X. Combine the given two sentences into one using the Objective Infinitive Complex:

Model: They will tell us about Trust Services. I expected. I expected them to tel! us about Trust Services. 1. Firms made investment decision. I heard it. 2. Increased government expenditure increases aggregate demand. We consider it. 3. We save because of uncertainty about our future income and about how long we shall live. The life caused it. 4. Individual consumption is directly influenced by individual income. We think so. 5. Aggregate demand and aggregate supply are useful concepts only if they help us understand why an economy may not always fully employ its productive resources, have price stability, or grow at an acceptable rate. We know it. 6. Saving is a way of transferring current income into future consumption. I suppose it.

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XI. Change the following complex sentences into simple ones using the Objective Infinitive Complex:

Model: We expect that firms produce goods of high

quality.

We expect firms to produce goods of high quality. 1. People expect that saving allows them to transfer consumption from the present to the future. 2. We think that the firms accumulate unwanted inventories, if desired aggregate saving exceeds desired aggregate investment. 3. We consider that government spending, taxes and subsidies are the fiscal activities of government. 4. Consumers believe that they purchase goods of high quality. 5. We know that changes in aggregate demand lead to changes in actual real output.

XII. Translate into English:

1. HaM Aywe xoTinocn 6, lmo6 cno>KMBaMi i3 3aflOBOJieH-hhm KynyBanw Hami TOBapn. 2. Mm BBajKaeMO, mo b HeV floc-TaTHifi BnacHMM aocbia y U'fi ccfciepi Bnpo6HwujBa i BOHa Mo«e poano^aTM cboio cnpaBy. 3. 5\ cnoAisaiocq, 140 tm HaBHmuca HaKonMHyBatM CBoTnpn6yTKn. 4. 3 3HaK>, mo cyKynHHH nonm 3HM>KyeTbcn, kojim 3pocTatOTb nonaTKM. 5. EaTbKM cnofliBatOTbcs, U40 bjh CTaHe rapHMM niAnpneMU,eM i MaTMMe BnacHMfi 6i3Hec.

XIII. Communicative situations:

1. What will happen to aggregate demand if firms become more pessimistic about the future?

2. What will happen to aggregate demand if firms become more optimistic about the future?

3. Discuss the ways in which government activities may affect the economy.

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Lesson 27

FURTHER CONSTRAINTS ON STABILIZATION POLICY

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

stabilization policy — noniriKa cTa6iniaauiT eKOHOMiiHoT

KOH'lOHKTypd

e.g. It is important to remember that the crucial issue for stabilization policy is whether an economy moves towards full employment quite rapidly or quite slowly.

interest rate — craBKa BiacoTKa

e.g. Appropriate fiscal policy will be relatively more effective if stimulative policies do not affect interest rates by much or interest rates do not affect investment by much.

elasticity — enacTHMHicrb; rwywicTb

e.g. Long-term monetary policies will be affected by the income elasticity of demand for real money balances and the price-level elasticity of demand for nominal money balances.

monetary policy — rpowoBo-KpeflMTHa noni-rnio

e.g. A stimulative monetary policy requires an increase in the money supply.

automatic stabilizer — aBTOMarMHHMM cra6ini3aTop eKOHOMiKM

e.g. An automatic stabilizer is an expenditure law or tax law that automatically increases expenditures (or decreases taxes) when an economy enters a recession.

government transfer payments — ypqfloei TpaHCcbep™i Burma™

e.g. Since more people are becoming unemployed during a recession, government transfer payments increase.

predictability — MowoiMBicTb nporHo3yeanHfi

e.g. Predictability is important in efficiently organizing economic activity and the inconsistency of expectations creates a less predictable economic environment.