Inflation and deflation

An inflationary development is characterized by rising prices within a certain period of time.

The rising prices is a consequence of an uneven development in the quantity of goods on offer and the quantity of money available, which it self determines the demand and is the infla­tion rate.

The causes of inflation are generally complex and can arise either from the goods or from the monetary side.

The consequences of inflation are extremely damaging for the economy. Inflation becomes stagflation when economic growth decreases or comes to a halt, but inflation continues to rise. If the state does not take measures to combat stagflation, this leads to deflation.

Deflation, the opposite development to inflation, represents a reduction in the supply of money in comparison with the supply of goods.

Exercises:

№ 1. Answer the questions using the text:

When does inflation become stagflation ?

What is deflation ?

What are the characteristics of inflation ?

№ 2. Write down the sentences or parts of sentences which describe:

inflation

stagflation

deflation

“Внешняя торговля”.

Тема: “Основные термины внешнеторговой деятельности”.

Words:

foreign food invisible freight expertise Gross National Product to balance earnings to spend

иностранный, внешний продовольствие невидимый фрахтование, фрахт экспертиза, знания валовой национальный продукт балансировать, уравновешивать доходы, поступления тратить, расходовать

term insurance abroad visible total amount expenditure surplus to earn

термин страхование за границу видимый общий сумма расходы излишек зарабатывать

Text:

Basic terms in foreign trade

Countries buy and sell various goods as well as various services. Goods bought from abroad, such as food, cars, machines, medicines, books and many others, are called visible imports. Goods sold abroad are called visible exports.

Services, such as insurance, freight, tourism, technical expertise and others, are called invisible imports and invisible exports. The total amount of money a country, makes including money from visible and invisible exports, for a certain period of time, usually for a year, is Gross National Product, or GNP. The difference between a country’s total earnings or GNP, and its total expenditure is called its balance of payments.

The difference between what a country receives for its visible exports and what it pays for its visible imports is its balance of trade. If a country sells more goods than it buys, it will have a surplus. If a country buys more than it sells, it will have а deficit.

Exercises:

№ 1. Find the definitions of the following terms in the text and write them down:

visible imports

invisible imports

GNP

balance of payment

balance of trade

a surplus

a deficit

№ 2. Underline the correct word in the brackets:

1. Goods sold to other countries are (visible, invisible) exports.

2. Services sold to other countries are invisible (imports, exports).

3. The difference between total earnings of a country and its total expenditure is called its balance of (payments, trade).

4. The difference between a country’s GNP and its total expenditure is called its balance of (payments, trade).

5. If a country sells more goods than it buys it will have a (deficit, surplus).

№ 3. Complete the sentences:

If a country buys more goods than it sells it will have a … .

Gross National Product is the total amount … .

Gross Domestic product is … .

Invisible exports and import are … .

A country’s trade balance is … .

Тема: “Европейский экономический союз”.

Words:

to establish to be established to join to join smb./ smth. enormous duty free of duty customs to contribute to contribute to smth.

образовывать, создавать быть образованным, созданным присоединять (ся) присоединиться к кому-либо/ чему-либо огромный пошлина* беспошлина таможенные пошлины* вносить долю вносить долю во что-либо

regulation council cart justice cart of justice headquarters to be located in … relative output

положение, постановление совет суд правосудие, юстиция суд центральный орган, штаб-квартира быть расположенным в… относительный выпуск

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