UNIT 12. ABOUT III. Inflation. 1 - d; 2 - b; 3 - a; 4 - c; 5 - e

INFLATION

V Test yourself. "Economic Indicators."

True

True

3. False. Not always. If consumption is high there may be more jobs in some sectors of the economy, such as retailing. However, if consumers are buying a lot of imported goods, there may be negative consequences and redundancies for domestic manufacturing.

4. False. It is most necessary during a downturn, but paying for it is more difficult for a government when income from taxation is down, and more difficult for private industry when income from sales is down.

5. False. The opposite: low taxation and low government spending.

True

I. False. It makes products more expensive, so less attractive, for importers.

True

9. False. This is Gross Domestic Product (GDP). GNP includes companies abroad.

10. False. This is a measure of how much an industry is working to its full potential. If a company is producing only half the products that it is physically capable of producing, its capacity utilization is only 50%. This means redundancies are possible.

II. False. No. Unemployment normally rises in this case.

12. True. Generally true, but in an age of high technology, some sectors can experience high growth without creating much employment.

True.

True.

15. False. The term is used to describe government spending, (where government is acting on behalf of the national economy), not company spending.

VI. Financial Indicators. 1 - FX reserves; 2 - Annual Percentage Rate; 3 -unemployment figures; 4 - trade balance; 5 - average monthly salary; 6 - annual inflation; 7 - industrial output; 8 - bank prime rate; 9 - Gross foreign debt; 10 - current account balance; 11 - discount rate; 12 - Gross Domestic Product.