Vocabulary Focus. Ex. 1. Match the words in column A with their definitions in column B. A B 1) invisible hand 2) invisible foot 3) invisible handshake 4)

Ex. 1. Match the words in column A with their definitions in column B.

A	B
1) invisible hand 2) invisible foot 3) invisible handshake 4) autocracy 5) labour resources	a) social forces b) economic forces c) physical and mental talents that people can make available for production d) political forces e) absolute power

Ex. 2. Complete the sentences, use the words and expressions from the text.

1. An economic system works via … of three invisible forces.

2. An economic system can be described as the collection of laws, activities, values and human ….

3. In a … voting procedures determine society’s will.

4. In an …, a ruling individual decides what society’s desires are.

5. Before we discuss how the … operate, we need to find out what people can expect from an economic system.

6. It is necessary to decide if the production of … will be restricted to the….

7. If … are to be produced, what kind and how many of each will be produced.

8. There are three basic … to economic decisions.

9. One of them is based on… or command.

Words for reference invisible forces, basic necessities, approaches, the interaction, incentives, autocracy, democracy, consumer goods, luxury goods, authority.

Ex. 3. Match the Russian word combinations from A with their English equivalents from B.

A	B
1) альтернативная стоимость, цена возможности 2) невидимые силы 3) средства производства 4) потребительские товары 5) процедура голосования 6) удовлетворить потребности 7) торговаться о цене 8) экономическое заключение	a) capital goods b) opportunity cost c) economic decision d) invisible forces e) bargain f) voting procedures g) satisfy wants h) consumer goods

Ex. 4. Fill in the following prepositions: into, for, by, with, from, out, through, to.

1. An economic system is closely tied … a political system.

2. … a political system people decide what their society desires.

3. We need to find … what people expect … an economic system.

4. People must decide what goods and services they should produce … their limited resources.

5. Food can be produced … a large number of workers.

6. It is necessary … people to have a method of deciding who gets the goods and services produced.

7. Economic systems are classified … four broad categories.

Comprehension

Ex. 1. Complete the sentences, use the information from the text.

1. People and societies organize economic life through ….

2. An economic system works via the interaction of three invisible forces. They are….

3. An economic system can be described as ….

4. There are three basic economic questions that every nation must consider. They are...

5. Three basic approaches to economic decisions are ….

Ex. 2. Say if the statements are true or false.

1. An economic system works via the interaction of three invisible forces: the invisible hand (economic forces), invisible foot (political forces) and invisible handshake (social forces).

2. An economic system is interrelated with a political system.

3. In an autocracy voting procedures determine society’s will.

4. In a democracy a group of individuals decide what society’s desires are.

5. Every nation can produce enough goods and services to satisfy everybody’s wants.

6. Every economic system answers three basic questions: what, how and for whom.

7. There are three basic approaches to economic decisions.

Ex. 3. Answer the following questions.

1. How can economic systems be classified?

2. What are the three invisible forces which make economic system work?

3. What are the tree basic economic questions that every nation must answer?

4. What are three basic approaches to economic decisions based on?

5. What economic systems do you know?

6. How can you characterize the economy of Belarus?

Text 2

As you read the text, think what the best title for it is and explain your choice:

– market economy vs command economy;

– mixed economy;

– basic types of economic systems.

Economic systems are classified into four broad categories. These are traditional, command, market, and mixed economies. Each of these systems works well to some degree at different points in time and for different cultures, but some are often better for answering one of the basic economic questions, while other systems may answer other questions more successfully.

Traditional economy is an economic system using social customs to answer the basic economic questions.

Nowadays traditional economies are found primarily in the rural, non-industrial areas of the world. In such areas, there is no national economy. Instead, there are many small segmented economies, each centred around a family or tribal unit. Each unit produces most of its own goods and consumes what it produces. The basis economic questions of “what”, “how”, and “for whom” are answered directly by the people involved, and the answers are usually based on tradition.

In command economies, the basic economic questions are answered by government officials. Government leaders decide what goods and services will be produced, how they will be produced, and how they will be distributed. Individuals have little control or influence over the way the basic economic questions are answered. They are told what to produce, how to produce it, and what they will receive.

Command economies are often called planned economies, because the government engages in elaborate, detailed planning in an effort to produce and distribute goods and services in a way that is consistent with the wishes of government leaders. Command economies usually are also characterized by government ownership of the economy’s natural resources and capital goods.

A market economy is the opposite of a command economy. In a command economy, the government answers the basic economic questions. In a market economy, basic economic questions are answered by individual households and businesses through a system of freely operating markets. In market economies, natural resources and capital goods are usually privately owned. In such economies, buyers and sellers have a great deal of economic freedom, and they send signals to one another as they interact through the system. For example, by purchasing more of an item than usual, buyers send a signal to producers to increase production of that item. Similarly, by reducing their purchases of an item, buyers signal producers to reduce production of that item.

The American economy is predominantly a market economy. Other examples of predominantly market economies include the economies of Canada, Japan, and many of the countries of Western Europe.

In actual practice, there are no real economies in the world that rely solely on freely operating markets or on government decisions to answer basic economic questions. All major economies are mixed economies in the sense that some decisions are made through a system of freely operating, or free markets, by individual households and businesses, and some are made by the government. In mixed economies, a distinction is usually made between the private sector, in which decisions are made primarily by individual households and businesses, and the public sector, in which decisions are made by the government.

Mixed economy is an economic system that relies on a mixture of markets, government commands and tradition. This economic system is used in most countries. The United States are an example of this type of economy. Most decisions there are made by individuals and firms as they exchange goods, services, and resources in private markets. But some decisions are made through the political process of government.

Although several countries own most resources, especially land and large basic enterprises like steel plants, hospitals, and electric power plants, markets are allowed to play a role in certain economic activities, such as dining in restaurants, repairing shoes, selling garden produce, etc. Even China, at one time an extreme example of a command economy, has in recent years taken steps toward allowing some markets to operate.

In the 1990s there appeared a new term transition economy to describe the countries of Eastern Europe and the former Soviet Union. Transition economies face the task of moving from a centrally-planned system of resource allocation towards a more market-oriented approach.

Ex. 1. Find in the text definitions of:

– market economy;

– command economy;

– mixed economy.

Ex. 2. Which of the statements express the main ideas or supporting details?

1. Nowadays traditional economies are found primarily in the rural, non-industrial areas of the world. In such areas, there is no national economy.

2. In command economies, the basic economic questions are answered by government officials.

3. In a market economy, basic economic questions are answered by individual households and businesses through a system of freely operating markets.

4. The American economy is predominantly a market economy.

5. Mixed economy is an economic system that relies on a mixture of markets, government commands and tradition. This economic system is used in most countries.

Ex. 3. Speak on the basic kinds of economic systems, their advantages and disadvantages.

WRITING

Write an essay to define the type of economic system of Belarus. Give your arguments.