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II. Give English equivalents of the following:

KynyBaTM 3 MeToto po3uunpeHHfl HafiMa™ po6iTHMKiB

Ta noniniueHHfl Bnpo6wmnx oco6hctmS npn6yTOK

MOWfiHBOCTeM piBeHb 3aMMHTOCTi

nepefl6aneHHJ) MafiSyTHboro 3aranbHi BMTpaTM

36yry Ta npn6yTKiB pieeHb ujh

3afloBonbHMTH norpe6n cnojKMBa,Ha y u,bOMy poayMiHHi ynacHkKM pmmkobmx bjahochh

94

95

aggregate supply

combination

market participants

expenditures

aggregate demand

quantity

to hire

goods

services

demand

sufficiently

expenditure

income

interest rates

  1. III. Fill In the blanks with appropriate words:

    Aggregate demand is the total ... of output demanded at alterative price levels in a given time period.

  2. Equilibrium is the ... of price level and real output that is compatible with both ... and aggregate supply.

  3. ... is the total quantity of output pro­ducers are willing and able to supply at alternative price levels in a given time period.

  4. Aggregate spending is the rate of total ... desired at alternative levels of income.

  5. The role of business firms in factor markets is ... available workers and other factors of production to produce ... and ....

  6. In fact all of the income spent in product markets ends up as income for ... .

  7. Firms will ... more labor only if the demand for the goods and services such labor producer is ... strong.

  8. Consumption decisions are influenced by a variety of forces, including ..., prices wealth and expecta­tions.

9. Investment is ... on new plant and equipment in a given time period, plus changes in business inventories.

IV. Read and translate the text:

Producers have some notion of how much output they are willing and able to produce at various price levels. Likewise, consumers, businesses, governments, and the rest of the world have some notion of how much output they are willing and able to buy at different price levels. These forces of aggregate demand and aggregate supply confront each other in the market place. Eventually, buyers and sellers discover that only one nprice-outputtt combination is acceptable to both sides. This is the «price-output» combination we designate as (macro) equilibrium. , sr.,. s , ,_

At equilibrium, the aggregate quantity of goods demanded exactly equals the aggregate quantity supplied. In the absence of macro disturbances, the economy will gravitate toward equilibrium — and stay there.

Dollar expenditures (total spending) are directly related to the flow of real goods and services; the level of employment depends on the willingness of people to spend their incomes. Businesses hire workers only if the goods and services such workers produce can be sold in product markets. Firms will demand more labor only if the demand for goods and services such labor produces is sufficiently strong.

In this sense we say that employers have a derived demand for labor, a demand that is derived from demands for final goods and services.

Consumer expenditures account for two-thirds of total spending in the U.S. economy. We need to determine what factors influence the rate of consumption and thus the potential for achieving full employment.

Consumption decisions are influenced by a variety of forces, including income, prices, interest rates, wealth and expectations.

Disposable income (Dl) represents the amount of income consumers can actually choose to spend or not spend (save) in a given time period.

Business firms purchase a new plant and equipment for the purpose of expending or improving their output capabilities; such purchases are called fixed investment. Firms also acquire inventories of goods that can be used to satisfy consumer demands; such expenditures are called inventory investment. Both forms of investment represent a demand for output and are therefore counted as part of aggregate spending.

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