Inflation – Causes and Effects

Older people often talk about how cheap things were when they were young. A brand new car may have cost only $5,000 compared to $20,000 today, or petrol that cost only a few cents in the 60s costs over a dollar today. Inflation happens when money loses some of its value. We measure the rise of inflation in percent. For example, 2% inflation means that a $1 bottle of milk will cost $1.02 next year.

Inflation has many causes. In times when the economy is good and people have enough money they want to buy more products than factories can produce, so the prices go up. Inflation can also happen when workers demand more money or when the raw materials that producers need rise in price. The end product becomes more expensive and has to be sold at a higher price.

Some economists say that central banks do not do enough to control how much money there is in a country. There may be more money around than there are goods. Consumers want to buy more products, the demand gets higher and prices go up. Sometimes low interest rates on loans make people borrow money to buy houses or cars. These prices go up as well. Inflation is not produced by one country alone. Sometimes a country cannot control the prices of certain goods as it would like to. A country that does not have any energy supplies of its own has to import energy. It has to pay a high price for oil and gas.

Inflation is a sign that the economy is growing. It is normal when prices go up only a few percent every year. High inflation, on the other hand, leads to uncertainty in the population. Industries may not want to borrow money and invest when inflation is high. People don’t want to buy goods any more. Factories may get stuck with products they cannot sell and as a result workers get unemployed.

It is very difficult to fight inflation. Governments have an effect on inflation when they raise or lower taxes. They can also try to control wages and prices as far as possible.

V. Ответьте письменно на вопрос:

Why does high inflation lead to uncertainty in the population?

Вариант №2

I. Подберите к словам соответствующие определения:

1) budget a) how much people want something

2) demand b) money paid regularly for work done

3) inflation c) employees

4) commodity d) the amount of money you have for something

5) wages e) someone who sets up a new business of their own

6) staff f) what a company produces

7) output g) something you can buy or sell

8) entrepreneur h) rising prices

Занесите свои ответы в таблицу:

II. Вставьте в каждое предложение подходящее по смыслу пропущенное слово:

agency money traffic packaging care advice research employment

1. Some say that the purpose of business is to make …….; others say that it must have social aims.

2. If you are late for a business meeting, just say that you were stuck in the ……

3. Levels of ……. are so high that we can’t find the people we’re looking for.

4. Those who really need…….usually don’t like it and, anyway, they are not able to follow it.

5. We regularly win industry awards for our levels of customer …….

6. The…….of a product is very important: the company has to think carefully about how the product should look.

7. If you want to know what people think about a product, you do some market …….

8. You employ an advertising …….to create a product image.

III. Выберите правильный вариант ответа

1.ADVERTISING / ADVERTISEMENT

a) Our ………… budget is 10% less than last year.

b) Did you see the big ………… for a new Managing Director for Acme in this morning's newspapers?

2. LINE / STAFF

a) A………… manager works directly on the production of goods.

b) A………… manager gives service support to the managers in production.

3.PERSONNEL / PERSONAL

a) Smith has a…………problem: his wife wants to leave him.

b) Smith’s company has a ………… problem: their employees want a 20% pay increase.

4. RAISING / RISING

a) Prices are…….at a rate of about 4% per year.

b) The company is ……its prices by 5% this year.

Занесите свои ответы в таблицу:

a	b	a	b	a	b	a	b

IV. Прочитайте и устно переведите на русский язык весь текст. Письменно переведите абзац №1.

International Trade

Trade happens because people need or want things that they don’t have. Trade between countries happens for the same reason. Some countries, for example, have natural resources, like coal, oil or wood which other countries might want to buy. They try to sell the goods, products or services that they have too much to other countries. They earn money from these sales and then can buy the things that they themselves need and cannot produce on their own. Both producers and consumers profit from international trade. Even though many nations have a lot of different goods to export there are countries that depend only on one or two products to get money. Saudi Arabia, Kuwait and other countries of the Middle East depend on oil exports, because it is the only thing that they can sell.

The difference between what a country exports and what it imports is called the balance of trade. If a country exports more than it imports we call this a trade surplus. And if a country pays more for its imports than it gets for its exports it has a trade deficit. In some countries the government controls all trade and in others it allows companies and firms to trade freely. However, all governments control trade in some way. Sometimes a government forbids companies to buy or sell dangerous or illegal products, or military technology.

Many governments try to help their own industries by making it more difficult to import foreign products. They put import taxes on foreign goods to make products more expensive and their own products cheaper. A government may also limit the number of products that it will buy from another nation. European countries, for example, may limit the number of cars that are imported from Japan or the USA. They want their people to buy European cars. We call this strategy protectionism because governments want to protect their companies and industries.

V. Ответьте письменно на вопрос:

What is the difference between a trade surplus and a trade deficit?

Вариант №3

I. Подберите к словам соответствующие определения:

1) earnings a) financial protection

2) consumption b) income

3) recession c) the members of the population able to work

4) workforce d) the amount of a product that people buy or use

5) imports e) the people who control a country and make

laws

6) insurance f) when there is not enough of something

7) government g) goods and services a country buy abroad

8) shortage h) a serious slowing down of the economy

Занесите свои ответы в таблицу:

II. Вставьте в каждое предложение подходящее по смыслу пропущенное слово:

pensioners discount auction manufacturers structure demand increase competition

1. There is a lot of ……. for organic fruit and vegetables these days.

2. If there is only one producer in the market, there is no …….

3. There has been a huge ……. in demand for air conditioners due to the hot weather.

4. ……. produce new goods from raw materials.

5. Companies usually have a ……with senior managers at the top and employees at the bottom.

6. In an ……., the item for sale is sold to the customer who offers the highest price.

7. In the winter sales the shops often give a……. of up to 50%.

8. Because retired people usually receive a pension, they are often called…….

III. Выберите правильный вариант ответа:

1. INTERVIEWEE / INTERVIEWER

a) The person who usually asks most of the questions at an interview is the ………

b) The person who usually answers most of the questions at an interview is the ……… .

2. FOREIGNERS / STRANGERS

a) Our company has been bought by a German multinational. More and more .................. are coming from abroad to work in our office.

b) There were two ……… at the corner table in the restaurant where we usually go for lunch: no one had ever seen them before.

3. WHITE-COLLAR / BLUE-COLLAR

a) …….workers work in the factory.

b) …….workers work in the office.

4. TRAVEL / TRIP

a) Zangief is doing too much business ……………………and wants to cut the number of visits to foreign clients next year.

b) However, he still has to make one important ……………………to the agent in Singapore.

Занесите свои ответы в таблицу: