Vocabulary

unfavorable – неблагоприятный

confidence – уверенность

slowdown – замедление

to link – соединять

utilities prices – цены на коммунальные услуги

ASSIGNMENT

Make up a summary (a synopsis) of the text.

37. Modern american economy and its problems

The economy of the United States is the largest national economy in the world. Its gross domestic product was estimated at $14.2 trillion in 2009, which is about three times that of the world’s second largest national economy, Japan.

The US economy maintains a very high level of output per person. Historically, the US economy has maintained a stable GDP growth rate, a low unemployment rate, and high levels of research and capital investment funded by national and foreign investors. In 2009 consumer spending made up 70% of the US Gross Domestic Product. Since the 1970s, the United States economy has absorbed savings from the rest of the world. Economists discuss this phenomenon widely. The American population is young and growing when compared to Europe or Japan.

The American labor market has attracted immigrants from all over the world and has one of the world’s highest migration rates. Americans have the highest income per hour worked. The country is the world’s largest and most influential financial market, home to major stock and commodities exchanges like NASDAQ, NYSE, AMEX and CME.

Predictions about the direction of the United States economy in the short term and long term are decisive factors in determining federal government policies, business decisions and Federal Reserve decisions. Several institutions and various state agencies make economic predictions.

A central feature of the US economy is freedom given to the private sector to make economic decisions. They determine the direction and scale of what the US economy produces. The last ten years however the United States has seen average wages fall and the incidence of poverty and homelessness. They faced very high rates of inflation, unemployment and business bankruptcies. Yet, in such very uneven economic system, many rich Americans became richer. As happened before, the stock market flared in a speculative frenzy and then crashed. The United States moved from an international creditor to a debtor status. Basic industries were damaged by foreign competition. The collapse of medium and small farms took place in the country. The labor union movement declined sharply as well. The increased inequality of income distribution sharpens social divisions and conflicts everywhere. After severe recessions in the 1970s and early 1980s another one is widely expected.

Vocabulary

prediction – прогноз

severe – тяжелый, серьезный

recession – спад

flare – пылать

ASSIGNMENT

Mention the main problems of American economy.

38. The problem of unemployment

Unemployment occurs when a person is available and willing to work but currently without work. The prevalence of unemployment is usually measured using the unemployment rate, which is defined as the percentage of those in the labor force who are unemployed. The unemployment rate is also used in economic studies and economic indices such as the United States Conference Board’s Index of Leading Indicators as a measure of the state of macroeconomics.

Mainstream economics believes that unemployment is inevitable, and a necessary evil to prevent inflation; this is disputed by some schools of heterodox economics. The causes of unemployment are disputed. Keynesian economics emphasizes unemployment resulting from insufficient effective demand for goods and services in the economy (cyclical unemployment). Others point to structural problems and inefficiencies inherent in labor markets; structural unemployment involves mismatches between demand and supply of laborers with the necessary skills.

Classical or neoclassical economics tends to reject these explanations, and focuses more on rigidities imposed on the labor market from the outside, such as unionization, minimum wage laws, taxes, and other regulations that may discourage the hiring of workers (classical unemployment). Yet others see unemployment as largely due to voluntary choices by the unemployed and the time it takes to find a new job (frictional unemployment). Behavioral economics highlights phenomena such as sticky wages and efficiency wages, which may lead to unemployment.

Economists distinguish between various types of unemployment, including cyclical unemployment, frictional unemployment, structural unemployment and classical unemployment. Some additional types of unemployment that are occasionally mentioned are seasonal unemployment, hardcore unemployment, and hidden unemployment. Real world unemployment may combine different types. The magnitude of each of these is difficult to measure, partly because they overlap.