NP-1k-short

Ex.15. Write a brief summary of the text (25-30 sentences).

Ex.16. Write an essay (100-150 words) about:.

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

71

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.

73

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

74

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

75

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?

76

7.The bar is next to the Chinese restaurant.

8.The women’s wear store is between the Italian restaurant and the sporting goods store.

9.The men’s wear store is on/at the corner of Pine Street.

Ex.2. Fill in the missing preposition.

1.The women’s wear store is _____ the jewelry store.

2.The movie theatre is _____ the book store.

3.The women’s wear store is _____ the jewelry store and the bar.

4.The toy store is _____ of Main Street and Forest Street.

5.The jewelry store is _____ the Italian restaurant.

Ex.3. Study the language of describing position below and use the information to answer these questions.

Where is the office? Is it in building A, B, or C? Describe the position of the other two.

-The office is near the station. (It’s only two minutes on foot.)

-It's in / on Liberty Avenue, on/at the corner, on the left.

-It's next to the post office. (They are side by side.)

-And it's opposite / across from the bank. (On the other side of the road.)

Ex.4. You are in the University. If someone gives you some instructions, where would you arrive?

1.Go straight on, take the second turning on your left. Pass the pub. It’s opposite the stadium.

2.Go straight on, turn right on Cliff Street. Go up Oxford Street. Turn left. It is between the station and the pub.

3.Go ahead. Turn the second turning on your right. Pass the bank and the chemist.

It’s at the corner of Oak Street and Oxford Street.

4.Go ahead. Turn right. Go along Cliff Street. Turn right again. It is on your right next to the baker.

78

5. Go along Pine Street. Cross Cliff Street. It is between the hospital and the bank.

B. Giving directions.

Memorise the language of giving directions:

-come out of the General Post Office on Eighth Avenue,

-turn left into / onto Eighth Avenue,

-go along /up / down Eighth Avenue,

-take the first right onto West 33rd Street.

-walk past Madison Square Garden and Penn Station,

-go across Seventh Avenue, Avenue of the Americas, and Broadway,

-go into the last building on the left,

-take the lift (AmE elevator) to the 102nd floor.

Ex.5. Read the following conversations with visitors to the town.

Conversation 1

A:Excuse me, how do I get to the shopping centre?

B:Go along Princes Street, turn first left at the crossroads, then turn second right. The

shopping centre is about 50 metres along that road, in the pedestrian area.

A:So, down Princes Street, left at the crossroads and then second right?

B:Yes, that's right.

A: Thanks a lot.

79