English guide for economists and managers (руководство на английском языке для экономистов и менеджеров). Учебное пособие

Inflation.

Interest rates.

GDP growth. GDP stands for Gross Domestic Product. In other words, is the economy in recession, is it booming, etc.

Taxes.

Exchange rates, i.e., how much currencies are worth in relation to one another.

How much discretionary income consumers have, i.e. income after paying tax, social security, etc.

Levels of consumer confidence.

Savings rates.

Business people cannot control their economic environment. However, they can evaluate conditions in the marketplace before deciding whether to proceed with a plan or project.

Do not confuse the term ‘economic environment’ with ‘environmental economics.’ Although they sound similar, their meanings are quite different.

Environmental economics, a sub-field of economics, is all about environmental issues. Since the second half of the last century, environmental economics has become an increasingly popular topic.

Environmental economics looks at the economic effects of local or national environmental policies across the globe. Particular issues include the costs and benefits of alternative environmental policies that deal with water quality, air pollution, and global warming.

по материалу: https://marketbusinessnews.com/financial-glossary/economic- environment/

UNIT IV

ECONOMIC SYSTEMS

Starting up

Before studying the material of Unit IV, read and memorize the definitions of the key terms of this unit.

Economy:

– thrifty, efficient and concise use of material and nonmaterial resources;

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–control, management of the money, goods, and other resources of a community, society, or household;

–the structure or conditions of economic life in a country, area or period;

–the arrangement or mode of operation of something.

Capitalism:

–an economic system characterized by private or corporate ownership of capital, goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market; contrasted with socialism or especially communism, in which the state has the predominant role in the economy.

Socialism:

–a theory, system or way of organizing a society in which major indus-

tries are owned and controlled by government rather than by individual people and companies.

Egalitarianism:

–a social philosophy advocating the removal of inequalities among people; a belief in human equality especially with respect to social, political, and economic affairs.

Libertarianism:

–libertarian principles or doctrines. A libertarian is one who holds to the doctrine of free will; a person who believes that people should be allowed to do and say what they want without any interference from the government.

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While reading the Text of this Unit, you’ll find these words and expressions. They will be given as italicized ones. You may also consult any English-Russian dictionary.

Vocabulary

Task 1. While reading the text «Types of Economic Systems» find the following English phrases in it and a) read them aloud; b) give their Russian equivalents (consult the dictionary if it is necessary); c) say what types of economic systems exist and which of them our country has.

A mechanism for survival, broad categories, distribution of wealth, the sense of community, economic growth and development, to regulate production, distribution and prices, centralized economic planning.

Task 2. Find synonyms among the following words. Give translation of them. Time for doing this task is limited – 7 minutes. Mind the time.

System, target, contain, businessman, question, community, method, have, entrepreneur, category, common, goal, state, development, general, own, concern, include, government, growth, society, kind.

Task 3. Find antonyms among the following words. Give translation of them. Time for doing this task is limited – 7 minutes. Mind the time.

Wealth, diminish, merchandiser, private, expenditure, development, advantage, provide, public, poverty, decrease, supply, increase, abundancy, broad, consumer, income, disadvantage, narrow, lack.

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Task 4. Complete each sentence, using the words given. One word may be used once. Translate these words and define what part of speech they are.

technically, by, disadvantages, four, produce, planned, traditional, not, combination, in spite of

1.In fact, ... the appearance of great variety, it is possible to group these different economic structures into ... broad categories.

2.There are some advantages and ... in a ... economy.

3. ... this means that the producer gets to decide what to produce, how much to ... , what to pay employees, etc., and not the government.

4.A planned economy may either consist of state owned enterprises, private enterprises who are directed ... the state, or a ... of both.

5.Therefore, command economies are ... economies, but ... necessarily the reverse.

Reading

Task 1. Discuss these questions in pairs.

a)Which economic system can be considered as the oldest one?

b)What other synonyms for the term «planned economy» can you give?

c)Why is it often difficult to obtain agreement about which type of economy is preferable?

Types of Economic Systems

Introduction. To an economist, economic society presents itself as a mechanism for survival – a means whereby people are able to carry out the tasks of production and distribution. If we look at the different political and social structures which exist in the world today, and the way in which those systems have developed over years, we are tempted to say that people have made use of, and are making use of, a very great varieties of economic systems. In fact, in spite of the appearance of great variety, it is possible to group these different economic structures into four broad categories. These basic and general types of economic organization are usually described as:

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1.Traditional economy (a generic term for the oldest and traditional economic systems);

2.Market economy (the basis for several «hands off» systems, such as capitalism);

3.Planned economy (the basis for several «hands on» systems, such as socialism);

4.Mixed economy (a compromise economic system that incorporates some aspects of the market approach as well as some aspects of the planned approach).

Typically, «hands on» economic systems involve a greater role for society and / or the government to determine what gets produced, how it gets produced, and who gets the produced goods and services, with the stated aim of ensuring social justice and a more equitable distribution of wealth. Meanwhile, «hands off» economic systems give more power to certain private individuals (or corporations) to make those decisions, rather than leaving them up to society as a whole, and often limit government involvement in the economy.

The primary concern of «hands on» economic systems is usually egalitarianism, while the primary concern of «hands off» economic systems is usually private property. Libertarians target individual economic freedom as a primary goal of their «hands off» policies.

The following text divides the main economic systems into «hands on» and «hands off», it attempts to structure the systems in a given section by alphabetical order and in a vertical hierarchy where possible.

Part I. Traditional economy. It is an economic system in which resources are allocated by inheritance, and which has a strong social network and is based on primitive methods and tools. It is strongly connected to subsistence farming. In the majority of countries traditional economy has been replaced by command economy, market economy or mixed economy. However, it is found today mainly in underdeveloped, agricultural parts of South America, Asia and Africa. There are some advantages and disadvantages in a traditional economy. The advantages are: a traditional economy fosters the sense of community, as it causes little friction among members and provides a sense of security and psychological comfort. Subsequently, there is a relatively low unemployment rate and low crime rate. A traditional economy allows for a greater degree of autonomy as no money or little is given to the government and there is no competition. The disadvantages are: a traditional economy

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does not allow for much economic growth and development as changes are very slow and there is a lack of social mobility. A traditional economy does not take advantage of technology and there is relatively little promotion of intellectual and scientific development. With no incentives for entrepreneurs, the consumer choice is diminished, which leads to a lower standard of living.

Part II. Market economy. This type of economy (also called a free market economy or a free enterprise economy) is an economic system in which the production and distribution of goods and services take place through the mechanism of free markets guided by a free price system. In a market economy, businesses and consumers decide of their own volition what they will purchase and produce. Technically this means that the producer gets to decide what to produce, how much to produce, what to charge to customers for those goods, what to pay employees, etc., and not the government. These decisions in a free market economy are influenced by the pressures of competition, supply, and demand. This is often contrasted with a planned economy, in which a central government decides what will be produced and in what quantities.

No pure market economy exists. Thus, almost all economies in the world today are mixed economies which combine varying degrees of market and command economy traits. For example, in the United States there are more market economy traits than in Western countries.

Part III. Planned economy. It is also known as command economy and centrally planned economy Planned economy is an economic system in which the state or government controls the factors of production and makes all decisions about their use and about the distribution of income. In such an economy, the planners decide what should be produced and direct enterprises produce those goods. Planned economies are in contrast to unplanned economies, for example, a market economy, where production, distribution, and pricing decisions are made by the private owners of the factors of production based upon their own interests rather than upon furthering some overarching macroeconomic plan.

A planned economy may either consist of state owned enterprises, private enterprises who are directed by the state, or a combination of both. Though «planned economy» and «command economy» are often used as synonyms, some make the distinction that under a command economy, the means of production are publicly owned. That is, a planned economy «an economic system in which the government controls and

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regulates production, distribution, prices, etc.» but a command economy, while also having this type of regulation, necessarily has substantial public ownership of industry. Therefore, command economies are planned economies, but not necessarily the reverse.

Important planned economies that existed in the past include the economy of the Soviet Union, which was for a time the world’s secondlargest economy. Beginning in the 1980s and 1990s, many governments presiding over planned economies began deregulating and moving toward market based economies by allowing the private sector to make the pricing, production, and distribution decisions. Although most economies today are market economies or mixed economies, planned economies exist in some countries such as Cuba and North Korea.

Part IV. Mixed economy. It is an economy that has a mix of economic systems. It is usually defined as an economy that contains both private-owned and state-owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and command economy.

There is no one single definition for a mixed economy, but relevant aspects include: a degree of private economics (including privately owned industry) intermingled with centralized economic planning (which may include intervention for environmentalism and social welfare, or state ownership of some of means of production). As private property is an important institution in this type of economy, supporters of the mixed system hold the view that private property provides an important incentive for people to work, save and invest.

For some states, there is not a consensus on whether they are capitalist, socialist, or mixed economies. Economies in states ranging from the United States to Cuba have been termed mixed economies. By most definitions, Canada could be referred to as a mixed economy, as Canadian health care is nationalized in order to provide health care free of charge.

There are several basic and unfinished questions that must be answered in order to resolve the problems of economics satisfactorily. The scarcity problem, for example, requires answers to the basic questions, such as: what to produce, how to produce it, and who gets what is produced. An economic system is a way of answering these basic questions. Different economic systems answer them differently.

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Task 2. Translate the following Russian phrases into English. Time for doing this task is limited – 5 minutes. Mind the time.

Механизм выживания, ограничивать вмешательство правительства, частная собственность, распределение товаров и услуг, спрос и предложение, факторы производства, бесплатно, проблемы экономики.

Task 3. Make sentences, using the following words.

1.produced, role, involve, «hands on», society, economic, what, determine, systems, a, etc, greater, for, and, the, government, to, gets.

2.strongly, subsistence, it, farming, connected, to, is.

3.what, in, businesses, own, a, decide, and, market, purchase, will, economy, consumers, of, their, volition, they, and, produce.

4.economies, Soviet, the, important, of, planned, that, existed, in, past, the, Union, include, economy, the.

5.contains, an, capitalism, it, elements, is, usually, private-owned, de- fined, as, economy, that, both, and, state-owned, or, that, combines, of, enterprises, and, socialism.

Task 4. Answer the following questions:

1.How many categories is it possible to group economic structures into?

2.What are the disadvantages of traditional economy?

3.Does pure market economy exist?

4.What may planned economy consist of?

5.What relevant aspects does mixed economy include?

6.What basic questions does the scarcity problem require to answer?

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Language review

Task 1. Fill in the blanks in the sentences with proper prepositions. Define Grammar Tense and the Voice of the underlined predicate in each sentence.

1. ... an economist, economic society presents itself as a mechanism ...

survival – a means whereby people are able to carry ... the tasks of pro-

duction and distribution.

2. ... the majority ... countries traditional economy has been replaced ...

command economy, market economy or mixed economy.

3.These decisions ... a free market economy are influenced ... the pressures ... competition, supply, and demand.

4.There is no one single definition ... a mixed economy, but relevant aspects include: a degree ... private economics intermingled ... centralized economic planning.

5.Many governments presiding ... planned economies began deregulating and moving ... market based economies ... allowing the private sector to make the pricing, production, and distribution decisions.

Task 2. a) Fill in the blanks with proper forms of the verbs.

b) Take any three verbs, used in the Text or in Task 2 a) and make three sentences of your own in English (in a written form). Making the sentences, any Grammar Tense and Voice can be used.

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