Unit 3 types of economic systems

Lead-in

Answer the following questions before you read the text below. If you can’t answer them now, try to answer them after reading the text.

1. What types of economic systems do you know? What is the difference between them?

2. What factors may affect the type of economy a country holds? When would it be beneficial for a country to change its economy?

Key Vocabulary

1. Study the following list of vocabulary.

1. produce v	производить
2. market n	рынок
3. determine v	устанавливать, определять
4. price n	цена
5. trade n	торговля
6. exchange n	обмен
7. government n	правительство
8. society n	общество
9. alleviate v	уменьшать, ослаблять
10. advancement n	развитие
11. decide v	решать
12. free enterprise	свободное предпринимательство
14. private adj	частный
15. wages n	зарплата
16. regulate v	регулировать
17. provide v	предоставить, обеспечить наличие
18. run v	управлять
19. tax n	налог

2. Mind the following forms of the irregular verb “to sell”:

sell (sold, sold) - продавать

Pre-reading Activities

1. Match synonyms from the two columns. Learn these pairs of words.

1. market	a) to manage
2. to regulate	b) to manufacture
3. to produce	c) to control
4. to run	d) marketplace

2. Consult a dictionary and complete the chart. Some boxes will not be filled.

NOUN	VERB	ADJECTIVE
production	to produce	productive
	to price
		governmental
decision
	to regulate

Reading

Read the text focusing on the main ideas.

There are three main questions any economy has to answer, whether it is a highly developed economy, the poorest of countries, or a small group of people.

• What is to be produced?

• How will it be produced?

• Who will get what is produced?

To answer these questions, different economic systems have been developed.

Traditional economies are dictated by tradition, customs, and religion. One of the features of this type of economy is very little economic growth. In traditional societies people use methods of production and distribution which were invented in the past and have become accepted ways of doing things.

A market economy is an economy in which the prices of goods and services are determined in a free price system. 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. In the real world, market economies do not exist in pure form, as societies and governments regulate them to different degrees rather than allow self-regulation.

The opposite of a market economy is a planned or command economy, where the government decides what to produce, in what quantity, and to be sold at what price. A planned economy alleviates the use of private enterprises and allows the government to determine everything from distribution to pricing. Planned economies can provide stability, but they can also limit the growth and advancement of the country if the government does not allocate resources to the innovative enterprises.

A mixed economy is the one in which there exists a mixture of free enterprise and government control. In some areas of a mixed economy, the government may even have a monopoly. In a typical mixed economy, the government may run such things as the postal service, rail lines, libraries, and in some cases, the health care service. Even in industries which are not owned or run by the government, its influence is very noticeable in the form of taxes and regulations like wage controls.

Comprehension Check

1. Are these statements True or False? Use the following expressions:

I (don’t) agree that… (я (не) согласен, что…)

I think that… (я думаю, что…)

1. Any highly developed country has to answer three main questions.

2. Traditional economies are dictated by very little economic growth.

3. A free market economy is an economy in which the prices of goods and services are determined in a free price system.

4. A planned or command economy is the opposite of a mixed economy.

5. A planned economy is the one that can limit the growth and advancement of the country.

6. A mixed economy is a mixture of market and planned economies.

7. In a mixed economy the influence of the government is considerable.

2. Complete the sentences.

1. Three main questions any economy has to answer are: … .

2. Different economic systems have developed to … .

3. One of the features of traditional economies is … .

4. In a market economy … takes place in a free market.

5. In a command economy, the government decides … .

6. Planned economies can provide stability, but … .

7. … the government may have a monopoly.

3. Check how well you know some characteristic features of different types of economic systems. Are these statements about market, command, or traditional economies?

1. You can decide what job you would like to do in this economic system.

2. Making a profit is highly stressed in this economic system.

3. Making money is not stressed in this economic system.

4. You will work at the same job that your ancestors worked at in this economic system.

5. You produce what your ancestors produced in this economic system.

6. The government decides what you will produce in this economic system.

7. You decide what you will produce in this economic system.

8. You work in this economic system to make as much money as you want.

9. Competition, material rewards, self-gain, and freedom are the basic values for this economic system.

10. Custom, traditional ways and beliefs are the basic values of this economic system.