VI. Fill in the blanks with may, might, can or could
1. Any child … attend school without paying fees.
2. Holders of the Associate Degree … apply to enter other first degree programmes.
3. I thought we … go to the new Chinese restaurant on the High Street.
4. In the beginning, only white men with property … vote.
5. Parliament … force the Government to change its mind
6. Students with good degrees … go on to higher degrees.
7. The Associate Degree … be awarded in U.S. postsecondary education.
8. The universities … decide which students to admit, what and how to teach, which degrees to award.
9. Today any citizen of the USA who is at least 18 years old … vote.
10. U.S. Master's Degrees … be taught without thesis or research with thesis and … be awarded in academic or professional fields.
VII. Make up sentences from the words given below
1. age; age; and; between; can; eighteen; exit; of; of; sixteen; the; vary; years.
2. a; by; education; education; followed; is; middle; number; of; of; primary; school; years.
3. also; called; education; education; higher; in; is; postsecondary; States; the; United.
4. and; both; education; for; higher; is; its; known; quality; size; system; the.
5. academic; Associate; awarded; be; can; Degree; degree; education; first; in; is; or; Postsecondary; professional; States; that; the; the; the; United.
6. apply; Associate; Degree; degree; enter; first; holders; may; of; other; programmes; to.
7. awarded; Bachelor's; be; can; Degree; education; in; postsecondary; States; the; the; United.
8. academic; awarded; be; disciplines; Doctorate; in; may; Research; the.
9. actual; and; degree; depending; of; programme; structure; subject; the; the; the; the; time; to; upon; varies.
10. academic; are; awarded; disciplines; Doctorates; in; Research; the.
UNIT 12
ECONOMIC SYSTEMS
BEFORE YOU READ
Answer these questions
1. What is economic system? Are all economic systems the same?
2. What types of economic systems do you know?
READING TASKS
A. Understanding main points
Read the text below about types of economic systems and answer the questions, beginning your answers with the following phrases: as a rule …; to tell the truth …; as far as I know …; the matter is that …; as far as I remember …; as far as I am concerned …; frankly/strictly speaking …; to make a long story short … .
1. Why do we say that economic systems differ from country to country?
2. What countries are we more likely to find free market economic systems in?
3. In what countries may the state have taken control over many enterprises?
4. How many types of economic systems can we identify? What are they?
5. What is characteristic of a pure market economy? What can you say about production, demand for a product, supply or purchasing patterns of consumers?
6. What is the role of government in a market economy?
7. What does private ownership encourage and ensure in a market economy?
8. Who plans the production of the goods and services, their quantity and the prices at which they are sold in a pure command economy?
9. Where were command economies found? Where were some elements of a command economy evident?
10. What does the abolition of private ownership mean?
B. Understanding details
Mark the statements T (true) or F (false) according to the information in the text. Give your reason using the following phrases: as a matter of fact ...; I don't think so …; I'm of the same opinion …; in my opinion …; on the contrary …; strictly speaking ...; to my mind ... .
1. All economic systems are the same. They don’t differ from country to country.
2. We can identify three types of economic systems: a market economy, a command economy, and a state-directed economy.
3. In a pure market economy all productive activities are state owned.
4. If demand for a product exceeds supply, prices will fall, if supply exceeds demand, prices will rise.
5. The goods and services that a country produces, and the quantity in which they are produced, are planned by the government.
6. The purchasing patterns of consumers, as signaled to producers through the mechanism of the price system, determine what is produced and in what quantity.
7. The role of government in a market economy is to encourage vigorous competition between private producers.
8. Command economies were found in communist countries where collectivist goals were given priority over individual goals.
9. In a command economy, state-owned enterprises have very much incentive to control costs and be efficient, because they can go out of business.
10. In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.
TYPES OF ECONOMIC SYSTEMS
Economic system is a set of principles and techniques by which the ownership and allocation of economic resources are organized by society. Not all economic systems are the same. They differ from country to country. Each country has its own particular features. In countries where individual goals are given primacy over collective goals, we are more likely to find free market economic systems. In contrast, in countries where collective goals are given prominence, the state may have taken control over many enterprises, while markets in such countries are likely to be restricted rather than free. More specifically, we can identify four broad types of economic systems: a market economy, a command economy, a mixed economy, and a state-directed economy.
In a pure market economy all productive activities are privately owned. The goods and services that a country produces, and the quantity in which they are produced, are not planned by anyone. Production is determined by the interaction of supply and demand and signaled to producers through the price system. If demand for a product exceeds supply, prices will rise, signaling producers to produce more. If supply exceeds demand, prices will fall, signaling producers to produce less. In this system consumers are sovereign. The purchasing patterns of consumers, as signaled to producers through the mechanism of the price system, determine what is produced and in what quantity.
The role of government in a market economy is to encourage vigorous competition between private producers. Governments do this by outlawing monopolies and restrictive business practices designed to monopolize a market. Private ownership also encourages vigorous competition and economic efficiency. Private ownership ensures that entrepreneurs have a right to the profits generated by their own efforts. This gives entrepreneurs an incentive to search for better ways of serving consumer needs. That may be through introducing new products, by developing more efficient production processes, by better marketing and after-sale service, or simply through managing their businesses more efficiently than their competitors.
In a pure command economy, the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold are all planned by the government. In a pure command economy, all businesses are state owned. The government can direct them to make investments that are in the best interests of the nation as a whole, rather than in the interests of private individuals. Historically, command economies were found in communist countries where collectivist goals were given priority over individual goals. Some elements of a command economy were also evident in a number of democratic nations led by socialist inclined governments.
While the objective of a command economy is to mobilize economic resources for the public good, just the opposite seems to have occurred. In a command economy, state-owned enterprises have little incentive to control costs and be efficient, because they cannot go out of business. Moreover, the abolition of private ownership means that there is no incentive for individuals to look for better ways to serve consumer needs. Hence, dynamism and innovation are absent from command economies. Instead of growing and becoming more prosperous, such economies tend to be characterized by stagnation.
Between market economies and command economies there are mixed economies. In a mixed economy, certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant state ownership and government planning. Mixed economies are relatively common in Western Europe although they are becoming less so. France, Italy, and Sweden can all be classified as mixed economies. In these countries the governments intervene in those sectors where they believe that private ownership is not in the best interests of society. For example, Britain and Sweden both have extensive state-owned health systems that provide free universal health care to all citizens, it is paid for through higher taxes. In both countries it is felt that government has a moral obligation to provide for the health of its citizens. One consequence is that private ownership of health care operations is very restricted in both countries. In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.
A state-directed economy is one in which the state plays a significant role in directing the investment activities of private enterprise through “industrial policy” and in otherwise regulating business activity in accordance with national goals. Japan and South Korea are frequently cited as examples of state-directed economies. A state-directed economy differs from a mixed economy in so far as the state does not routinely take private enterprises into public ownership. Instead, it nurtures private enterprise but proactively directs investments made by private firms in accordance with the goals of its industrial policy. One criticism of state-directed economies is that government bureaucrats don't necessarily make better decisions about the allocation of investment capital than the market mechanism would.
