Assignment 2

Suggest the Russian equivalents for the expressions and word-combinations given below.

.

Millions of people today enjoy a quality of life; previous generations could not have dreamed of; home ownership; standard for most families; at the same time; live without proper food or even clean drinking water; huge abyss between the formers and the latters; the fortunate few live in industrialized countries; sustained economic growth; the underdeveloped countries; the gross national product is increasing year after year; economists must take into account the effects of inflation; calculate economic growth; an impressive increase of two per cent in

output; no real growth at all; we should remember that not all growth is good.; governments want steady, sustainable growth; sudden, sharp increases; a boom can cause the economy to overheat and fall into recession; the long run growth over many years; the short run is a roller-coaster ride of boom and depression; look carefully at any decade; we’ll see that there is a cycle of growth, recession and recovery; steady growth in the short term is very hard to achieve; many countries struggle to achieve any kind of growth; three things are essential for economic growth to happen: capital growth, savings and technological progress; labour force turns raw materials into products; capital growth can include training and education for the labour force; this makes the workforce more efficient, creative and productive; capital growth needs investment; savings are very important for growth; the economy will not grow if everyone is saving and nobody is spending; the right balance between consumption and saving; another part of the challenge of economic growth.

Assignment 3

Fill in the gaps in the sentences, using the words given below.

When economic growth is calculated … is taken into account.

Sharp, sudden economic growth may cause the economy to overheat. Such growth is called … .

Savings, capital growth and technological progress are considered essential … for economic growth.

Technology advances lead to increased … from the same amount of capital and resources.

Long-term economic growth is often followed by … . [productivity, inflation, conditions, a recession, a boom]

Assignment 4

Say, whether these statements are true or false:

Economic growth does happen everywhere, in each country.

An increase in GNP may not show economic growth.

Any growth is good.

For economic growth there needs to be the right amount of saving and spending.

Technology creates greater output from the same amount of capital, labour and materials.

Reading II: The business cycle

An economy can grow at a steady rate over many years, in the long term. However, the climb up the hill of economic growth is quite complicated, really. Long term growth is made up of many short-term steps. Each short-term step may last from five to ten years. Over this short-term period the economy goes through a cycle of growth and recession. This may be called the business cycle, and it has four stages: boom, slump, recession and recovery.

Everything is very good during a boom. Demand for goods and services is high. Business is going well. Unemployment is low, because companies have to take on more staff – in order to meet demand. Consumers feel confident about spending because their jobs seem secure. What’s more, interest rates are reasonable, that is why people take out loans and use their credit cards. Low interest rates encourage companies to invest in new capital, and businesses grow. Confidence is in the air! Governments are happy too, because tax revenues are increasing.

But the governments should be very careful during the boom, because boom economies are always in danger of overheating. Demand-pull inflation or cost-push one will eventually bring these good times to the end.

When the slump comes, the economy continues to grow, but not so fast. Confidence falls, when inflation starts to rise. The government may want to put up interest rates – to slow down borrowing. People with mortgages, in this case, have to spend more money to pay off their debts, so they should less spend on other things. Higher interest rates discourage business investment. People, surely, hope, that the economy will improve again, but everything is moving slowly.

Recession is inevitable, if the government have not acted quickly enough. Fiscal and monetary policy changes may occur too late. A recession is bad news. Companies have to reduce costs because turnover is so low. The first thing they do is to lay off staff. If the recession is very bad, some companies may even go bankrupt and close. When this happens, thousands of workers lose their jobs. Unemployment rises, and the government needs to spend more on providing unemployment benefit for people who are out of work. These things can last for a number of years in the worst recessions.

Some economists say a recession exists when the current rate of growth falls below the long-term rate of growth. Others believe a recession is when there is no growth at all. The economy actually shrinks, and something should be done to improve the situation. Recovery will come eventually, with good government policy and a demand for goods and services from healthier economies abroad. Slowly, confidence returns, investment grows, and the cycle begins again.

Vocabulary

climb – подниматься short-term – краткосрочный stage – стадия

slump – кризис; (резкий) спад confident – уверенный reasonable – разумный

careful – осторожный eventually – в конечном счете

to pay off the debt – заплатить долг discourage – препятствовать

inevitable – неизбежный, неминуемый turnover – товарооборот

to lay off staff – увольнять, сокращать штат go bankrupt – обанкротиться

provide – обеспечить the worst – худший current – текущий shrink – сжиматься improve – улучшать

Assignment 1

Answer the questions, according to the text.

What is long term economic growth made up of?

How long is a short-term step?

What is the business cycle?

Describe the period of a boom.

Why should the government be careful during this period?

Does the economy continue to grow during the slump?

Why is a recession so bad in economic development?