3(9).Listening.ListenandcompletethechartwiththecorrectpricesforFebruaryandMarch.Mindsomenewwords.

togoup(down)inprice	подняться(опуститься)вцене
aquart	кварта(около1.145литра)
an18-ouncecontainer	контейнеробъемом18унций(1унция =около28.35гр.)
apound	фунт(1фунт=около453гр.)
abox	коробка
acan	жестянаябанка

Item

February

March

Inflation

April

Item	February	March	Inflation	April
milk(1liter)	$1.50
yogurt(500g)			0%
loafofbread		$3.05
sugar(2kilo)	$2.00
apples(1kilo)			5%

teabags(100)	$2.20
coffee(500g)			-12%

3.1Nowcalculatetherateofinflationoneachitemasapercentage.ThenmakepredictionsaboutthecostofeachiteminthechartforthemonthofApril.

4.Reading.Readthetextandexplainthewordsinbold.

Inflation

Wheneconomiststalkaboutinflationtheymeanthatthegenerallevelofpricesisgoingup.Inflationmeansthatmoremoneywillneedtobepaidforthesamegoodsandservices.Inflationismeasuredregularly,andtheinflationrateisoneofthemostimportantindicatorsofthestateaneconomyisin.Ahighinflationmeanstrouble.Ifinflationgoestheotherway(yougetmoregoodsforyourmoney),itiscalleddeflationandisequallyproblematic.Economistsgenerallypreferstableprices.Therearealsootherkindsofinflationlikehyperinflationandstagflation.

Onesurewaytocreateinflationistoincreasethemoneysupplytoorapidlythusdevaluingthecurrency.Inthisinstance,priceinflationissimplytheflip-sideofmonetarydeflation.Thisisusuallywhateconomistsfearmostwhentheyseegeneralpriceinflation.

Thereisnoonecauseofinflationthateveryoneagreeson,butthereareatleasttwoNeo-Keynesiantheoriesthataregenerallyaccepted:Demand-PullinflationandCost-Pushinflation.

TheDemand-Pullinflationtheorycanbesaidsimplyas"toomuchmoneychasingtoofewgoods."Inotherwords,ifthewillofbuyinggoodsisgrowingfasterthanamountofgoodsthathavebeenmade,thenpriceswillgoup.Thismostlikelyhappensineconomiesthataregrowingfast.

TheCost-Pushinflationtheorysaysthatwhenthecostofmakinggoods(whicharepaidbythecompany)goup,theyhavetomakepriceshighertostillmakeprofitoutofsellingthatveryproduct.Thehighercostsofmakinggoodscanincludethingslikeworkers'wages,taxestobepaidtothegovernmentorbiggercostsofgettingrawmaterialsfromothercountries.

Almosteveryonethinksinflationisbad.Inflationaffectsdifferentpeopleindifferentways.Italsodependsonwhetherinflationis

expectedornot.Iftheinflationrateisequaltowhatmostpeopleare

expecting(anticipatedinflation),thenwecanadjustandthecostisnotashigh.Forexample,bankscanchangetheirinterestratesandworkers

cannegotiatecontractsthatincludeautomaticwagehikesastheprice

levelgoesup.

Problemsarisewhenthereisunanticipatedinflation:

Creditorsloseanddebtorsgainifthelenderdoesnotguessinflationcorrectly.Forthosewhoborrow,thisissimilartogettingan

interest-freeloan.

Uncertaintyaboutwhatwillhappennextmakescorporationsandconsumerslesslikelytospend.Thishurtseconomicoutputinthelongrun.

Peoplelivingoffafixedincome,suchasretirees,seeadeclineintheirpurchasingpowerand,consequently,theirstandardofliving.

 Theentireeconomymustabsorbrepricingcosts("menucosts")

aspricelists,labels,menusandmorehavetobeupdated.

Iftheinflationrateisgreaterthanthatofothercountries,domesticproductsbecomelesscompetitive.