EXERCISES. Command and market economies both have significant faults

NOTES

VOCABULARY

READING

MIXED ECONOMY

Command and market economies both have significant faults. Partly because of this, an intermediate system has developed, known as mixed economies.

A mixed economy means very much what it says as it contains elements of both market and planned economies. At one extreme we have a com­mand economy, which does not allow individuals to make economic deci­sions, at the other extreme we have a free market, where individuals exercise considerable economic freedom of choice without any govern­ment restrictions. Between these two extremes lies a mixed economy. In mixed economies some resources are controlled by the government whilst others are used in response to the demands of consumers.

Technically, all the economies of the world are mixed: it is just the balance elements between market and planned elements that alters. Some countries are nearer to command economies, while others are closer to free market economies. So, for example, Hong Kong has some state-con­trolled industry, while Cuba has some privately owned and controlled firms.

The aim of mixed economies is to avoid the disadvantages of both sys­tems while enjoying the benefits that they both offer. So, in a mixed eco­nomy the government and the private sector interact in solving economic problems. The state controls the share of the output through taxation and transfer payments and intervenes to supply essential items such as health, education and defence, while private firms produce cars, furniture, electri­cal items and similar, less essential products.

The UK is a mixed economy: some services are provided by the state (for example, health care and defence) whilst a range of privately owned businesses offer other goods and services. The Conservative government under Margaret Thatcher switched many businesses from being state-owned and controlled to privately owned as part of its privatization pro­gramme. This has taken the UK economy further away from the planned system.

significant faults - значні недоліки extreme - полюс, крайність to exercise considerable economic free­dom - мати значну економічну свободу restriction - обмеження to enjoy the benefits - користуватися перевагами

whilst [wailst] (syn. while) - у той час як

to interact - взаємодіяти

output - обсяг виробництва

essential items - товари та послуги

першої необхідності

a range of businesses - тут ряд

компаній, фірм

Answer the questions:

1. Are there really pure examples of planned and market economies in the world?

2. What's a mixed economy? What's its aim?

3. What type of economy is the UK? is Ukraine now?

UNIT 4. TYPES OF ECONOMIC SYSTEMS

II. Suggest the Ukrainian equivalents:

• intermediate system has developed;

• to supply essential items;

• the government controls a share of the output

III. Replace the parts in italics by synonyms:

• significant faults

• a range of products

• whilst others are used in response to the demands of consumers.

IV Fill in the gaps with the words and expressions from the text.

1. Command and market economies both have____.

2. contains elements of both market and planned economies.

3. ____ we have a command economy, which does not____,___ we have a free market,

where individuals____ without____.

4. Some countries are____ to command economies, while others are_____ to free market

economies.

5. It is just___ between market and planned element that_____ in all the economies of

the world.

6. The aim of mixed economies is____ the disadvantages of both systems____ while the

benefits that they both offer.

7. In a mixed economy the government and the private sector_____ in____.

8. The state controls____ through____, and___, and intervenes to supply____.

9. The Conservative government switched many state-owned businesses to being privately owned as part of its_______________________.

V Complete the table using information from the text.

Type of economic system	What to produce?	How to produce?	For whom to produce?
MARKET ECONOMY	Business firms produce goods and services that consumers are willing and able to buy for prices that will yield profits for the firms.	Seeking to compete profitably in the marketplace, individual business owners decide what combinations of productive resources (land, labour, capital and entrepreneurship) they will use in producing goods and services.	Finished goods and services are distributed to individuals who are willing and able to buy them.
COMMAND ECONOMY	A central planning authority (government agency) decides what goods and services to produce.	A central planning authority (government agency) decides what combinations of productive resources will be used in producing goods and services.	A central planning authority (government agency) decides who will receive the goods and services that are produced.
TRADITIONAL ECONOMY	The goods and services produced today are the same as those produced in previous generations.	The combination of productive resources used in producing goods and services are the same as those in past generations.	Finished goods and services are traded locally for other finished goods and services.
MIXED ECONOMY

PART I. ECONOMICS

VI. Increase your vocabulary. Translate the expressions and make some sentences of your own with them. to enjoy (syn. to have as an advantage - мати, користуватися)

• to enjoy a boom;

• to enjoy a high standard of living;

• to enjoy a basic standard of living;

• to enjoy the benefits.

VII. Check your grammar. It is (was)... that (who).

A. Study the following examples:

It is the intention of the planners that there should be enough goods and services for all. It is these disadvantages that have led to many countries abandoning planned economies. It is consumers who decide what is to be produced. It is just the balance between market and planned elements that alters.

B. Rewrite the following sentences using the emphatic construction.

1. Television was invented in this century.

2. Mathematicians have solved complicated problems with the help of computers. 3.1 first saw this play on TV

4. Two doctors made this discovery.

5. Owing to the rain we couldn't come.

VIII. Translate the following sentences into English.

1. У реальній дійсності економічні системи перебувають між суто ринковою та плановою економіками.

2. Змішана економіка - це система, при якій приватна власність та ринок, так само як і уряд та громадські установи, взаємодіють під час розв'язання економічних проблем.

3. Змішані економіки намагаються уникнути недоліків як планової, так і ринкової економік, стараючись при цьому якнайкраще скористатися їхніми перевагами.

IX. Make up a dialogue following these specific situation and use set phrases you know. Compare the deliveries by the leading manufacturers within the frameworks of the planned socialist economy and the free market economy.

X. Express your attitude towards the following proverbs and sayings.

• A beggar can never be bankrupt.

• A fool and his money are soon parted.

• A heavy purse makes a light heart.

• A light purse is a heavy curse.

XL Writing Practice. Make a short summary about different economic systems from the above text. Use the opening phrases from Appendix 1.

IT 4. TYPES OF ECONOMIC SYSTEMS

UNIT 5.

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