10. Give a summary of your home reading text

11. Translate the following sentences into English

1. Доходность ценных бумаг отдельных классов и видов зависит от рыночной стоимости  портфеля  инвестиций.

2. Иногда банковские  инвестиции в России  в  ценные  бумаги тщательно регулируются  из-за  кредитного  риска,  присущего  большей  части ценных бумаг.

3. Необходимо также отметить, что банковские инвестиции в России более низкого качества приносят более  высокий  доход. 

4. Прямые инвестиции представляют собой непосредственное вложение, средств в производство, приобретение реальных активов.

5. Руководство банка утверждает положения и инструкции, регламентирующие деятельность подразделений, связанных с реализацией инвестиционной политики банка.

12. To maximize your chances of receiving approval on a business loan from a bank, it's wise to look at the situation from the standpoint of the lender. Discuss with your partner the importance of following questions that a lender wants to know:

 Exactly how this business will operate and why it's expected to make money;

 Exactly how the money will be used;

 How you plan to repay the loan and over what time frame;

 That you're willing to take a significant financial risk in the business;

 That you're responsible and can manage this business;

 Who else is involved in management or operations, and that they will also be responsible for the proper use of the money from the loan.

Unit 12

Pre-reading

1. What comes to mind when you hear the word ‘policy’?

2. What types of economic policy do you know?

1. Read and translate the text economic policy

Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government deficit as well as the labour market, national ownership, and many other areas of government.

Such policies are often influenced by international institutions like the International Monetary Fund or World Bank as well as political beliefs and the consequent policies of parties.

The overall performance of the economy is now generally accepted as a major responsibility of the government. That branch of economics which deals with the economy as a whole is known as macroeconomics, while the study of the 'parts' of the economy is known as microeconomics. Thus, the examination of the forces which determine the price of beef, or the wages of miners, or the size of the firm, would be an example of micro-economic analysis, whereas a study of the forces determining the general price level, or the general level of wages, or the balance of payments would be classified as macroeconomic analysis.

Economic analysis is concerned with the means of achieving particular economic objectives. The choice of the objective — how people want economic resources to be used in order to satisfy their wants — is a matter of political decision.

Policy is generally directed to achieve particular objectives, like targets for inflation, unemployment, or economic growth. Sometimes other objectives, like military spending or nationalization are important.

These are referred to as the policy goals: the outcomes which the economic policy aims to achieve.

To achieve these goals, governments use policy tools which are under the control of the government. These generally include the interest rate and money supply, tax and government spending, tariffs, exchange rates, labour market regulations, and many other aspects of government.

It is important to note that governments have found that some of these objectives may be incompatible. In order to achieve one goal governments have often been obliged to sacrifice another. Policies designed to bring about full employment have sometimes generated unacceptable levels of inflation; policies aimed at eradicating a balance of payments deficit have restricted the rate of economic growth, and so on. Policymakers, therefore, are obliged to establish some priorities. If the choice is, or seems to be, between a higher rate of inflation or a higher rate of unemployment, then the issue must be solved by the value judgments of the people concerned (i.e. through the political system).

The first task is to determine the objectives. The next task is to choose the instruments of policy to be used in pursuit of the objectives and these instruments are based upon some available range of measures. For example, the government might decide that its immediate objective is to reduce the level of unemployment. For this purpose it might choose to use the instruments of taxation and government spending. The particular measures adopted might be a reduction in income tax and an increase in public spending on housing and roads. But the essential link between the desired objective and the appropriate means of achieving it is economic analysis. The role of analysis is to provide some understanding of how the economic system works. We cannot choose the realistic objectives or design appropriate measures for attaining those objectives unless we have some knowledge of how the economy works.

Types of economic policy

Trade policy includes strategically analyzed guidelines for the trade sector of economy. Major guidelines for this type of policy can be summarized as:

• To focus on initiatives for improvement in trade relations

• To fulfill general requirements regarding export and import

• To identify the loopholes

Fiscal policy includes guidelines that manage the public revenue and public expenditure side of any economy. A proper fiscal policy can minimize the effects of economic fluctuations. The reasons for formulating a fiscal policy include the following:

• To bring stability in general prices

• To increase welfare of economy with a balanced consumption level

• To reach efficient employment level

• To lower degree of inflation

• To increase capital formation

Tax policy includes the ways to collect taxes to increase government revenue. Tax policy is a welfare approach as it decides the way to collect more money from higher income sectors. It is an approach to create a balance in distribution of income.

Monetary policy

Inflation is a major concern of any economy. Monetary policy is an approach towards controlling inflation. Monetary policy is required to stabilize economic fluctuations. Major functions of a monetary policy include:

• Regulation of supply of money

• Checking availability of money

• Exercising control on rate of interest