment – достижения

price stability – стабильность цен

 

COMPREHENSION CHECK

I. Give English equivalents to the following:

Экономика, экономическая теория, производство, потребление, распределение, обмен, дефицит, доход, уровень жизни, изучение поведения в сферах производства, физические лица, ограниченность ресурсов, безграничные потребности, удовлетворение своих желаний и потребностей, предмет экономической теории, малые экономические единицы, крупномасштабные экономические явления, экономический анализ, занятость населения, товары и услуги, национальный доход, стабильность, оптимизация, нехватка рабочей силы.

 

II. Read the international words and guess their meanings:

Economic activity, economic system, macroeconomics, microeconomics, to produce, to operate, to protect, to analyze, to finance, to manufacture, to specialize, to focus, to affect, service, school, hospital, garage, fact, base, production, material, industry, radio, strategy, status, export, import, institution, distribution, division, investment, history, organization, period, spectrum, agriculture, essential, basic, industrialized, oriented (policy), national, financial, social, major, fact, base, total, primarily, public.

 

III. Are the following statements true or false?

1. There is no brief description of the content and character of economics.

2. Economics is only a theoretical science.

3. Economics deals with the problem of income, employment and interest rates.

4. Economics also deals with weather forecasting, psychology and fantasy writing.

5. In recent years economists switched to the new fields, such as political science and sociology.

6. Macroeconomics deals with global questions only.

7. Macroeconomics means economics in the large because it asks more questions than microeconomics.

8. Macroeconomist analyses activities of families and large firms.

9. Such concepts as gross domestic product, national income and personal disposable income serve as meaningful totals.

10. Macroeconomic analysis shows the development of the economic theory.

 

IV. Fill in the gaps using the words given:

Scarcity, income, interact, society, trends, management, economics, economy

1) The word ______ comes from the Greek word for "one who manages a household.''

2) Like a household, a _____ faces many decisions.

3) The _____ of society's resources is important because resources are scarce.

4) _____ means that society has less to offer than people wish to have.

5) _____ is the study of how society manages its scarce resources.

6) Economists also study how people _____ with one another.

7) Economists analyze forces and _____ that affect the economy as a whole, including the growth in average _____, the fraction of the population that cannot find work, and the rate at which prices are rising.

 

V. Translate into English

1. Мировая экономика – это наука, которая изучает состояние экономики в разных странах мира.

2. Экономика - общественная наука, изучающая поведение в сферах производства, потребления, распределения и обмена. Экономисты анализируют происходящие в этих сферах процессы и исследуют их последствия для физических лиц, организаций, например фирм, и общества в целом.

3. Состояние экономики (экономической среды) имеет большое значение для успешной деятельности фирм.

4. При изучении экономики необходимо различать позитивную и нормативную экономические теории. Если в позитивной теории мы можем оставаться беспристрастными, независимо от наших политических убеждений, то нормативная теория основывается на личной системе ценностей.

5. Позитивная теория может предложить ряд возможных альтернатив, из которых индивид или общество в целом выбирают наиболее приоритетные.

6. Макроэкономика – это один из основных разделов экономической теории, которая изучает поведение экономики как единого целого.

7. Макроэкономика анализирует взаимодействие факторов, влияющих на рост национального производства, а также такие процессы, как безработица, инфляция и т.п.

8. Объектом макроэкономики является именно взаимодействие этих величин внутри экономики, при этом сами эти величины рассматриваются упрощенно, абстрактно.

9. Микроэкономика – это один из основных разделов экономической теории, изучающей поведение отдельных экономических единиц, их взаимодействие на рынках, в результате которого формируются цены на производимые товары и услуги.

10. Микроэкономика стремится к детальному рассмотрению поведения какой-либо экономической единицы.

 

TOPIC 2.

THE BASIC ECONOMIC PROBLEM

The central problem of economics is to determine the most efficient ways to allocate the factors of production and solve the problem of scarcity created by society’s unlimited wants and limited resources. In doing so, every society must provide answers to the following three questions:

1. What goods and services are to be produced, and in what quantities are they to be produced?

2. How are those goods and services to be produced?

3. Who will receive and consume (get to use) those goods and services?

The solution of these questions depends on the economic system of each particular society.

The economic system determines how the nation's resources of land, labour, machinery and raw materials are allocated and used. The problem of allocating resources is a central theme of economics, because most resources are scarce. The allocation of scarce resources and the distribution of the product of those resources are a major part of the subject matter of economics.

In Western economies many resources are allocated to whoever is willing and able to pay the most for them. The distribution is determined by the amounts of money paid as wages, rent and other forms of income.

A country's economic system is its way of organizing economic activities, including the ways in which people come to specialize in particular tasks they do best. The more goods and services can be produced from limited resources, the higher the standard of living enjoyed by the country’s citizens.

Different economic systems answer the “what”, “how” and “for whom” questions differently. There is a variety of economic systems, which can be divided into three groups:

a) Market or decentralized economic systems.

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.

b) Planned or centralized economic systems, in which economic decisions are taken by government planners.

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. A planned economy is simple to understand but not simple to operate.

c) Mixed economic systems, in which many economic activities are organized in a decentralized way, but in which the government takes some of the most important economic decisions. In mixed economies some resources are controlled by the government whilst others are used in response to the demands of consumers. In a mixed economy the government and the private sector interact in solving economic problems.

In practice, every economic system is mixed to some extent.