1. Read the following text. For each gap, choose the best words a, b, c, or d.

In China, all economic activity used to be controlled by the state. Prices were fixed by the government, not by buyers and sellers in the ___________________ (1). But in the last 20 years there has been a series of ___________________ (2) that have allowed people to go into business and start their own companies. _______________ (3) are determined by what buyers are willing to pay, rather than by the state. There are still state-owned companies that lose a lot of money. Until recently, they have been protected from _________________ (4), but __________________ (5) will eventually mean that they close down. Of course, the ___________________ (6) has its losers: those without work, and victims of crime, which used to be very rare.

1	market reforms	market place	market forces	market prices
2	market economy	market pressures	market reforms	market place
3	market price	market force	market economy	market reforms
4	market pressures	market price	market place	market force
5	market economy	market reforms	market forces	market price
6	market price	market economy	market pressures	market place

2. You are going to read the text about “a traditional economy”. . A) Brainstorm words connected with “ economy”

b) Consider the questions and be ready to answer them as soon as you read the text.

1. What characteristics does a traditional economy have?

2. Where do most traditional economies operate?

3. Where does a traditional economy exist?

4. What do traditional economies rely on?

5. What is the role of individual in a traditional economy?

A traditional economy

A traditional economy is defined by three characteristics:

1. It is based on agriculture, fishing, hunting, gathering or some combination of the above.

2. It is guided by traditions.

3. It may use barter instead of money.

For these reasons, people who live in a traditional economy appear to be living in poverty, even if their daily needs are being met. Most traditional economies operate in emerging markets, or the Third World countries. They are usually located in Africa, Asia, Latin America and the Middle East. However, pockets of traditional economies can be found throughout the world. It is generally thought that all other economies got their starts as traditional economies. Likewise, it is generally expected that a traditional economy will evolve into either a market, command or mixed economy. At its most basic level, a traditional economy exists in a hunter, gatherer and nomadic society. These groups live in families or tribes, and cover wide areas to find enough food to support them.

Since traditional economies center around a family or tribe, it is easy to use traditions gained from the experience of the elders to guide day-to-day life. Economic decisions are based on these traditions.

Nomadic hunter usually compete with other groups for scarce natural resources. There is little need for trade, since they all consume and produce pretty much the same things. There may be trade between groups that don't compete, such as between one that relies on hunting comes across a group that relies on fishing, for example. In these cases, metal coins would be heavy to carry and not really needed.

When traditional economies in the modern world interact with market or command economies, cash takes on a more important role. Cash enables those in the traditional economy to purchase better equipment to make their farming, hunting or fishing more profitable.

Since traditional economies rely on custom and tradition, the distribution of resources is usually well-known. Everyone knows their role in production, and what they are likely to receive. Traditional economies are usually less destructive to the environment, and are therefore sustainable.

c) Mark these statements T (true) or F (false) according to the information in the text. Find the part of the text that gives the correct information.

1. Most traditional economies operate in emerging markets.

2. All other economies got their starts as command economies.

3. Traditional economies center around a family or tribe.

4. Traditional economies rely on custom and tradition.

5. Traditional economies are usually destructive to the environment.

a ) Read the following text and write short headings for each paragraph.

b) Make up a question plan to the text.

1._______________________________________________________________

Command economy, economic system in which the means of production are publicly owned and economic activity is controlled by a central authority that assigns quantitative production goals and allots raw materials to productive enterprises. In such a system, determining the proportion of total product used for investment rather than consumption becomes a centrally made political decision. After this decision has been made, the central planners work out the assortment of goods to be produced and the quotas for each enterprise. Consumers may influence the planners’ decisions indirectly if the planners take into consideration the surpluses and shortages that have developed in the market. The only direct choice made by consumers, however, is among the commodities already produced.

2.______________________________________________________________

Prices are also set by the central planners, but they do not serve, as in a market economy, as signals to producers of goods to increase or decrease production. Instead, they are used mainly as instruments of the central planners in their efforts to reconcile the total demand for consumer goods with the supply available, allowing also for revenues to the state.

3.______________________________________________________________

The central authority in a command economy assigns production goals in terms of physical units and allocates physical quantities of raw materials to enterprises. The process for a large economy with millions of products is extremely complex and has encountered a number of difficulties in practice.

4.______________________________________________________________

Central planning of this kind is not without apparent advantages, however, since it enables a government to mobilize resources quickly on a national scale during wartime or some other national emergency. But the costs of centralized policies are real and quite high. Moreover, it is often the case that much of the burden of these costs is shifted away from the government. One example is the military draft, which largely shifts the cost of mobilizing troops from the government to the draftees, who could be employed at a higher rate of pay elsewhere.