Практикум по развитию навыков устной речи на английском языке
.pdffluctuation – колебание, изменение
Answer the questions:
1.How do Financial pyramids influence the society?
2.For what purpose were the financial pyramids originally created?
3.Give three main approaches which explain people’s participation in financial pyramids.
General understanding:
1.Explain the scheme of Financial pyramids.
2.Name four main principles of Pyramids.
3.Give your own example of Financial Pyramid.
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Text 14
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Capitalism.
In common usage capitalism refers to an economic system in which the means of production are privately owned and operated in order to generate capital, and where investment and the production, distribution and prices of commodities (goods and services) are determined mainly in a free market, rather than by the state. The means of production are usually operated in pursuit of profits.
Capitalism is contrasted with feudalism, where land is owned by the feudal lords, who collect rent from private operators; socialism, where the means of production is owned and used by the state; and communism, where the means of production is owned and used by the community collectively.
An economy with a large amount of intervention - which may include state ownership of some of the means of production - in combination with some free market characteristics is sometimes referred to as a mixed economy, rather than a capitalist one. Some economists oppose all or almost all state control over an economy. By some definitions, all of the economies in the developed world are capitalist, or mixed economies based on capitalism. Others see the world integrated into a global capitalist system, and even those nations which today resist capitalism, operate within a globalized capitalist economy.
Anders Chydenius was first to propose free trade and industry and to lay out the principles of liberalism in 1765, eleven years before Adam Smith. Yet, Adam Smith became more famous as the intellectual father of capitalism. From then on, most theories of what has come to be called capitalism developed in the 18th century, 19th century and 20th century, for instance in the context of the industrial revolution and European imperialism (e.g. Chydenius, Smith, Ricardo, Marx), The Great Depression (e.g. Keynes) and the Cold war (e.g. Hayek, Friedman).
These theorists characterize capitalism as an economic system in which capital is owned by the capitalist class and economic decisions are determined in a market – that is, by trades that occur as a result of agreement between buyers and sellers; where a market mentality and entrepreneurial spirit exists; and where specific, legally enforceable, notions of property and contract are instituted. Such theories typically try to explain why capitalist economies are likely to generate more economic growth than those subject to a greater degree of governmental intervention.
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Some emphasize the private ownership of capital as being the essence of capitalism, or emphasize the importance of a free market as a mechanism for the movement and accumulation of capital, while others measure capitalism through class analysis (i.e. class structure of society, relations between the proletariat and the bourgeois). Some note the growth of a global market system.
Others focus on the application of the market to human labor. Still others, such as Hayek, note the self-organizing character of economies which are not centrallyplanned by government. Many, such as Adam Smith, point to what is believed to be the value of individuals pursuing their self-interest as opposed to altruistically working to serve the "public good."
Many of these theories call attention to various economic practices that became institutionalized in Europe between the 16th and 19th centuries, especially involving the right of individuals and groups of individuals acting as "legal persons" (or corporations) to buy and sell capital goods, as well as land, labor, and money, in a free market, and relying on the state for the enforcement of private property rights rather than on a system of feudal protection and obligations.
Aside from referring to an economic or political system, capitalism may also refer to the condition of owning capital. Likewise, in addition to the term "capitalist" referring to someone who favors capitalism, capitalist also commonly refers to a person who owns and controls capital.
Vocabulary:
means of production – средства производства pursuit of profits – погоня за прибылью intervention – интервенция, вмешательство to lay out – выложить
entrepreneurial – предпринимательский enforceable – обеспеченный страховой силой institute – учреждать, основывать
essence – сущность
accumulation of capital – накопление капитала
Answer the questions:
1.What is usually operated in pursuit of profit?
2.How do the theorists characterize “capitalism”?
3.Name different theories of capitalism.
General understanding:
1.What is “сapitalism”?
2.With what is capitalism contrasted and how?
3.Who was the intellectual father of “сapitalism”?
4.Give examples of the capitalistic countries.
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Text 15
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Price revolution.
Price revolution used generally to describe a series of economic events from the second half of the 15th century to the first half of the 17th, the price revolution refers most specifically to the relatively high rate of inflaction that characterized the period across Western Europe, with prices on average rising perhaps six fold over 150 years.
It was once thought that this high inflation was caused by the large influx of gold and silver from the Spanish treasure fleet from the new World, especially the silver of Bolivia and Mexico which began to be mined in large quantities from 1545. According to this theory, too many people with too much money chased too few goods.
The start of the price rises actually predated the large-scale influx of bullion from across the Atlantic, reflecting in part a quintupling of silver production in central Europe in 1460-1530: though this output fell by two-thirds by the 1610s, it was significant in fueling the early stages of inflation that undermined a price regime in place since the previous upsurge in silver production in 1170-1320.
Demographic factors also contributed to upward pressure on prices, with the revival (from around the third quarter of the 15th century) of European population growth after the century of depopulation and demographic stagnation that had followed the Black Death. The price of food rose sharply during epidemic years, then began to fall very rapidly as there were fewer mouths to feed. At the same time prices of manufactured goods tended to rise because of dislocation of supply. Later on, increased population placed greater demands on an agricultural area that had contracted significantly after the 1340s, or had been converted from arable to less intensive livestock production. The increase in the proportion of Europe's population living in towns, though slight (in the region of one percentage point a century) until the 19th century, coupled with economic diversification, meant that there were more people to feed, but proportionately slightly fewer producers of stample food. Urbanization also contributed to increased trade between Europe's regions, which made prices more responsive to distant changes in demand, and provided a channel for the flow of silver from Spain through western and then central Europe.
Increased trade and availability of manufactured and luxury goods, especially in the 16th century, had also encouraged many landowners to convert their tenants' payments from produce to cash. Initially, this had helped the wealthy to accumulate more of the trappings of wealth, but as prices rose, those landlords who received payment in cash found themselves in financial straits. They often took extreme measures to
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combat the problem - measures that would add to social unrest and ultimately to a worsened financial position for themselves and their tenants.
In England, for example, many lands held as common lands(pastures, fields, etc.) were enclosed so that only the landlord could graze his animals. This forced his former tenants either to pay increased rents, which was close to impossible, or to leave their own farms. An increase in vagrancy meant more brigandage, a movement to the towns in search of employment and, where no employment could be found, an increase in urban poverty and crime.
The inflation of c.1470-1620 eventually petered out with the end of the initial rush of New World bullion, though prices remained around or slightly below the levels of the first half of the 17th century until the onset of new inflationary pressures in the later decades of the 18th century.
Vocabulary:
Influx – прилив (денег) mine – добывать
predate – предшествовать quintupling – увеличение в пять upsurge – повышение, подъем diversification – многообразие
social unrest – общественные беспорядки distant – далекий, отдаленный
tenant – арендатор, наниматель brigandage – разбой
peter out – постепенно прекращаться
Answer the questions:
1.What is “рrice revolution”?
2.According to what theory did rich people chase too few goods?
3.What had encouraged landowners to convert their tenants’ payments from “produce” to “cash”?
General understanding:
1.When and where did the Price revolution begin?
2.Name the factors which can characterize the Price revolution.
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Text 16
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Great depression in the USA.
The Great Depression began with the Wall Street Crash of October, 1929 and rapidly spread worldwide. The market crash marked the beginning of a decade of high unemployment, poverty, low profits, deflation, plunging farm incomes, and lost opportunities for economic growth and personal advancement. Although its causes are still uncertain and controversial, the net effect was a sudden and general loss of confidence in the economic future.
The usual explanations include numerous factors, especially high consumer debt, illregulated markets that permitted overoptimistic loans by banks and investors, and the lack of high-growth new industries, all interacting to create a downward economic spiral of reduced spending, falling confidence, and lowered production.
Industries that suffered the most included construction, agriculture as dust-bowl conditions persisted in the agricultural heartland, shipping, mining, and logging as well as durable goods like automobiles and appliances that could be postponed. The economy reached bottom in the winter of 1932–33; then came four years of very rapid growth until 1937, when the Recession of 1937 brought back 1934 levels of unemployment.
The depression caused major political changes in America. Three years into the depression, Herbert Hoover lost the 1932 presidential election to Franklin Delano Roosevelt in a sweeping landslide. Roosevelt's economic recovery plan, the New Deal, instituted unprecedented programs for relief, recovery and reform, and brought about a major realignment of American politics.
The Depression also resulted in an increase of emigration of people to other countries for the first time in American history. For example, some immigrants went back to their native countries, and some native US citizens went to Canada, Australia, and South Africa. Some extreme examples were cases of some Americans emigrating to the Soviet Union (some of whom died during Stalin's Great Purges). It also resulted in the mass migration of people from badly hit areas in the Great Plains and the South to places such as California and the North, respectively (see Okies and the Great Migration of African Americans). Racial tensions also increased as well during this time. By the 1940s immigration had returned back to normal, and emigration declined.
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The American depression produced severe effects abroad, especially in Europe, where many countries had not fully recovered from the aftermath of World War I; in Germany, the economic disaster and resulting social dislocation contributed to the rise of Adolf Hitler. In the United States, at the depth (1932–33) of the depression, there were 16 million unemployed—about one third of the available labor force. The gross national product declined from the 1929 figure of 3,828,000,000 to ,760,000,000 in 1933, and in two years more than 5,000 banks failed. As a social consequence of the depression, the birthrate fell precipitously, for the first time in American history falling below the replacement rate. The economic, agricultural, and relief policies of the New Deal administration under President Franklin Delano Roosevelt did a great deal to mitigate the effects of the depression and, most importantly, to restore a sense of confidence to the American people. Yet it is generally agreed that complete business recovery was not achieved and unemployment ended until the early 1940s, when as a result of World War II the government began to spend heavily for defense.
The memory of Depression also shaped modern theories of economics and resulted in many changes in how the government dealt with economic downturns, such as the use of stimulus packages, Keynsian economics, and Social Security. It also shaped modern American literature, resulting in famous novels such as John Steinbeck's "The Grapes of Wrath" and "Of Mice and Men".
Vocabulary:
Loan – заем, ссуда
Realignment – перестройка , преобразование
Aftermath – последствие
Consequence – результат
Mitigate – уменьшать
Answer the questions:
1.What caused the Great Depression?
2.Can you enumerate the consequences of the Great Depression? 3.What kind of effects did The Great Depression produce in Europe?
General understanding:
1.What spheres of life did the Great Depression influence on?
2.How did Americans deal with this depression?
3.What other facts of the Great Depression and their results to economy can you name?
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Text 17
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Utility
The focus of economics is to understand the problem of scarcity: the problem of fulfilling the unlimited wants of humankind with limited and/or scarce resources. Because of scarcity, economies need to allocate their resources efficiently. Underlying the laws of demand and supply is the concept of utility, which represents the advantage or fulfillment a person receives from consuming a good or service. Utility, then, explains how individuals and economies aim to gain optimal satisfaction in dealing with scarcity. Utility is an abstract concept rather than a concrete, observable quantity. The units to which we assign an “amount” of utility, therefore, are arbitrary, representing a relative value. Total utility is the aggregate sum of satisfaction or benefit that an individual gains from consuming a given amount of goods or services in an economy. The amount of a person's total utility corresponds to the person's level of consumption. Usually, the more the person consumes, the larger his or her total utility will be. Marginal utility is the additional satisfaction, or amount of utility, gained from each extra unit of consumption.
Although total utility usually increases as more of a good is consumed, marginal utility usually decreases with each additional increase in the consumption of a good. This decrease demonstrates the law of diminishing marginal utility. Because there is a certain threshold of satisfaction, the consumer will no longer receive the same pleasure from consumption once that threshold is crossed. In other words, total utility will increase at a slower pace as an individual increases the quantity consumed. The law of diminishing marginal utility helps economists understand the law of demand and the negative sloping demand curve. The less of something you have, the more satisfaction you gain from each additional unit you consume; the marginal utility you gain from that product is therefore higher, giving you a higher willingness to pay more for it. Prices are lower at a higher quantity demanded because your additional satisfaction diminishes as you demand more.
In order to determine what a consumer's utility and total utility are, economists turn to consumer demand theory, which studies consumer behavior and satisfaction. Economists assume the consumer is rational and will thus maximize his or her total utility by purchasing a combination of different products rather than more of one particular product.
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Vocabulary:
Scarcity – дефицит, недостаток Arbitrary – произвольный, случайный certain threshold – определенный предел
Answer the questions:
1.What’s the concept of utility?
2.Give the definition to ”marginal utility”
3.What law helps economists understand the law of demand?
General understanding:
1.Explain the difference between total utility and marginal utility.
2.What does the consumer demand study?
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Text 18
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The economic crisis of 1998 in Russia.
The economic crisis of 1998 in Russia (also called a Default on the name of one of the causes of the crisis) was one of the most severe economic crises in the history of Russia.
The main reasons for default were a huge national debt of Russia, spawned by the collapse of the Asian economies of the liquidity crisis, low world prices for raw materials that made up the core of Russia's exports, as well as the populist economic policies of the state and the construction of the pyramid of GKO (state short-term obligations). Actually date of default is the seventeenth of August 1998.
The effects it has had a major influence on the development of the economy and the country as a whole, both negatively and positively. The rate of the rouble relative to the dollar has fallen for six months in more than three times. It was undermining the confidence of the population and foreign investors to the Russian banks and the state. Ruined a large number of small enterprises, burst, many banks. The banking system was in a collapse of at least six months. The population has lost a considerable part of their savings, fell level of life. However, the devaluation of the ruble has allowed the Russian economy to become more competitive.
The causes of the crisis from the standpoint of international Economics
In the theory of international Economics the concept of the “impossible Trinity” implies the unattainability of the situation of a fixed exchange rate, free capital movements and independent monetary policy at the same time. In Russia the rate of ruble to dollar was fixed. The free movement of capital has allowed foreign companies to invest in the GKO market. The monetary policy was aimed at curbing inflation. In such a situation, if there revalued the currency (the real exchange rate of the ruble to the dollar was very high), there is a strong speculative attack on the currency. In the case of Russia, the pressure went through the GKO market with its high rates not corresponding inflation. In the end, falling foreign exchange reserves forced the Government to devalue the currency by default.
Possible scenarios of the crisis
The state in 1998 had three opportunities to exit from the crisis:
a)print the money and pay the bills running mechanism of inflation,
b)declare a default on external debt, c)declare a default on domestic debt. It was selected the third option. The alleged reasons for the following: the experience of hyperinflation of the nineties was quite fresh, launch of a new inflationary spiral is not
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