Economic policy and economic indicators

Vocabulary notes

		equitable distribution  справедливое распределение; to distribute  распределять
		efficient allocation  эффективное размещение; to allocate  размещать, распределять
		economic growth per capita  экономический рост на душу населения syn. output per person
		aggregate  совокупность, совокупный aggregate output  совокупный выпуск aggregate demand  совокупный спрос syn. total, overall
		indicator  показатель to indicate  указывать economic indicator  экономический показатель
		GNP (Gross National Product)  ВНП (Валовый Национальный Продукт)
		sophisticated  сложный, усложненный sophistication of economic research  усложнение экономических исследований
		constraints  помехи, препятствия
		total market value  совокупная рыночная стоимость market price  рыночная цена market place  (физ.) рынок, место торговли to size up the market  оценить конъюнктуру рынка
		final goods  конечный продукт intermediate goods  промежуточный продукт
		price level  уровень цен, ценовой уровень to come up in price  подниматься в цене to come down in price  падать в цене to buy (sell) smth at a price  покупать (продавать) что-либо по какой-либо цене to set a price for, to price smth  устанавливать цену на что-либо to bargain for a better price  требовать, добиваться более приемлемых цен, торговаться price index  ценовой индекс Consumer Price Index (CPI)  индекс потребительских цен cost price  себестоимость
		interest-sensitive expenditures  расходы, зависящие от процентной ставки
		the Great Depression  Великая Депрессия, экономический кризис в США, конец 20-х  начало 30-х г. 20 века
		to cut back on spending  сокращать syn. to cut (to reduce) expenditure
		to have enormous implications (for)  иметь большое значение, смысл, влияние
		fluctuation  колебание to fluctuate  колебаться (о ценах, показателях) price fluctuations  колебания цен
		depression  (экон.) кризис, резкое снижение деловой активности syn. crisis
		to reach the bottom of the trough  достичь самой глубокой точки падения
		recovery  (экон.) выход из кризиса, постепенное улучшение экономической ситуации
		boom  процветание, подъем деловой активности syn. prosperity
		recession  упадок, снижение деловой активности syn. decline
		to contract  сокращаться, уменьшаться contraction  сокращение, уменьшение
		to expand  расширяться, увеличиваться expansion  расширение, увеличение

Answer the following comprehension questions based on the text.

1. What does the economy comprise?

2. What do economic goals for a nation usually include?

3. What are the major branches Economics is divided into?

4. What are the areas Macroeconomics and Microeconomics deal with?

5. Comment on the basic Macroeconomics indicators.

6. What are characteristic features of the business cycle and its four stages?

The economy comprises millions of people and thousands of firms as well as government and local authorities, all taking decisions about prices and wages, what to buy, sell, produce, export, import and many other matters. All these organizations and decisions they take play a prominent part in shaping the business environment in which firms exist and operate.

Economic goals for a nation include price stability, full employment, economic growth and equitable distribution of income. Price stability contributes to the efficient allocation of resources and facilitates long-term planning. Full employment means that jobs are available for those seeking work. Higher standards of living require increased output per person (economic growth per capita). An equitable distribution of income means that the fruits of the economy are divided in a way that seems fair to the majority of the people. With the long-run trend toward a more sophisticated, highly integrated economic system, it is becoming increasingly important for an individual decision maker to be aware of the macroeconomic environment.

Economics is divided into two major branches: macroeconomics and microeconomics.

The level of Macroeconomics is concerned either with the economy as a whole or with the basic subdivisions of aggregates - such as government, household and business sectors  which make up the economy. An aggregate is a collection of the specific economic units which are treated as if they were one unit. Macroeconomics overviews all economy by generally outlining the main aggregates which construct the economy. That's why such words as "total, general" are always used in Macroeconomics. That is the part of economics concerned with the economy as a whole; with such major aggregates as households, business and governmental sectors and with other totals for the economy. So, the basic Macroeconomics indicators are: Gross National Product (GNP), Price level, Interest Rate and Employment etc.

The other major branch of economics is Microeconomics. Microeconomics is the study of behavior of individual units within the economy. The division of Economics has resulted from the growing complexity and sophistication of economic research.

These two approaches and the topics they include are in fact interdependent. Individuals and firms make their decisions in the context of the economic environment, which has an impact on the constraints the decision makers face as well as their expectations about the future. At the same time, when taken as a whole, their decisions determine the condition of the overall economy.