Exercise 7. Fill in the missing words in the text below and then translate into Ukrainian. Use Vocabulary-2 and Exercise 2A.

For several decades the bogeyman for most rich economies has been inflation. (1)

began to fight it seriously 20 years ago, when Paul Volcker, chairman of America’s Federal

Reserve, dramatically (2) monetary policy. Countries from Britain to Brazil then

joined the fray. With great success: the average (3) rate in the G7 economies is now

a mere 1 %, the lowest for half a century. But even as the old enemy seems quiescent, a new and possibly more dangerous one may be rising up : (4).

And isn’t the sign of a good (5) bank its willingness to turn a deaf ear to calls

for (6) expansion, whatever the circumstances? Actually, no. The right target is

broadly stable (7), which requires that a central bank should be ready to attack

(8) as fiercely as it does inflation. Not only that, but a good central bank also keeps

in mind that deflation can be more (9) than inflation,' if it creates a downward

(10) in which the (11) of falling prices (12) demand and pushes prices

lower still, as happened in the Great Depression.

In much of the world outside America, the risk of falling the (13) prices (i.e.

deflation) is at its greatest since the 1930s. Japan is already in the grip of deflation. Prices are falling in China and some other parts of East Asia. Continental Europe’s inflation rate, if

correctly measured, is close to zero. Prices are coming down partly thanks to the (14)

effects of (15) technology and deregulation, and partly thanks to cheaper oil and

other (16). Such deflation is generally benign. But alongside it are signs of a more

(17) deflation, caused by (18) capacity and weak (19).

Exercise 8. Work in pairs. Translate the following two texts into Ukrainian. Use Vocabulary 3-4 and Exercises 3A^4A in case of difficulties.

Text 3

By the late 1980s and early 1990s, inflation had not disappeared, but Americans were enjoying a level of inflation that was relatively low and stable compared with the 1970s. This resulted in large part from the severe recessions and tight monetary policy of the early 1980s. But many Americans were not totally convinced that the problem of infla­tion had been permanently solved. They suffered a scare in 1990 when, as a result of an outbreak of war in the oil-rich Gulf, the price of petroleum rose sharply on the world market. It declined again after a few months, and after hostilities had ceased the incident appeared not to have left lingering inflationary after-effects.

But the incident showed how vulnerable the U.S. economy is to sudden shocks. The 1990 oil shock appeared to help tip the U.S. economy into recession in 1991. By then, the major concern of many Americans was gradually shifting from fears of renewed infla­tion to questions about how soon there would be an economic recovery, how robust the recovery might be, and whether after an initial upswing the economy might suddenly slide downward - a phenomenon known as a ‘double-dip’ recession.

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