Discussion

Discuss the following problems:

• In what way can the advantage of long-term government’s planning turn to a disadvantage due to the political system of the country? Give examples.

• In a free market system the products reflect the wishes of the consumer. But if the wishes are harmful for his health (tobacco, alcohol) and the producers meet his ever-growing demand, will that be an advantage?

• Capitalism without bankruptcy is like Christianity without hell. (Anon.). Where do you see the analogy?

• Competition brings out the best in products and the worst in people. (David Sarnoff, former president of RGA). What does he mean by “the worst in people”? Doesn’t competition bring out some good qualities in people as well?

• Discuss the main economic problems facing our society nowadays.

Vocabulary

agriculture, n – сельское хозяйство; земледелие

capital, n – капитал; накопленный запас результатов прошлого труда, необходимый для создания материальных благ в будущем

compete, v – состязаться, соревноваться, конкурировать

distribute, v – распределять; сбывать

economics, n – экономика, народное хозяйство, экономическая наука, политическая экономия, хозяйственная жизнь

economy, n – хозяйство, экономика, народное хозяйство; бережливость, расчет, расчетливость, экономия, экономность, экономичность

entrepreneur, n – предприниматель

goods, n – товары

industry, n – промышленность, индустрия

investment, n – капиталовложение, инвестиция

labour, n – труд (особенно физический ), работа, работники, рабочая сила

manufacture, n – производство

market, n – рынок, рынок сбыта

production capacity – производственная мощность

resources, n – запасы, ресурсы, средства; природные богатства

scarcity, n – нехватка, редкость, дефицит, недостаточное количество

stock , n – акционерный капитал; акции; пакет акций; фонды

tertiary, adj – относящийся к сфере услуг

vital – жизненный; насущный, очень важный, крайне необходимый

wages , n – заработок, доход, вознаграждение

welfare , n – благосостояние

workforce , n – рабочая сила

Glossary

Asking price – the price that someone wants to sell something for.

Bid price – an offer to pay a particular price for something.

Black economy – business activity that takes place unofficially, especially in order to avoid tax.

Business cycle – fluctuation in economic activity characterized by periods of rising and falling fiscal health. During a business cycle, an economy grows, reaches a peak, and then begins a downturn followed by a period of negative growth (a recession) that ends in a trough before the next upturn.

Capital – 1 the stock of wealth existing at anyone time. 2 money or property, especially when it is used to start a business or to produce more wealth.

Capital goods – goods such as machines or buildings that are made for the purpose of producing other goods.

Competition – the eternal contest between business firms to see which can perform the best either in terms of market share, profit, or some other recognized yardstick.

Consumer goods – goods such as food, clothes, and equipment that people buy, especially to use in the home.

Consumption – 1 the using up of a resource. 2 the selection, adoption, use, disposal and recycling of goods and services, as opposed to their design, production and marketing.

Demand – people’s need or desire to buy or use particular goods and services.

Depression – a period of economic crisis in commerce, finance, and industry, characterized by falling prices, restriction of credit, low output and investment, numerous bankruptcies, and a high level of unemployment.

Economic sector – a part of an area of economic activity.

Economics – the study of the way in which money and goods are produced and used.

Economies of scale – the financial advantages of producing something in very large quantities.

Economy (economic system) – the system by which a country's money and goods are produced and used, or a country considered in this way.

Entrepreneurship – an activity of starting a company, arranging business deals, and taking risks in order to make a profit.

Factors of production – the sum total of the economic resources which we have in order to provide for our economic wants.

Labour – 1 the exercise of human mental and physical effort in the production of goods and services. 2 all the people who work for a company or in a country.

Market economy – a system of producing wealth based on the free operation of business and trade without government controls.

Mixed economy – an economic system in which some industries are owned by the government and some are owned by private companies.

Output – the amount of goods or work produced by a person, machine, factory etc.

Participatory economics – an economic system proposed as an alternative to contemporary market economies and also an alternative to centrally planned socialism or coordinatorism. It implies participatory planning, transparency in all discussions and decision-making.

Planned economy – an economic system in which decisions about the production, allocation and consumption of goods and services is planned ahead of time, in either a centralized or decentralized fashion.

Recession – a period of a business cycle during which there is less trade, business activity, and wealth than usual.

Recovery – a period of a business cycle during which the economy is becoming stronger or more successful again after a difficult period.

Scarcity – a situation in which there is not enough of something.

Traditional economy – an economic system in which decisions are all made on the basis of customs, beliefs, religion, habit, etc.