Develop the following ideas. Make use of the words from the text.

1. People earn money in different ways.

2. The worst-off people are the unemployed, the homeless, and people liv­ing at a subsistence level.

9. Read the text and fill each gap with a suitable word from the list: sold, pension, costs, poverty, invested, contrast, on credit, unemployment, income.

Do you agree that there is a contrast between wealth and poverty in many countries of the world?

Our way of life is closely linked to our economic circumstances. In my retirement, I really have a very good life. When Iretired I... my big house and bought a very small cottage. I... the money in securities and that gives me a large part of my.... The rest comes from my... and savings. So I'm comfort­ably off.

In many countries there is a... between the wealth of a small number of people and the... of the masses. It's very difficult to manage if you are poor because everything... much more. You have to buy.... The more things you buy on credit, the more you have to pay for them. The poorest seem to suffer most in periods of recession in which output falls and... rises.

Words and word combinations you may need

to link — связывать

contrast — противоположность, кон траст

retirement— выход на пенсию

(the) rest — остаток, остальное

to manage - справляться, управлять

to be comfortably off — быть хорошо обеспеченным

to suffer — страдать

recession — спад (деловой активности)

Get into pairs and discuss with your partner how people can earn money. Give examples from your family's life, the life of your friends and relatives.

Sum up the text “Personal Finances” and work with the situation.

Situation: You and your mate are going to get married. You want a flat, furniture and a TV. You are students and your families are not well off. Dis­cuss with your mate how to solve the problems, consider the following: The flat - borrowing some money from a bank; getting a mortgage to buy a flat; renting a flat. The other things - buying furniture by hire purchase.

Read the text “Personal Finances” once more and give answers to the questions.

1. What do people regard as the most important thing in family life?

2. What do people need for day-to-day living?

3. Why do some people live on credit?

4. How do people earn money?

5. Who are the worst-off people?

6. To what people are banks unwilling to lend money?

 

Personal Expenditure

The modern market economy is populated by three types of eco­nomic agents, whose interaction constitutes economic activity: consumers, producers, and the government. The main purpose of the econ­omy is to produce goods and services for the satisfaction of the needs of consumers.

Consumers, typically representing households, spend their income to buy consumer goods and services or to save.

How does a consumer distribute the income earned by him amongst a variety of goods and services offered in the market?

There are different factors affecting his decisions. For instance, a fall in the price of a good or service will increase his consumption of it, while a rise in its price will have the opposite effect.

Then a rise in his real income will naturally result in an increased consumption of goods and services, a fall in real income having the opposite effect¹.

The pattern of consumer expenditure is also influenced by tastes, consumer preferences and family circumstances. As incomes rise, ex­penditure on basic goods will form a smaller proportion of total spend­ing. The terms "necessities" and "luxuries" are of little use in analyzing consumer expenditure because what are today's luxuries will probably be tomorrow's necessities.

It should be stressed here, that some customers, however, want to have high-quality products even when quality means a higher price. Some other customers prefer foreign products.

The amount spent on goods and services and changes in this vari­able have a big impact on the level of economic activity: the increase in consumer spending creates new employment opportunities and causes better living standards.

 

Note on the Text

¹... a fall in real income having the opposite effect -... при этом падение реального дохода будет иметь обратный результат.

Vocabulary

personal expenditure — личные затраты

agent — агент, участник экономической деятельности

market economy — рыночная экономика

interaction — взаимодействие

to populate — населять

to constitute — составлять

consumer – потребитель

to result in - приводить к чему-л.

producer - производитель

pattern - структура, характер

to represent - представлять, быть представителем

consumer expenditure - затраты на потребление

level - уровень

opposite - противоположный, обратный

household - семейная единица, домашнее хозяйство

consumer preferences - предпочтения потребителей

consumer goods - потребительские товары

basic goods - основные товары

to save - экономить, копить, откладывать

luxury - роскошь, предмет роскоши

variable — переменная величина

to distribute – распределять

to have an impact - оказывать воздействие

to affect - оказывать воздействие

to cause — вызывать, быть причиной

to effect - воздействие, влияние

living standard - жизненный уровень

 

Write the transcription and train the pronunciation of the following words. Memorize them.

agent whose constitute purpose

typically earn distribute variety

naturally increase expenditure preference

quality however luxuries circumstances

foreign amount vari­able employment causes opportunities higher opposite

 

Practice the reading of the following groups of words.

market economy eco­nomic agents variety of goods a rise in its price spend their income

there are different factors consumer expenditure increase in consumer spending ex­penditure on basic goods employment opportunities

for instance real income in analyzing are of little use want to have

Read, translate, make the following sentences negative.

1. The modern market economy is populated by three types of economic agents.

2. Consumers spend their income to buy consumer goods and services.

3. There are different factors affecting this decision.

4. The price will have the opposite effect.

5. Some customers wanted to have high-quality products.

Read and translate the following sentences. Make them passive.

1. Consumers spend their income to buy consumer goods and services.

2. There are different factors affecting this decision.

3. A fall in the price of a good or service will increase the consumption of it.

4. Consumer spending creates new employment opportunities.

5. Consumer distributes the income earned by him

 

Read, translate, make the following sentences active.

1. The modern market economy is populated by three types of economic agents.

2. The pattern of consumer expenditure is also influenced by tastes, consumer preferences and family circumstances.

3. A variety of goods and services are offered in the market.

4. The decision is affected by several factors.

5. The level of economic activity is influenced by the amount spent on goods and services.

 

Compile special and negative questions to the following sentences. Translate them.

1. The main purpose of the economy is to produce goods and services for the satisfaction of the needs of consumers.

2. The increase in consumer spending creates new employment opportunities and causes better living standards.

3. The pattern of consumer expenditure is also influenced by tastes, consumer preferences and family circumstances.

4. The fall in the price of a good or service will increase the consumption of it.

5. Some customers want to have high-quality products.

Find in the text sentences containing the following Participles and translate them into Russian in writing.

-... consumers... representing

-... the income earned by him

-... goods and services offered

-... factors affecting

-... the amount spent....