- •Белорусский государственный университет
- •Предисловие
- •1. Profession of an economist
- •Vocabulary Focus
- •1. K p. A. – one thousand per annum.
- •Ex. 3. Express in one word.
- •Comprehension
- •Degrees in Economics
- •Basic Courses
- •Supporting Courses
- •Required Courses Year 1
- •Questions
- •Outstanding Economists
- •The Founder of Economics
- •David Ricardo (1772–1823)
- •John Maynard Keynes (1883-1946)
- •Writing
- •Study the biographical data of Michael Del and Ingvar Kamprad, find the information about famous businessmen and write it down as in the examples that follows the tables.
- •Michael Dell
- •Timeline
- •Ingvar Kamprad Timeline
- •Example
- •Translation a. Translate into Russian. Woman’s Place in Management
- •B. Translate into English.
- •Listening
- •Speaking
- •Vocabulary academic adj – 1. Университетский; академический; учебный; 2. Чисто теоретический; 3. Фундаментальный (в противоположность прикладному)
- •Salary n – жалованье, оклад self-employed adj – обслуживающий свое собственное предприятие; работающий не по найму
- •2. Economics as a science
- •2.1. Economics and Economic Methods
- •Economics: the Study of Scarcity and Choice
- •Vocabulary Focus
- •Opportunity Cost
- •Satisfying People’s Wants
- •Methodology
- •Economic Theory and Models
- •Speaking Discuss the following questions.
- •Vocabulary
- •Economic systems
- •Vocabulary Focus
- •Translation a. Translate the text from English into Russian. Classification of Countries
- •Vocabulary
- •3. The macroeconomy
- •3.1. Gross domestic product
- •Gross Domestic Product
- •Vocabulary Focus
- •Questions
- •Writing
- •Speaking
- •Vocabulary
- •3.2. InflAtion
- •Meaning and Measurement of Inflation
- •Vocabulary Focus
- •Demand-Pull and Cost-Push Inflation
- •Does it Cost More to Laugh?
- •Writing
- •Consumer Price Index Criticism
- •Vocabulary
- •3.3. Economic business cycles and unemployment
- •Economic Business Cycles
- •Vocabulary Focus
- •Comprehension
- •Unemployment
- •Types of Unemployment
- •W.H. Philips and the Philips Curve
- •Vocabulary
- •3.4. Banking discovering connections
- •Reading
- •Vocabulary Focus
- •Comprehension
- •Commercial Banks of Britain
- •Banking in the usa
- •Banking and Monetary System of the Republic of Belarus
- •The Paris Club
- •Listening Student Banking
- •Student Banking
- •Application for Credit
- •Vocabulary
- •3.5. Money and monetary policy
- •Reading
- •Money and its Functions
- •Vocabulary Focus
- •Comprehension
- •Classical Economics
- •Keynesian Economics
- •Monetarism
- •Instruments of Monetary Policy
- •Monetary Policy during the Great Depression
- •Listening Central Banking
- •Talking with Paul Volker
- •Vocabulary
- •Glossary
- •3.6. Fiscal policy
- •Fiscal Policy
- •Discretionary fiscal policy
- •Vocabulary Focus
- •Other Issues in Fiscal Policy
- •The Role of Government
- •Writing
- •Transition and the Changing Role of Government
- •Budgets and Fiscal Policy
- •Briefing on Personal Taxation
- •Vocabulary
- •4. The microeconomy
- •4.1. Supply and demand
- •Supply and Demand
- •Vocabulary Focus
- •Equilibrium: Mr.Demand, Meet Mr.Supply
- •Equilibrium
- •Elasticity
- •Ex. 2. Answer the questions on the text.
- •Negotiating on the Phone
- •North Holland Dairy Cooperative, Volendam, Postbus 4550nl-4452
- •Jan van Geelen
- •Vocabulary
- •4.2. Market structure
- •Monopoly
- •Vocabulary Focus
- •Comprehension
- •Three Pricing Strategies
- •Market Leaders, Challengers and Followers
- •Vocabulary
- •5. The global economy
- •5.1. International trade
- •International Trade
- •Vocabulary Focus
- •Comprehension
- •The Arguments for and against Free Trade
- •The Banana Wars
- •The Legacy of Adam Smith and David Ricardo
- •Listening
- •Vocabulary
- •5.2. Global market and developing nations discovering connections
- •The World’s Economies
- •Industrialized nations: Growing and Growing Old
- •Newly Industrialized Nations: Getting Going
- •Developing Nations
- •Vocabulary Focus
- •To develop, development, developed, developing
- •Comprehension
- •Economic Cooperation
- •Case study
- •B. Scanning for Information
- •Airbus Industrie
- •The Boeing Company
- •C. Interpreting Information
- •Multinational Corporations and Globalization: the Pros and Cons
- •Translation
- •Vocabulary
- •6. Business administration
- •6.1. Company structure discovering connections
- •Reading
- •Forms of Business Organization
- •Vocabulary Focus
- •Comprehension
- •Flotation
- •Describing Company Structure
- •Is made up of is diveded into
- •Listening
- •Interview with Willhite
- •Vocabulary
- •6.2. Management
- •Nature of Management
- •Vocabulary Focus
- •A. Introduction to the problem
- •B. Scanning for Information
- •Beginning the Business
- •Text b Business Principle: Supermarket Shopping Should Be Fun To Stew Leonard, the distinction between a supermarket and an amusement park is slight, and not necessarily useful.
- •Business Principle: Listen to the Customer
- •Stew Leonard’s Fact Sheet
- •Look at the Stew Leonard's Approach to Supermarket Sales. What do you think about his ideas of running the business. Stew Leonard's Approach to Supermarket Sales
- •Principles of Management
- •What Makes a Good Manager?
- •Семь заповедей бизнесмена
- •Vocabulary
- •Glossary
- •6.3. Accounting
- •What is Accounting?
- •Vocabulary Focus
- •Accounting and Financial Statements
- •The Accounting Profession
- •Business Documents
- •The Balance Sheet
- •Income Statement
- •Bookkeeping
- •Role Play
- •Project X
- •Vocabulary
- •6.4. Marketing
- •Concept of Marketing
- •Vocabulary Focus
- •Building a Brand
- •The brand name
- •B. Scanning for Information
- •The Creation of Levi Jeans
- •Other Levi Strauss Products
- •Text c Why New Products Are Needed
- •Levi Strauss & Co. Product History
- •C. Discussion
- •Writing
- •Marketing Information System
- •You are discussing a new product with your marketing manager. You may use the dialogue below as a model.
- •Vocabulary
- •6.5. Advertising
- •Advertising
- •Vocabulary Focus
- •Comprehension
- •How Companies Advertise
- •Ad advertising campaign advertising standards advertisement advertising budget advertising agencies print
- •Designing an Advertising Campaign Putting the Problem in Perspective: Applying Business Concepts
- •E. Fieldwork
- •Every Day ups Are Trusted To Reliable Deliver 12 Million Shipments Worldwide
- •Vocabulary
- •Glossary
- •Список использованной литературы
- •Contents
3.2. InflAtion
DISCOVERING CONNECTIONS
How does inflation affect people’s income and wealth? Why should inflation cause concern?
Suppose you borrow $100 from a bank at 5 percent interest for one year and the inflation rate that year is 10 percent. Was this loan advantageous to you or to the bank?
Who do you think loses from inflation? Who wins from inflation?
How will you explain this statement: “If everyone expects inflation to occur, it will.”
READING
Text 1
As you read the text, focus on the terms in italics.
Meaning and Measurement of Inflation
Inflation is a situation in which a decline in the purchasing power of money results in a rise of the general price level. Its opposite is deflation. Prices in some markets (e.g. pocket calculators) can fall even in times of inflation, and prices in some markets (e.g. medical care) rise even in times of deflation. But it is not the change in individual prices that determines the extent to which an economy is experiencing inflation or deflation. It is the upward or downward movement in the average prices of all goods and services combined that determines the extent of inflation or deflation. In other words, inflation is an increase in the overall average level of prices and not an increase in the price of any specific product. An extreme form of inflation is known as hyperinflation. Hyperinflation is an extremely rapid rise in the general price level. There is no consensus on when a particular rate of inflation becomes "hyper."
The boundary between inflation and deflation is price stability. Price stability occurs when the average level of prices is moving neither up nor down. The average level of prices is called the price level and is measured by a price index. A price index measures the average level of prices in one period as a percentage of their average level in an earlier period called the base period.
The inflation rate and the price level. The inflation rate is the percentage change in the price level.
The most widely reported measure of inflation is the consumer price index (CPI) which measures changes in the average prices of consumer goods and services. The CPI is sometimes called the cost-of-living index. It includes only consumer goods and services in order to determine how rising prices affect the income of consumers. Unlike the GDP chain price index, the CPI does not consider items purchased by businesses, and government.
As the price level rises during an inflation, the same sum of money (a dollar, a ruble) buys fewer goods and services than before. Hence, inflation reduces the money real purchasing power. As the price level falls during deflation, a dollar (a ruble) buys more goods and services than before. Hence, deflation increases the money real purchasing power.
Because money is used as a unit of account and as a medium of exchange in most economies, changes in the purchasing power of money generally have several (sometimes adverse) consequences.
Inflation hurts people living on fixed money incomes and people who have saved fixed amounts of money for specific purposes such as financing their children's education or their own retirement. Inflation hurts people who have loaned out money at a rate of interest that did not include an allowance for an increase in the average price level. So lenders are without protection against a decline in the purchasing power of the loan when it is repaid.
The adverse effects of inflation depend on the extent to which inflation is correctly anticipated and the extent to which it is unanticipated. If inflation is correctly anticipated, contracts can be negotiated to include “inflation premiums”. Such premiums are designed to protect lenders and other recipients of future money payments from declines in the purchasing power of the money to be repaid to them. Lenders, for example, will insist on higher interest rates if they anticipate inflation; and the greater the inflation they anticipate, the higher the rate of interest they will ask. Borrowers who agree to the lender's terms presumably share similar anticipations of inflation.
However, it is often difficult to correctly anticipate a future rate of inflation.
Inflation is a phenomenon experienced in all countries. But inflation rates vary from one country to another. When inflation rates differ by a lot and over a prolonged period of time, the result is a change in the foreign exchange value of money.