Choose synonyms (antonyms) from the following list.

Wage, possible, different, a fall, large, outside, to learn, difficult, salary, to increase, small, worse, narrow, main, to sell, impossible, similar, a rise, inside, wide, easy, major, to study, big, to enlarge, better, to buy.

Insert prepositions.

1. People take part … economic activity.

2. This word is … Latin origin.

3. Economic system must deal … many challenges.

4. Economy produces goods and services … the satisfaction … the needs of consumers.

5. Different factors affect … the decision.

6. The rise … the real income will result … an increased consumption.

7. The amount spent … goods has a big impact … the level … economic activity.

8. Economy refers … the human activities.

9. The composition of an economy is inseparable … Earth’s geography.

Fill in the blanks with the Vocabulary on the text.

1. … and monetary policies of the government are the major factors of economic environment.

2. The Greek word “economy” meant the art of … .

3. Consumer … depends on tastes, … and family circumstances.

4. The increase in consumer spending creates new … opportunities and results in better … … .

5. A fall in prices will increase … of a good.

6. The rise in real … will cause increased … of goods.

7. The definition of economy transformed … history.

8. In modern economies there are three main sectors of economic activity: …, … and … .

19. Answer the questions on the text. Use the following expressions to begin your answer:

Ø The text tells the readers …

Ø I suppose …

Ø I think …

Ø I am certain that …

Ø If I got it right …

Ø It seems to me …

Ø In my opinion …

1. Why is economy a part of people’s everyday life?

2. What origin is the word economy?

3. What does economy refer to?

4. What is the composition of a given economy influenced by?

5. Why is economics called the Queen of sciences?

6. What are the main sectors of economic activity?

7. What does primary sector involve?

8. What does secondary sector involve?

9. What does tertiary sector involve?

10. What economic agents interact in the market?

11. What is the main purpose of the economy?

12. How do consumers spend the income they earn?

13. How do prices influence consumers’ decisions?

14. How does a rise in real income affect consumers’ decisions?

15. Why does consumer expenditure have a big impact on the level of economic activity?

Agree or disagree. Correct wrong statements.

I (quite) agree (with you). I don’t think so.

I think so too. I don’t agree.

Certainly! I think you are mistaken.

Just so. You are wrong

1. Economy is a part of government’s everyday life.

2. Economy refers to the human activities related with the production, distribution, exchange and consumption of goods and services.

3. The composition of a given economy is separable from civilization’s history.

4. Equilibrium in the market is determined by core variable components in the economy.

5. Primary sector involves the transformation of raw materials into goods.

6. To study economics means to calculate expenses and profits.

7. Economics is called the Queen of sciences as the changes in the world may be explained by it.

8. There are many economic agents in the modern economy.

9. Consumers spend their income on goods and services offered in the market.

10. The rise in consumer’s real income will result in decreased consumption of goods and services.

11. The increase in consumer spending creates new employment opportunities.

Complete the following sentences according to the text.

1. Economy is a part of …

2. The word economy is of … and its meaning was …

3. The composition of a given economy is …

4. Practical fields directly related to …

5. P. Samuelson called economics the Queen of sciences as …

6. The modern economy is populated by …

7. The main purpose of the economy is to …

8. Consumers distribute their income amongst …

9. A fall in the price of a good will …

10. A pattern of consumer expenditure is influenced by …

11. The increase in consumer spending causes …

Arrange the sentences according to the text.

1. The increase in consumer spending creates new employment opportunities and causes better living standards.

2. The modern economy is populated by three types of economic agents: consumers, producers and the government.

3. Economy is a part of people’s everyday life as they take part in economic activity and live in economic environment.

4. Consumers spend their income to buy goods and services.

5. The meaning of the word economy was the art of keeping house.

6. All the changes in the world can be explained by economics so it was called the Queen of sciences.

7. Different factors affect consumers’ decisions about distribution of their income.

8. They are: a fall in the price of a good, a rise in real income, tastes, preferences and family circumstances.

9. There are three main sectors of economic activity: primary, secondary and tertiary.

10. Economy refers to the human activities related with the production, distribution, exchange and consumption of goods and services.

Make up a plan of the text.

Speak on the topic “People and economy”.

LESSON 2. Microeconomics and Macroeconomics

Grammar Presentation: Инфинитив и его функции в предложении

Grammar Revision: Видовременные формы глагола в страдательном залоге. Причастия I и II в функции определения. Указательные местоимения.

ECONOMICS.

MICROECONOMICS. MACROECONOMICS

Economics is the study of how individuals and societies choose to use the resources that nature and previous generations have provided. The key word in this definition is “choose”. Economics is a behavioral science. In large measure it is the study of how people make choices. The choices that people make, when added up, translate into societal choices.

There are three fundamental choices to be made. These basic problems are common to all societies no matter what level of economic development they have reached.

1. Which goods shall be produced and in what quantities?

2. How should the various goods and services be produced?

3. How should the goods and services be distributed?

There are two major divisions of economics: macroeconomics and microeconomics.

Microeconomics is a branch of Economics that studies how individuals, households, and firms make decisions to allocate limited resources, typically in markets where goods or services are being bought and sold.

Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the supply and demand of goods and services.

One of the goals of microeconomics is to analyze market mechanisms that establish relative prices amongst goods and services and allocation of limited resources amongst many alternative uses. Microeconomics analyzes market failure, where markets fail to produce efficient results, as well as describing the theoretical conditions needed for perfect competition. Significant fields of study in microeconomics include markets under asymmetric information, choice under uncertainty and economic applications of game theory. Also considered is the elasticity of products within the market system.

Macroeconomics, on the other hand, involves the "sum total of economic activity, dealing with the issues of growth, inflation, and unemployment and with national economic policies relating to these issues" and the effects of government actions (e.g., changing taxation levels) on them.

Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. Macroeconomists study and seek to understand the determinants of aggregate trends in the economy with particular focus on national income, unemployment, inflation, investment, and international trade. In contrast, microeconomics is primarily focused on the determination of prices and the role of prices in allocating scarce resources (Blaug 1985).

While macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline. The attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income).

Macroeconomic models and their forecasts are used by both governments and large corporations to assist in the development and evaluation of economic policy and business strategy.

In order to try to avoid major economic shocks, such as great depression, governments make adjustments through policy changes which they hope will succeed in stabilizing the economy. Governments believe that the success of these adjustments is necessary to maintain stability and continue growth. This economic management is achieved with different types of strategies.

Notes on the text

in large measure – в большой степени

when added up – при суммировании

ways of bringing together or summing primary data – способы сведения воедино или суммирования основных данных

Vocabulary on the text

adjustment, n – регулирование, согласование; установка

aggregate, n – совокупность

aggregate, a – собранный вместе; общий

aggregate, v, – собирать в одно целое

application, n – заявление, прошение; употребление, применение

assist, v, – помогать, содействовать

asymmetric, a – асимметричный

avoid, v, – избегать, сторониться, уклоняться

competition, n – соревнование; конкуренция

deal with, v, – иметь дело, рассматривать вопрос

demand, n – спрос, требование

determine, v, – определять, устанавливать

economics, n – экономика (как наука)

emblematic, a – символический

evaluation, n – оценка; определение качества, количества и т.п.

fail, v, – потерпеть неудачу; провалиться; не удаваться

failure, n – неуспех, неудача

fluctuation, n – колебание, неустойчивость

focus, n – центр, средоточие

forecast, n – предсказание, прогноз

goal, n – цель, задача

income, n – доход

issue, n – выпуск, издание; pl – доходы

issue, v, – выходить, выпускать, издавать

previous, a – предыдущий, предшествующий

produce, v, – производить, создавать

production, n – 1) производство; 2) продукция

productive, a – производительный

provide, v, – 1) предоставлять, давать; 2) снабжать, обеспечивать

provision, n – снабжение, обеспечение

scarce, a – недостаточный, скудный, редкий, редко встречающийся

seek, v, – искать; добиваться

service, n – 1) обслуживание, сервис; 2) услуга

significant, a – значительный, существенный

societal, a – общественный

society, n – общество

study, n – изучение, исследование

study, v, – изучать, исследовать

succeed, v, – достигать цели, преуспевать, иметь успех

supply, n – предложение, снабжение, поставка, запас

uncertainty, n – неуверенность, сомнение, неопределенность

Phonetic and lexical exercises