I. Read and memorize following words, word-combinations and word-groups:

a pillar — onopa, crosn

e.g. There are three «pillars» of economic system: private property, the price system and competition.

to use one's assets — BMKopMCTosyBaTw (nnЈ-ne6yp,b) MaiiHo

e.g. According to the right to private property the owners of natural resources and capital can use their assets as efficiently as they can.

economic incentives — eKOHOMiHHi ctmmviim

e.g. Economic incentives influence our decisions about what and where to buy.

to switch one's deposits from one bank to another — nepeBOflMTM fleno3MTM 3 oflHoro 6aHKy b iHLUMM

to receive higher interest rates — oAepwyBatw bmimI BiAcoTKn 3a BKnaAOM

e.g. Savers will switch their deposits from one bank to another to receive higher interest rates.

profit motive — motmb npn6yn<y

e.g. The profit motive is the force that drives our economic system.

entrepreneur — niAnpneMeu,b

e.g. Profits drive entrepreneurs to risk capital, hire employees and purchase the things they need to produce goods and services.

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npwiiMaTM piujeHHSi flOMaiune rocnoflapcTeo CTa6inbHi ivhh HaMMaTM Ha po6oTy sanoBMH HauioHaubHMM nponyKT

to set the price — BcraHOBMTn u,iHy

e.g. Monopolies can set the price at which their goods are

sold.

gross,national product — BanosMM Hau,ionanbHnvi npoAyxT e.g.^The total value of the goods and services produced

by the economy in a single year is called the gross national

product (GNP). \ /"'

household — floMaujHe rocnoaapCTeo; cim'ji

e.g. We live in what economists like to call households.

II. Give English equivalents of the following:

eKOHOMinni cTHMynn

niflnpMCMeLib

KiHueaMM npoftyKT

o6MeJKyBarn flinnbHicTb

onopa

BMKopMCTOByeaTM (Hne-He6yflb)

M3MHO

III. Fill in the blanks with appropriate words:

Property owners know they will money

make ... if they can produce goods and resources

services that buyers want, at ... they a profit

are willing to pay. the answers

Government in America functions at prices

three ... . consumers

In our economic lives we spend ... levels

to buy the things we want. a price

Price stability refers to time during

which ... remain constant.

As a national goal, economic efficiency

refers to the entire economy's ability to

get rhemost out of its limited ... .

6'.

... are people who use goods and

services to satisfy their wants.

The price system provides ... to the

fundamental questions of what goods and

services will be produced, how they will

be produced, and who will receive them.

IV. Read and translate the text:

The «pillars» of economic system are private property, the price system and competition.

The right to private property gives the owners of natural resources and capital the incentive to use their assets as they can. The price system provides the answers to the fundamental questions of: «What goods and services will be produced?»; «How they will be produced?» and «Who will receive them?». Competition refers to the rivalry among buyers and among sellers. _ _{t ;}, ,

Economic incen five^'inf&erfci' our decisions about what and where to buy. The desire to achieve the greatest profit for our efforts is the principal economic incentive in the American and other market economies. Economists refer to this as economic self-interest.

Profits are what remains after the costs of production have been deducted from sales. The quest for profits, or the profit motive, as it is often called, is the force that drives our economic system.

People in business buy or sell land or other natural resources if they think they can profit from the transaction. They also put those resources to use in such a way as to make the greatest profit. Profits affect the allocation of labor, influence the allocation of capital resources. Profits drive entrepreneurs to risk capital, hire employees and purchase the things they need to produce goods and services. Profits also provide the incentive to improve products, reduce costs and outsell the competition.

Government in America functions at three levels:

federal, state and local.

Governments

• compel people to sell their property for public use through the power of eminent domain;

• decide who may sell electric power in a geographic region;

• control which medicines may be sold commercially;

• licence certain businesses (such as banks, barber shops, taxi cabs and restaurants);

• pay dairy farmers for not producing as much milk as they can;

• forbid export of certain machinery to specific foreign countries;

• establish the minimum wages employers must pay;

• issue permits for and inspect construction of homes and buildings.

The following economic responsibilities are best fulfilled by government:

• safeguarding the market system;

• providing public goods and services;

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• dealing with externalities;

• assisting those in need;

• helping specific groups;

• stabilizing the economy.

The gross national product, or GNP, is the total value of all the goods and services produced by the American economy in a single year. Government transfer payments, payments like Social Security benefits, pensions, welfare, and interest on government debt represent a significant percentage of GNP.

In order to calculate the GNP, government economists add the amounts that were spent by the three elements of the economy (households, business and government) to purchase the finished products. We can express this mathematically as C + I + G = GNP, where:

C — consumer household spending;

I — investment, or business;

G — government purchases of goods and services (pp.11 — 22)*.

V. Answer the following questions:

1. What are the «pillars» of economic system?

1. What does the right to private property give the owners of natural resources and capital?

2. How do prices influence American economic system? Give your own examples.

2. What does competition refer to?

3. How do you understand the term «profits».

4. What is the force that drives our economic system?

5. What is the role of profits in the economic system?

3. What economic responsibilities are best fulfilled by go­vernment?

6. What is «the gross national products?

VI. Define the terms:

competition	GNP
economic self-interest	consumers
profit motive	profit
private property	price system

VII. Translate into English:

1. riptiBaTHa BnacHicTb, uJHoea cucreMa, KOHKypeHuja — ronoBMi «onopw» eKOHOMinwo"! cMCTeMM. 2. LfjHOBa CMcreMa BiflnoBiaae Ha raKi nmaHHa: a) n«i TOBapn ra nocnyrn Bnpo6nn-

THM/TbCH? 6) hk Yx BMpo6/ifiTMMyTb? b) xto i'x oipHMyeaTUMe? 3. Ekohomnhi CTHMynn ennnsaioTb Ha Hauje piujeHHfl, mo i Be KynMTH. 4. 6i3HecMeHn KynytoTb a6o npoAaK>Tb 3eMnio mm iHLui npnpoflHi pecypcn, hklho cnoflisaiOTbcsi Ha npn6yTOK eifl Ufa yronM. 5. BanoBuft HaujoHanbHMM npoayKT — u,e 3aranbHa BapricTb ycix TOBapiB i nocnyr, BMpofineHMX 3a oahh piK. 6. flnn Toro mo6 Kynmvi mocb, Tpe6a Main rpoiui. 7. Cno-)KMeaHi — u,e jwoah, hk\ KopwcTytoTbcn TOBapaMW Ta nocnyraMM Ana 3aflOeoneHHn cboYx norpe6.

VIII. Read and dramatize the following dialogue:

Mary (a student): Would it be troubling you too much, Mr.Brown, if I ask you some questions about eco­nomics?

Mr. Brown (an American teacher of economics): Not at all, dear. I'll answer all your questions with great pleasure, but what particulars are you interested in?

M.: I'm mostly interested in everything concerning the American economic system.

Mr. B.: Well, ask your questions and I'll do my best to satisfy you.

At.: Thank you. First of all I should like to know what is Adam Smith and why is he considered «the father of modern economics:*?

Mr. B.: Well, you see, 1776' the year that we associate with the signing of the Declaration of Independence, also marked the publication in England of one of the most influential books of our time «The Wealth of Nations» written by Adam Smith. It earned the author the title «The father of economics».

M.: Did he describe the principal elements of the economic system in this book?

Mr. B.: Yes, he did. He differed with the physiocrats who argued that land was the only source of wealth. He also disagreed with the mercantilists who measured the wealth of a nation by its money supply, and who called for government regulation of the economy in order to promote a «favorable balance of trade».

M.: In Smith's view a nation's wealth was dependent upon production, not agriculture alone, wasn't it?

Mr. B.: Yes, it was. How much it produced, he believed, depended upon how well it combined labor and the other factors of production. The more efficient the combination, the greater the output, and the greater the nafen'r weartrr:

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The heart of Smith's economic philosophy was his belief that the economy would work best if left to function on its own without government regulation. In those circumstances, self-interest would lead business firms to produce only those products that consumers wanted and to produce them at the lowest possible cost. They would do this, not as a means of benefitting society, but in an effort to outperform their competitors and gain the greatest profit. But all this self-interest would benefit society as a whole by providing it with more and better goods and services, at the lowest prices.

M.: Now, I know why Adam Smith is considered «fhe father of economics». I think that the other sections dealing with the factors of production, money and international trade are as meaningful today as when they were first written.

Mr. B.: Ves, of course. Adam Smith gave the best description of the principles upon which our economic systems are based.