To draw from — выводить из (проистекать из)

Rational expectations — рациональные ожидания

Account for the cycle — служат причиной, основой цикла

The effects of shocks — эффекты шоков

Make strenuous efforts — прилагать всемерные усилия

16.7.1.2. Read, translate the text “Elements of the Stabilization Policy of the Business Cycle”

and answer the question: What measures do governments take to stabilize the business cycle?

Elements o f the Stabilization Policy o f the Business Cycle

All governments are compelled to take measures to sustain the economic stability of the country,

Dampening, if possible, the phases of the business cycle. That is why we consider the government

Actions aimed at reducing fluctuations in national income as an element of the stabilization

Policy. Such policy — to expand demand when unemployment exists and reduce demand when

Inflation threatens became the norm after the Second World War in all Western economies, and

The low rates of unemployment prevailing during the 1950s coupled with high rates of economic

Growth were seen as a testimony to its success. In the 1960s, however, the UK faced difficulties

Sustaining a stabilization policy, with a stop-go cycle by which reflation occurred, the economy

would “overheat” and then a rapid deflation would be necessary. In the 1970s stagflation developed,