Economic stability

The way to smooth out economic fluctuations and thus to stabilize the economy has not been found yet. To fight inflation and recession economists have developed two strategies: fiscal policy and monetary policy.

The term fiscal policy refers to the government efforts to keep economy stable by increasing or decreasing taxes and/or government spending. When taxes are reduced, individuals and businesses have more money to spend and thus the total spending begins to increase. Eventually the economy will enter the expansion phase. If taxes are increased, consumers and businesses have less money to spend and thus the total demand for goods and services will decline. The economy, in its turn, will contract, but inflation will be reduced.

Government raises taxes to spend more and more on social and defense programs. When the revenue from taxes is less than spending, the government has to cut spending to balance the budget that is to make incomeequal spending.

Fiscal policies can provide effective means to fight recession and inflation. It is the responsibility of the government to time fiscal policies correctly and to apply them at the right moment.

Monetary policy refers to regulating the supply of money as the means to stabilize the economy. Monetary policy is the responsibility of the National Bank of the country. The National Bank is an independent institution and has a goal of keeping the economy stable, encouraging its growth without causing inflation.

When booming economy pushes up prices causing inflation the National bank can apply a tight monetary policy restricting the money supply and increasing interest rates. Less money is available for spending; businesses and consumers are discouraged from borrowing money because of high interest rates. Businesses cut back on production and lay off workers. This slows down the economy and lowers inflation. In the time of contraction and recession the National Bank may put more money into the economy and lower interest rates. These measuresstimulate spending and encourage business expansion, which leads to the increase of employment.

Such interventions into free markets have serious consequences for businesses. That is why businesses follow the monetary policy very closely to see what it is now and will be in the future.

Assignment 3. Answer the following questions.

1. What two strategies have economists developed to fight recession and inflation?

2. What is the meaning of the term ‘fiscal policy’?

3. Who is responsible for providing the fiscal policy?

4. What does the government raise taxes for?

5. How does the economy respond to increasing taxes?/ decreasing taxes?

6. In what case does the government cut its spending?

7. How should the government apply the fiscal policy to make it effective?

8. What is the meaning of the term ‘monetary policy’?

9. Who is responsible for providing the monetary policy?

10. What measures does the National Bank apply in the period of economic boom?

11. What measures does the National Bank apply in the period of contraction and recession?

12. Why do businesses follow the monetary policy very closely?

Assignment 4. Translate into English.

Згладжувати/вирівнювати економічні коливання; зусилля уряду; врешті решт; в свою чергу; надходження від оподаткування; врівноважити надходження та витрати; як засіб стабілізувати економіку; обмежувати грошову пропозицію; вкладати більше грошей в економіку; подібне втручання у вільні ринки; дуже уважно слідкувати за монетарною політикою.

Assignment 5. Translate into Ukrainian. Find in what situations these word combinations are used in the text.

Government spending; to keep economy stable; the economy will enter the expansion phase; booming economy; effective means to fight inflation and recession; encouraging (economic) growth without causing inflation; because of high interest rates; to stimulate spending; to have serious consequences.

Assignment 6. Match the pairs of synonyms.

A: revenue, goal, consequence, total, independent, to restrict, way, to balance, to lower, to encourage, to find, responsibility;

B: overall, means, to limit, obligation, to equal, result, to reduce, free, to discover, purpose, income, to stimulate.

Assignment 7. Paraphrase the words in bold style.

1. The National Bank’s purpose was to limit the money supply. 2. The government had to cut spending as it outweighed the overall income from taxes. 3. The National Bank isa free institution whose obligation is to stimulate the economic growth. 4. The government ought to discover the way to equal the budget. 5. The result of the government’s intervention into business was very serious: producers raised prices on many essential consumer goods.

Assignment 8. Match the pairs of opposites.

A: to borrow, to slow down, to lay off, spending, independent, consequence, stable, contraction, to encourage, tight, right;

B: cause, wrong, income, unstable, to lend, to discourage, expansion, loose, to hire, dependent, to speed up.

Assignment 9. 1. Use the prefix dis- to form the verbs with opposite meaning. 2. Translate the phrases below using the verbs you have formed. 3. Use any 5 phrases in the sentences of your own.

A. To agree, to allow, to approve, to believe, to cover, to encourage.

B. Не погоджуватись з фіскальною політикою уряду; не вірити у дієвість(ефективність) заходів; не заохочувати позичання грошей у банку; відкривати засіб вирівнювання економічного циклу; не дозволяти втручання в економіку; не схвалювати підвищення відсоткової ставки.

Assignment 10. Fill in the prepositions from the box below.

at back by during into of(2) off on(2) out for(2) from without

1. The government keeps economy stable … increasing or decreasing taxes. 2. How much money was spent … social programmes last year? 3. The Ministry … Finance must apply fiscal policy … the right moment. 4. High interest rates discouraged small businesses … borrowing money. 5. … the time … recession the National bank may put more money … the economy. 6. The National Bank is responsible … encouraging economic growth … causing inflation. 7. When less money is available … spending businesses cut … … production and lay … workers. 8. Economists haven’t found the ways to smooth … economic fluctuations.

Assignment 11. Make up questions to the words in bold style.

1. When taxes are reduced the total spending begins to increase. 2. These measures encourage business expansion. 3. Government interventions into free markets have serious consequences for businesses. 4. Businesses follow the monetary policy very closely. 5. Economists have developed two strategies to fight inflation and recession.

Assignment 12. Agree or disagree with the following statements.

If you agree, begin with:You are quite right; I quite agree with you; Exactly; Quite so.

If you partially disagree, begin with: You are not quite right; True, but…; It is true in a way, but …

If you find the sentence completely wrong, begin with: I’m afraid, that’s wrong; I think you are mistaken; On the contrary; That’s not quite so.

1. Economists have already found the way to smooth out economic fluctuations. 2. Taxes are raised by private businesses to finance their development. 3. A tight monetary policy is applied by the National Bank in the period of contraction and recession. 4. If the money supply is restricted the total demand will decline and businesses will cut back on production. 5. The National Bank implements the decisions of the government. 6. It is the National Bank that is responsible for timing the fiscal policy correctly. 7. If interest rates are lowered businesses are encouraged to borrow money and expand. 8. The period of recession is characterized by double digit inflation. 9. The government has to cut spending if the budget shows a surplus.

Assignment 13. Complete the following sentences with the words from the box.

interest rates, the fiscal policy, the monetary policy, taxes, to borrow, social and defense, effective means, consequences, the government (2), the National Bank

1. Businesses follow … …very closely because its changes lead to very serious …. 2. … are used to finance different … … programmes. 3. When … … are low businesses are encouraged … money from the bank. 4. Both … and … … should provide … … to fight inflation and recession. 5. The responsibility of … is to apply … … at the right moment.

Grammar: expressing degrees of certainty

Модальні дієслова must, may, might, cannot(can’t) передають різні ступені впевненості (degrees of certainty) щодо дії, позначеної інфінітивом. Дієслово must передає абсолютну впевненість в дії (positive certainty) – напевно, тоді як дієслово cannot (can’t) передає абсолютну впевненість в неможливості дії (negative certainty) – не може бути. Дієслово may передає припущення (possibility) – можливо, а дієслово might передає припущення, що межує з сумнівом (weak possibility) – можливо, хоча сумнівно; навряд чи. Можна схематично представити ступені впевненості як:

Must (positive certainty) ~ 100% – напевно;

May (possibility) > 50% – можливо;

Might (weak possibility) < 50% – навряд чи;

Can’t (negative certainty) ~ 0% – не може бути.

Assignment 14. Use the table to make up all possible sentences; translate them.

He must speak on behalf of the company.

may make this statement at the press conference.

might return from his business trip on Friday.

can’t be tired from watching TV commercials.

Assignment 15. Translate into English.

1. Вони, напевно, працюють в цій фірмі. 2. Вони, можливо, працюють в цій фірмі. 3. Вони, можливо, і працюють в цій фірмі, хоча навряд чи. 4. Не може бути, що вони працюють в цій фірмі.

* Для висловлення різних ступенів впевненості в дії, що відбудеться в теперішньому чи майбутньому, після модальних дієслів вживається простий інфінітив (Indefinite infinitive – do); для висловлення різних ступенів впевненості в тривалій дії, що відбувається саме в момент мовлення, вживається тривалий інфінітив (Continuous infinitive – be doing); для висловлення різних ступенів впевненості в дії, яка вже відбулась, вживається

перфект ний інфінітив (Perfect infinitive – have done). Порівняйте:

The plane must arrive at 10. – Літак, напевно, прибуде о 10.

The plane must be arriving just now. – Літак, напевно, прибуває саме зараз.

The plane must have arrived already. – Літак, напевно, вже прибув.

Assignment 16. Use the table to make up all possible sentences; translate them.

	must	come in time for the meeting.
They	may	be our competitors.
	might	be busy with the project.
	can’t	agree to our proposal.

	must		holding a meeting with the partners.
They	may	be	working on this project.
	might		negotiating the terms of the sales contract.
	can’t		taking part in the opening ceremony.

	must		seen the competitor’s commercial.
They	may	have	sent this information to the proper people.
	might		signed all necessary documents.
	can’t		made this statement at the press conference.

Assignment 17. Match the sentence 1-4 with its meaning a)-d).

1. He must have arrived by now. a) 40% possibility of his arrival.

2. He may have arrived by now. b) 0% possibility of his arrival.

3. He might have arrived by now. c) 100% possibility of his arrival.

4. He can’t have arrived by now. d) 80% possibility of his arrival.

Assignment 18. Translate into English.

А. 1. Вони, напевно, працюють над цим проектом саме зараз. 2. Вони, можливо, працюють над цим проектом саме зараз. 3. Навряд чи вони працюють над цим проектом саме зараз. 4. Не може бути, що вони працюють над цим проектом саме зараз.

В. 1. Напевно, він вже підписав контракт. 2. Можливо, він вже підписав контракт. 3. Сумнівно, що він вже підписав контракт. 4. Не може бути, що він вже підписав контракт.

Assignment 19. Paraphrase the following sentences using one of the modal verbs must, may, might or can’t + proper form of infinitive .

1. I am sure he is a successful businessman. 2. Perhaps they are at the meeting now, but I doubt it. 3. He is probably reading your report. 4. It is likely that they have examined your project. 5. I am certain that he has solved this problem. 6. Probably she will initiate a new plan. 7. I refuse to believe that he wrote the report in time. 8. Maybe we shall take part in the exhibition. 9. I am sure he forgot about the meeting. 10. Perhaps she went home already. 11. I doubt that he is still working. 12. It is impossible that they reached the agreement.

Assignment 20. Translate into English.

1. Де мій звіт? – Не знаю. Можливо, секретар вже відправила його. 2. Не може бути, що він ще працює. Вже дуже пізно. 3. В офісі нікого немає. Вона, напевно, вже пішла додому. 4. Цей товар продається дуже добре. Ми, можливо, замовимо більше. 5. Нікуди не йди ввечері. Вона, можливо, подзвонить, хоча навряд чи. 6. Умови контракту дуже хороші. Ми, напевно, підпишемо його. 7. Не може бути, що він вже відіслав цю інформацію. Вона не перевірена. 8. Можливо, він і забув про зустріч, хоча навряд чи.

Дата добавления: 2014-11-29