Topic №5 «Economics and The Economy»

1. The words an economy and economics are the words we hear or read almost every day.

2. But what is meant by the economy, what is an economy, what happens in one, how does it work?

3. The economy is a social mechanism, which answers these three questions.

4. The economy means a system for the management, use and control of the money, goods and other resources of a country, community or household.

5. Economics is a social science, studying economy.

6. Like all the natural sciences and other social sciences, economics attempts to find laws or principles.

7. Economics tries to find laws or principles by building models.

8. The predictions of the models form the basis of economic theories.

9. Then the predictions of the modes are compared with the facts of the real world.

10. Adam Smith was a great scientist, who made extraordinary contributions in economics, this Scottish economics is often regarded as the founder of political economy too.

11. He devoted 10 years to writing his work which founded economic science.

12. Its full title was «An Inquiry into the Nature and Causes of the Wealth of Nations», it was published with great success in 1776.

Questions for Discussion:

1. What is an economy?

2. What is economics?

3. How does economics try to find laws or principles?

4. What do the predictions of the models form?

5. What are the predictions of the models compared with?

6. Who was Adam Smith?

7. What was the title of his work, which founded economic science?

Topic №6 «Microeconomics and Macroeconomics»

1. Economics is a social science, studying economy.

2. Like all the natural sciences and other social sciences, economics attempts to find laws or principles.

3. Economics tries to find laws or principles by building models.

4. The predictions of the models form the basis of economic theories.

5. Then the predictions of the models are compared with the facts of the real world.

6. Economics as a science consists of two disciplines that is of microeconomics and macroeconomics.

7. Microeconomics is the branch of economics that studies individual producers, consumers, or markets.

8. Microeconomics also studies how government activities such as regulations and taxes affect individual markets.

9. Besides, microeconomics tries to understand what factors affect the prices, wages and earnings.

10. Macroeconomics is the branch of economics that studies the economy as a whole.

11. It tries to understand the picture as a whole rather that small parts of it.

12. In particular, it studies the overall values of output, of unemployment and of inflation.

Questions for Discussion:

1. What does economics as a science consist of?

2. What does microeconomics study?

3. What does microeconomics also study?

4. What does it try to understand?

5. What does macroeconomics study?

6. What does macroeconomics try to understand?

7. What does it study in particular?

Topic№7