Smb is likely (unlikely) to be (to do smth)

1. Эта статистика, возможно, будет опубликована в ежегоднике Цен­трального статистического бюро.

2. Вряд ли эти цифры говорят о низком уровне занятости.

3. Похоже, что эти производственные мощности используются не полностью.

4. Может быть, экономика будет работать на полную мощность, если будут использованы все факторы производства.

VI. Give explanations in English

media; householders; mortgages; trade balance; wages; building societies

VII. Answer the questions

1. Why does the media relate to economic data and the implications for individuals and businesses?

2. What aspects of the economy's operation are statistics available to show?

3. What do statistics show?

4. What are the sources of data on the economy in the UK? In Russia?

5. What is the GNP?

6. Why should statistics be treated with some caution?

VIII. Translate using all the active possible

1. К официальным статистическим данным по уровню инфляции в стране следует относиться с осторожностью.

2. Валовой национальный продукт – это совокупность товаров и ус­луг, произведенных национальной экономикой за год.

3. Объем производства продукции в ключевых отраслях промышлен­ности в значительной степени показывает уровень активности населения.

4. Если в экономике отмечается падение производства, то следствием этого становится рост безработицы и понижение уровня зарплаты.

5. Средства массовой информации сообщили об отрицательном влия­нии на производство увеличившейся процентной ставки.

THREE ECONOMIC ISSUES (ТРИ ВОПРОСА ЭКОНОМИКИ)

Three economic issues

Economics is the study of how people choose to allocate scarce resources to satisfy their unlimited wants. The main problem in economics is the question of allocating scarce resources between competing uses. In this section three economic issues are discussed to show how society allocates its scarce resources between competing uses. In this connection the question what, how and for whom to produce is of great significance.

The oil price shocks

Oil is an important commodity in modem economies. Oil and its derivatives provide fuel for heating, transport, and machinery, and arc basic inputs for the manufacture of industrial petrochemicals and many household products ranging from plastic utensils to polyester clothing. From the beginning of this century until 1973 the use of oil Increased steadily. Over much of this period the price of oil fell in comparison -with the prices of other products. Economic activity was organized on the assumption of cheap and abundant oil.

In 1973 – 74 there was an abrupt change. The main oil-producing nations, mostly located in the Middle East but including also Venezuela and Nigeria, belong to OPEC — the Organisation of Petroleum Exporting Countries. Recognizing that together they produced most of the world's oil, OPEC decided in 1973 to raise the price at which this oil was sold. Although higher prices encourage consumers of oil to try to economize on its use, OPEC countries correctly forecast that cutbacks in the quantity demanded would be small since most other nations were very dependent on oil and had few commodities available as potential substitutes for oil. Thus OPEC countries correctly anticipated that a substantial price increase would lead to only a small reduction in sales. It would be very profitable for OPEC members.

Oil prices are traditionally quoted in US dollars per barrel. Fig. 1 shows the price of oil from 1970 to 1986. Between 1973 and 1974 the price of oil tripled, from $2,90 to $9 per barrel. After a more gradual rise between 1974 and 1978 there was another sharp increase between 1978 and 1980, from $12 to $30 per barrel. The dramatic price increases of 1973 – 79 and 1980 – 82 have become known as the OPEC oil price shocks, not only because they took the rest of the world by surprise but also because of the upheaval they inflicted on the world economy, which had previously been organized on the assumption of cheap oil prices.

People usually respond to prices in this or that way. When the price of some commodity increases, consumers will try to use less of it but producers will want to sell more of it. These responses, guided by prices, are part of the process by which most Western societies determine what, how and for whom to produce. Consider first how the economy produces goods and services. When, as in the 1970s, the price of oil increases six-fold, every firm will try to reduce its use of oil-based products. Chemical firms will develop artificial substitutes for petroleum inputs to their production processes; airlines will look for more fuel-efficient aircraft; electricity will be produced from more coal-fired generators. In general, higher oil prices make the economy produce in a way that uses less oil.

Oil price ($ per barrel)

Figure 1. The price of oil. 1970 – 86

How does the oil price increase affect what is being produced? Finns and households reduce their use of oil-intensive products, which are now more expensive. Households switch to gas-fired central heating and buy smaller cars. Commuters form car-pools or move closer to the city. High prices not only choke off the demand for oil-related commodities; they also encourage consumers to purchase substitute commodities. Higher demand for these commodities bids up their price and encourages their production. Designers produce smaller cars, architects contemplate solar energy, and research laboratories develop alternatives to petroleum in chemical production. Throughout the economy, what is being produced reflects a shift away from expensive oil-using products towards less oil-intensive substitutes. The for whom question in this example has a clear answer. OPEC revenues from oil sales increased from $35 billion in 1973 to nearly $300 billion in 1980. Much of this increased revenue was spent on goods produced in the industrialized Western nations. In contrast, oil-importing nations had to give up more of their own production in exchange for the oil imports that they required. In terms of goods as a whole, the rise in oil prices raised the buying power of OPEC and reduced the buying power of oil-importing countries such as Germany and Japan. The world economy was producing more for OPEC and less for Germany and Japan. Although it is the most important single answer to the 'for whom' question, the economy is an intricate, interconnected system and a disturbance anywhere ripples throughout the entire economy,

In answering the 'what' and 'how' questions, we have seen that some activities expanded and others contracted following the oil price shocks. Expanding industries may have to pay higher wages to attract the extra labour that they require. For example, in the British economy coal miners were able to use the renewed demand for coal to secure large wage Increases. The opposite effects may have been expected if the 1986 oil price slump had persisted.

The OPEC oil price shocks example illustrates how society allocates scarce resources between competing uses.

A scarce resource is one for which the demand at a zero price would exceed the available supply. We can think of oil as having become more scarce in economic terms when its price rose.

VOCABULARY NOTES

to allocate resources – распределять ресурсы

scarce resources – ограниченные, скудные ресурсы

scarcity – дефицит

to satisfy unlimited wants – удовлетворять неограниченные потребности

competing uses – конкурирующие сферы использования

to be of great significance – иметь большое значение

commodity (syn. good) – товар, предмет широкого потребления

modern economy – современная экономика

oil and its derivatives – нефть и нефтепроизводные

to provide fuel for heating and transport – обеспечивать топливом систе­мы теплоснабжения и транспорт

basic inputs – основные составляющие

to range from... to... – от... до...

plastic utensils – изделия из пластика

polyester clothing – одежда из синтетических тканей

to increase [-z], v. steadily – постоянно увеличиваться

increase [-s], n. – увеличение

over much of this period – большая часть этого периода

in comparison with (syn. as compared with) – по сравнению с

on the assumption of – исходя из предположения (допущения)

abundant oil – нефть, имеющаяся в изобилии, избытке

an abrupt change – резкое изменение

oil-producing nations – страны, производящие нефть

to be located in – располагаться в

to belong to – принадлежать

OPEC (the Organization of Petroleum Exporting Countries) – ОПЕК (Организация стран – экспортеров нефти)

to raise the price – повышать цену

(о encourage consumers – побуждать, поощрять потребителей

to economize on its use – экономить на использовании

to forecast correctly – правильно прогнозировать

cutbacks in quantity demanded – сокращения требуемого количества

to be dependent on oil – быть зависимым от нефти

to be available (syn. to be in stock; ant. to be out of stock) – иметься в наличии potential substitutes – потенциальные (возможные) заменители

to anticipate – предсказывать, предвидеть, прогнозировать

substantial price increase [-s] – существенное, значительное повышение цен

to lead (led, led) to (syn. to cause, to entail, to result in) – привести к

reduction in sales – сокращение продаж

to be profitable for – быть прибыльным, выгодным

OPEC members — страны – члены ОПЕК.

to quote prices in US dollars per barrel – назначать, котировать цены в долларах США за баррель

to triple ['tripl] – возрастать в три раза, утраивать

a gradual rise – постепенное увеличение

sharp, dramatic increase – резкое повышение

to take by surprise – застать врасплох

upheaval [i:] – переворот

to inflict upheaval on the world economy – наносить удар по (причинять ущерб) мировой экономике

to respond to prices – реагировать на цены

a producer – производитель

to determine what, how and for whom to produce – определять что, как и для кого производить

to increase six-fold – возрастать в шесть раз

oil-based products – нефтепродукты

artificial substitutes for petroleum – искусственные заменители бензина production processes – производственные процессы

fuel-efficient aircraft – самолет с экономичным расходом топлива

oil-intensive products – продукты с высоким содержанием нефти

switch to – переключиться на

commuters – жители пригорода, регулярно приезжающие в город на работу или учебу

car-pools – группа людей, договорившихся по очереди обслуживать друг друга автомашиной

to choke off the demand – задушить спрос

substitute commodities – товары-заменители

to bid up the price – наращивать цену

to encourage production – стимулировать производство

to contemplate solar energy – рассматривать (обдумывать) вопрос об использовании солнечной энергии

to reflect a shift away from... towards (to)... – отражать переход (смену, замену) от... к...

OPEC revenues – доходы стран – членов ОПЕК

nearly $300 billion – почти 300 миллиардов долларов

industrialized Western nations – индустриальные (промышленные) за­падные страны

in contrast – по контрасту

oil-importing nations – страны, импортирующие нефть

to give up the production – отказаться (прекратить) от производства

in exchange for – в обмен на

to require – требовать

the buying (syn. purchasing, spending) power – покупательная способность

an intricate interconnected system – сложная взаимосвязанная система

a disturbance – нарушение равновесия, отклонение, срыв

to ripple throughout the entire economy – прокатиться волной через всю экономику

some activities expanded/contracted – некоторые виды деятельности расширились/сократились

to pay higher wages to attract the extra labour – платить более высокую зарплату для привлечения дополнительной рабочей силы

to renew – восстанавливать, возобновлять

demand for – спрос на

to secure wage increases – добиваться повышения зарплаты

price slump – резкое снижение цен

to persist – сохраняться, продолжать существовать

to exceed – превышать

the available supply – имеющееся предложение

to become more scarce in economic terms – стать более скудным, недос­таточным в экономическом смысле

Assignments

I. Suggest the Russian equivalents

to increase steadily; try to economize on the use of...; to choke off the demand;

to encourage consumers to purchase smth; to encourage the production of...

II. Replace the parts in italics by synonyms

three economic questions; to give a share of resources; to have scarce supplies of raw materials; a sudden change; realising that; potential replacements; to encourage people who use oil; price increases six times; try to cut down on the use of oil

III. Find in the text antonyms for the following words rare, scarce; outputs; expensive; exports; straightforward; get, acquire; not to need; getting smaller

IV. Fill in the gaps with the words and expressions from the text

1. Economics is the study of how people choose __ scarce resources to satisfy their __.

2. Economic activity was organized on the assumption of__ oil.

3. In 1973 – 74 there was an __ change in oil prices.

4. __ countries correctly forecast that __ in the quantity demanded would be small.

5. Most nations are very dependent on oil and have few commodities available as __ for oil.

6. Oil prices are traditionally __ in US dollars per barrel.

7. The price of oil __, from $2.90 to $9 per barrel.

8. There was another __ between 1978 and 1980, from $12 to $30 per ban-el.

9. The dramatic price increases inflicted __ on the world economy.

10. These responses, __ prices, are part of the process by which most Western societies __ what, how and for whom to produce.

11. Chemical firms will develop __ for petroleum inputs to their production processes; airlines will look for more __ aircraft.

12. Finns and __ reduce their use of__ products.

13. Commuters form __ or move closer to the city.

14. High prices not only __ for oil-related commodities; they also encourage consumers to purchase __.

15. OPEC __ from oil sales increased from $35 billion in 1973 to nearly $300 billion in 1980.

16. The rise in oil prices raised __ of OPEC.

17. The economy is an __, interconnected system and a __ anywhere ripples throughout the entire economy.

18. __ industries may have to pay higher wages to attract the __ labour that they require.

19. A scarce resource is one for which the demand at a zero price would __ the available supply.

V. Find in the text English equivalents for the following

распределять ресурсы; ограниченные ресурсы; значительное повышение цен повлечет за собой несущественное снижение объема продаж; цена возросла в три раза; резкий подъем; резкий взлет цен; возросшие доходы; повысить/понизить покупательную способность; повышать зара­ботную плату для привлечения дополнительной рабочей силы

VI. Explain in English

prices are quoted; a gradual rise; a sharp increase; household; commuters;

commodities

VII. Check your grammar

Present Tenses

Use the following verbs to complete the paragraph below:

concern, base, discuss, be, show, take up, hope for, say, offer, wish, live, suggest, provide, govern

Students __ economics for different reasons. Some __ a career in business, some __ for a deeper understanding of government policy, and some ___ about the poor or the unemployed. This book __ an introduction, which__ that economics__ a live subject. It__ real insights into the world in which we __. The material that we__ in this book __ by two ideas. The first __ that there __ a body of economics, which has to be learned in any introductory course. The second __ on the belief that modem economics is more readily applicable to the real world than traditional approaches __.

Past Tenses

Write the following sentences out in full, like this:

Keynes/famous/ his/ day/ economist/ own/ a/in... (be) Keynes was a famous economist in his own day

· 1915/ Treasury/ London/ in/ he/ in/ the/... (join)

· best-known/ 1935/ his/ book/ in... (publish)

· public/ war/ during/ he/ service/ the/ to... (recall)

· 5th/ in/ Cambridge/ June/ Keynes/ 1883/ on... (bear)

· student/ he/ distinguished/ a... (be)

· instrumental/ the IMF/ in/ the/ 1944/ World Bank/ he/ in/ and/ starting... (be)

· Cambridge University/ to/ 1902/ he/ in... (go)

· a/ he/ as/ Cambridge/ teacher/ to... (return)

· time/ he/ a/ economist/ by/ as/ this/ brilliant... (accept)

· also/ heavy/ his/ he/ by/ workload... (exhaust)

· The General Theory of Employment, Interest and Money/ it... (call)

· 1919/ in/ he/ with/ Treaty of Versailles/ he/ because/ the... (resign, disillusion)

· April/ on/ 21st/ he/ 1946... (die)

· book/ conventional/ this/ thinking/ enemies/ many/ and/ him... (go against, make)