Ex. 7. Match the questions (1-8) to their answers (A-H)

1. How many years did the Great Depression last for?

2. How are changes in business activity called?

3. What happens in a period of depression?

4. When is the economy booming?

5. What marks the beginning of a contraction in the business cycle?

6. Why are prices increasing during a boom period?

7. Why do businesses and consumers reduce their spending during a contraction cycle?

8. During which period does business begin to expand its activities?

A. At the peak of the business cycle.

B. Ten years

C. Because the demand for goods and services is increasing.

D. During a period of expansion.

E. Factories are idle, millions of workers are unable to find jobs, and the rate of business

failure is high.

F. Because economists predict that business will be slowing down in the next few months.

G. The periods of boom, contraction, recession and expansion.

H. Reductions in business and consumer spending.

Ex. 8. Multiple choice. In the space provided, write the letter of the item that best

Completes the statement.

1. “Prosperity” is ordinary used to describe ______________period of high employment.

a) a long

b) an extended

c) a short-lasting

2. “Depression” refers to an extended period of general __________________ of economic

resources.

a) underemployment

b) employment

c) unemployment

3. The worst depression in American history lasted from __________________.

a) 1920 to 1930.

b) 1930 to 1940

c) 1940 to 1950

4. Some businesses and consumers will even reduce spending because economists predict that

business _______________________ in the next few months.

a) will be booming

b) will be flourishing

c) will be slowing down

5. The way to smooth out economic ___________________was not found yet.

a) fluctuations

b) activity

c) systems

6. The recession is the ______________ phase of the business cycle.

a) most important

b) final

c) bottom

7. During the Great Depression 4,000 ______________________banks closed permanently.

a) state-owned

b) privately-owned

c) government-owned

8. During the period of recession total output of goods and services enters a long-term decline.

a) a short-term decline

b) a long-term decline

c) a long-term boom

9. During a period of expansion the conditions are about to improve, business begins _________

its activities.

a) to expand

b) to cut back

c) to cease

Ex. 9. Translate into English. (Modal Verbs)

1. When I was area manager, I could visit five customers a day.

2. Only employees can buy products from the company shop.

3. This is a dander area. Employees may not enter this area without protective clothing.

4. Next year we may launch a sales campaign in Japan.

5. May I make a comment at this point? – Yes, of course you may.

6. Many customers give to charity money that they might have spent on themselves.

7. Changes in the quantity of money may or may not have an influence on prices.

8. All the shareholders must receive an invitation to the meeting; however, they needn’t attend.

9. These figures can’t be right. There must be a mistake somewhere.

10. If you want my advice, you should find another supplier.

Text 2

WHAT CAUSES BUSINESS CYCLES?

VOCABULARY

distinguish- проводить различие

external and internal events – внешние и внутренние события

occurring– происходящие

causes –причины, мотивы

significant – значительные, важные

trigger off– инициировать; давать начало

are likely to have – вероятно будут иметь

inventions and innovations –изобретения и новшества

burst of business activity – взрыв/ вспышка деловой активности

to provide – обеспечивать

capital goods– средства производства

tools and equipment – станки и оборудование

total production – совокупный продукт

generated – вызванный

to give a nudge – дать толчок; подтолкнуть

power to tax and spend – право налогообложения и расходов

the supply of money and credit in circulation –денежно-кредитная масса, находящаяся

в обращении

fiscal policy– фискальная (налогово-бюджетная) политика

monetary policy –денежно-кредитная политика

For many years economists struggles to find a theory that would explain all business cycles. In explaining business cycle fluctuations, today’s economists often distinguishbetween external and internal events

External events are those outside the economic system that explain fluctuations in the business cycle. Internal events are those occurringwithin the economy itself.

External Causes. External factors which affect the economy are: population changes, inventions and innovations, and other significant political and social events.

Population changes. Changes in population affect the demand for goods and services. Population increases can lead to increased production and employment levels that trigger offexpansion and boom. Population decreases are likely to have the opposite effect.

Inventions and innovations. Major changes in technology, such as the development of the automobile, the airplane and the computer, have ledto burstsof business activity and investments. This, in turn, was followed by increased employment opportunities and a period of expansion and boom.

Internal causes. Internal causes of fluctuations are factors within the economy which are likely to start an expansion or contraction of the business cycle. Three of these internal factors have to do with consumption, business investments, and government activity.

Consumption. Business firms try to provide consumers with the goods and services they want. When consumer spending is on the increase, business firms hire additional help and increase their level of production. As production, employment and sales increase, the business cycle enters a period of expansion and boom. When consumer spending decreases, the opposite occurs. Production is reduced, workers are laid off, and the economy enters a period of contraction and recession.

Business investment. Investment in capital goods like plants, tools and equipment, creates additional jobs, thereby increasing consumer purchasing power. The increase in spending generated by the initial increase in investment leads to still further investment, consumption and total production. When investment decreases, the opposite occurs and the economy enters a period of contraction.

Government activity. Governmental policies can give the business cycle an upward or downward nudge. Government does this in two ways. One is through the use of its power to tax and spend. The other is by reducing the supply of money and credit in circulation. Economists describe government’s ability to tax and spend as its fiscal policy, and its ability to regulate the supply of money and credit as its monetary policy.

WORD STUDY