Foundations of Economics. Учебное пособие

-To address smth. – - " - ., -., ;

-Major – , ;

-Along with – …;

-More specifically – ;

-Overtime – ", " ";

-To seek – , ";

-To grasp – , , ;

-Differential calculus – ;

-Command – , ;

-Path – , , , ;

- To put into motion – , , ;

-Self-sustaining – "- ;

-Way – , , , ;

-Certain – , , , ;

-Steady-state – ;

-Frequently – ;

-Testable – - ;

-Implication – , ;

-Definite – , , ;

-Insight(into) – ", , ;

II.Translate these words without a dictionary:

III.Skim the text. Try to understand the general sense.

GROWTH AND DEVELOPMENT

Growth economics studies factors that explain economic growth – the increase in output per capita of a country over a long period of time. The same factors are used to explain differences in the level of output per capita between countries, in particular why some countries grow faster than others, and whether countries converge at the same rates of growth.

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The study of economic growth and development is not a single branch of economics but falls, in fact, into two quite different fields. The two fields—growth and development—employ different methods of analysis and address two distinct types of inquiry.

Development economics is easy to characterize as one of the three major subfields of economics, along with microeconomics and macroeconomics. More specifically, resembles economic history in that it seeks to explain the changes that occur in economic systems over time.

The subject of economic growth is not so easy to characterize. Indeed, it is the most technically demanding field in the whole of modern economics, impossible to grasp for anyone who lacks a command of differential calculus. Its focus is the properties of equilibrium paths, rather than equilibrium states. In applying economic growth theory, one makes a model of the economy and puts it into motion, requiring that the time paths described by the variables be self-sustaining in the sense that they continue to be related to each other in certain characteristic ways. Then one can investigate the way economics might approach and reach these steady-state growth paths from given starting points. Beautiful and frequently surprising theorems have emerged from this experience, but as yet there are no really testable implications nor even definite insights into how economies grow.

TEXT ASSIGNMENTS

V.Answer the following questions:

1)What does growth economics study?

2)What does development economics study?

3)What is the most demanding field in the whole of modern economics?

4)What does the subject of economic growth focus on?

5)What does one investigate in applying economic growth theory?

6)Are there any testable implications of how economies grow?

1)Growth economics studies the raise in output per capita of a country over a long period of time.

2)There are two different fields studied by growth and development economics.

3)The two fields—growth and development—employ the same

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methods of analysis and types of inquiry.

4)Growth economics studies factors that explain distinctions in the level of output per capita between countries.

5)The subject of economic growth is the least technically demanding field in the whole of modern economics.

6)Development economics looks for an explanation of the changes that occur in economic systems over time.

7)The subject of economic growth concentrates on the properties of equilibrium states, rather than equilibrium paths.

8)There exist a great amount of testable implications and exact insights into how economies grow.

VIII. Choose a preposition in black type to fit the gaps in the sentences below. Some of them may be used twice. Translate these sentences:

1)Development economics is easy to characterize as one of the three major subfields of economics … … microeconomics and macroeconomics.

2)These factors are used to explain differences … the level of output … capita between countries.

3)In applying economic growth theory, one makes a model of the economy and puts it … motion.

4)There are no really testable implications nor even definite insights … how economies grow.

5)Development economics seeks to explain the changes that occur … economic systems … time.

6)One can investigate the way economics might approach and reach these steady-state growth paths … given starting points.

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UNIT 10

EMPLOYMENT AND UNEMPLOYMENT

I.Topical vocabulary. Read the words.

Text A

-Employment – , ;

-Labor statistics – ;

-Survey – , , ;

-Sample – ", ";

-Household – " , ";

-To be employed – ";

-To search for smth. – - .;

-Deem – , ;

-The percent – , ;

-Unemployment rate – ;

-Payroll – ";

-To report – , ;

-Employer – ;

-Employee – - ;

-Measure – , ";

-Reliable – , ;

-Aggregate demand – ;

-To make sense – " ";

-To meet – - ., "- ..;

-Need – " "- ., ;

-A bit – ";

-To hire – ", ;

-Spell – , , " ";

-To experience – , ;

-To engage(in) – , " "- ;

- Transition – , "- ;

-Right way – ;

-To remain – , ;

-Relationship – , (") ;

-Either…or… – … …;

-Quit – , ;

-Lay-off – " , ;

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-To terminate – , ;

-Noticeably – ", ;

-Delicacy – ;

-Term – , , , , ;

- In term of – c , , ;

-Spell – , " ";

-Foregoing – ";

-To maintain – , ;

- As long as – , ..;

-As well as – , ..;

-To absorb – " - .;

-Entrant – ;

-To experience – ( );

-Throughout – " ( ");

-To decline – , ";

-Persistent – , ;

-Overall – - ;

Text B

-Tax – ;

-Policy – , , ;

-Welfare – , " "- ,

, ;

-To affect smth. – - ., - .;

-Approval – , , ;

- Leery – ;

-Stuck – , , ; -To be stick with smth. – , ;

-Reluctant – - - . , ";

, ;

-Effect – , ", , ;

-Policy issue – ;

-To extend – , , ;

-Unemployment benefit – ;

-While – ", ; ;

-Income – , ;

-Payroll tax – . ;

-To drive a wedge(between) – " "- .,"- .;

-To take home – ";

-To putter around – ;

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-To show up – , , ( ), ;

-Picky – , ;

-To look for – - .;

-To accept smth. – - ., ";

II.Translate these words without a dictionary:

III.Skim the text. Try to understand the general sense.

TEXT A. EMPLOYMENT AND UNEMPLOYMENT

A major macroeconomic indicator is the unemployment rate. In the United States, the Bureau of Labor Statistics (BLS) conducts a monthly survey of a sample of households in which it asks whether individuals in the household are employed or have searched for work recently. Those who have done neither are deemed to be out of the labor force. Of those in the labor force, the percent that is not working is the unemployment rate.

Another employment survey is called the payroll survey. The BLS asks all large employers and a sample of small employers to report the number of employees on their payrolls. This gives an alternative measure of total employment, one that is considered to be a bit more reliable than the household survey.

When aggregate demand goes up in the economy, employment goes up and unemployment goes down. This makes sense, because as firms must meet the need for more output, they have to hire more workers.

A typical unemployment rate for the U.S. economy might be 6 percent. However, it is important to realize that many more than 6 percent of workers experience spells of unemployment over the course of a year. Each month a large percentage of the labor force engages in transitions. Many people leave their old jobs. Some start new jobs right away, and others remain unemployed for a few months.

Economists Bruce C. Fallick and Charles A. Fleischman estimated that about nine million employment relationships end each month, due

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either to quits by workers or lay-offs by firms. Also, about nine million new employment relationships start each month. The change in the unemployment rate represents the difference between relationships newly broken and relationships newly started. In a month where 9 million jobs are terminated and only 8.75 million jobs are created, the unemployment rate will rise noticeably.

Another way of looking at the delicacy of the unemployment rate is to think of it in terms of the average spell for those who are unemployed.

From the foregoing, it should be evident that the key to maintaining full employment is job creation. As long as new jobs are being created at a sufficient rate to absorb people leaving old jobs as well as new entrants to the labor force, the economy can experience a large number of layoffs and yet not have an unusually high unemployment rate. The media was reporting massive layoffs at major corporations throughout the 1990's, as the unemployment rate persistently declined. For most of the 1990's new job creation was strong, so that average unemployment spells shortened, reducing the overall unemployment rate.

TEXT B. MICROECONOMIC CAUSES OF UNEMPLOYMENT

In addition to macroeconomic factors, there are microeconomic causes of unemployment. Taxes, welfare policies, and regulatory policies can affect the unemployment rate. Here are some examples.

1/ In many European countries, it is illegal for firms above a certain size (say, 20 employees) to lay off an employee without going through an approval process with the government. This makes firms very leery about hiring new workers, because the firm knows that it will be stuck with the worker even if demand falls off or the relationship does not work. Because firms are reluctant to add workers, new jobs are not created as fast as in the United States, and economists believe that the effect of these laws is to increase the unemployment rate in Europe.

2/ During a recession, one policy issue that comes up is extending unemployment benefits to cover a longer period of time. While this often is the right thing to do for other reasons, it does reduce the incentive of unemployed workers to take new jobs, which tends to raise the unemployment rate.

3/ Income and payroll taxes drive a wedge between the value of a worker's time and the income that a worker can receive from paid employment. If I only take home 50 cents of every dollar I earn, then I may choose to putter around the house more and work less. This can show up as an increase in

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the unemployment rate, as I look for work but get very picky about the jobs that I will accept.

TEXT ASSIGNMENTS

V. Answer the following questions:

Text A

1)What does a monthly survey of the Bureau of Labor Statistics consist of?

2)What is the payroll survey?

3)What is the employment and unemployment behavior when aggregate demand goes up in the economy?

4)What is the percentage of a typical unemployment rate for the U.S. economy?

5)What does the change in the unemployment rate represent?

6)What should one do to maintain full employment?

Text B

1)What can affect the unemployment rate?

2)What are the examples of it? Give 3 ones.

1)The Bureau of Labor Statistics (BLS) conducts a weekly polling of a model of households.

2)In the payroll survey the BLS asks all large employers and a sample of small employers to state an account of the number of employees on their payrolls.

3)When aggregate demand goes up in the economy, employment goes down and unemployment goes up.

4)Economists Bruce C. Fallick and Charles A. Fleischman estimated that about nine million employment relationships end each month, because either of quits by workers or lay-offs by firms.

5)In a month where 9 million jobs are cancelled and only 8.75 million jobs are created, the unemployment rate will fall considerably.

6)As long as new jobs are being created at a satisfactory rate to hire people leaving former jobs as well as new entrants to the labor force, the economy can experience a large number of layoffs.

7)Taxes, welfare policies, and regulatory policies can’t influence the

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unemployment rate.

8) In many European countries, firms having, say, 20 employees may lay off an employee without going through an approval process with the government.

VII. Explain the meanings of the following words in English:

VIII. Match the first column with the second one adding prepositions if necessary. Translate the word combinations. Make sentences with some of them:

IX. Look at the following words from the text. Find at least 2 synonyms to each of these words consulting a dictionary and make up sentences with some of them:

X.Give English equivalents to the following sentences:

Text A

1) % " ", "

,

.

2) #x x "

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