VII. Match these word combinations with their Russian equivalents.

1) continuing increase of prices	a) спираль заработной платы и цен
2) to provide a service	b) взимать процент
3) wage-price spiral	c) пенсионеры
4) public company	d) предоставлять услугу
5) to charge interest	e) регулируемая процентная ставка
6) retired people	f) получать прибыль с займов
7) adjustable interest rate	g) государственная компания
8) to make a profit on loans	h) постоянный рост цен

 

VIII. Paraphrase the sentences using the synonyms from the box instead of the underlined words.

are hurt by, pay, borrow, profit, price, increases, kinds

 

1. There are two basic types of inflation.

2. In the case of cost-push inflation, the cost of making a product or providing a service goes up.

3. Retired people living on pensions suffer from inflation because they have fixed incomes.

4. The Consumer Price Index (CPI) measures how the cost of goods and services changes.

5. Labor leaders often argue that workers need more money to keep up with the cost of living.

6. People who owe money are sometimes helped by inflation.

7. If you borrow 1000000 rubles at 10% interest, and inflation shoots up to 15%; the 5% loss for the bank is your 5% gain.

IX. Match the words and word combinations in column A with their antonyms in column B.

A	B
borrow v more adv high-income people gain n go up v increase v inflation n rise n	loss n lend v less adv drop n deflation n decrease v low-income people go down v

 

X. Insert the proper prepositions. Try to memorize some of these expressions.

in (2) of (2) with (1) by (1) from (1)

 

1. The most popular measure … inflation is the Consumer Price Index.

2. People who keep their money in savings accounts at a bank are hurt … inflation.

3. Employees of public companies are also hurt because their salaries do not keep up … inflation.

4. What good is to earn 5.5% interest … a bank if the inflation rate is 15%?

5. Banks are … the business of lending money.

6. Inflation raises the value … land and housing.

7. Renters do not own what is increasing … value.

 

XI. Match the words in column A with their definitions in column B.

A	B
1) wage	a) an advantage, improvement, or help that you get from something
2) salary	b) money usually paid every month by the employer, especially to someone in a profession, such as a teacher or a lawyer
3) pension	c) money usually paid every week by the employer, especially to someone who works in a factory or a shop
4) benefit	d) an amount of money paid regularly by the government or company to someone who does not work anymore, for example because they have reached the age when people stop working

 

XII. Answer the following questions.

1. What is inflation?

2. What is the Consumer Price Index?

3. What are the two kinds of inflation?

4. What is demand-pull inflation?

5. What is cost-push inflation?

6. Who is hurt by inflation?

7. Are the banks hurt by inflation?

8. Who is helped by inflation?

XIII. Interpret and extend the following statements.

· Inflation is an economic event affecting everyone.

· Inflation raises the value of land and housing.

· Inflation does not hurt everyone equally.

· Some young workers and employees can benefit from inflation.

XIV. Find some additional information and prepare short reports on the inflation in Russia from the year 2000.

· Inflation rate and its fluctuation;

· Reasons of inflation;

· Methods of regulating inflation.

 

XV. Read the international words from the text below. Say what Russian words help to guess their meaning.

Favorite, football, club, dollar, electricity, deflation, gas, seasonal, loser, naturally, sign.

 

XVI. Before reading the text below take part in a group discussion and share your ideas with partners on the following questions.

1. What are the main reasons of inflation?

2. How does inflation influence people and their life?

 

XVII. Read the text about inflation and answer the questions after it. To make your understanding clearer some vocabulary notes are given below.

Vocabulary notes

bill _n – счет, квитанция

blame _v – ругать

destroy _v – разрушать

entertainment _n – развлечения

food _n – пища

healthy _adj – здоровый

heating _n – отопление

item _n – товар, предмет

 

When the cost of a favorite product goes up, people often blame inflation. But, is it inflation when the football club increases ticket price by a dollar? Is it inflation if the bill for electricity jumps by 15%? In each case, the answer is no.

A rise in the cost of one or two or even three items is not inflation. Inflation is a rise in the overall level of prices. The cost of living, which is the price of most goods and services, has to be going up, not just the cost of one thing. Likewise, deflation is not just a drop in gas prices. It is a drop in the overall cost of goods and services.

Seasonal supply can affect prices. Peaches are in greater supply in July than in December. For this reason, the price is lower in July and higher in December. Demand can also affect prices. A successful football team can charge more for tickets than a loser team.

To have inflation, almost all the prices have to go up. There is no inflation if half the prices go up and half the prices go down by the same amount. You have inflation if the cost of food is going up and the cost of entertainment is going up and the cost of heating your home is going up.

Naturally, most people do not like inflation. However, small increases in inflation of about 3% or 4% a year do not hurt too much. A little inflation is often a sign of a healthy, growing economy. Deflation, on the other hand, seems good. But in almost every case, deflation comes only where there is no growth and unemployment is high.

While a little inflation may be all right, too much inflation clearly is not. High inflation can destroy the value of your earnings. Runaway or hyperinflation can destroy the economy of a nation.

Questions

1. What are the signs of inflation?

2. What phenomenon is opposed to inflation? What is its definition?

3. What affects prices?

4. Which prices rise with inflation?

5. Is inflation good or bad for the economy of a nation? Why?

6. What is hyperinflation?