Exercises

I. Questions for Economic Reasoning and Discussion

1. Between the 16^th and 18^th centuries the major countries of Europe believed in the economic theory of mercantilism:

1. What situation did a favorable balance of trade describe?

2. Did most people agree in those days that the true measure of a nation’s wealth was its hoard of gold and silver?

3. What did major European powers seek to achieve favorable trade balances?

4. What could colonies provide the “ mother country” with?

5. What Acts did Britain enact? Why?

6. What did the Navigation Acts protect British industry from? Why?

7. Why was resentment towards the Navigation Acts great?

8. Are there people today who still argue that America should promote “a favor able balance of trade”? What are they called?

2. What did physiocrats argue about?

3. Did physiocrats oppose government efforts to promote a “ favorable balance of trade”? Why?

4. In what slogan did physiocrats express their idea?

5. Is the 200-year-old argument between the Mercantilists and Physiocrats still with us?

II. Match each item in Column A with its definition in Column B:

	Column A		Column B
	to compete with		to feel bitter, indignant or angry
	to achieve		to manufacture, make, grow, create
	to exceed		to compare debits and credits and record the sum needed to make them equal
	profit		point marking the end of a race
	hoard		money gained in business
	balance		carefully saved or guarded store of money or other treasured objects
	goal		feeling that one has when insulted, ignored, injured
	to produce		to take part in a race, contest, examination
	to resent		to gain, to reach by effort
	resentment		to be greater than go beyond what is allowed, necessary or advisable

III. Complete the phrases with prepositions (where it is necessary) and say in what situations they are used in the text. Use them in sentences of your own.

1. to believe…

2. to compete…

3. to result…

4. supply…

5. to provide smb…

6. resentment…

7. to keep one’s hands…

1. IV. Give Russian equivalents for the following words or word combinations from the text:

1. accordingly

2. to support industry by enacting laws

3. a favorable balance of trade

4. exports exceeded imports

5. the excess

6. to result in

7. hoard of gold and silver

8. mother country

9. cheap labor

10. raw materials

11. to attain a goal

V. Say if you agree or disagree with the following statements and give your reasons:

1. The Navigation Acts protected British industry

by prohibiting the colonies from producing certain goods.

2. Interestingly, the 200-year-old argument between those regulations of the economy and those supporting laissez faire is still with us.

VI. Complete the table. Work out your point of view on the Mercantilists and Physiocrats.

Appraisal Ideas and Beliefs	Still Relevant	Needs Modification	Should be Rejected
1.Nations should behave as if they were merchants competing with one another for profit. 2….

Give your reasons.