POSIBNIK_1_KURS

Ex.6. Choose an appropriate word or a phrase to complete the following sentences.

Decision maker, a mechanism, traditional, basic and unfinished, in the distant past, a free enterprise or laissez-faire, a sense of security, owned and operated, government, in spite of.

1.To an economist, economic society presents itself as __________ for survival.

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

3.In traditional societies people use methods of production and distribution devised __________.

4.A __________ economy does not allow for much economic growth and development as changes are very slow and there is little social mobility.

5.The market system of economic organization is also commonly described as

__________, or capitalist system.

6.Traditional economy provides __________ and psychological comfort.

7.In a command economic system, the main __________ is the government.

8.All countries today have mixed economic systems or mixed economies, with some free enterprise and some __________ ownership.

9.Government planners decide the answers to the __________ questions.

10.If almost all the stores, factories, and farms in a nation are __________ by private individuals or businesses, then its system is called free enterprise.

Ex.7. Complete the following sentences with prepositions.

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

survival.

2.If we look _____ the different political and social structures which exist in the world today, we are tempted to say that people have made use _____ , and are making use _____ , very great varieties _____ economic systems.

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3.Tradition decides what these people do _____ a living and how their work is performed.

4.A traditional economy does not allow _____ much economic growth and development.

5.We shall use all these terms to stand _____ a market economy.

6.Every person has a property right _____ his own person and his own labor, and that he can make free contracts _____ those services.

7.Its most extensive form is referred _____ as a command economy.

8.Each nation and society thus must make choices and decisions based _____

their own values.

9.There is not one single definition _____ a mixed economy.

10.Economies _____ states ranging _____ the United States _____ Cuba have been termed mixed economies.

Ex.8. Combine two parts logically to make a complete sentence.

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Ex.11. Ask questions to which the following sentences may be answers.

1.As a mechanism for survival.

2.It is possible to group these different economic structures into four broad categories.

3.The oldest and the most common way of solving economic problems was that of tradition.

4.Strictly speaking, the pure market of laissez-faire system has never existed.

5.Supporters of planned economies cast them as a practical measure to ensure the production of necessary goods.

6.Efficiency is best achieved through a market economy where individual producers each make their own production decisions based on their own profit motive.

7.All countries today have mixed economic systems or mixed economies, with some free enterprise and some government ownership.

8.Economies in states ranging from the United States to Cuba have been termed mixed economies.

9.If the government owns and operates almost all of the nation's means of production, then that nation's economic system is called communism.

10.The U.S. has a free enterprise, or capitalist, economic system.

Ex.12. Answer the questions:

1.How does every economic society present itself for an economist?

2.What are the basic types of economic systems?

3.What kind of questions may help to solve economic problems satisfactorily?

4.Why does every society face the problem of resource allocation?

5.What methods of production and distribution are used in a traditional economic system?

6.Describe advantages and disadvantages of traditional economies.

7.Who makes economic decisions in a market economic system?

10.What are disadvantages of planned economies?

11.Define a mixed economic system.

12.What is the fourth basic question that should be asked by every society? 13.Who owns the means of production in the discussed economic system?

Ex.13. Make a presentation of the topic “Types of Economic systems”.

WRITING

Ex.14. Make a plan for a summary of Text A.

Ex.15. Write a brief summary of the text (25-30 sentences). Ex.16. Write an essay (100-150 words) about:.

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a)Pros and cons of command economies.

b)The role of government in a free-enterprise system.

DISCUSSION POINTS

Ex.17. With your partners do the following.

Explain the basis on which economists in classifying economic systems distinguish between ‘market’ and ‘command’ economies. On what basis, if any, is it possible to say which type of economy is superior?

Establish criteria such as resource ownership, for comparing market and command economies.

Explain how welfare criteria can be used to judge the success of an individual economic system.

One economic system is superior to another only if it is better able to satisfy welfare criteria. Discuss the evidence.

Avoid making subjective, political statements of opinion.

Ex.18. Can you explain the following sayings in your own words? What other sayings about different kinds of economic systems do you know?

1.Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.Ronald Reagan (American 40th US President (19811989, 19112004)

2.The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.Thomas Sowell (American writer and Economist) (1924 – 2006)

3.I don't know if I can live on my income or not - the government won't let me try it. Bob Thaves, the creator of the comic strip Frank and Ernest (1924-2006)

4.We have long had death and taxes as the two standards of inevitability. But there are those who believe that death is the preferable of the two. "At least," as one man said, "there's one advantage about death; it doesn't get worse every time Congress meets.Erwin N. Griswold, Solicitor General of the United States,(1904 - 1994)

5.Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. Teach a man to create an artificial shortage of fish and he will eat steak. Jay Leno, an American stand-up comedian and television host, (b. 1950)

TEXT B:COMMAND ECONOMY

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3.The central plan sets the priorities for production of all goods and services. The goal is to supply enough food, housing and other basics to meet the needs of everyone in the country. In addition, it may have other priorities, such as mobilizing for war or increasing the nation's economic growth.

4.The government owns a monopoly business in industries deemed important to the goals of the economy. This usually includes finance, utilities, and automotive. There is no domestic competition in these industries.

5.The government creates the laws that regulate economic activity. These include regulations, directives and wage/price controls to implement the central plan.

Centrally planned economies are great at mobilizing economic resources quickly, effectively and on a large scale. They can execute massive projects, create industrial power and attain imperative social goals. They are able to override individual self-interest, and subjugate the welfare of the general population, to achieve a greater agreed-upon goal for the society at large.

Command economies are also good at wholly transforming societies to conform to the planner's vision, as in Stalinist Russia, Maoist China and Castro's Cuba. For example, the command economy in Russia built up an effective military might and quickly rebuilt the economy after World War II.

This rapid mobilization often means command economies mow down other societal needs. For example, workers are often told what jobs they must fulfill and are even discouraged from moving. However, people won't ignore their own needs for long. They often develop a shadow economy, or black market, to buy and sell the things the command economy isn't producing. The efforts of leaders to control this market can ultimately weaken support for the central planning authority.

Instead of leading to efficiency, command economies often produce too much of one thing and not enough of another. That's because it's difficult for the central planners to get up-to-date information about consumers' needs. In addition, prices are set by the central plan, and so can't be used to measure or control demand. Instead, rationing often becomes necessary.

Command economies are not good at stimulating innovation. Businesses are focused on following directives, and are discouraged from making any autonomous decisions.

Centrally planned economies also have trouble producing the right exports at global market prices. It's difficult for the various planning sectors to coordinate with each other, not to mention foreign countries' needs.

Cuba, North Korea, China, Russia and Iran are the most commonly referenced examples of command economies. Russia's Gosplan has been the most studied. It was also the longest running, lasting from the 1930s until the late 1980s.

Ex.20. Read the text and decide whether the statements are true or false. Correct the false statements.

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1.In a command economy, companies carry out the implemented plan on the basis of the laws of supply and demand.

2.The concept of a command economy was first put into practice in the US during the WWII mobilization.

3.In a command economy, the government allocates resources in line with the central plan, usually for a five-year period.

4.The goal of the central plan is to provide only basic goods and does not have any other priorities.

5.Such important industries as finance and utilities are the state monopoly.

6.Being overregulated, the command type of economic systems doesn’t have any advantages.

7.As in a free-market economy, prices set by the central plan measure and control demand.

8.A shadow economy can appear as a result of peoples’ inability to satisfy their needs.

9.In a command economy, businesses are free to introduce innovations to improve their production and selling practice.

10.Cuba, South Korea, China, Iraq and Russia are the most frequently used examples of command economies.

Ex.21.Read the text more thoroughly and answer the questions.

1.Who makes economic decisions in a command economy?

2.When was the concept of a command economy developed?

3.What are the goal and duration of central economic plans?

4.Is unemployment characteristic of the command economic system?

5.How is economic activity regulated in a command economy?

6.Is the rapid mobilization of economic resources inherent in this type a positive or negative factor?

7.What aspects is the command economy most strong in?

8.Why is rationing necessary in this type of economy?

9.Give examples of command economies.

TEXT C: THE GOOD (AND BAD) MODEL GUIDE

Before reading

If we classify economic models basing on countries’ geographical location, do you think the countries within one group - American, Asian and European economic models – have the same features? How can you briefly characterize them?

Reading

Read an article from The Economist and

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do the tasks following the text.

A SUMMARY of economic models' best and worst features:

(1)The American model. Good points: flexible labour and product markets; low taxes; fierce competition; and shareholder capitalism, which puts pressure on managers to maximise profits. Bad points: wide income inequalities; low welfare benefits; poor quality of “public goods”, such as primary and secondary education; low investment and very low savings rates.

(2)The Japanese model. Good points: lifetime employment encouraged loyalty and high skill levels; public services, especially education, of high quality; close relations between banks and other firms; corporate crossshareholdings shelter managers from impatient shareholders, allowing them to take a long-term view of investment. This, it was once argued, gave Japan an advantage over American capitalism, obsessed with short-term profit. Bad points: these “virtues” are now seen as vices at the root of the country's problems: firms sheltered from the full force of the market feel little pressure to use capital efficiently.

(3)The East Asian model. The region has long been an intellectual battleground for economists. Some saw East Asia's rapid growth as proof of the virtues of market-friendly policies—low taxation, flexible labour markets and open trade. Others argued that South Korea's industrial policy was evidence of the possible gains from selective government intervention. The truth is that there is no single “East Asian model”: economic policies vary hugely from relatively liberal Hong Kong to heavy-handed South Korea; from widespread government corruption in Indonesia to squeaky-clean Singapore. What the East Asian countries shared was an openness to trade and higher savings than in other emerging economies.

(4)The German social-market model. Good points: excellent education and training; a generous welfare state and narrow wage dispersion breed social harmony; close relations between firms and banks assist high investment. Bad points: overly powerful trade unions, high taxes, overgenerous jobless benefits and widespread labour and product market restrictions have led to persistently high unemployment.

(5)The Swedish model. Once advertised as a “third way” between capitalism and socialism. Good points: relatively open markets combined with a comprehensive welfare state, narrow wage dispersion and employment schemes that pushed the jobless back into work. Bad points: rising inflation and recession increased the budget deficit, and as unemployment rose, costly job schemes were no longer affordable; high personal taxes blunted incentives to work.

(6)The New Zealand model. Radical reforms in the 1980s transformed the rich world's most regulated and closed economy into one of the most freemarket, with the lowest tax rates, lowest trade barriers and widespread privatisation. Bad point: a big increase in inequality.

(7)The Dutch model: Once an extreme example of Eurosclerosis, some now see the Netherlands as a model for the rest of Europe. Workers have

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accepted smaller pay rises in return for more jobs; rules on part-time and temporary jobs have been relaxed; and social-security taxes have been trimmed. The result has been a dramatic fall in unemployment—to 3.6%, compared with an average in the euro-11 area of 10.6%. The Dutch model appears to offer a way to cut unemployment without big cuts in the welfare state or wide pay differentials. However, the headline jobless rate paints too rosy a picture: onethird of workers are part-time, the highest proportion in the rich world, and an unusually large number of people receive disability or sickness benefits and so are excluded from the jobless count.

Task 1.Compare European models − German, Swedish and Dutch: what they have in common and in what they are different.

Task 2.Compare European economic models with American, Asian (Japanese and East Asian) and New Zealand. Say which of the models you consider the most effective.

Task 3.If somebody is obsessed with an idea (para.2), is he

a)disagreeing strongly with it;

b)refusing to support it;

c)having the mind excessively preoccupied with this idea.

Task 4.How do you understand the term “emerging economies” (para.3)? Give other examples of emerging economies.

Task 5.Choose the best synonym for the verb “to trim (taxes)” (para.7):

a)to enlarge;

b)to reduce;

c)to keep stable.

BUSINESS COMMUNICATION

FINDING THE WAY. GIVING DIRECTIONS

A Describing location

Ex.1. Answer the questions.

1.How do you get to the university? (by bus, car, train, bike, on foot)

2.How far is the university from your home?

3.How long does it take you to get to the university?

4.Can you describe where your university is situated and how to get there?

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