Тексты для индивидуального чтения для студентов экономического факультета.

Market Economy.

The pillars of free enterprise - private property, the price system, market competition, and entrepreneurship - are essential to the operation and success of a market economic system. The rights to own and exchange property and to make a profit give individuals and businesses incentives to use their resources wisely. Prices provide consumers and producers with the information they need to make economic decisions. Market competition, like private proper­ty, provides incentives to use resources wisely and produce goods and services people want and will pay for.

Economists use a circular flow model to highlight basic features of a free enterprise economy. The model shows how the voluntary exchanges between households and businesses answer the what, how, and who questions and create flows of money, products, and resources. Money makes exchange of products and resources easier. Money is a medium of exchange, a store of value, and a measure of value.

Entrepreneurship is important for the growth of an economy over time. Entrepreneurship is the willingness and ability to see opportunities and to develop them into new products for the market. It also involves risk-taking and innovation as well as good management.

Most people agree on several broad economic goals. These include full employment, economic growth, price stability, economic freedom and security, equity, and efficiency.

Topical Vocabulary:

Free enterprise – свободное (частное) предпринимательство

Private property – частная собственность

Price system – система цен

Market competition – рыночная конкуренция

Entrepreneur (ship) – предприниматель (ство)

To own – владеть

To make a profit – извлекать прибыль

Consumer – потребитель, покупатель

Producer – производитель

Incentive – заинтересованность, стимул

Goods – товары

Services – услуги

Circular flow – круговой поток

Value – стоимость, цена (ценность)

Full employment – полная занятость

Equity – справедливость, собственность в бизнесе

Financing a Business.

Financial markets play an important role in a market economy by channeling money from savers to businesses that use it to invest in new capital resources. Businesses use the financial markets as a source for capital investment funds by borrowing, selling new shares of owner­ship* and by saving the money themselves.

To borrow money, corporations and government often sell long-term debts called bonds. Bondholders lend money and are called creditors. They may receive interest payments during the term of the bond and the face value at maturity. Businesses can also borrow for short periods of time by using trade credit, loans from financial institutions, and direct loans from other companies. Small start-up businesses have unique financing options like savings from family and friends, loans from banks, and venture capital.

Corporations sell stock or equity ownership to raise funds in the financial markets. The stock­holders gain ownership rights when they buy common and preferred stock. All corporations issue common stock with dividends paid at the discretion of the board of directors.

Businesses can also gain funding for new capital resources by retaining some of their profit for reinvestment. Newly established firms often use this strategy to increase the company's future earnings potential, so that future dividend payments are larger and the stock price appreciates.

New issues of stocks are called initial public offerings (IPOs) and are financed in the primary market. After buying the shares, investors can trade them in the secondary market, which we call the stock market. The stock market has organized exchanges like the New York Stock Exchange and American Stock Exchange and electronic trading markets like NASDAQ. An agency of the federal government, the Securities and Exchange Commission oversees the market for stocks, bonds and other securities.

Investors and others interested in the financial condition of a firm can learn much from its balance sheet and income statement. The balance sheet is like a snapshot describing a firm's assets (what it owns) and its liabilities (what it owes). The difference between these is the firm*H net worth. The income statement, like a movie, shows revenue and expenses for a peri­od of time. The difference between these is the profit.

Topical Vocabulary:

To save – сберегать, экономить

Source – источник

To borrow – брать взаймы

Shares – акции

Long-term debt – долгосрочный долг

Bond – долговое обязательство

To lend – давать взаймы

To pay interest – выплачивать проценты

Loan – заем, ссуда, кредит

Stock – имущество, фонд, акции (ценные бумаги)

Stockholder – акционер

Common stock – обычные (простые) акции

Preferred stock – привилегированные акции

Issue of stock – выпуск акций

Stock exchange – фондовая биржа

Securities – ценные бумаги

Balance sheet – балансовая ведомость

Income statement – декларация о доходах

Assets – активы

Liabilities – денежные обязательства, долги; пассив

Net worth - чистая стоимость компании

Revenue - доход

Money and Financial Institutions.

Money can be anything that is generally accepted in payment for goods or services. It pro­vides a medium of exchange, a measure of value, and a store of value. Principal forms of money are currency, demand deposits (checking accounts), and other checkable deposits.

Financial institutions such as commercial banks, savings and loan associations, and savings banks are essential to the smooth operation of a market economy system because demand deposits and other checkable deposits held by banks and thrifts make up the largest part of the money supply. These institutions also provide a safe place for the deposit of funds and serve as a source of loans and other financial services.

Because loans are typically added to demand deposits, one can say that the lending ability of banks serves to "create money." How much money the commercial banks can create is limit­ed by the reserve ratio, which determines the amount of money that a bank can lend at any particular point in time.

The Federal Reserve System is the nation's central bank. It provides banking services for financial institutions and supervises their activities. It also acts as a bank for the federal gov­ernment.

The "value of money" is really its purchasing power-the amount of goods and services it can buy. The purchasing power of money can increase, as it does during periods of deflation, and it can decrease, as it does during periods of inflation.

The causes of inflation are generally described as either demand-pull or cost-push. Demand-push inflation is brought on by an excess of purchasing power that serves to drive up prices ("too much money chasing too few goods"). Cost-push inflation is brought about by rising production costs that feed upon one another. Although certain groups within the economy may benefit from the increasing prices associated with inflation, more people and the econo­my as a whole are likely to suffer.

Topical Vocabulary:

To accept in payment – принимать в уплату

Medium of exchange – средство обмена

Currency – валюта

Demand deposit – вклад до востребования

Savings bank – сберегательный банк

Reserve ratio – резервная квота

To supervise – осуществлять надзор

Purchasing power – покупательная способность

To increase – увеличивать (ся)

Deflation – дефляция

To decrease – уменьшать (ся), снижаться

Inflation – инфляция

Demand-pull – увеличение спроса

Cost-push – рост цен

Excess – избыток, превышение

To benefit – извлекать выгоду

Fiscal Policy.

Through fiscal policy (the ability to establish taxing and spending policies), the government can do more than provide basic services. It can influence economic activity.

Suppose the economy is in a recession. This means consumers are spending less, and busi­nesses are not investing in new plants and equipment. In fact, businesses may even be laying off workers. As a result, real GDP, the nation's production, is falling. Government can stimulate economic activity or increase demand for goods and services.

If spending by consumers, businesses, or governments were to increase, GDP would increase. What fiscal policy tools can stimulate the growth of GDP? The government could lower taws and continue to spend the same amount on government programs, or increase government spending while keeping taxes about the same, or simultaneously increase government spending and reduce taxation.

When taxes are cut, individuals and businesses have more income to spend. As business and consumer spending (and therefore GDP) begin to increase, the economy will enter an expan­sion phase. Similarly, if government spending increases, the GDP increases too.

Fiscal tools also can be used to slow the economy. For example, in economic booms, prices may increase at an alarming rate. To end inflation, government could decide to use the fiscal powers. Government could increase taxes, reduce government spending, or both. If taxes were increased, consumers and businesses would have less to spend. This would reduce the total demand for goods and services and the rate of inflation.

Topical Vocabulary:

Fiscal policy – бюджетно-налоговая политика

Taxing policy – налоговая политика

Spending – расходование (расходы)

Government – правительство

Recession – рецессия, спад

To invest – инвестировать, вкладывать

To lay off – увольнять

GDP – Gross Domestic Product – валовой внутренний продукт (ВВП)

To lower taxes – снижать налоги

To keep taxes – сохранять налоги

Income – доход

Rate of inflation – уровень инфляции