6. Give Russian equivalents for the following words and phrases used in the text

shrinking output; to trim investment and production; to slim excess stock; consumer spending; corporate spending; a sudden break in consumer confidence; job lay-offs; to prevent a recession through interest-rates cuts; producer-price inflation; to shorten recession.

6. Translate the following sentences into Russian in writing

1. Many economists predict growth of barely 1 % in the first half of this year.

2. Consumer prices rose by 0.6 in the month, twice as much as expected, to give a 12-month increase of 3.7%; the 12-month rate of producer-price inflation jumped to 4.8%, its highest for ten years.

3. Yet, if a recession were to occur, the shock to confidence could be severe...

4. Even without a recession, capacity utilization in manufacturing will fall.

6. Summarize the text using the words and phrases given below

to sound reassuring; to admit to...; shrinking output; gloomy( about a trend);

the main driver of the downturn; to squeeze profits; to cause; to pile up (about inventories); to cut investment plans; to have a big impact on growth in spending; to crumble; a spate of corporate lay-offs; poor inflation figures; to operate with long lags; to shorten recession; to underpin confidence.

6. Translate into English

1. Сокращение ВВП в течение, по крайней мере, двух кварталов означает наступление рецессии.

2. Экономисты признают, что рецессия трудно поддается прогнозированию.

3. Предсказать, когда наступит поворотный момент от роста к спаду, невозможно даже при помощи известных экономических моделей.

4. Пока ведущим фактором экономического спада является деловой сектор.

5. По мере того как снижаются доходы, сокращается число продаж.

6. Фирмы начинают сворачивать инвестирование и производство.

7.Снижение доходов заставит многие фирмы отказаться от широкомасштабного инвестирования.

6. Supply details to prove the following:

Economic models are not much help for spotting turning-points in the cycle.

XI. Meet as one group. One of you should lead the meeting. Argue for or against the following debating themes:

1. The most useful economic indicator to watch is consumer confidence.

2. The rate of change in confidence may have a bigger impact on growth in spending than the absolute level.

3. What would really cause consumer confidence to crumble is big job lay-offs.

XII. Study the text in several groups and comment on the following statement:

Monetary policy always operates with long lags, but with record levels of debt and excessive capacity, lower interest rates may be even less effective than usual in spurring new spending.

Text 3 Argentina in a Fix

Pre-reading task

Read the following text, explain its title

At the beginning of the 1990s, Argentina was regarded as an emerging-market success story. And much of its success was attributed to its adoption in 1991 of a convertibility law, pegging the currency, the peso, to the American dollar: every peso in circulation had to be backed by a dollar in reserves. This type of "currency board" arrangement is super-fashionable among economists.

In recent years, whenever an emerging economy's currency - be it the Indonesian rupiah, the Russian ruble, the Brazilian real or the Turkish lira -has hit the rocks, some wise man has been on hand to tell the failing government that a currency board would solve all its troubles. It was argued that countries had only two choices: to allow their currencies to float freely or, conversely, to fix them by means of a currency board. Short of outright dollarization, this is the cast-iron way to fix a currency. It amounts to an open-ended promise to swap dollars for pesos at the promised parity.

Such a system worked, for example, for Hong Kong, whose dollar weathered the Asian currency crisis of 1997-98. It means that the government forgoes its right to set its own monetary policy. But, in return, it gains a strong weapon against inflation. In Argentina, for example, inflation was tamed.

Now the country is tasting some of the drawbacks to a currency board. The strength of the dollar has pulled the peso up to damaging heights.

For Argentina, with its currency board, devaluation is a far more drastic option than it was even for Brazil, where the crisis surrounding the flotation of the real was bad enough.

Weaker pegs, such as the one that Thailand used to keep its currency (the baht) stable, are now recognized as dangerous. When investors lose confidence, as happened in Thailand in 1997, interest rates soar.

Variants of this system were used, with bad results, in Indonesia, Brazil and Turkey. Instead of fixing the currency at a set parity, the government lets its value fluctuate within a pre-set range; and that range itself moves over time against the other currency (usually downwards).

Nor do "free-floating" exchange-rate systems provide an easy solution. Few governments are willing to leave the exchange rate entirely up to the market. For good reason: pure floats are vulnerable, at times of extreme market turbulence, to shuddering exchange-rate shocks.

In many emerging markets, the apparent failure of an exchange-rate system also looks like the failure of the IMF, on whose authority the policy has been followed. It is not so much the exchange-rate system that has crumbled, but more the faith of investors in the government's ability to deliver the policies needed to maintain it.