Ex 2.Fill in the gaps with the words and expressions from the text
1. Price stability prevents costs from …… and …… important benefits for all citizens.
2. If the …… is stable, consumers know that the …… price of this product has increased and may …… of it.
3. Uncertainty about the …… may also lead firms to make …….
4. The firs might then decide … and … workers in order to reduce …
5. Socially, …… is a very destructive …… which has …… for individuals and society as a whole.
Ex 3. Find in the text the English equivalents for the following:
высокий уровень занятости; увеличиться на 3%; осознавать что-либо; идти на риск; сократить производственные мощности; из-за более низкой инфляции; неустойчивость; тяжелое бремя; высокие заработки привели к увеличению производственных издержек; стать невыносимым; неофициальные деньги.
Ex 4.Match each term with the appropriate explanation.
hyperinflation, misallocation of resources, redundancy, relative prices, living standard, price stability
1. Changes in the prices of goods expressed in terms of other goods
2. The degree to which a person and their families, or a community, are able to satisfy their needs.
3. Taking wrong decisions as to application of capital, labour etc.
4. A situation where the rate of inflation is rising and becoming uncomfortable.
5. Maintaining the annual inflation rate at below but close to 2% (for the euro area) over the medium term.
6. A situation when an employee is no longer needed by his employer.
Ex 5. Answer the questions and do the assignments.
1. How can price stability help to achieve high level of economic welfare?
2. What is implied in “economic welfare”?
3. What stands for the transparency of relative prices?
4. What happens if a firm misinterprets the increase in the market price of its goods (in an environment of high inflation)?
5. Give examples of “misallocation” of resources.
6. What stands for the nation “hyperinflation”? Give examples of this phenomenon occurring in different countries.
Ex 6. Increase your vocabulary.
A. Fill in prepositions where necessary.
1. The changes in the cost of living were related …… inflationary processes in the economy.
2. The price of buckwheat has increased …… more than 50% lately.
3. An inflation rate of 250% …… month implies an increase …… of more than 50-fold …… the price level …… a year.
4. The inflation rate has recently fallen …… 8% ……6%, which has caused a substantial decrease …… some consumer prices.
5. Prices stability makes it easier …… people to identify changes …… the prices …… goods expressed …… terms of other goods. Such changes are not concealed …… fluctuations …… the overall price level.
B. Match the words that are similar in meaning.
| fluctuation expect welfare lay off misinterpretation related decrease consequence devastating increase | reduce prosperity misunderstanding connected instability destructive dismiss effect anticipate rise |
C. Study the word combinations with the word “price”. Use them in thesentences of your own.
- acceptable price – приемлемаяцена
- attractive price – привлекательнаяцена
- fixed price – фиксированнаяцена
- average price – средняяцена
- competitiveprice – конкурентнаяцена
- consumerprice – цены на потребительские товары
- costprice - себестоимость
- fairprice – справедливая цена
- falling/risingprice – снижающаяся/растущаяцена
- at a (high, low) price – поцене
- priceperunit - цена за единицу
- to fix (establish) a price – устанавливатьцену
- to price – назначатьцену
- a price of, for – ценачего-либо
Other adjectives: cut, current, discount, inflated, high (heavy), low (keen), just, stable (steady), fluctuating, retail, wholesale.
Verbs: to bargain over, to cut, to increase/decrease, to raise, to reduce, to buy/sell at a price, to pay/meet the price, to go down/up in price.
D. Translate into English.
1. Растущие цены на продукцию, даже на потребительские товары - отличительная черта инфляции.
2. Мы не можем покупать ваши товары по таким высоким ценам.
3. Себестоимость этого товара достаточно низка. Это позволит нам продать его на рынке по привлекательной цене.
4. В условиях плановой экономики правительство устанавливает фиксированные цены на все товары.
5. Если вы поторгуетесь, вам, может быть, удастся купить эту вещь по более приемлемой цене.
6. Во время кризиса цены на многие товары и услуги значительно снижаются.
7. Наша компания установила конкурентные оптовые цены на это оборудование.
8. Текущие цены на топливо достаточно высоки.
9. Если урожай в этом году будет ниже ожидаемого, цены на сельскохозяйственную продукцию возрастут.
10. Средняя цена за единицу продукции ниже рыночной.
Writing
Task I. Write a Summary and a Gist of Texts A, B and C.
Task II. Write down a numerical example of the calculation of the total cost of the basket and the computation of the price index, similar to that given below. Make all the necessary calculations and comment on them.
Let us illustrate the considerations above by means of a simple numerical example.
Suppose that a representative market basket of the yearly expenditure of teenagers is 100 sandwiches, 50 soft drinks, ten energy drinks and one mountain bike.
| Quantity | Price (year 1) | Price (year 2) | Price (year 3) | |
| Sandwiches | EUR 1.00 | EUR 1.20 | EUR 0.90 | |
| Soft drinks | EUR 0.50 | EUR 0.40 | EUR 0.70 | |
| Energy drinks | EUR 1.50 | EUR 1.70 | EUR 1.20 | |
| Mountain bike | EUR 160.00 | EUR 173.00 | EUR 223.00 | |
| Cost of the market basket | EUR 300.00 | EUR 330.00 | EUR 360.00 | |
| Price index | 100.00 | 110.00 | 120.00 |
The total cost of the basket can then be calculated by multiplying the quantities by the respective prices and adding everything up. It is easy to see that between the first and second year, the cost of this basket of goods has risen from EUR 300 to EUR 330, or by 10 %. From the first to the third year, the cost has risen from EUR 300 to EUR 360, or by the equivalent of 20 %.
Another way to express this is by means of a price index. In order to compute the price index, the cost of the market basket in any period is divided by the cost of the market basket in the base period, and the result is multiplied by 100. In the table above, year 1 is the base period. The price index for year 3 is therefore:
Price Index = (P3/P1) × 100 = (360/300) × 100 = 120.00
The price index tries to give a general picture of what is happening to a great many prices. As the example shows, the price index may rise despite some prices actually declining.
Speaking