460775

1

ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ ВЫСШАЯ ШКОЛА ЭКОНОМИКИ

Пермский филиал

English for Economics

Под редакцией кандидата филологических наук С. О. Глушаковой, Marcia A. Rauch, M.A. (TESOL EFL

Fellow, sponsored by the Public Affairs Section,

U.S. State Department)

Рекомендовано Научно-методическим советом по иностранным языкам Министерства образования и

науки Российской Федерации в качестве учебного пособия для студентов, обучающихся по экономическим специальностям

Пермь 2006

2

ББК 81.2Англ-923

Авторы-составители:

Антинескул О.Л., Глушакова С.О., Георгиева Н.Ю.,

Егорова И.В., Королева О.Л., Костарева Е.В., Маслова С.М.,

Пахомова О.С., Пермякова Т.М., Рачева И.А., Садикова Т.Б., Ухова Т.В., Халезова Е.Н., Шевелева М.С.

English for Economics: Учебное пособие для студентов экономических

специальностей вузов / Под ред. Глушаковой С.О., Marcia A. Rauch, M.A.

– Пермь: Пермский филиал Государственного университета – Высшей

школы экономики, 2006. – 216 с.

ISBN 5-88187-286-X

Целью учебного пособия является обучение аспекту «English for Specific

Purposes» на первых двух курсах экономических вузов и факультетов. В задачи

обучения входит развитие навыков чтения и перевода текстов общеэкономиче-ской направленности. К текстам прилагаются задания, способствующие более

глубокому пониманию текстов и содержащихся в них экономических понятий

и терминов, закреплению терминологического и понятийного аппарата для

дальнейшей работы по ESP. Учебное пособие содержит также набор текстов,

объединенных общей тематической направленностью и позволяющих контро-лировать усвоение базового материала.

Печатается по решению Учебно-методического совета Пермского фи-

лиала Государственного университета – Высшей школы экономики.

Рецензенты:

доктор пед. наук Гейхман Л.К., зав. кафедрой прикладной лингвистики и информационных

технологий образования ПГТУ

доктор фил. наук Кузменкова Ю.Б., зав. кафедрой

английского языка факультета «Менеджмент» ГУ-ВШЭ

ISBN 5-88187-286-X Коллектив авторов, 2006

Пермский филиал ГУ-ВШЭ, 2006

Е 56

3

ПРЕДИСЛОВИЕ

Предлагаемое учебное пособие предназначено для студентов I-II кур-

сов специальностей «экономика» и «менеджмент» специализированного вуза и

является результатом опыта преподавания английского языка на факультетах

«Экономика» и «Менеджмент» Пермского филиала ГУ-ВШЭ. Пособие рассчи-

тано ориентировочно на 60 часов годовых аудиторных занятий. Целью данного пособия является развитие навыков чтения и перевода

текстов общеэкономической направленности, выработки навыков понимания

содержания иноязычного специального текста, которое дополняется формиро-

ванием умения грамматически и лексически пр авильно оформлять речевые

высказывания в процессе перевода, различных видов коммуникации и профес-сионального общения.

В рамках указанной цели учебное пособие делится на четыре части. В

первой части содержатся аутентичные тексты по экономике. Первым этапом

работы с текстами является их чтение и перевод. Второй этап включает вы-

полнение заданий, способствующих более глубокому пониманию текстов и содержащихся в них экономических понятий и терминов. Вторая часть может

использоваться при аудиторном контроле и/или самоконтроле студентов. Эта

часть предназначена для работы над пониманием англоязычного экономическо-

го текста и содержит тексты, аналогичные по тематике текстам первой части,

что позволяет контролировать усвоение базового материала. Тематическое единство и равновеликая сложность заданий составляют

внутренний принцип преемственности данного учебного пособия. Кроме того, в

третьем разделе задания по чтению составлены с учетом проверки умений студен-

тов находить искомую информацию, оперировать перифразом, сопоставлять дан-

ные, критически осмысливать и генерализировать содержание – все эти умения и навыки включены в Европейскую схему компетенций изучающего иностранный

язык. К вышеупомянутым разделам прилагается глоссарий экономических терми-

нов. Четвертый раздел учебного пособия представляет собой теоретическую часть

с широким диапазоном справочных и практических материалов по грамматиче-

ским вопросам перевода. Эта информация, включающая основные правила пер е-вода, необходима для начального этапа работы с пособием – работы по переводу

текстов. На первоначальном этапе студенту рекомендуется самостоятельно прочи-

тать и перевести текст, используя справочный материал пособия и словари. В

дальнейшем при аудиторной работе могут вноситься необходимые дополнитель-

ные коррективы. Преподаватель имеет возможность гибко выстраивать учебный процесс с учетом организационных моментов и конкретных условий обучения.

4

CONTENTS

Part I. Texts on Economics 6

1. The Science of Economics 6

2. Microeconomics and Microeconomics 9

3. The Future of Economics 13

4. Economic Systems: Two Important Distinctions 16

5. Labour 19

6. Unemployment 24

7. Supply and Demand 29

8. Wants and Utilities 35

9. Market 39

10. Markets and Monopolies 43

11. Money 47

12. Pricing 50

13. The Problem of Inflation 54

14. Banking 59

15. Central Banking: An Overview 60

16. Loans in the United Kingdom 63

17. Market Research 66

18. Marketing 73

19. Consumer Choice 77

Part II. Review Tests 82

TEST 1 (The Science of Economics, Macroeconomics and

Microeconomics, The Future of Economics, Economic

Systems: Two Important Distinctions) 82

TEST 2 (Labour, Unemployment) 85

TEST 3 (Wants and Utilities, Supply and Demand) 88

TEST 4 (Market, Markets and Monopolies) 90

TEST 5 (Money, Pricing, The Problem of Inflation) 93

TEST 6 (Banking, Central Banking, Loans in the UK) 96

TEST 7 (Market Research, Marketing, Consumer Choice) 98

Part III. Resource Tests 101

1. Alternative Market Structures 101

2. Free-Market Medicine in Russia. Is the Patient Recovering 103

3. Should Health Care Provision be Left to the Market? 108

5

4. Can the Market Provide Adequate Protection for

the Environment? 113

5. Strategic Trade Theory. An argument for protection? 116

6. Concentration Ratios. Measuring the degree of competition 119

7. Competitive Advantage and the Small Firm Sector 122

8. Growth Through Diversification 125

9. The Firm as a Legal Entity 127

10. Should Central Bank be Independent of Government? 131

11. Are the Days of Cash Numbered? EFTPOS versus ATMs 134

12. Regulation US-Style 137

13. The Political Business Cycle 140

14. Managers and Owners: High Salaries and Corporate Goals 143

15. Inequity and Poverty 145

16. Technology and Employment. Does Technological

Progress Create or Destroy Jobs? 148

17. Do People Volunteer to be Unemployed 151

Part IV. Fundamentals of Translation 154

Introduction 154

Lesson 1 159

Lesson 2 162

Lesson 3 167

Lesson 4 171

Lesson 5 175

Lesson 6 178

Lesson 7 181

Lesson 8 186

Lesson 9 189

Lesson 10 192

Lesson 11 196

Lesson 12 200

Glossary 205

Bibliography 214

6

Part I. Texts on Economics

THE SCIENCE OF ECONOMICS

Economics, like physics or meteorology, is a science to the extent that it

comprises a set of analytical principles that work with consistent regularity. Unlike

the so-called natural sciences, however, economics is a social science because it

studies human behavior rather than the disembodied workings of nature. Thus it is

appropriate to describe the subject, by analogy, as a set of tools. Just as a carpenter’s

tools may be used to build a house, a printer’s tools to make a book, so an economist

uses tools to build understanding – in this case, understanding of human behavior

and its consequences. Each social science makes the same claim, however. So what

distinguishes economics from its “sister” social sciences, such as sociology or psy-

chology? The unique feature of economics is that it studies human behavior within

the context of markets. A market is an institutional arrangement that fosters trade or

exchange. Modern economics, therefore, is the study of how markets work – of how

value is determined, and how inputs relate to each other in production, for exa mple.

But there is a larger set of questions involved: where did the market come from? Is it

the only way to organize economic activity? What are its alternatives? How might

they work?

The history of economic thought is replete with writers who sometimes ad-

dressed the former set of questions (i.e. how markets work) and sometimes the latter

(what are its alternatives). Occasionally, but rarely, a writer will address both. Marx

was such a writer. Most of the writers who achieved lasting fame as architects of the

discipline of economics stuck to the former set of questions, however. So dominant

was this tendency that it may be termed mainstream, or orthodox. By contrast, at-

tempts to explore the second set of questions are typically regarded as unorthodox,

or outside the mainstream. Surely the market place of ideas encourages variety.

Although others might present the subject differently, the important point

that should be derived from any historical survey of the subject is that economics is

a vibrant form of intellectual discourse, not a set body of principles.

7

Even in this new millennium, there is increasing evidence that economics con-

tinues to ferment. Even among mainstream economists, gnawing questions persist about

the nature, scope and method of economic inquiry, and the value and place of economics

among competing social sciences. Disagreement persists about the proper boundaries of

the subject, the role of the individual versus the group, the method of analysis to be em-

ployed, and the usefulness of the field itself.

TASKS

I. Give the English equivalents to:

Родственная дисциплина, факторы производства, обмен, экономич е-

ское исследование, в условиях рынка, обеспечивать торговлю, определять

стоимость, метод анализа, альтернатива, масштаб, основное направление.

II. Find words with similar meanings in the text:

Resources required for production, to promote commerce, the way people

act, academic discussion, economic research, to remain, a related science, the first of

two, to develop, a definite set of concepts, a dominant tendency.

III. Answer the following questions:

1. Why can economics be called a science?

2. What kind of science is economics? Why?

3. What other social sciences do you know?

4. What is the difference between economics and other social sciences?

5. What are the two sets of questions connected with modern economics?

6. What questions were addressed by the mainstream economists?

7. Can Marx be regarded as a mainstream economist?

8. What evidence is there that economics continues to develop?

9. What are the main areas of disagreement among contemporary economists?

IV. Are the following statements true or false? Correct the false ones:

1. To build understanding all economists use the same tools as carpenters and prin-

ters do.

2. Modern economics studies problems connected only with the market.

3. Economics is based on a set body of principles.

4. There are a lot of authors addressing both sets of questions mentioned in the text.

5. Most scientists agree on the methods and scope of economic r esearch.

V. Render the text in English:

Экономика, подобно родственным социальным наукам (например, со-

8

циологии), изучает поведение человека. Однако, в отличие от других дисциплин,

экономика анализирует поведение человека в условиях рынка. Рынок – это ин-

ститут, обеспечивающий торговлю и обмен.

Исследованием вопросов, связанных с рынком, занимались многие

ученые. Некоторые из них рассматривали проблемы функционир ования рынка

(данное направление получило название основного, или ортодоксального),

другие искали альтернативы рынку. В работах Карла Маркса затрагиваются

оба аспекта.

Экономика – постоянно развивающаяся наука: среди экономистов не

прекращается полемика по ряду ключевых моментов, таких как место эконо-

мики среди других социальных наук, методы экономического исследования и

др.

VI. Give a summary of the text.

9

MACRO ECONOMICS AND MICROECONOMICS

“Macro” is derived from the Greek word makros meaning “large”. Macroe-

conomics considers the whole economy from a national point of view. In studying

macroeconomics we turn our attention to the major forces acting and interacting

within the economy. Macroeconomics in a modern economy is largely a study of

government economics. Central and local governments play such a signif icant role in the formation and application of economic policies that it has become essential

for businessmen to appreciate the bases of government economic policy. In former

times, and in a very few countries perhaps still today, the free play of market forces

was left to decide the level of national income, and the rate of growth of the econo-

my. As a result of this policy of laissez-faire (“let the thing work itself out”) the economy tended to grow in spiral-like movements of business activity. Years of

rapid expansion, called “booms”, were followed by years of consolidation and slow-

er progress, called “slumps”. The economy was always growing, but it suffered from

cycles of activity spiraling upwards. The more exposed members of society, the

poor, and the immigrant, suffered great misery. A cry went out for more conscious

control of business activity, and eventually Keynesian economics showed the way

to achieve it.

Under this final group of studies we must consider:

a) The national income; what it is, how it may be increased, and how it may be fairly shared;

b) Business cycles; their causes and cures. This involves a study of deflation, in-

flation, and equilibrium levels of activity in the economy;

c) Problems associated with full employment, structural unemployment, and

regional under-employment; d) The public sector of the economy; its conflict with the private sector and

their reconciliation with one another;

e) Public finance;

f) The balance-of-payments problem presents itself mainly at macroecono m-

ics levels; g) The international implications of national policies and co-operation with

other countries.

Though macroeconomics has been defined as the study of the whole, or of the

aggregate, of a national economy, the central problem of it in the second half of the

twentieth century is the management of prosperity to maximize individual welfare. In fact, the whole economy stands or falls by what is achieved for the individual. If I am

not prosperous, what use is it to me that society as a whole is prosperous? What satis-

faction do I get, when I am poor, to know that others are rich? If I am unemployed,

high levels of general employment do me no good, and what use is the general security

if I am insecure?

*

The British economist, John Maynard Keynes, is one of the most influential

economists of the 20th century. In 1936 his book The General Theory of Em-

ployment, Interest, and Money transformed the economic thinking of that time.

10

The application of economic theory to the aggregate level is a process subject to a reasonably high degree of uncertainty. No one can be absolutely sure what the

outcome of a particular macroeconomic policy will be. There is though, in practical

terms, every reason for the study of macroeconomics. That a point cannot be made

100% clear ought not to detract from the achievement of a highly probable prediction.

Business itself is founded upon the principle of exploiting uninsurable risk. Those who operate businesses ought to appreciate what is likely to happen within the national and

international economy so that they can reduce the risk element in their own businesses.

Microeconomic analysis offers a detailed treatment of individual decisions

about particular commodities. For example, we might study why individual house-

holds prefer cars or bicycles and how producers decide whether to produce cars or bicycles. We can then aggregate the behavior of all households and all firms to dis-

cuss total car purchases and total car production. Within a market economy we can

discuss the market for cars. Comparing this with the market for bicycles, we may be

able to explain the relative price of cars and bicycles and the relative output of these

two goods. The sophisticated branch of microeconomics known as general equili-brium theory extends this approach to its logical conclusion. It studies simultaneous-

ly every market for every commodity. From this it is hoped that we can understand

the complete pattern of consumption, production, and exchange in the whole econ-

omy at a point in time.

Microeconomists tend to offer a detailed treatment of one aspect of econo m-ic behavior but ignore interactions with the rest of the economy in order to preserve

the simplicity of the analysis. A microeconomic analysis of miners’ wages would

emphasize the characteristics of miners and the ability of mine owners to pay. It

would largely neglect the chain of indirect effects to which a rise in miners’ wages

might give rise. When microeconomic analysis ignores such indirectly induced ef-fects it is said to be partial analysis.

TASKS

I. Answer the following questions:

1. What do macroeconomics and microeconomics consider?

2. Why does the study of modern macroeconomics involve governments? 3. Is there any interaction of “general” and “individual” in economics? Give your

reasons.

4. Despite a high degree of uncertainty macroeconomics is necessary to study. Do

you agree with the statement or not? Explain your point of view.

5. What is the interconnection of macroeconomics and microeconomics? 6. What is known as a “partial analysis”?

7. John Maynard Keynes said that: “The ideas of economists and political philosophers,

both when they are right and when they are wrong, are more powerful than is commonly

understood. Indeed the world is ruled by little else”. (What do you think Keynes meant by

this last statement? Do you agree or disagree? Give the reasons that would support your opinion.)

II. Fill in the blanks using the correct term: microeconomics, macroeco-

nomics, microeconomists or macroeconomists:

11

1. …is concerned with what actions governments can take to achieve desired ends. 2. …deliberately simplifies the individual building blocks of the analysis in order to

retain a manageable analysis of the complete interaction of the economy.

3. …worry about the breakdown of consumer goods into cars, bicycles, televisions,

and calculators.

4. …prefer to treat cars, bicycles, televisions, and calculators as a single bundle called “consumer goods”.

5. …ignore interactions of one aspect of economic behavior with the rest of the econ-

omy in order to preserve the simplicity of the analysis.

6. The conflict between public and private sectors exists mainly at … levels.

III. Consider which of the following matters might be classified as ma-croeconomic and which as microeconomic:

1. The size of aggregate output.

2. The assortment of commodities to which resources are devoted.

3. The distribution of the wealth created by the production of cars.

4. The rate of growth of output from one period to another for the economy as a whole.

IV. Match a line in A with a line in B:

A B

1. Aggregate A. the aggregate net product and the sole source of pay-

ment for all the agents of production

2. Business cycle B. the state of having prosperity

3. Boom C. a decrease in the supply of money usually produced

intentionally by a government in order to reduce demand

and check rising prices

4. Co-operation D. a period of increasing business activity

5. Deflation E. combining in bringing about the result

6. National income F. regularly recurring rhythms of business activity

7. Welfare G. bring or come together in a mass

V. Give a summary of the text.

VI. Render the text in English: В экономике существуют два основных раздела. В обоих разделах

применяются одни и те же основные принципы. Макроэкономика изучает

функционирование экономики в целом, сосредоточиваясь на таких вопросах,

как инфляция, безработица и рост совокупного выпу ска; почему наблюдаются

спады и подъемы; почему цены растут быстрее в одном периоде, чем в другом; почему общее число безработных в экономике иногда бывает высоким, а ино-

гда низким. Микроэкономика, наоборот, сосредоточена на изучении функцио-

нирования отдельных рынков и их взаимодействия, отдельных экономических

элементов – в основном домашних хозяйств и фирм. Упор делается на цены и

объемы выпуска конкретных товаров и услуг и на то, как в результате взаимо-

12

действия рынков формируется распределение ограниченных ресурсов по мил-лионам альтернативных направлений использования.

13

THE FUTURE OF ECONOMICS

The modern word “economics” has its origin in the Greek word oikonomos

meaning a steward. The two parts of this word – oikos, a house, and nomos, a man-

ager, show what economics is all about. How do we manage our house, what ac-

count of our stewardship can we render to our families, to the nation, to our descen-

dants ? From Socrates and Aristotle to J. M. Keynes, and Prof. J. K. Galbraith is a

span of 2,250 years. It takes us from a slave society, where all but a few were poor,

to an affluent democracy. Great changes of taste and fashion have occurred. Socrates

rose in the morning, put on his cloak and went out into the public square to engage

in conversation and discussion. His needs were few. Today we are obsessed with material wants, and struggle to the beach with a car loaded with deck chairs and

aqua-lungs, towing a yacht or a power boat behind us.

Economics is the study of mankind in the everyday business of providing

this enormous variety of goods and services. This book has attempted to describe the

major aspects of production, distribution and exchange. It is clearly only a beginning to the vast study of specialized aspects of the economy.

Certainly economics is a liberal study. Everyone needs to know some eco-

nomics, for it explains the framework of prosperity and a liberal life is only possible

when prosperity exists. Historically follow the flowering of art, literature and

science around the world, and you will find they flourished most where prosperity was to be found. Even today only where the economy is strong can men be spared

from production to think sublime thoughts, create beautiful objects, paint immortal

pictures, or compose imperishable melodies. The humblest worker in such societies

is ennobled by his labour, for it alone makes possible the culture of his times.

Within the last 30 years Thomas Carlyle's characterization of economics as

“the Dismal Science” has been invalidated. The new economics can handle the

cycles of depression which gave such distress in the early years of the capitalist

system. There are still problems to be solved, but reasonable affluence appears to be

within the reach of all men if the political and social framework can be adjusted to

suit the new situation. No longer do the greatest economists of their age stand aghast

at the enormity of the problems. Instead they look blithely and optimistically for-

ward to a future where the stockpiling of consumer goods ceases to be the major

preoccupation of men’s minds. When private wealth is assured, social well-being

becomes a possibility. We turn from investment in things to investment in man him-

self.

Part of that investment must include a reappraisal of our attitude to material

things. If we are to avoid the exhaustion of the earth’s resources, to preserve natural

beauty, to prevent the destruction of our traditional environment and protect what

little innocence is left we must examine what economic growth implies for world

society. Inevitably controls over economic activity seem bound to increase unless

14

individuals can show restraint. The fullest development of man requires a return to

Socratic contemplation of the state of “The Republic”.

TASKS


Экономический рост, распределение, потребительские товары, матер и-

альные потребности, благосостояние, спад, экономический цикл, блага, капи-

талистическая система, изобилие, услуги, инвестиции, экономическая дея-

тельность.

II. Find words and expressions that mean:

1. a man who is employed to look after a house and lands (old use); 2. a period of time;

3. a prosperous democratic society;

4. to spend much time in communication;

5. to move violently in a certain direction;

6. fast growth in any sphere of life; 7. deathless and timeless things;

8. to adapt to new conditions.

III. Match the terms with their definitions:

1. Goods A. the period that is characterized by high unemployment,

low prices, low business activity, etc.

2. Services B. the dividing up of something among a number of people

or places

3. Consumable

goods

C. the process of giving and receiving by common agreement

4. Production D. things in everyday use such as food, clothing, and personal

services, such as those of doctors, etc.

5. Distribution E. the work done by an employee, consultant or helper of any

kind

6. Exchange F. all personal movable property other than money

7. Depression G. the act of using money to obtain profits

8. Investment H. the act or process of manufacturing something

IV. Divide the text into 4 parts and formulate the main idea of each of

them.

V. Answer the following questions:

15

1. Where does the word “economics” come from?

2. How can the word oikonomos be interpreted?

3. How can you describe a slave society and the modern world in terms of prosperi-

ty? Give your own examples.

4. What is the aim of business?

5. What are the three components of business?

6. What is the connection between prosperity and a liberal life? Can you explain

your point of view?

7. How did Th. Carlyle characterize economics? Do you think Carlyle’s definition is

still applicable?

8. Why is it important for us to change our attitude to material things?


16

ECONOMIC SYSTEMS: TWO IMPORTANT DISTINCTIONS

Economic systems can be distinguished along many lines, but two are most

fundamental. The first is: How is economic activity coordinated – by the market or

by the plan?

The question does not, of course, demand an “either, or” answer. Rather the

choice extends over a wide range from pure laissez-faire to rigid central planning.

Society must decide which decisions it wants made in markets by individual bus i-

nesses and consumers acting in their own self-interests, and which decisions it wants

centrally planned so that businesses and consumers act more “in the national inter-

est”.

The second crucial distinction among economic systems concerns who owns

the means of production. Specifically, are they privately owned by individuals or

publicly owned by the state? Again, there is a wide range of choice and, to our

knowledge, there are no examples of nations at either the capitalist extreme where

all property is privately owned or at the socialist extreme where no private property

whatever is permitted. For example, while most industries are privately owned in the

United States, a few are not. Many business owners face restrictions on what they

can do with their capital. Automobile companies must comply with environmental

and safety regulations. Private communication and transportation companies may

have both their prices and conditions of service regulated by the government. Even

in China, where large enterprises are publicly owned, anyone who can afford it can

own a car, a bank account, or even a small business.

People tend to merge the two distinctions and think of capitalist economies

as those with both a great deal of privately owned property and heavy reliance on

free markets. By the same token, socialist economies typically are thought of as

highly planned, as were those in the former Soviet bloc.

However, while there is an undeniable association between private ownership

in a country and the degree to which it relies on markets, it is a mistake to regard these

two features as equivalent. Socialism can exist with markets and capitalism can exist

with rigid state planning. So, in thinking abstractly about a society’s choice among

economic systems, it is best to keep the two distinctions separate.

History holds examples of planned, capitalist economies-such as Germany

under Hitler, Italy under Mussolini, and Argentina under Juan Peron. To a much

lesser extent, Japan and the other “Asian tigers” have also planned their capitalist

economies-apparently with great success.

17

TASKS


Экономическая система, невмешательство, жесткое центральное пла-

нирование, средства производства, частная собственность, сталкиваться с ог-

раничениями, правила безопасности, предприятие, частное предприятие, об-

щественное предприятие.

II. Answer the following questions:

1. What are the two fundamental distinctions of economic system?

2. Give examples of the capitalist extreme or the socialist extreme?

3. Are all the industries in the US privately owned?

4. Can socialism exist with markets and can capitalism exist with rigid state plan-

ning?

III. Complete the following sentences:

1. The first fundamental distinction among economic systems is…

2. The second crucial distinction among economic systems is…

3. Capitalist economies are based on a great deal of…

4. Socialist economies are thought of as…

IV. Match a line in A with a line in B:

A B

1. Important 1. Account

2. Rigid 2. Business

3. Small 3. Regulations

4. National 4. Market

5. Publicly (privately) 5. Planning

6. Safety 6. Interest

7. Bank 7. Owned

8. Free 8. Distinction

18

V. Are the following statements true or false? Correct the false ones:

1. There are three fundamental distinctions among economic systems.

2. Most industries are privately owned in the US.

3. Business owners don’t face restrictions on what they can do.

4. In China anyone (who can afford it) can own a small business.

5. Socialism can exist with markets.

6. There are examples of nations who are at either a capitalist extreme or at a social-

ist extreme.

7. Capitalism can’t exist with rigid state planning.

VI. Render the text in English:

Все экономические системы имеют две фундаментальные отличительные

черты. Первая: как координируется экономическая система – рынком или пла-

нированием. Вторая: кто владеет средствами производства – государство или

частные лица. Смешение этих двух характеристик приводит к появлению та-

ких понятий, как абсолютный капитализм и абсолютный социализм. Однако

абсолютного капитализма не существует. Так, в капиталистическом США ча-

стные компании могут контролироваться и регулироваться государством, а в

социалистическом Китае каждый, кто может себе это позволить, имеет право

владеть личной машиной, банковским счетом и даже заниматься мелким биз-

несом. Социализм может сосуществовать с рынком, а капитализм может иметь

строгое государственное планирование, как Германия при Гитлере, Италия

при Муссолини, и в более мягкой форме Япония и другие «Азиатские тигры»

также планируют свою капиталистическую экономику.

VII. Gi ve a summary of the text.

19

LABOUR

“Labour” is the supply of human resources, both physical and mental, which

is available to engage in the production of goods and services. The supply of labour

depends on two things:

the total labour force available, i.e. the population less any sections of the popula-tion who do not work

the number of hours per week the population is prepared to work

The Working population. The groups who do not work consist of:

Young People. The number of young people available for work varies with

the education available. If education is largely a matter of parental instruction and the handing down of techniques from father to son, as in many peasant communities,

children will participate in production from an early age. If education is a matter of

specialist tuition by professional educators the labour supply will be correspondingly

reduced as pupils and students are withheld from the labour force during their

schooling. Retired Persons. The age of retirement affects the supply of labour. If, for

example, retirement at the age of 65 is normal, so that perfectly healthy and energet-

ic men and women retire compulsory at that age, the supply of labour is reduced.

Many people of retirement age today are quite capable of continuing in productive

employment.

The Hours Worked per Year. If the working week is reduced the supply of

labour falls, unless the resultant improvement in health enables more efficient labour

to take place in the shorter working week. Today reducing the 40-hour week to 35

hours almost certainly lowers the supply of labour. Holiday periods reduce the supply of labour. Some workers prefer extra income to shorter working hours, so

that “moonlighting” (doing one job by day and another in the evening) is quite

common. “Moonlighting” therefore increases the supply of labour available to en-

trepreneurs.

The Quality of Labour. More important than the actual supply of labour is the quality of labour. It is skilled, semi-skilled, or unskilled. Skilled labour is labour

which has either mastered a particular craft, like toolmaking or printing, or has been

professionally trained, like doctors, dentists, lawyers, and accountants. Semi-skilled

labour is in some way a misnomer, since the operatives who are described as se-

miskilled have in fact reached very high degrees of skill over a very limited range of activities. Such labour can be very quickly trained, in from 4 to 6 weeks at the most.

Unskilled labour, as its name implies, requires little specialized training.

Skilled labour tends to be more specific than semi-skilled or unskilled la-

bour. The idea of “specificity” is an important one in economics. If a factor of pro-

duction is specific it can be used in only one particular task: for instance, a dentist must be employed in dentistry if his true talents are to be used. If we take a dentist

and turn him into the fields to cut sugar cane we shall be wasting his talents. Of

course it may do the dentist a world of good to find out what a hard life the cane-

worker leads, but this is no substitute for the efficient use of his services in caring

for his patients’ teeth. Unfortunately, specialization can have some negative consequences. The most sig-

20

nificant drawback is the boredom and dissatisfaction many employees feel when they do the same job over and over. Monotony can be deadening. Bored employees may be absent from

work frequently, may not put much effort into their work, and may even sabotage the com-

pany. Because of these negative side effects, managers have recently begun to search for

alternatives to specialization in the design of jobs. The three most common antidotes to the

problems that job specialization can breed are job rotation, job enlargement, and job enrichment.

Job rotation is the systematic shifting of employees from one job to another.

For example, a worker may be assigned to a different job every week for a four-

week period and then return to the first job in the fifth week. The idea behind job

rotation is to provide a variety of jobs so that other workers will be less likely to get bored and dissatisfied. Companies that use job rotation include Ford, Xerox, the

Prudential Insurance Co. of America, and the US Nissan subsidiary.

In job enlargement, the worker is given more things to do within the same

job. For example, under job specialization, each worker on an assembly line might

connect three wires to the product as it moves down the line. After job enlargement, each worker might connect five wires. AT&T, IBM, and the Maytag Co. have all

experimented with job enlargement.

Job enrichment is perhaps the most advanced alternative to job specialization.

Whereas job rotation and job enlargement do not really change the routine and monoton-

ous nature of jobs, job enrichment does. It is, in essence, providing workers with both more tasks to do and more control over how they do their work. In particular, under job

enrichment many controls are removed from jobs and workers are given more authority.

Moreover, employees are frequently given new and challenging job assignments. By

blending more planning and decision making into jobs, job enrichment builds more depth

and complexity into jobs. These changes tend to increase the employee’s sense of respon-sibility and provide motivating opportunities for growth and advancement.

Factors affecting the efficiency of labour include:

1. The general education and background knowledge of the labour force. If

it has been born into the television era of an advanced society it will be knowledge-

able, adaptable, and sophisticated. If it has only recently left a peasant community it will be unsophisticated, superstitious, nervous, and slow to adapt itself.

2. The general health of labour force. This may be improved by diet, and ade-

quate welfare services of all sorts. A developing nation’s progress may be slow be-

cause a fully effective labour force depends on raising the standard of living. This is a

slow process and depends on an efficient labour force. We therefore have a vicious circle, which spirals slowly upwards, but at an increasing pace as the years go by.

3. The incentives offered to labour. Where there are few incentives labour

will be less efficient. Where the incentives are great labour will apply itself more

assiduously.

4. The availability of other factors of high quality. This is the commonest method of increasing the efficiency of labour. If it is backed by good quality land,

labour itself will be more efficient. If it is backed by well chosen tools and adequate

power supplies, even a poor labour force will be highly productive.

21

TASKS


Людские ресурсы, общая рабочая сила, предложение труда, пенсио н-

ный возраст, обязательный выход на пенсию, дополнительный доход, работа

по совместительству, квалифицированный труд, неквалифицированный труд,

полуквалифицированный труд, социальные услуги, повышать уровень жизни, стимул, повышать эффективность труда, высокопродуктивный.

II. Match the terms with their definitions:

1. Labour A. an individual’s working career at a certain age with

the expectation that he or she will no longer undertake

paid employment.

2. Job enlargement B. having a second job “on the side” during the normal

working hours of his or her main employment.

3. Retirement C. the monetary and non-monetary elements which together make up a person’s lifestyle.

4. Moon-lighting D. any form of pay system which rewards an employee

or group of workers in such a way as to induce in-

creased effort of production.

5. Standard of living E. the systematic shifting of employees from one job to

another

6. Incentive F. any competence possessed by someone. In an em-

ployment context it often refers to a combination of

knowledge and manual dexterity amongst manual

workers.

7. Skill G. one of the three factors of production. The contribu-

tion to productive activity made by the workforce both

by hand and mentally.

H. giving a worker more things to do within the same job.


1. What is labour?

2. What does the supply of labour depend on? 3. What are the main population groups “who do not work”?

4. How does education influence the number of young people available for work?

5. In what way does the age of retirement affect the supply of labour?

6. What are the results of reducing of the working week?

22

7. What is “moonlighting”? How does it affect the supply of labour? 8. What is more important than the actual supply of labour?

9. What is skilled, semi-skilled, unskilled labour?

10. How do you understand the idea of “specificity”? Give some examples.

11. Enumerate the major factors affecting the efficiency of labour. Speak on each of

them. 12. Think of possible disadvantages of job rotation, enlargement and enrichment.


1. Labour is the supply of physical human resources which is available to engage in

the production process.

2. The number of young people available for work depends on the education availa-ble.

3. Pupils and students are usually withheld from the labour force if education is a

matter of parental instruction.

4. Moonlighting decreases the supply of labour available to entrepreneurs.

5. The quality of labour is as important as the actual supply of labour. 6. Where there are more great incentives, labour will be more efficient.

7. If labour is supported with well-chosen tools and adequate power supplies, it will

be highly productive.


Человеческий капитал включает врожденные способности и талант, а также образование и приобретенную квалификацию. Человеческий капитал соз-

дается тогда, когда человек инвестирует в самого себя. Инвестиции в человече-

ский капитал со временем окупаются, давая отдачу в виде более высокой зара-

ботной платы или способности выполнять работу, приносящую большее удовле-

творение. Студенты имеют возможность производить огромные инвестиции в образование, а наниматели могут платить образованным людям больше. Высшее

образование не увеличивает производительность работника, однако оно свиде-

тельствует о том, что работник обладает качествами, полезными для фирмы.

Образование увеличивает доходы, и поэтому инвестиции, вложенные в образо-

вание, окупаются. Однако время, проведенное на работе, также приносит свои плоды. Опытный работник гораздо ценнее для своей фирмы, чем новичок. Ра-

ботники, имеющие некоторый опыт, являются более производительными, чем

неквалифицированные; соответственно с приобретаемым опытом растет и опла-

та.

23

UNEMPLOYMENT

Not everyone wants a job. Those people who do are called the labor force.

The labor force comprises all those people holding a job or registered as being will-

ing and available for work.

The participation rate is the percentage of the population of working age

who declare themselves to be in the labor force. The postwar growth of the labor

force has been caused less by an increase in the population of working age than by

an increase in participation rates, most notably by married women. The unemploy-

ment rate is the percentage of the labor force without a job but registered as being

willing and available for work.

Of course, some people without a job are really looking for work but have

not bothered to register as unemployed. These people will not be included in the

official statistics for the registered labor force, nor will they appear as registered

unemployed. Yet from an economic viewpoint, such people are unemployed. This is

an important phenomenon. Economists used to classify unemployment as frictional,

structural, demand-deficient, or classical.

Frictional Unemployment. This is the irreducible minimum level of unem-

ployment in a dynamic society. It includes people whose physical or mental handi-

caps make them almost unemployable, but it also includes the people spending short

spells in unemployment as they move between jobs in an economy where both the

labor force and the jobs on offer are continually changing.

Structural Unemployment. In the longer run the pattern of demand and

production is always changing. In recent decades industries such as textiles and

heavy engineering have been declining in the UK. Structural unemployment refers

to unemployment arising because there is a mismatch between skills and job oppor-

tunities when the pattern of demand and production changes. For example, a skilled

welder may have worked for 25 years in shipbuilding but is made redundant at 50

when the industry declines in the face of foreign competition. That worker may have

to retrain in a new skill which is more in demand in today’s economy. But firms

may be reluctant to take on and train older workers. Such workers become the vic-

tims of structural unemployment.

24

Demand-deficient Unemployment. This refers to Keynesian unemploy-ment, when aggregate demand falls and wages and prices have not yet adjusted to

restore full employment. Aggregate demand is deficient because it is lower than full-

employment aggregate demand. Until wages and prices have adjusted to their new

long-run equilibrium level, a fall in aggregate demand will lead to lower output and

employment. Some workers will want to work at the going real wage rate but will be unable to find jobs. Only in the longer run will wages and prices fall enough to boost

the real money supply and lower interest rates to the extent required to restore ag-

gregate demand to its full-employment level, and only then will demand-deficient

unemployment be eliminated.

Classical Unemployment. This describes the unemployment created when the wage is deliberately maintained above the level at which the labor supply and labor demand

schedules intersect. It can be caused either by the exercise of trade union power or by mini-

mum wage legislation which enforces a wage in excess of the equilibrium wage rate.

The modern analysis of unemployment takes the same types of unemploy-

ment but classifies them rather differently in order to highlight the behavioral impli-cations and consequences for government policy. Modern analysis stresses the dif-

ference between voluntary and involuntary unemployment.

The natural rate of unemployment is the rate of unemployment when the la-

bor market is in equilibrium. This unemployment is entirely voluntary. A worker is

involuntarily unemployed if he or she would accept a job offer at the going wage rate. So, frictional, structural and classical types are voluntary unemployment and

demand-deficient is involuntary unemployment.

TASKS


Рабочая сила, процент рабочих, временная безработица, структурная безработица, классическая безработица, безработица вследствие снижения

совокупного спроса, добровольная безработица, выну жденная безработица,

структура спроса производства, совокупный спрос, полная занятость, уровень

полной занятости, денежная масса, ставка реальной заработной платы, ставка

равновесной заработной платы, естественная норма безработицы.


1. Unemployment A. the proportion of a country’s total population

which makes up the country’s labour force.

2. Unemployment rate B. a work task or series of work tasks to be per-

formed in order to produce a good or a service.

3. Labour force C. the pay made to an employee for the use of his or

her labour as a factor of production. It is usually

paid on a weekly basis and it will depend on the

hourly wage rate and the number of hours which

constitute the basic working week.

25

4. Participation rate D. the money payment made to a worker for each

“unit” of his or her labour input, usually measured

either on an hourly time basis, or for each unit of

output produced.

5. Wage rate E. unemployment which is due to workers refusing

to take paid jobs because they consider that the wage

rate for such jobs are too law, particularly in relation

to the employment and/or other social security bene-

fits they are currently receiving.

6. Natural rate of

unemployment

F. the non-utilization of labour resources, as a result

of which the actual output of the economy is below

its potential gross national product.

7. Wage G. the total number of workers available for em-

ployment in a country. It comprises those people

currently working as employees, the self-employed

and people currently unemployed.

8. Job H. the general rate of unemployment which is con-

sistent with a stable rate of inflation.

9. Voluntary unemployment

I. unemployment which is due to workers being unable to find paid jobs even though they are pre-

pared to work at current wage rates because there

are insufficient jobs available due to recession, or

because they don’t have the necessary skills to per-

form available work.

10. Involuntary

unemployment

J. the number of unemployed workers expressed as a

percentage of a country’s labour force.


1. What is labour force?

2. What is unemployment rate?

3. Who is considered to be unemployed? 4. How do economists classify unemployment?

5. How is functional unemployment characterized?

6. Who becomes a victim of structural unemployment?

7. What does demand-deficient unemployment refer to?

8. How is classical unemployment described?


1. The labour force only comprises those people holding a job.

26

2. People who haven’t bothered to register as unemployed will not be included in the official statistics for the registered labour force.

3. Frictional unemployment refers to unemployment arising because there is a mis-

match between skills and job opportunities when the pattern of demand and produc-

tion changes.

4. Demand-deficient unemployment happens when aggregate demand falls and wag-es and prices have not yet adjusted to restore full employment.

5. Classical unemployment arises when the wage is deliberately maintained below

the level at which the labour supply and labour demand schedules intersect.

6. The natural rate of unemployment is the rate of unemployment when the labour

market is in disequilibrium. 7. Voluntary unemployment only includes classical unemployment.


Чтобы измерить безработицу, необходимо знать, сколько людей хотят

иметь работу при текущих ставках заработной платы, но в действительности

не имеют ее.

Человек, который не работал предыдущую неделю, но был болен, на-

ходился в отпуске, бастовал или не мог работать из-за плохой погоды, счита-

ется занятым. Человек, ожидающий разрешения возвр атиться на работу или

приступить к работе на новом месте в течение следующих 30 дней, но не рабо-

тавший предыдущую неделю, считается безработным.

Существуют три способа потерять работу и стать безработным. Первый

– если человека увольняют, поскольку фирма, в которой он работает, закрыва-

ется. Второй случай, когда человек временно отстр анен от работы. Например,

в автомобильной промышленности, когда спрос на автомобили резко понижа-

ется, фирма заявляет рабочим, что работы нет, но она надеется нанять их вновь

в случае, если спрос возрастет. Третий способ – добровольно оставить работу

и стать безработным по собственному желанию.

Безработица растет во время спадов и уменьшается в периоды подъемов

и роста экономической активности. Каждый раз, когда наступает спад, доля без-

работных растет. Как только начинается подъем и расширяется экономическая

активность, доля безработных снижается.

27

SUPPLY AND DEMAND

Demand. If production is undertaken in order to supply the “wants” of man-

kind demand must be the most basic idea in economics. Every individual demands

goods and services. When all the ind ividual demands are put together the resulting

composite demand is what the industry must supply if people are to achieve satisfac-

tion. In defining demand economists cannot equate “demand” with “want”, because

an industry cannot be expected to supply goods and services without payment. In

attempting to discover the demand for a particular commodity we only consider

demand that is backed by purchasing power. Man’s wants are unlimited, but his

demand for a particular item is very often limited if the price he must pay is too

high. The demand for goods or services is therefore that quantity consumers will be

prepared to buy at a given price, in a given period of time.

Demand is not fixed, but varies with changing conditions. The demand for

silk stockings has been completely altered by the invention of nylon fiber, and the

demand for bicycles in advanced nations has been greatly reduced by the develop-

ment of motor vehicles. The chief factors affecting demand may be divided into the

factors affecting the individual consumer or family of consumers and those factors

affecting the total demand of the whole market.

Factors Affecting the Demand of Households.

a) The Tastes of the Households. Every family is different, and even me m-

bers of the same family have different preferences. We may demand goods because

they satisfy innate wants; or because they are fashionable; or because we have been

convinced by advertising that they are desirable. The demand for all such goods will

rise, and the demand for goods which are not to our taste or less well promoted will

decline.

b) The Income of the Household. Family income is always decisive as to

whether a commodity is demanded or not. Many families own a car, some own two

cars, and many are resigned to the fact that they will never be in the car-buying in-

come range.

c) The Necessity of the Commodity, and its Alternatives if Any. Some goods are

demanded by everyone because they are necessities. Some goods become necessities

because they are habit-forming, like tobacco and alcohol. Where a commodity has alter-

natives it is not a necessity, but the alternative must be in the same price range.

d) The Price of Other Goods. If the price of a commodity is high compared

with the price of other goods the demand for it will be relatively weak. If the goods

are close substitutes for one another (for instance, motor cycles and motor scooters),

28

the price of one will be seriously affected by a lower price of its competitor.

Factors Affecting the Total Market Demand.

a) The Size and Structure of the Population.

If there are many people to be fed, clothed, and housed demand will tend to

be strong, especially if the population is able to back its “wants” with purchasing

power. The structure of the population will influence demand for particular items. A

bulge in the birthrate for any reason will alter demand as the children born develop

through to maturity. In the early years the demand for children’s clothes, toys, etc.,

will be increased. Gradually the increased demand will change to school books and

games equipment, later to cosmetics and motor cars. Finally, an increased demand

for wheelchairs and bearing aids may result.

b) The Distribution of Income among the Population.

Some societies are so organized that classes of rich and poor persons appear.

Others are organized to achieve greater equality of wealth. A progressive system of

taxation, which taxes the rich to help the poor, is often used to achieve greater equal-

ity. Market demand will be stronger in egalitarian societies than in those where ob-

vious inequalities exist, for the mass of the people there can back their “wants” with

purchasing power.

The Consumer’s Scale of Preferences.

The result of these conditions often called the determinants of demand, is a

scale of preferences for each customer. High on each consumer’s scale of prefe-

rences come the things he needs most or likes best. Lower on the scale come things

he will buy if income permits, once all the more satisfying items have been pur-

chased. The scale changes with the pressure of daily events. We all know of things

we have been meaning to buy for years, but somehow their purchase eludes us be-

cause more pressing requirements prevent them reaching the top of our scale of pre-

ferences. Every consumer subconsciously has a personal demand schedule for each

class of goods, which reflects his individual attitudes and inclinations. This schedule

takes for granted that the only thing that has changed to alter the demand is the price

of the commodity. All other conditions of demand, like family income, or personal

taste, or fashion, have not changed. The phrase “ceteris paribus” (“other things being

equal”) is often used in economics to describe a situation where only one aspect of

situation is deemed to be changed.

Supply. The responses that entrepreneurs make to the demands of consum-

ers bring on to the market a wide variety of goods and services.

The total quantity of a good, or service, made available to the general public

29

as a result of the business decisions of the entrepreneurs in the industry is called the

supply of that good or service.

Factors Affecting Supply.

a) The Price of the Commodity.

The price of the commodity affects the prospect of profitability of an enter-

prise. Every entrepreneur is assumed in economics to be engaged in production in

order to achieve maximum profit. He must certainly achieve a normal return on

capital invested, or there is no incentive at all to stay in the industry. Good prospects

of profitability will encourage him to come in and produce the supplies required. He

will expand the production of his enterprise until output reaches such a level that

profit is at a maximum.

b) Conditions of Supply.

They are the costs of production, the state of technological development (the

more advanced the technology, the greater the flood of supplies that pours on to the

market), natural influences (hurricanes, tornadoes, hail, frost, and drought disrupt

output) and abnormal political influences (war, strikes, civil unrest, government

interference prevent the normal activities of production).

Thus, we must note that just as want is the basis of demand, the prospect of

profitability is the basis of supply; and just as consumers vary in their demand for

goods, suppliers vary in their ability to supply. This is shown in the Laws of Supply

and Demand summarized as follows: 1. When the price of a commodity falls the quantity that is demanded will be in-

creased. 2. When the price of a commodity rises the quantity that is supplied will be in-

creased.

3. Prices will adjust to that level which equates demand and supply.

4. All increased supply lowers market price and causes an extension of demand.

5. A decreased supply raises market price and causes a reduction of demand. 6. A decreased demand lowers price and also brings about a reduction of supply.

7. An increased demand raises price and also brings about an extension of supply.

TASKS


Спрос и предложение, покупательная способность, товары и услуги,

предприниматель, прибыльность (рентабельность) предприятия, вложенный

капитал, расширять производство, поставщики.

II. Give one word from the text which matches the following definition:

A thing used instead of something else; things that are desired; any article

30

that can be bought and sold; a person who buys goods; a person who buys goods that

he will use himself; the amount of a particular good or service that will be bought by

consumers at a given price; all the money coming in to an individual or a business

firm.

III. Explain in your own words:

1. The population is able to back its “wants” with purchasing power.

2. Many families will never be in the car-buying income range.

3. Every entrepreneur must achieve a normal return on capital invested.

4. The great flood of supplies pours onto the market.

IV. Answer the following questions:

1. What is the demand for a particular good or service? Distinguish “demand” from

“want”.

2. What is the supply of particular goods or services? What motivates an entrepre-

neur to supply a commodity or service?

3. What are the determinants of demand and supply?

4. What is the basis of a scale of preferences?

5. What are the seven laws of demand and supply?


1. Man’s wants and demands are unlimited.

2. Price is decided by the interaction of demand and supply.

3. Demand is set.

4. If there is an alternative to a commodity, then it is no longer a necessity.

5. The price of a substitute cannot seriously affect the price of a good.

6. A progressive system of taxation strengthens the purchasing power of consumers.

7. The least preferred items are put on the top of the scale of preferences.

8. Even when a good is free, the amount wanted will be limited.

9. Supply describes the behavior of buyers.

VI. Explain what will happen to the demand for apples if:

1. Workers get a 10% pay raise.

2. The price for oranges and pears has fallen.

3. A health report is published saying that apples should be part of everyone’s diet.

VII. Explain what will happen to the supply of apples if:

1. Workers on farms growing apples get a 10% pay raise.

2. A new type of tree is introduced which produces 50% more apples per acre of

31

apple orchard.

3. The price of pears doubles and stays very high over a number of years.

4. The apple crop is ruined by bad weather.

VIII. Here are some of the laws of supply and demand. Read them very

carefully and correct the mistakes where necessary:

1. When the price of a commodity falls the quantity that is demanded will also fall.

2. When the price of a commodity rises the quantity that is supplied will increase.

3. A decreased supply lowers market price.

4. An increased demand raises price and brings about an extension of supply.

IX. Fill in the gaps with the words below:

Free, supply, quantity, fall, purchase, produce, supply, price, rise, quantity

Demand is not a particular __1__ such as six bars of chocolate, but rather a

full description of the __2__ of chocolate the buyer would __3__ at every __4__

which might be charged. Even when chocolate is __5__ only a limited amount will

be wanted. As the price of chocolate __6__ the quantity demanded __7__ other

things being equal. Chocolate cannot be __8__ for nothing. Nobody would wish to

__9__ if they received a zero price. Thus, __10__ is the quantity of a good sellers

wish to sell at each conceivable price.

X. Render the text in English:

Спрос на некий товар – это количество товара, которое покупатели же-

лают приобрести за некоторый период. Спрос зависит от цены данного товара

и прочих факторов, включающих цены других товаров, в особенности альтер-

нативных товаров, а также доходы покупателей и их вкусы. Предложение то-

вара – это количество товара, которое продавцы желают продать за некоторый

период. Объем предложения зависит от цены товара и других факторов, преж-

де всего от цен используемых в производстве ресурсов и имеющихся в распо-

ряжении продавцов производственных технологий. Цена на конечный продукт

должна быть достаточно высокой, чтобы покрывать расходы и давать пр и-

быль. Если не будет перспективы прибыли, никто не начнет производство. Как

видим, цена играет ведущую роль в модели «спрос – предложение». Как пра-

вило, при прочих равных условиях объем спроса на товар увеличивается, ко-

гда цена товара падает, и уменьшается, когда цена растет.

32

WANTS AND UTILITIES

The study of economics begins with understanding human wants. By “want”

the economist means the endless succession of material “wants” which are displayed

by all living things. Everyone needs air, food, and water to support life. If we live in

some climates we need clothing and shelter from the weather. Everyone needs a

home to call his own; some territory which is his, by right.

Even when we have these basic “needs”, other more advanced “wants”

present themselves. We want comfortable homes, entertainment, education, and

transport. As the things we want increase in variety and become more and more

sophisticated, the economy becomes more intricate too, until thousands of men are

cooperating in different countries to produce the raw materials, designs, and specia-

lized machinery which are necessary for a single thing we “want” – such as an aero-

plane or a motor vehicle.

Everyone has an individual scale of preferences, a ladder-like arrangements

of things in one’s own mind with the most preferred items towards the top of the

scale. Some things never climb up the scale higher than the first few rungs, for they

are constantly leapfrogged by other unexpected items. Every father of a family can

think of things, often quite essential things, which he has been meaning to buy for

years, but repeatedly has to reject for other items which the children need if they are

to make the progress he wishes them to make.

What is it that decides the position of an item on a consumer’s scale of pre-

ferences? The answer is that preferences are based upon the consumers’ view of

utility of a particular good.

Utility is the ability to satisfy wants. The basic needs of mankind are called

wants, the means of satisfying these wants are called utilities. The purpose of an

economy is to create utilities which will satisfy mankind’s wants.

Total utility is the total satisfaction we derive from the possession of a com-

modity. Usually total utility will continue to rise as we acquire more and more of the

same goods. This would certainly be true, for example, of a collector’s acquisition of

antiques. It might not be quite so true of a smoker’s purchases of cigarettes. There

might come a point with many commodities where total utility had reached a maxi-

mum and a further supply would be a positive nuisance.

Marginal utility is the utility of one unit of a good or service. In fact we have

to value it in imaginary “units of satisfaction”. Take the housewife buying bread.

Her usual daily supply is two loaves, and each of these loaves will have great utility

but the first loaf more than the second.

33

Diminishing marginal utility sets in as soon as the first loaf is bought; each

extra loaf is valued less and less. Another loaf may have negative utility and be a

cause of dissatisfaction. We may say then that diminishing marginal utility sets in

very soon after we have purchased a normal supply. How does the housewife choose

a balanced supply of goods and services? By comparing in her mind the marginal

utilities of a further unit of various goods and services, one with another, and choos-

ing the ones which will maximize her family’s satisfaction.

The production of utilities. Satisfaction can be achieved in two ways: by the

enjoyment of goods or the enjoyment of services. Goods are tangible items which

either satisfy the basic requirements of human life or make that life fuller and richer.

Common examples are foods, clothing, housing, furniture, books, television sets,

and motor cars. The actual point of satisfaction occurs when we consume the food,

or beverage, wear the clothing, make use of the furniture, and so on, so that the

name consumer goods is usually applied to these tangible utilities. There is another

class of goods, called producer goods. These are goods which do not yield personal

satisfaction to consumers but are part of the capital assets of production. A drilling

machine, or an assembly line in a factory, are examples of producer goods.

Services are intangible “utilities”, which satisfy our needs by personal atten-

tion. The dentist who extracts a painful tooth; the surgeon who sets a broken leg; the

television personality who brightens an otherwise dull evening; or the hairdresser

who prepares us for a social occasion are examples of people offering personal ser-

vice. As with goods, there is a class of services which is not directly personal in this

way, but forms part of the productive organization. Such services are commercial

services; trade, banking, transport, insurance, and communications are the chief

examples.

The whole purpose of production, which makes use of producer goods and

commercial services in the course of its activities, is to create utilities by providing

an endless flow of consumer goods and personal services. In order to achieve this

production of utilities the resources available to mankind must be mobilized. These

resources are called the factors of production.

TASKS


1. What does an economist mean by “want”? Is there a difference between “need”

and “want”?

2. What is a scale of preferences?

3. What is the basis of a scale of preferences?

34

4. What is utility?

5. What is the purpose of economy according to the concept of utility?

6. What are the differences between marginal and total utility?

7. How do you choose “your” supply of goods and services?

8. What are producer goods?

9. What are tangible goods?

10. What are the factors of production?


1. Utility A. goods that satisfy personal need rather than those re-

quired for the production of other goods

2. Consumer goods B. total satisfaction derived from the possession of a

commodity

3. Wants C. the ability to satisfy wants

4. Total utility D. the utility of one unit of a commodity

5. Marginal utility E. the basic needs of people

III. Translate the words and word combinations: Потребительская корзина, удовлетворять потребности, средства, по-

учать, иерархия потребностей, предельная полезность, общая полезность,

уменьшающаяся предельная полезность.


1. If total utility reaches a maximum, a further supply is a positive nuisance.

2. A drilling machine, or an assembly line in a factory are examples of tangible

items.

3. Total utility rises while marginal utility always falls.

4. Consumers base their choice of a supply of goods on the total utility they can

obtain.

5. Utility is a subjective concept.

V. Render in the text English:

В экономической теории под полезностью понимается удовлетворение,

получаемое потребителем от товаров и услуг, которые он покупает. Представ-

ление потребителя о полезности того или иного товара определяет его поло-

жение на индивидуальной шкале предпочтений. Поскольку ни один потреби-

тель не может себе позволить все, что ему хочется, то он оказывается перед

лицом выбора благ, которые он может позволить себе приобрести. Так вы-

страивается индивидуальная иерархия потребностей.

35

Совокупная полезность – это полное удовлетворение, которое мы по-

лучаем от обладания товаром. Предельная полезность представляет собой

прирост совокупной полезности в результате потребления дополнительной

единицы данного блага. Как правило, предельная полезность является убы-

вающей, что означает, что предельная полезность тем меньше, чем большим

количеством блага потребитель уже обладает.


36

MARKET

A market is where buyers and sellers transact business for the exchange of

particular goods and services and where the p rices for these goods and services tend

toward equality. In order for a market to “clear” or function properly, the quantity of

goods and services demanded and supplied must be equal at some given price. At

any particular point in time, markets can be in “equilibrium” or “disequilibrium”

depending on whether or not aggregate supply equals aggregate demand at the pre-

vailing price. Markets may differ in scope and do not necessarily require buyers and

sellers to meet or communicate directly with each other. Business may be transacted

through the use of intermediaries as well.

There are two fundamental dimensions of market definition: (i) the product

market, where products group together, and (ii) the geographic market, where geo-

graphic areas group together. Market definition takes into account both the demand

and supply considerations. On the demand side, products must be substitutable from

the buyer’s point of view. On the supply side, sellers must be included who produce

or could easily switch production to the relevant product or close substitutes. Market

definition generally includes actual and potential sellers, that is, firms that can rapid-

ly alter their production processes to supply substitute products if the price so war-

rants. The rationale for this is that these firms will trend to dampen or curb the abili-

ty of firms in the market to raise price above the competitive level.

The location of buyers and sellers will determine whether the geographic

market is local, regional, national or international. The exchange of goods and ser-

vices in the world, or global, market is known as international trade. There are three

main benefits to be gained from this type of exchange.

First, international trade makes scarce goods available to nations that need or

desire them. When a nation lacks the resources needed to produce goods domestical-

ly, it may import them from another country. For example, Saudi Arabia imports

automobiles; the United States – bananas; and Japan – oil.

37

Second, international trade allows a nation to specialize in the production of

those goods for which it is particularly suited. This often results in increased output,

decreased costs and a higher national standard of living. Natural, human and tech-

nical resources help determine which products a nation will specialize in. Saudi

Arabia is able to specialize in petroleum because it has the necessary natural re-

source; Japan is able to specialize in the production of televisions because it has the

human resources required to assemble the numerous component s by hand; and the

United States is able to specialize in the computer industry because it has the tech-

nical expertise necessary for design and production.

There are two economic principles that help explain how and when special i-

zation is advantageous. According to the theory of absolute advantage, a nation

ought to specialize in the goods that it can produce more cheaply than its compet i-

tors or in the goods that no other nation is able to produce. According to the theory

of comparative advantage, a nation ought to concentrate on the products that it can

produce most efficiently and profitably. For example, a nation might produce both

grain and wine cheaply, but it specializes in the one which will be more profitable.

The third benefit of international trade is its political effects: nations that

trade together develop common interests which may help them overcome political

differences. Economic cooperation has been the foundation for many political al-

liances, such as the EC (Common Market) founded in 1957.

TASKS

I. Match the terms with their definitions:

1. Equilibrium A. an individual acting as a link between persons or

companies

2. Aggregate supply B. prices now current in the market

3. Aggregate demand C. a state of balance when all the economic forces

present in a situation have an equal influence and

there is no tendency to change

38

4. Prevailing price D. the total amount of goods and services resulting

from adding together all the spending power of

people in the complete economy of a country

5. Intermediary E. the amount of an economic good that will be

offered for sale in the market at a certain price or

time

6. Substitute F. the proportion of the total demand (for a product)

that is supplied by a particular manufacturer

7. Market share G. a thing that replaces or can be used in place of

something

II. Answer the following questions:

1. What is a market?

2. When does a market function properly?

3. What are the key points of market definition?

4. How do markets differ in scope?

5. What benefits can be gained from international trade?

6. Why is specialization advantageous?

7. What political changes can economic cooperation lead to?

8. How can we balance market growth and development with conservation of natural

resources and protection of the environment?

III. Are the following statements true or false? Correct the false ones:

1. A market is where sellers raise or fix prices and reduce output in order to increase

profits.

2. A market functions properly if the quantity of goods and services demanded and

supplied is equal at some given price.

3. When a market is in disequilibrium, aggregate supply equals aggregate demand at

the prevailing price.

4. Markets are all similar in scope. There are only local markets, where buyers and

sellers must meet and communicate directly with each other.

5. To define a market, all you need is to identify the number of companies and prod-

ucts available in the market.

6. Market definition takes into account supply and demand.

7. In defining a market, potential sellers are not considered.

8. Specialization brings about a rise in both output and costs.

39

9. According to the theory of comparative advantage, a nation should focus on the goods

that it can produce more cheaply than its competitors.

10. Economic cooperation is the best way to solve political problems.

IV. Render the following sentences in English:

Рынок – это механизм, обеспечивающий осуществление обменных операций

между продавцом и покупателем.

Для нормального функционирования рынка необходимо состояние равнове-

сия, когда совокупный спрос равен совокупному предложению.

В определении рынка учитываются два аспекта: продукция и географиче-

ская территория, на которой она реализуется.

Если фирма является единственным продавцом того или иного вида пр о-

дукции, она может поднять цены с целью максимизации пр ибыли.


40

MARKETS AND MONOPOLIES

A monopoly is a situation where there is a single seller in the market. In

conventional economic analysis, a monopoly is taken as the polar opposite of perfect

competition. By definition, the demand curve facing the monopolist is the industry

demand curve, which is downward sloping. Thus, the monopolist has significant

power over the price it charges, i.e. is a price setter rather than a price taker. Comparison of a monopoly and perfect competition* reveals that the mono-

polist will set a higher price, produce a lower output and earn above normal profits

(sometimes referred to as monopoly rents). This suggests that consumers will face a

higher price, leading to a loss. In addition, income will be transferred from consum-

ers to the monopoly firm. The preceding arguments are purely static and constitute only part of the

possible harm resulting from monopoly. It is sometimes argued that monopolists,

being largely immune from competitive pressures, will not have the appropriate

incentives to minimize costs or undertake technological change. Moreover, re-

sources may be wasted in attempts to achieve a monopoly position. However, a counter argument advanced is that a degree of monopoly power is necessary to earn

higher profits in order to create incentives for innovation.

Monopolies can only continue to exist if there are barriers to entry. Barriers

which sustain monopolies are often associated with legal protection created through

patents and monopoly franchises. However, some monopolies are created and sus-tained through strategic behavior or economies of scale. The latter are natural mono-

polies which are often characterized by steeply declining long-run average and mar-

ginal costs and the size of the market is such that there is room for only one firm to

exploit available economies of scale or duplication of facilities would be wasteful.

* Perfect (pure) competit ion is the complete form of competit ion. It is the

market situation in which there are many buyers and sellers of a product,

and no single buyer or seller is powerful enough to affect the price of the

product.

41

Monopsony. A monopsony consists of a market with a single buyer. When

there are only a few buyers, the market is defined as an oligopsony. In general, when

buyers have some influence over the price of their inputs they are said to have mo-

nopsony power.

Natural monopoly. A natural monopoly exists in a particular market if a

single firm can serve that market at lower cost than any combination of two or more

firms. Natural monopoly arises out of the properties of productive technology, often

in association with market demand, and not from the activities of governments or

rivals. Generally speaking, natural monopolies are characterized by steeply declining

long run average and marginal-cost curves such that there is room for only one firm

to fully exploit available economies of scale and supply the market.

Oligopoly. An oligopoly is a market characterized by a small number of se l-

lers who realize they are independent in their pricing and output polices. The num-

ber of sellers is small enough to give each seller some market power.

An oligopoly is distinguished from perfect competition because each seller

in an oligopoly has to take into account their independence; from monopolistic com-

petition because firms have some control over price; and from monopoly because a

monopolist has no rivals, in general, the analysis of oligopoly is concerned with the

effects of mutual interdependence among firms in pricing and output decisions.

There are several types of oligopoly. When all sellers are of (roughly) equal

size, the oligopoly is said to be symmetric. When this is not the case, the oligopoly

is asymmetric. One typical asymmetric oligopoly is the dominant firm. An oligopoly

industry may produce goods which are homogeneous (undifferentiated) or may pro-

duce goods which are heterogeneous (differentiated).

The analysis of oligopoly behavior normally assumes a symmetric oligop o-

ly, often a duopoly. Whether the oligopoly is differentiated or undifferentiated, the

critical problem is to determine the way in which the firms act in the face of their

realized independence.

42

TASKS


Естественная монополия, средние издержки, предельные издержки

(краткосрочного/долгосрочного периода), монопсония, олигопсония, произ-

водственная технология, экономия от масштаба, совершенная конкуренция,

однородные/неоднородные товары, научно-технический прогресс, дуополия,

барьеры входа.


1. Barriers to entry A. a market with a single buyer who has some influ-

ence over the price of his output

2. Franchise B. factors which prevent the entry of new firms into

an industry

3. Economies of scale C. a situation when a single firm can serve a particu-

lar market at lower cost than any combination of two

or more firms

4. Monopsony D. a situation when the average costs per unit of

output decrease with an increase in the size of the

output produced by a firm

5. Natural monopoly E. a market consisting of two sellers

6. Duopoly F. a market with a few buyers

7. Oligopsony G. privileges


1. What is a monopoly?

2. What is the difference between a monopoly and perfect competition?

3. Who sets prices in a monopolistic market?

4. What are the results of monopolistic behavior in a market?

5. Under what conditions does a monopoly continue to exist?

6. What are the main types of monopolies?

7. What are the distinctive features of a natural monopoly?

IV. Do the following tasks:

1. Describe a monopoly from the standpoint of conventional economic analysis.

2. Compare a monopolistic market to a normal competitive environment.

43

3. List all the arguments against monopolies and counter arguments in favor of mo-

nopolies.

4. Describe the conditions under which monopolies continue to exist.

5. List all kinds of monopolies and describe in what way they differ from each other.


Монополия характеризуется наличием одного-единственного продавца

конкретного товара на рынке. Продавец обладает монопольной властью, если

он может повышать цену на свою продукцию путем ограничения своего соб-

ственного объема выпуска. Монополистической конкуренции свойственны

черты как монополии, так и совершенной конкуренции. Монополистическая

конкуренция – это совершенная конкуренция плюс дифференциация продук-

ции. В условиях монополистической конкуренции, как и в условиях совер-

шенной конкуренции, не существует барьеров для входа на рынок новых

фирм. Открыть новый ресторан, бензоколонку или аптеку в большинстве

крупных городов не составляет труда. Но поскольку барьеры входа отсутст-

вуют, фирмы в монополистически конкурентных отраслях не рассчитывают на

получение значительной прибыли в долгосрочном периоде.

44

MONEY

People practising specialized production must exchange their outputs of

goods and services with one another. Until a full money system has been developed,

such an exchange is usually carried on by barter. This is the exchange of goods di-

rectly for other goods and services. Barter, however, has certain disadvantages. The

chief of these are the need for a coincidence of wants, the difficulty of equating val-

ues, and the indivisibility of large items.

Money is a solution to the problems of barter, because each commodity or

service can be exchanged for money, which can then be used by the new owner to

purchase a balanced supply of utilities. Money is any medium of exchange which is

generally acceptable.

Types of money.

a) Token coins. These are coins made from metals whose real value is less

than the face value of the coin.

b) Paper money. Printed money is more convenient than coins, being lighter to

carry and easier to handle in large quantities. One more advantage of paper money is ease

in guarding against forgery. The denominations of notes can be arranged to suit price

levels in common use.

c) Bank deposits. Amounts placed to the credit of customers’ accounts at

banks are the same as money. These deposits can then be transferred from one per-

son to another by means of cheques. So cheques are not money, but only orders to

pay money.

Any means of payment which people are forced by law to accept in settle-

ment of a debt is legal tender. Money need not be legal tender and in fact bank depo-

sits, which are money, are not legal tender. If legal tender is not generally accept a-

ble, then it will cease to be money. In Germany at the end of the Second World War,

marks, which were legal tender, were often not accepted in payment whereas ciga-

rettes often were.

Money functions as a medium of exchange, a measure of value and store of

value.

a) Medium of exchange. This is the chief function of money. It overcomes

the need for a coincidence of wants, since everyone “wants” money, which

represents a claim against any goods or services which will yield satisfaction.

b) Measure of value. The value of goods and services is measured in terms

of money. It is then known as price.

45

c) Store of value. Wealth can be kept in the form of money. The use of mon-

ey as a store of value only applies when individuals are storing it; a whole nation

could not do so.

The value of money, like the value of anything else, is whatever it can be ex-

changed for. It is, in effect, its purchasing power. A rise in prices means that the value of

money has fallen; a fall in prices, that it has risen. The value of money changes inversely

with changes in the price level. It is highly desirable that the value of money should remain

stable over the years, otherwise its functions cannot be fulfilled properly.

TASKS


Совпадение потребностей, законное платежное средство, средство об-

ращения, мера стоимости, средство сбережения, материальные ценности, рост

и снижение цены.


1. Token money A. the form of money in which a person has a

right by law to pay a debt

2. Barter B. the bank’s liabilities to its customers

3. Legal tender C. exchange of goods for goods

4. Medium of exchange D. any convenient and commonly acceptable

means of payment

5. Value of money E. Coins in which the metallic content is less

valuable than the face value

6. Bank deposit F. the quantity of goods and services that money

will buy at a certain time

III. Fill the gaps with the following words: coins, money, barter, legal

tender, notes, value:

1. Until a full money system has been developed, trade is usually carried on by … .

2. Money is only a claim against the real goods that have … .

3. … is of no use unless wealth is created.

4. Bank of England notes are … to any amount in the UK.

5. Where devaluation of a currency is possible, foreigners are unwilling to accept the

… and … of the country in question.

IV. Answer the following questions:

1. What are the disadvantages of barter?

2. What are the main functions of money? 3. What is meant by the value of money?

4. Why are these functions less effectively performed if money changes in value?

46

5. What is the correlation between the value of money and prices? 6. What is meant by legal tender?


1. Barter is the exchange of goods for money.

2. Bank deposits and cheques are types of money.

3. Price is the value of goods and services measured in terms of money. 4. Paper money consists of notes issued by commercial banks.

5. One of the advantages of paper money is ease in handling in large quantities.

6. Any type of money can be classified as legal tender.

7. A rise in prices means that the value of money has also risen.

VI. Render the text in English: C развитием рыночных отношений параллельно с товаром появляются

деньги. Деньги – это особый товар, всеобщий эквивалент. Они могут обмени-

ваться на все другие товары и удовлетворять любые потребности их владель-

цев. Сущность денег проявляется в их функциях.

Средство обращения. Деньги используются при покупке и продаже товаров и услуг. Как средство обмена деньги позволяют обществу избежать

неудобств бартерного обмена.

Мера стоимости. Общество считает целесообразным использовать

денежную единицу в качестве масштаба для соизмерения относительных стои-мостей разнородных благ и ресурсов. Мера стоимости – это выражение стоимо-

сти товаров в деньгах, которые позволяют идеально оценивать товары до их

появления на рынке.

Средство сбережения. Поскольку деньги представляют собой наибо-лее ликвидное (то есть такое, которое проще всего истр атить) имущество, они

являются очень удобной формой хранения богатства. Владение деньгами, за

редким исключением, не приносит денежного дохода, который можно полу-

чить при сохранении богатства, например, в форме недвижимого имущества

или ценных бумаг. Однако деньги имеют то преимущество, что они могут быть безотлагательно использованы для выполнения любого финансового

обязательства.

VII. Gi ve a summary of the text.

47

PRICING

Price is one element of the marketing mix. A business must decide how to price its

product. In making this decision it needs to consider:

what are the prices charged by competitors;

how prices can be used to increase sales of the product;

whether the price will cover costs of p roduction.

Competition based pricing. One factor which is likely to influence is the

price of similar competitive products. To sell a bottle of Tresor, produced by

L’Oreal, at ₤50 a bottle when Chanel № 5 is selling at ₤30 a bottle may lose L’Oreal

sales. On the other hand, to sell it at ₤10 might not increase sales because consumers

might think that Tresor was a lower quality perfume. Any business needs to think

carefully about the price charged by rivals. When a perfume house sets a price which

is roughly the same as that set by other perfume houses, it has decided to avoid price

competition. Instead, it could attempt to get customers through advertising attractive

packaging or other marketing means. On the other hand, some businesses deliberate-

ly attempt to undercut their competitors’ prices. In 1993 and 1994, for instance, The

Times newspapers deliberately cut its price from 45p to 30p and then to 20p a copy

to raise sales.

Market orientated pricing. Whilst thinking about prices charged by com-

petitors, the world’s perfume manufacturers also use a number of other pricing strat-

egies to raise sales and profits. These strategies are called market oriented pricing

strategies because they are based on analyzing the market and its characteristics.

Discounts, special offers and sales. To encourage consumers to buy, the

perfume houses often run special offers. The price of a bottle of perfume might be

lower if another product is bought at the same time. Discounts might be offered at a

particular time of the year. Top perfumes are rarely reduced in a sale because this

would affect their high class image. However, many other products, like clothes, are

sold at a lower price in sales.

Price discrimination. The perfume houses sell perfumes at different prices in

different areas of the world. Selling the same product at different prices to different

segments of the market is known as price discrimination. The perfume houses attempt

to charge what the market will “bear” in order to earn the highest profit possible in

each market. If, for example, consumers in the USA were prepared to pay a higher

price for a bottle of Chanel №5 than consumers in the Middle East, then Chanel might

charge a higher price in the USA.

Penetration pricing. A new competitor to the perfume market might be

tempted to use penetration pricing. This is charging a lower price for a product at the

48

start in order to gain market share. Once a product is established in the market, the

business would raise its price. This is suitable for products where price is important

in influencing spending decisions and where there is a long term market for the

product. The problem with using this strategy with perfumes is that price can be

linked to quality in the minds of consumers. Consumers may be happy to buy cheap

sample bottles, but a low priced bottle of perfume could be seen as low quality.

Creaming. Creaming (or skimming) is the opposite of penetration pricing. It

is setting a high price for a product initially and lowing it later on. It is used, for

instance, with hi-tech products. When video machines first came out, they cost thou-

sand of pounds. They were bought by companies and enthusiasts who were prepared

to pay a high price for a product. However, to create a mass market for the video

machines, the manufacturer had to lower the price. Again, a perfume house is un-

likely to want to lower prices when a product reaches the maturity stage of its life

cycle because price is often linked to image of quality with perfumes.

Cost based pricing. Perfume manufacturers are in business to make a profit.

Charging a price similar to competitors is one way to set prices but might lead to

losses. Another way would be to base price on costs of product ion. A retailer like

Superdrug might use cost plus pricing. It could calculate the cost of selling a per-

fume, add a make-up or profit margin for its profit and this would then be the price

of the bottle. The cost is the average cost and is made up of:

~ the variable cost – mainly the cost of buying the bottle from the distribu-

tor;

~ the fixed cost – such as wages of staff, rent, heating and lighting.

When the price covers both the average fixed and variable costs of the prod-

uct, the business is said to be full-cost pricing. Sometimes, another competing retail-

er might run a special offer on a product line. Superdrug might respond by cutting its

prices too, below the full-cost price. So long as the new price more than covers the

variable cost, it will at least make some contribution towards paying the fixed costs

of the business. This contribution might be far more than if Superdrug didn’t cut its

price and sales of the product fell dramatically. In 1993, Superdrug was, in fact, in

dispute with the major perfume manufacturers. They refused to sell to Superdrug

unless Superdrug charged the high prices found in retailers like Harrods. The manu-

facturers didn’t want perfume to be sold on price. Superdrug said that its prices were

based on its costs. If it had lower costs than Harrods, why should it not be allowed to

sell at a lower price? The manufacturers won and have forced Superdrug to sell at

higher prices than it would like to. This shows that there are many different ways to

fix a price for a product.

49

TASKS


1. What is meant by competitive pricing?

2. Why do shops have sales?

3. Why might penetration pricing be a good price strategy to use when launching a

new brand of yogurts?

4. Mobile phone networks have used price creaming strategies when setting prices.

Explain what this means.

5. What is meant by cost based pricing?


1. Competition based pricing A. setting an initial low price for a new prod-

uct so that it is attractive to customers. The

price is likely to be raised later as the product

gains more market share

2. Cost plus pricing B. setting a price based on an analysis of the

market

3. Creaming or skimming C. fixing a price by adding a percentage profit

margin to the cost of production of the good

or service

4. Market orientated pricing D. the extra which is added to the cost of a

product to cover the profit to be made

5. Mark-up or profit margin E. setting a price based on the charged by com-

petitors for similar products

6. Penetration pricing F. the percentage added to the cost of produc-

tion which equals the profit on the product

7. Price discrimination J. selling product at a high price, sacrificing

high sales in order to earn high profits

8. Profit margin I. setting a different price for the same prod-uct in different segments of the market

III. Give synonyms to the words and expressions from the text:

Effect, keep away from, method, pleasant-looking, example/case, planning

of an action, special features, region, part, obtain/get, at the beginning, let.

IV. Render the text in English: Установить цену нового товара трудно, так как у менеджеров мало

данных для оценки потребительского спроса. Чем более новаторский характер

имеет товар, тем сложнее оценить реакцию потребителей до появления товара

на рынке. При установлении цен на новые товары используют два вида страте-

50

гий: «снятие сливок» и «проникновение на рынок». При стратегии «снятия сливок» устанавливают высокую цену, преду-

сматривая ее возможное снижение по мере появления на рынке конкурентов.

Такая стратегия наиболее эффективна, если спрос на товар неэластичен, а

компания пользуется патентной защитой.

В рамках стратегии «проникновения на рынок» компания устанавлива-ет низкую цену на новый товар, чтобы предотвратить приход на рынок конку-

рирующих товаров. Это имеет смысл, если товар не защищен патентом, а

спрос на него эластичен. Такой стратегии придерживалась компания

«Bausch&Lomb», выйдя на рынок с мягкими контактными линзами в начале

70-х годов. Она проводила агрессивную ценовую политику, устанавливая в отрасли цены на 50% ниже обычных. Когда ее главный конкурент компания

«Cooper-Vision» также понизила цены на свои линзы, «Bausch&Lomb» в ответ

еще больше снизила цены – до 10-15 долларов.


51

THE PROBLEM OF INFLATION

Of the large number of definitions of inflation to be brought forward by

economists, the simplest and most widely understood is that inflation is a period of

rising prices. Further consideration though, reveals that in the United Kingdom some

prices have reduced since the Second World War, the examples are color television

sets, calculators, etc. Does this mean that there is no inflation? The answer, obvious-

ly, is ’’no’’; the measurement of inflation depends upon the general price level and

it is perfectly possible for the general price level to rise while specific prices fall.

The general price level must therefore be a form of average. The normal me-

thod of calculation is by the use of price index. The best known price index, and the

one usually chosen to indicate the level of inflation, is the Index of Retail Prices.

Further points arising from the index are as follows:

The Inflation Rate

The inflation rate can be calculated by dividing the change in the index of

retail prices over the last year by the starting index, and multiplying the result by

100. If we analyze the following table, we can make any calculations.

General Index of Retail Prices in the United Kingdom

Year Jan. Feb. Mar. Apr. May June

1977 172.4 174.1 175.8 180.3 181.7 183.8

1978 189.5 190.6 191.8 194.6 195.7 197.2

1979 207.2 208.9 210.6 214.2 215.9

Year July Aug. Sept. Oct. Nov. Dec.

1977 183.8 184.7 185.7 186.5 187.4 188.4

1978 198.1 199.4 200.2 201.1 202.5 204.2

1979

The calculation for May 1979 is: Inflation Rate =

The purchasing power of the pound

Until the middle 1960s the rate of inflation was relatively low: 2-3 per cent

per annum. So-called creeping inflation took place. Economists found no reason for

alarm in this. In fact, after the period of depression between the wars, when for a

time prices fell, some commentators were enthusiastic over rising prices. It became

generally accepted in economic literature that a period of gradually rising prices was

a good thing since it made businessmen optimistic about their chances of profit mak-

52

ing. Inflation was welcomed as a sign of growth and prosperity, and no sense of

danger prevailed since it was gradual. In more recent years an annual rate of 10 per

cent has looked desirable but it highlights an obvious danger: when is gradual inflation

no longer gradual? Most people would agree that 25 per cent per annum is too high a

rate to be tolerable. But how much could be desirable? Accept inflation as a small

friend and it can easily become a large and difficult enemy to deal with. The task is

made more difficult by widespread disagreement over the causes of inflation.

Economists of the nineteenth and early twentieth centuries were convinced

that a close link existed between the amount of money circulating within an econo-

my and the level of its prices. Increases in the quantity of money were likely to lead

to increases in prices. It was expressed in the formal way by the American econo-

mist Irving Fisher, using what became known as the Fisher Equation. The modern

theorists are still maintaining that the quantity of money has a direct influence upon

prices. However, one of the major problems is the uncertainty surrounding the time

period which elapses between an increase in money and an increase in prices. Six

months to a year and a half is not accurate enough.

During the years when monetarism was out of fashion, changes in the level

of aggregate demand were used to explain why inflation occurred. Called demand

inflation it takes place when supply cannot respond (i.e. when most of all resources

are already employed) and leads to a rise in prices instead of to extra output. Cost

inflation assumes that the collective upwards “push” of costs is sufficient to raise the

general level of prices even though there has been no noticeable increase in the level

of aggregate demand. In order to grasp the idea of cost inflation it is necessary to

distinguish between costs in total and costs per unit of output. For example, wage

rates – the rates paid to each employee – can rise and yet the wage element in each

unit of output can still fall, provided that output per man rises. In such a situation

any extra payments are provided for by extra sales. Then inflation is not fueled,

since more output is forthcoming and costs per unit should not rise. However, in

markets for labor resources the granting of one group often leads to demands that

such deals be extended to other groups even though no extra productivity is fort h-

coming. And that is a source of cost inflation. Yet another explanation for inflation,

bottleneck inflation, is a close relative of both demand and cost inflation. Bottleneck

inflation assumes rising costs and rising prices long before all resources are fully em-

ployed. The basis for this assumption is that specific shortages occur in some areas –

bottleneck areas – of the economy where demand is unusually heavy.

The effects of inflation can be classified at three levels: international, insular

and personal. Let us examine each in turn.

International Aspects of Inflation

53

By definition, trading nations function within an international community. In

the international field, inflation rates have to be identical between all trading partners if

trading flows are to remain undisturbed. In a world where most governments are mak-

ing efforts to reduce their domestic rates of inflation, the rate of inflation in a country

has come to have particular international significance. The community which lives by

trading in finance regards its government’s record with regard to inflation rate as an

indication of its ability to control the domestic economy. When inflation rates exceed

the tolerances allowed for by a government, selling of that country’s currency often

takes place. The currency consequently depreciates. The effect of this is to make infla-

tion even worse, especially if the country concerned is a major importer of raw mat e-

rials and semi-finished goods. Inflation gets worse because, when a currency floats

downwards or is devalued, import prices rise. When disparate rates of inflation exist

between nations, cooperation in the monetary field becomes extremely difficult.

Insular Aspects of Inflation

Consumers soon become accustomed to inflation. The habits of saving for

consumption are soon forgotten. As far as consumers are concerned the immediate

purchase of goods, especially consumer durables, is the rational course – they have

developed inflationary expectations. This means that they expect the present infla-

tion to continue, and perhaps, even to get worse. In such a situation the obvious line

of action is to buy now before the price rises. Of course, that only fires inflation. The

other aspect is that when inflation persists it becomes increasingly difficult for bus i-

nessmen and investors to calculate real rates of return on capital expenditures.

54

Personal Aspects of Inflation

Inflation influences the behavior of individuals within an economy. Those

who depend upon fixed sources of income find that the real value of their income

flow is diminished. But there are others who can take advantage of infl ation. In

times of inflation fixed debt tends to diminish in significance. Hence those who have

mortgages find that their incomes rise but the repayments do not and the real cost of

borrowing diminishes. Vast numbers thus have at least some vested interest in con-

tinued inflation. Yet another way in which inflation affects the behavior of individuals

is that it encourages them to find inflation-proof outlets for accumulated funds. Those

commodities in fixed, or almost fixed, supply tend to increase in price ahead of the

general rate. Such “hedges against inflation” enable a person to escape the worst rigors

of an unfavorable economic climate.

The above gives the impression that causes of inflation are simple to under-

stand and easy to regulate. This is far from the truth. In practice many governments

seem powerless to reduce inflation to manageable rates. This is probably because

real-life inflations are caused by a variety of factors which almost by chance coin-

cide.

TASKS


1. What is inflation?

2. How are prices increases measured?

3. Have rising prices always been regarded as a threat to the stability of an econo-

my? 4. Why is inflation now a disadvantage?

5. What might be the consequences of inflation?

6. Are there no explanations for inflation?

7. Is inflation inevitable?

II. Match the terms with their definitions: 1. Inflation A. the kind of inflation that is caused by rising costs of labour and

materials, not by increased demand

2. Inflationary

gap

B. the lowering of the quality of products in general in order to pre-

vent, and so to hide, an increase in price

3. Creeping

inflation

C. a rise in the general level of prices

4. Demand

inflation

D. a slow rise in the level of prices of below 2 or 3 per cent per

year

5. Cost

inflation

E. inflation that would be much greater if the government were to

remove controls on prices and wages

55

F. that part of government spending which is not covered by taxes or borrowing from the public, but is met by issuing new paper

money

G. an extreme form of inflation, when the money supply is

being increased very rapidly, resulting in an increase of over

20% of the price level annually

H. the kind of inflation caused by an excess of demand over supply resulting in a decrease in the value of money

I. a state of inflation that gets worse and worse, because higher prices result in demands for higher wages; and higher wages

increase costs and so cause higher prices

III. Explain the following terms:

1. the level of inflation

2. the output per man 3. consumer durables

4. the government’s record

5. inflationary expectations

6. inflation-proof outlets

7. hedges against inflation

IV. Render the text in English:

Одним из типов инфляции является сдерживаемая инфляция. Она свя-

зана с ситуацией, когда спрос превышает предложение. Но влияние на цены

путем использования таких инструментов, как контроль за ценами и нормир о-

вание (rationing), минимально. Необходимо отметить, что контроль за ценами не связан с причинами инфляции. Это просто попытка сгладить (подавить)

симптомы. Избыточный спрос все равно существует, и он будет проявляться в

виде очередей, списков и, почти неизбежно, в черном рынке.


56

BANKING

Banking centers around money and financial services. Virtually any activity

involving money or advice about financial matters is undertaken by all the commer-

cial banks. The immediate service offered by the bank is the receipt for deposit of

coins, notes and cheques and the cashing of cheques, through current accounts.

Coins and notes in circulation have the status of “legal tender” that is to say they must be taken in payment of a debt although the extent to which this applies in the

case of coins is deliberately restricted for the sake of convenience.

The most common means of payment, particularly for significant sums of

money, is a cheque since it is both safer and more convenient than using cash. How-

ever, it is not legal tender and creditors can refuse to accept it if they wish. Normally both national cheques and traveler’s cheques are readily negotiable if the bearer has

some means of proving his identity and the creditor can be sure that the cheque will

be “honored”. To assist the use of cheques banks now provide their customers with

bankers cards which, when used in association with a cheque, will guarantee it up to

a stated maximum. If a customer wishes to make payments of large amounts of money by cheque and is not known to the creditor, then he may obtain a “cert ified

cheque” from his bank. Such a cheque is signed by the bank and therefore payment

is guaranteed.

Those trading overseas, or in conditions where there may be a significant

time lapse between sending out goods and their receipt by the customer, may use a Bill of Exchange as a means of payment. This is really a post -dated cheque which

assures the creditor payment but also gives the buyer opportunity to inspect the

goods before the transaction is completed. Those whose credit standing is unknown

may have to get the Bill “accepted” before a creditor will take it. Such a p rocess

guarantees payment and most work of this kind is undertaken by the merchant banks. Because Bills are post dated creditors may have to wait some time for their

money. They can overcome this problem by endorsing the Bill and then either dis-

counting it with a Discount House or a bank or passing it on to another trader in

settlement of a debt of their own. By the time it comes to maturity a Bill may have

passed through several hands and on each occasion it must be endorsed. The com-mercial banks participate in this activity in two ways: in part by lending money to

the discount houses and in part by discounting bills for their own customers.

CENTRAL BANKING: AN OVERVIEW

A major sector of any modern monetary system is the central banking sy s-

tem, which is important to the functioning of the private economy and the fiscal operations of the national government. Central banking is an activity separate from

ordinary commercial banking, because a central bank usually has few transactions

with private customers, dealing primarily with commercial bank and with the na-

tional government. The roots of the central banking system go back more than two

centuries. Nevertheless, central banks as we know them today are relatively recent development. Like electric power and the automobile, central banks are pretty much

the products of the twentieth century. For example, at the turn of this century no

central bank existed in any country of Western Hemisphere. The central banking

57

system for the United States (Federal Reserve System) was created late in 1913, and the Bank of Canada appeared in 1934.

The characteristics of the Modern Central Bank. It is difficult to give a

brief definition of a central bank that is both comprehensive and accurate. The na-

ture of a central bank depends largely on its function, which vary according to time

and setting. Essentially, a modern central bank performs at least three functions: managing the nation’s monetary system, serving as a bankers’ bank, and acting as

fiscal agent for the national government.

Monetary control. The most important characteristic of the modern central

bank is its control over the monetary system for facilitating the achievement of na-

tional economic goals. In exerting this control, the central bank regulates the supply, cost, and availability of money and credit. Monetary control is enhanced by the cen-

tral bank’s monopoly on the banknote issue and its ability to create and destroy

monetary reserves by its lending and “investing” activities. Since monetary control

is a prerogative of the sovereign government, the central bank is a public service

organization that emphasizes the national interest rather than its own profit or wel-fare.

Bankers bank. Being a bankers’ bank implies that the central bank provides

services to the commercial banking system similar to those that the commercial bank-

ing system performs for individuals and business firms. Commonplace services that

nevertheless promote the smooth operation of the monetary and banking systems in-

clude, for example, the clearing and collecting of checks, distributing coin and paper

currency to commercial banks, and providing some degree of supervision and regula-

tion over the activities of commercial banks.

Fiscal agency function. In its role as a fiscal agent, the central bank serves

as a banker for the national government. Here the central bank receives, holds, trans-

fers, and disburses funds of the central government.

Central and commercial banking functions involve widely differing objec-

tives and methods, and therefore these funct ions are kept separate. The central bank

orients its policy primarily toward the attainment of national economic objectives,

whereas the commercial banking system is essentially profit -motivated.

TASKS


1. Why is the central banking system a major sector of any monetary system?

2. How long is the history of modern central banking? 3. What are the functions of a central bank?

4. What does the nature of a central bank depend on?

5. What are the main distinctions between central and commercial banking?

II. Are the following statements true or false? Correct the false ones:

1. The object of central banks in the monetary field is to support the Government’s activities in other fields.

58

2. Every bank issues its own notes. 3. Private individuals and businesses often deal with central banks.

4. Central bank is a bank officially appointed by law to work closely with the Gov-

ernment.

5. Commercial banks perform the duties of issuing and managing the country’s cur-

rency. 6. The commercial banking system is profit motivated.

III. Render the text in English:

Федеральная резервная система была создана в 1913 г. на основании

закона, принятого Конгрессом. Наиболее важным органом в Fed является со-

вет управляющих, находящийся в Вашингтоне, федеральный округ Колумбия.

Совет состоит из семи членов, каждый из которых назначается на 14-летний

срок президентом США. Совет возглавляется председателем, назначаемым из

состава управляющих на 4-летний срок.

Fed – это банк банков. Коммерческие банки держат свои депозиты в

Fed и осуществляют платежи друг другу через перевод средств с этих депози-

тов. Fed устанавливает резервные требования для всех банков.

Федеральная резервная система состоит из 12 округов, каждый из ко-

торых имеет свой резервный банк. Предоставляя совету материалы по анализу

экономической ситуации в каждом из окру гов, банки тем самым держат совет

в курсе событий, происходящих в стране.

IV. Fill in the blanks with proper words or word combinations:

board of directors maximizing profit

public and private influences top executive off icers

Federal Reserve bank stockholders

public welfare

The United States is divided into 12 Federal Reserve Districts, each contain-

ing a … . A total of 25 branches serve particular areas within the various districts.

Blending … , the corporate organization of the Federal Reserve banks resembles that

of commercial banks. Each Reserve bank is headed by a … who select the … . Basic

differences as compared with commercial banks include the absence of powers held

by … in private corporations and orientation toward enhancing … rather than … .


59

LOANS IN THE UNITED KINGDOM

In the process of social production there can be saved up stocks of money, that

are kept in the Treasury, or funds, that can be accumulated by large insurance comp a-

nies, banks, pension funds as well as by private savers. These stocks could be used to

make different loans. Sometimes the government lends this money to various programs

in education, medicine, culture, construction, to support small business, etc., the inter-est rate to be paid being very low. We can instance a special program called Loan

Guarantee Scheme aiming at supporting small business in the United Kingdom. At 3%

interest the government guarantees 70% of the money lent by the bank to a business-

man. More often the funds are used to earn extra profit. The interest rate is determined

as the equilibrium price in the loan market, that is that part of the capital market which is concerned with the provision of medium-term and long-term loans to governments,

commercial houses and industrial companies, or in the money market for very short-

term loans.

Thus, a loan is money lent on condition that interest will be paid at an

agreed rate and that the amount lent will be repaid at an agreed time or in an agreed manner. There exist many types of loans in UK economy and each of them

has its specific features.

Such loans as balloon and bullet are repaid irregularly. The balloon loan is a

loan where the repayments are unevenly distributed throughout the life of the loan. The

borrowers usually make larger repayments as soon as they have got a possibility to return money; the larger repayments are known as the “balloons”. When the borrower

pays only interest during the life of the loan and then repays all the principal as the

final repayment, the loan is called a bullet loan.

There exist loans on mort gage of property. You will pay only interest during

the period of the flat loan, the amount borrowed being repaid at the end of the period in cash or by arranging another loan. The table loan is repaid by regular monthly

installments, and each consists partly of interest and partly of some of the amount

borrowed. Thus at the end of the period of the loan all the interest and the whole of

the amount borrowed will have been paid off. The name “table” relates t o the table

issued by building societies stating the amount of the monthly payments at various rates of interest and for various periods of loan. A building society can make the

interest-only-loan to a retired person who pays only interest, leaving the principal to

be repaid when the owner sells the house or when he dies.

A bank can lend money to a private person (personal loan) for the purpose of

personal expenditure, such as payment of household bills or for buying consumption goods such as a motor car, boat, furniture, etc. Such loans are usually repayable by in-

stallments in less than two years and are often made without security; the rate is therefore

high.

The hard and the soft loan is made by one country to another on condition

that the borrower repays it in the lender’s currency (the hard loan) or the borrower’s currency (the soft loan).

There exist loan or state clubs and societies. A loan club is often a private

club whose members, usually low-paid workers in a factory or office, pay regular

amounts into a fund from which short-term interest-bearing loans are made to mem-

60

bers who request them during the year. Fines are charged for late repayment, and interest is paid to members who deposit money with the club. On a certain date each

year, usually just before Christmas, the entire fund is shared out among the mem-

bers.

These are only a few examples of loans made in the United Kingdom.

TASKS


1. What stocks of money can be used to make loans?

2. What conditions should be taken into account to make loans?

3. When is the interest rate very high and when is it very low?

4. When do you pay only interest during the life of the loan? 5. What kinds of loans are made on mort gage of property?

6. Do employees earning low wages have any opportunity to borrow money?

7. Is it beneficial for a lender to make personal loans?


1. Loan A. the department responsible for the finances, the manage-ment of the monetary system, etc.

2. Interest B. the power of a business to earn profits

3. Mortgage C. a state of balance when the total demand is satisfied by

the total supply

4. Funds D. a series of regular payments made under agreement in order to settle a debt

5. Installment E. an amount of money borrowed by an individual or a com-

pany

6. Treasury F. the thing given as a security

7. Equilibrium G. a charge paid to a person or organization that has lent you money

H. amounts of money

III. Fill in each blank with one word from the box to illustrate typi cal

collocations:

condition repayments money rates interest security society business loan

1. to support 2. to pay

to run______ to sell_____

small compound

3. to lend 4. to agree on

to borrow_____ to accept______

to deposit to meet

5. to distribute 6. to arrange

uneven_______ to make________

61

monthly personal

7. various

agreed________

interest

IV. Render the text in English: Как известно, деньги, данные взаймы на условиях, что они будут воз-

вращены или частями, или единовременно и в согласованные сроки, являются

займом. Обычно заемщик платит кредитору согласованную процентную став-

ку, за исключением случаев беспроцентного займа. Существует теория ссу д-

ных фондов (loanable-funds theory), согласно которой процентные ставки должны подниматься или падать до тех пор, пока объем денег, который заем-

щики желают получить в кредит, не совпадет точно с объемами фондов, кото-

рые кредиторы хотят в этот период предложить взаймы.


62

MARKET RESEARCH

Businesses need information if they are to make good decisions. One way of

gaining that information is by carrying out market research. There are various types

of market research. Businesses need to decide which market research methods are

mostly likely to give them the information they need.

Many businesses are product orientated. This means that they design and

make a product, and then try to convince consumers to buy it. An example might be

a drug company, like Glaxo, developing a product to help consumers with an illness

and then advertising it.

Businesses can also be market orientаted. This is where they try to find out

what consumers want before making the final product. In 1993 Pepsi Cola launched

Pepsi Max, a sugar free cola drink designed to taste like the original. Before the

product was sold, Pepsi tried to find out the type of product consumers wanted.

Finding out about what consumers want and need, and what makes them buy, is

called market research.

Businesses which are mainly product orientated risk spending a large

amount of resources launching a product which proves to be a failure. Researching

the market helps reduce this risk. It should focus research and design effort onto

products which have a chance of success in the market place. When the product is

launched, a carefully researched product stands less chance of failing.

The stages of market research are:

– what is the question which the business wants to find an answer to?

– what information is needed to answer this question?

– what method of market research will be used?

– collect the data;

– analyze the data, draw conclusions and make recommendations.

Market research attempts to find the answers to questions a business might

have about its market. For example, in 1991 the marketing department of Pepsi-Cola

started with this question: would launching a new product increase total sales of its

products? The market researcher must then decide what information might help

answer this question. Pepsi-Cola wanted information about the existing pattern of

sales in the market and how the market had changed. It hoped to be able to identify a

segment of the market which it could sell to. Pepsi also wanted consumers to tell it

about the sort of new product they would like to buy. The market researcher then

decided how best to collect this information. There are two ways of doing this: desk

research and field research. Pepsi-Cola used both. The information is then collected

63

and analyzed. Finally, the business has to make a decision about what to do in the

light of the information formed. Pepsi-Cola decided to launch a new product, Pepsi

Max.

Desk research involves the use of secondary data. This is information

which is already available, both within and outside the business.

Information within the business. Businesses collect information routinely.

Invoices, for instance, will tell them how much they sell and who they are selling to.

Accounts will give information about the value of sales and costs of production.

Pepsi knew, for instance, that sales of ordinary Pepsi were far higher than sales of

Diet Pepsi.

Information from outside the business. Businesses can also collect infor-

mation which is available from sources outside the business. Some of these sources

are:

– government – published statistics, such as consumer spending figures; re-

ports such as Monopolies and Mergers Commission Reports;

– the media – reports in newspapers, magazines, on radio and on television;

– trade associations;

– research organizations – reports prepared by specialist market research or-

ganizations such as Mintel or Mori; articles published in academic jour-

nals.

Pepsi was able to use market research reports about the soft drink market. The re-

sults showed that both in the USA and outside North America Diet Pepsi and Regular

Pepsi sales were less compared to its main rival, Coca Cola. Pepsi used this information

to ask a market research question: how could Pepsi be changed so that sales increased?

Field research involves the collection of primary data – information which

no one has yet collected. It is collected specially for the particularly piece of re-

search. Primary data is collected through direct investigation, usually in one of three

ways – observation, survey and experiment.

Observation. Looking at and recording what people do and how they be-

have can be important. For instance, a supermarket may find that sales in one aisle

in the store are very poor. By observing people, it would be possible to see whether,

for instance, the problem was that people were not going down the aisle at all, or

whether there was reasonable traffic down the aisle but customers weren’t buying.

However, observation can’t tell the supermarket anything about why shoppers are

behaving in this way.

64

Survey. A survey usually involves asking question of respondents – people

or organizations reply to the questions asked. Pepsi surveyed consumers outside the

USA about Diet Pepsi. What it found was that Diet Pepsi had two problems. Firstly,

drinking Diet Pepsi left many consumers with a slightly bitter after-taste which was

caused by the use of artificial sweeteners. Secondly, many consumers, particularly in

Latin American countries, had a negative image of diet products. They saw them as

effeminate or linked them with people who had problems such as diabetes or being

overweight.

There are different ways of conducting surveys. A postal survey, where

questionnaires are sent through the post, or a newspaper survey, which readers are

invited to fill in and return, are cheap. Telephone surveys, personal interviews and

consumers’ panels are more expensive because an interviewer has to be employed to

interview customers. However, only a fraction of customers sent a postal survey will

respond. A much larger proportion of those approached will take part in telephone

and personal interviews. The interviewer can also help the respondents understand

what questions mean and how they should be answered.

65

If the interview is in a person’s home, products, packaging, etc. can also be

shown so that reaction can be recorded. A consumer panel, where a group of people

meet together, allows researchers to see how people react in a group situation to a

product or idea.

Surveys can only be useful for market research purposes if the questions

asked are appropriate. For instance, the name of Pepsi’s new product, Max, came

from asking consumer panels in a number of countries to choose the best name out

of 13 suggested (a closed question because there is a definite answer). Pepsi would

have learnt less if they had simply asked the panels to invent a name (an open ques-

tion because there are so many possible answers). This is because it is unlikely that

two panels would have come up with the same name. Pepsi would not then have

known which was the most popular.

Sampling. A survey cannot ask every customer for his opinion. Only a frac-

tion or sample of customers can be surveyed. To be useful, the sample chosen must

be representative of all consumers (the population).

In a random sample, every potential respondent has an equal chance of being

chosen. Random numbers can be used to do this or it can be done by “picking

people out of a hat”. A small random sample, however, may not be representative.

This means a large sample to be taken, which is costly and takes time. To reduce the

length of time, a systematic sample can be used. This is where every 100th or 1000th

person on a list like a telephone directory or the electoral register is chosen. In a

quota sample, the sample is broken down (or stratified). For instance, Pepsi might

know that one out of ten people who bought diet colas were aged 0-14, seven out of

ten 15-24 and the rest were over 25 years old. So out of a sample of 100, Pepsi

would ask 70 people (7 out of 10) aged 15-24 to complete a survey. One problem

with a quota sample is that any people who fit the description can be asked to com-

plete the survey. So Pepsi, wanting to find seventy people aged 15-24 to complete a

survey, could ask the first seventy 15-24 year olds who came out of a McDonalds in

London. This may not be very representative of all 15-24 year olds. A stratified

random sample may get round this problem. It is a quota sample where all the repre-

sentatives, the people being interviewed, must be chosen at random. For the sample

to be random, Pepsi would have to find some way of selecting 70 young people

through pure chance.

Experiment. Market researchers can use experimental techniques. To

launch a new product is often very costly. Instead, products could be tested on

groups of consumers to see whether they are acceptable and likely to sell well. For

66

instance, Pepsi tried out its new formula diet Pepsi Max with consumer panels. They

gave a favorable response. If they hadn’t, Pepsi would have gone back and produced

another formula. The next stage was to test market Max in two countries, Italy and

the UK. These two countries were chosen because British and Italian consumers

have different tastes. If the product was a success in both countries, then it was like-

ly that it would be successful throughout the world.

Decisions. The purpose of market research is to help a business come to a

decision. Pepsi thought that there was a potentially large market for a new diet coke

by looking at market sales figures. It found out what consumers didn’t like about its

existing product and designed a new product. Consumer trials showed t hat the new

product was well liked. Finally, Pepsi decided to launch Pepsi Max in some coun-

tries.

TASKS


1. What is the difference between a market orientated and product orientated bus i-

ness?

2. What is the purpose of market research?

3. What are the stages of market research?

4. What sources of information are available to someone undertaking desk research?

5. What are field research and desk research?

6. A shopping center wants to find out how many shoppers visit the cent er. How

could it gather this information?

7. What differences are there between a postal survey and personal interviews in

surveys?

67

8. A business wants to take a random sample of people in the Perm area. How could

it do so?

9. A chocolate manufacturer wants to find out if a new bar of chocolate is going to

sell well. How could it find this out without having to go to the expense of launching

the product nationally?

II. Match the terms with the definitions:

1. Research involving asking questions of people or

organizations.

A. desk research

2. Information which already exists, such as accounts

and sales records, government statistics, newspaper

articles or reports from advertising agencies.

B. field research

3. Small group out of a total population which is

elected to take part in a survey.

C. survey

4. Finding out information from secondary data. D. secondary data

5. The process of collecting primary data. E. Sample

6. A person who or an organization which answers

questions in a survey.

F. market oriented busi-

ness

7. A business which develops products which have

been researched and designed to meet the needs of

consumers.

G. questionnaire

8. A list of questions to be answered by respondents,

designed to give information about consumers’

tastes.

H. market research

9. Business which develops products with little or no

market research and which it hopes will prove suc-

cessful in the market.

I. respondent

10. The process of gaining information about cus-

tomers, competitors and market trends through col-

lecting primary and secondary data.

J. product oriented busi-

ness

68

III. Fill in the gaps with the following words: characteristics, acceptance,

market segment, analysis, carry out, techniques, products, surveys, observation, re-

search, panels, questionnaires, desk:

Market research is the systematic and objective classification, collection,

_______ and reporting of information about a particular marketing problem. Market

research uses a variety of ______ such as in-depth interviews and group _____

which can be used primarily for motivational _____; in addition, field studies can be

undertaken using ______ and interviews, and _____ research of records and data,

these being used primarily for marketing intelligence. Finally, techniques such as

consumer _____, market experiments and _____ may be used to gain information

about existing ____. Businesses _____ market research to enable them to identify

market tends; to find out about market _____; to forecast market potential; to ana-

lyze market share; to find a _____ ______; to test consumer _____ of new and exist-

ing products.


Практически любой компании требуются детальные и точные знания о

своих потенциальных клиентах и характере их потребностей и запросов. Сбор,

обработка и объяснение этой информации – изучение рынка – стало настоящей

индустрией, где работает множество специализированных фирм, использу ю-

щих новейшие научные методики и информационные технологии. Для мелких

фирм такие агентства слишком дороги, и они проводят свое собственное изу-

чение рынка (когда и где им это необходимо), посылая вопросники клиентам.

Более крупные фирмы часто поручают провести изучение рынка специали-

стам. В этом случае применяются различные методы:

кабинетное исследование, включающее использование вну тренней и

внешней информации;

полевое (экспедиционное) исследование, включающее наблюдение,

выборочное исследование, эксперимент, опрос (почтовый опрос, газетный

опрос, телефонный опрос, личную беседу, работу групп, изучающих реакцию

потребителей на новые изделия).


69

MARKETING

The process of planning and executing the conception, pricing, promotion,

and distribution of ideas, goods and services to create exchanges that satisfy indi-

vidual and organizational objectives.

or?

A business function (and a function of non-business enterprises) that often in-

cludes elements of sales, advertising, product development, research, pricing and other

activities… i.e., organizational tasks.

or?

Any activity which supports the primary purpose of any organization – to

gain and maintain a satisfactory customer base, or more broadly, to gain and main-

tain the support of important stakeholder groups.

or?

A force within the organization that encourages socially and ethically re-

sponsible behavior in the market place.

or?

A management orientation that suggests the objective of an enterprise is to

identify and satisfy customer values better than competitors can or will do. This

characterization of marketing implies that all organizations compete for markets

(customers) and/or resources and that a major objective is to favorably differentiate

your organization from that of your competitors.

There is little universal agreement on the best or right definition of market-

ing, although academics, particularly economists favor the first one, as a process.

Concepts of management and organization evolve and change over time, and have

more or less value depending upon a particular organizations circumstances. This is

also true of marketing. From simple exchange processes that served the needs of

ancient civilizations to the enormously complex processes of today, the foundation

of exchange is creating or adding value for the buyer. And what is of value to a buy-

er is very often far from clear. There are a few rules which can help us identify mar-

keting values, and to compete for customers more effectively.

Values are derived and influenced by what buyers think they know about the

economy, technology, competitive offerings, and experience if any, with our firm as

a supplier.

Buyers learn from experience and their values change. Think about your first

home purchase, airline flight or automobile, and what was important to you then and

what is important to you now as a buyer.

70

The process, functions, activities and forces of marketing provide a business with

an enormous (and untapped) array of weapons, tools and techniques that are potential

sources of competitor advantage.

In his book Marketing to Win (Harper&Row, 1999), Frank K. Sonnenherg,

national director of marketing in Ernst&Young’s management-consulting group,

writes about dramatic developments in the world marketplace that predicate deep

changes in the way we manage and market our goods and services. “The bottom

line”, he challenges, “is if you don’t change now, you may as well start filling your

scrap-book with memories of today. It is unlikely you will have much to show for

tomorrow”.

Two companies that excel in their marketing stances are Microsoft Corp. and

Alcoa. Both of them recognized and mastered a leading-edge marketing mentality

years ago, which propelled them into the world-class arena and to the top of their re-

spective industries.

In a truly world-class organization, marketing is a conduit through which

superior processes turn out innovative products to a worldwide audience. That chan-

nel operates in two directions. Initially, it transports valuable information about

market needs and deficiencies into the company, where it is translated into superior

products and service. These, in turn, are released into the marketplace.

The key to surviving the politically and geographically fluid markets of to-

morrow is to understand that the only universal is change. Companies must be astute

enough to realize that there is no one “right way”, and to be agile enough to respond

responsibly and effectively to changing dynamics.

What links companies such as Microsoft and Alcoa, jettisoning them into the

world-class elite, is their continuing tradition of exploring frontiers. Both are mave-

ricks not content to sit complacently atop their respective kingdoms, but are driven,

as overachievers, to push past the boundary of what we know, of what sells now,

and of what is safe.

On the face of it, Microsoft and Alcoa appear to have little, if anything, in

common. The former is an upstart pioneer and top performer in the young world of

high tech. And the latter is as familiar as an old friend in a mature, heavy -

manufacturing industry whose byproducts have been a part of American life for as

long as most of us can remember.

Yet each is a dynamic industry leader and innovator, wholly responsible for

nudging at the boundaries that define their businesses. It is this unique ability to

“grow” the marketplace that makes these companies world-class marketing entities

71

worthy of a closer look.

“To get results in the marketplace, your focus must be on positioning your firm and

differentiating your services from the competition”.

TASKS


1. What basic issues does marketing incorporate?

2. What propelled Microsoft and Alcoa into the world-class arena and to the top of

their industries?

3. How does marketing work in a truly world-class organizations?

4. What are the two primary directions marketing operates in?

5. What is the key to surviving the politically and geographically fluid markets of

tomorrow?

6. Why do companies such as Microsoft and Alcoa have much in common?

7. How would you define marketing? Why?

8. Why do you think marketing is important to a company’s growth?

9. What is meant by “both are mavericks”?

II. Paraphrase the following statements:

1. Marketing is the process of planning and executing the conception, pricing, promo-

tion, and distribution of ideas, goods and services to create exchanges that satisfy indi-

vidual and organizational objectives.

2. Marketing is a business function that often includes elements of sales, advertising,

product development, research, pricing and other activities.

3. Marketing is any activity which supports the primary purpose of any organization.

4. Marketing is a force within the organization that encourages behavior in the mar-

ket place.

5. Marketing is a management orientation that suggests the objective of an enter-

prise.

III. Render the text in English:

Концепции руководства и организации изменяются со временем в зави-

симости от конкретных обстоятельств. Это также верно и для маркетинга. Раз-

виваясь от простых операций обмена, служащих потребностям древних цивили-

заций, до необычайно сложных процессов сегодня, основа обмена состоит в

создании или прибавлении для покупателя. А что составляет ценность для поку-

пателя, зачастую остается далеким от ясности. Существует несколько правил,

которые помогают нам определять покупателей и бороться за них более эффек-

72

тивно. Ценности определяются знаниями покупателей об экономии, технологии,

конкурентных предложениях и опыте использования продукции компании.

IV. Give a summary of the text.

73

CONSUMER CHOICE

Economics is about scarcity, about social situations, which require that

choices be made. The theory of consumer behavior deals with the way in which

scarcity impinges upon the individual consumer and hence deals with the way in

which such an individual makes choices. This consumer may, but need not be, an

individual person. Families and households also make collective consumption

choices on behalf of their members. The theory takes the consumer unit as given. It

therefore presents us with an important instance of how social sciences, such as

sociology and social psychology, which deal, in part, with the way in which people

organize themselves into household and other units, could complement economics .

The theory of consumer choice has many applications. It enables us to deal

with the selection of consumption patterns at a particular time and the allocation of

consumption over time, and hence with saving. The individual supplying labor can

be thought of as simultaneously choosing an amount of leisure time, so the same

theory is relevant there as it is when we come to consider behavior in the face of

risk. Moreover, in constructing a theory to deal with problems such as these, we are

forced to think carefully and to define precisely, such much abused terms as “real

income” and the “cost of living”, so that our theory gives us many valuable insights

into matters of potentially considerable practical importance.

In order to derive the model of choice-making we need to describe first of all

the logical structure of the choice problem which faces any consumer. We will find

it helpful to think of that structure as being made up of three components. First, we

must consider the items which the consumer finds desirable, the object of choice.

Secondly, since the desirability of an object does not necessarily imply that it is

available to be chosen, we must consider any limitations that might be placed on the

alternatives available to the consumer, the constraints upon choice. Finally, because

choice necessarily involves the process of selection among alternatives, we must

consider the way in which the consumer ranks the alternatives available, the con-

sumer’s tastes or preferences.

The objects of consumer’s choice are goods and services, yielding utility,

which may be ordered and (in principal) measured. The consumer’s budget con-

straint shows how the upper limit on consumption (usually present disposable in-

come) may be allocated among consumption patterns or goods at given prices. The

The social sciences, such as sociology and social psychology can compl i-

ment the study of economics as they deal, in part, with the way in which

people organize themselves into household and other units.

74

position of the budget line is determined by income and price alone. Its slope re-

flects only relative prices.

Consumer tastes can be represented by a map of non-intersecting indiffe-

rence curves. Along each indifference curve, utility is constant. Higher indifference

curves are preferred to lower indifference curves. Since the consumer prefers more

to less, indifference curves must slope downwards. To preserve a given level of

utility, increases in the quantity of one good must be offset by reductions in the

quantity of the good.

Indifference curves reflect the principle of a diminishing marginal rate of

substitution. Their slope becomes flatter as we move along them to the right. To

preserve utility, consumers will sacrifice ever smaller amounts of one good to obtain

successive unit increases in the amount of the other good.

Maximizing consumer utility generates an equilibrium where the budget

constraint and the highest possible indifference curve are t angential. At any point

other that equilibrium, the consumer can substitute one good for another and in-

crease utility. In equilibrium the marginal rate of substitution between goods is equal

to their ratio of prices.

Income-consumption and price-consumption curves describe how the quan-

tity demanded of a good alters with variations in income and price.

At constant prices, an increase in income leads to a parallel outward shift in

the budget line. If goods are normal the quantity demanded will increase.

A change in the price of one good rotates the budget line around the point at

which none of that good is purchased. Such a price change has an income effect and

a substitution effect. The income effect of a price increase is to reduce the quantity

demanded for all normal goods. The substitution effect, induced by relative price

movements alone, leads consumers to substitute away from the good whose relative

price has increased.

In a two-good world, a good whose quantity purchased moves together with

the changes in the price of the other good is called substitute. That, whose quantity

moves in opposite directions to the other good’s price change is a complement.

The Engel curve maps quantity demanded of one good against changes in

income. The ratio of the marginal propensity to consume (slope of the Engel curve)

to the average propensity to consume (ratio of quantity demanded to income) is

known as the income elasticity of demand.

The demand curve relates quantity demanded of one good to its own price.

The own price elasticity of demand is given by the slope of the demand curve (treat-

ing quantity as the dependent variable) divided by the ratio of quantity demanded to

75

price. The cross elasticity of demand measures the proportional change in the quant i-

ty demanded of one good to a proportional price of another.

Transfers in cash and kind. Cash transfers allow consumers to spend the ex-

tra income in any way that they desire. Transfers in kind may limit the consumer’s

option. Where they do, The increase in consumer utility will be less than under a

cash transfer of the same monetary value. Yet transfers in kind are politically pop u-

lar. The electorate wants to know that money raised in taxation is being wisely

spent. Some who favor transfers in kind will argue that the poor really do not know

how to spend their money wisely. One view says that people can best choose for

themselves, whereas the other says that people may not act in their own best inter-

ests. This issue is not merely one of economics but also of philosophy, involving

wider questions such as liberty and paternalism. In so far as people are capable of

judging their own self-interest, economic analysis is clear: people will be better off,

or at least no worse off, if they are given transfers in cash rather than in kind.

76

TASKS


1. What does the theory of consumer goods enable us to do?

2. What are the components of the logical structure of the choice problem?

3. What is the difference between a substitute and a complement?

4. When do we have an income effect and a substitution effect?

5. How a given level of utility can be preserved?

6. How utility can be preserved?


1. Objects of consumer

choice

A. relates quantity demanded of one good to its own

price

2. Engel curve B. generates an equilibrium where the budget con-

straint and the highest possible indifference curve

are tangential

3. Maximizing

consumer utility

C. can be represented by a map of non-intersecting

indifference curves

4. Consumer tastes D. maps quantity demanded of one good against

changes in income

5. Budget constraint E. are goods and services, yielding utility which can

be ordered and measured

6. Indifference curves F. shows how the upper limit of consumption may

be allocated among consumption patterns or goods

at given prices

7. Demand curve G. reflect the principle of a diminish marginal rate of

substitution

III. Fill in the gaps:

1. The position of the budget curve is determined by … .

2. Consumer tastes can be represented by a map of … .

3. At constant prices, an increase in income leads to a parallel outward shift in … .

4. Income-consumption and … curves describe how the quantity demanded of a

good alters with variations in income and price.

77

5. …may restrain the choices a consumer can make.

6. In equilibrium … substitution between goods is equal to their ratio of prices.


В 19 веке многие экономисты были обескуражены следующей пробле-

мой: почему цена воды, столь необходимой для жизни человека, настолько

ниже цены алмазов, имеющих только декоративную функцию? Один простой

ответ состоит в том, что алмазы редки, а вода находится в изобилии. Но такой

ответ не может быть исчерпывающим, поскольку совокупная полезность, по-

лучаемая потребителями от использования воды, выше, чем от использования

алмазов. Эта проблема решается в рамках концепции предельной полезности.

Потребители продолжают покупать товар до тех пор, пока отношение

его предельной полезности к цене равно этому отношению для других благ. В

пределе последний литр воды, который мы выпиваем, дает очень малое пр и-

ращение полезности, тогда как в пределе последний алмаз, который некто

покупает, как правило, делает его очень счастливым.

Чтобы как-то иначе представить суть проблемы, вообразите, что некто,

имевший алмаз в один карат, умирает от жажды, и у него появилась возмож-

ность купить один литр воды за алмаз. Можете быть уверены, что он с упоени-

ем совершил бы эту сделку, потому что в этих условиях предельная полез-

ность воды была бы намного выше предельной полезности алмаза.

78

Part II. Review Tests

TEST 1

(The Science of Economics; Macroeconomics and

Microeconomics; The Future of Economics; Economic

Systems: Two Important Distinctions)

I. Match the terms with their definitions: 1. Goods A. a reduction in the level of total spending result-

ing in lower levels of trade, profits, and prices

2. Boom B. the raw materials, tools and machines employed

in the production process

3. Deflation C. the branch of economics concerned with aggre-gates, such as national income, consumption, and

investment

4. Market D. a period of high economic growth

5. Slump E. commodities that are tangible, usually movable,

and generally not consumed at the same time as they are produced

6. Macroeconomics F. an economic condition characterized by sub-

stantial unemployment, low output and investment,

etc.

7. Means of production G. the doctrine of unrestricted freedom in com-merce, especially for private interests

8. Laissez-faire H. an institutional arrangement that fosters trade or

exchange

II. Put the words in the correct order:

1. Restrictions, can, on, business, do, face, with, owners, they, cap ital, many, their, what.

2. Analysis, commodities, individual, with, decisions, microeconomic, deals, partic-

ular, about.

3. Science, of, extent, it, principles, a, economics, to, set, is, analytical, the, compris-

es, that, a. 4. Studies, every, for, theory, commodity, general, market, simultaneously, equili-

brium, every.

5. All, aggregate, we, purchases, discuss, of, behavior, total, the, can, households,

and, production, to, firms, and.

6. Needs, it, prosperity, the, know, everyone, explains, to, framework, economics, of, some, because.

III. Fill in the gaps with the words or word combinations in italics:

Market forces, value, depression, business activity, planning, economists, welfare, inputs,

economic growth, capitalist, consumer goods, national income, macroeconomics, public-

ly owned, management.

79

1. The central problem of … in the second half of the twentieth century is the … of prosperity to maximize individual … .

2. …look forward to a future where the stockpiling of … ceases to be the major

preoccupation of people’s minds.

3. In former times, the free play of … was left to decide the level of …, and the rate

of … . 4. Modern economics is the study of how … is determined, and how … relate to

each other in production.

5. The new economics can handle the cycles of … which caused such distress in the

early years of the … system.

6. Even in countries with rigid state …, where large comp anies are …, those who can afford it can own a small business.

7. In the past economy tended to grow in spiral-like movements of … .


1. Capitalism can never exist with central planning.

2. The whole economy stands or falls by what is achieved for the individual. 3. The unique feature of economics is that it studies human behavior.

4. Economics shouldn’t be regarded as a set body of principles.

5. Macroeconomics in modern society is largely a study of government economics.

6. Controls over economic activity are likely to decrease in the future.

7. The outcome of any macroeconomic policy is always certain. 8. There is still disagreement about the nature and scope of economic inquiry.

9. Private ownership in a country and its reliance on free markets are equivalent

features.

10. As a rule, microeconomists focus on one aspect of economic behavior in order to

preserve the simplicity of the analysis.

V. Translate the following sentences into Engl ish:

1. Экономика, в отличие от родственных социальных наук, изучает поведение

человека в условиях рынка.

2. Предметом макроэкономической теории является функционирование эко-

номики, рассматриваемой как единое целое. 3. Экономика капитализма отнюдь не исключает государственного планирова-

ния.

4. Макроэкономическое равновесие представляет собой единственный цено-

вой уровень, при котором объем предлагаемой на рынке совокупной проду к-

ции равен величине совокупного спроса. 5. Экономический рост – это долгосрочная тенденция увеличения реального

объема производства.

6. Такие ключевые вопросы, как место экономики в ряду других дисциплин,

методы и масштабы экономического исследования и др., до сих пор вызывают

оживленные споры. 7. Спад – исходная фаза экономического цикла, характеризующаяся снижени-

ем деловой активности, сокращением объемов производства и инвестиций, а

также ростом безработицы.

80

8. Различают два подхода к изучению совокупного предложения: классический (долгосрочный период) и кейнсианский (краткосрочный пер иод).

9. В определенной точке экономического цикла объемы производства достигают

максимальных значений, после чего начинается их постепенное снижение, за-

частую в результате государственного регулир ования.

10. В рамках микроэкономики рассматривается поведение и взаимодействие индивидов, домохозяйств, фирм и функционирование отдельных рынков.

81

TEST 2

(Labour, Unemployment)


1. Incentive A. the systematic shifting of employees from

one job to another

2. Labour force B. the irreducible minimum level of unem-

ployment in a dynamic society

3. Unemployment rate C. working at a secondary job

4. Sabotage D. an additional payment made to employees

as a means of increasing production

5. Frictional unemployment E. work requiring little specialized training

6. Moonlighting F. the total number of workers available for

employment in a country

7. Job rotation G. the deliberate destruction, or damage of

equipment, a public service, etc., by dissatis-

fied employees

8. Unskilled labour H. the percentage of people without a job but

registered as being willing and available for

work


1. Of, increases, labour, to, moonlighting, supply, entrepreneurs, the, available.

2. Demand, a, leads, output, in, lower, and, fall, to, employment, aggregate.

3. Difference, unemployment, and, stresses, modern, the, involuntary, analysis, be-

tween, voluntary.

4. Continuing, are, retirement, of, people, capable, age, employment, in, many, pro-

ductive, of.

5. Standard, force, fully, the, raising, of, depends, living, a, labour, on, effective.

6. Motivating, and, enrichment, provide, to, advancement, job, opportunities, tends,

growth, for.


Working hours, specialization, job enlargement, take on, supply, wage rate, skilled,

income, competition, quality, train, participation rate, redundant.

82

1. A lot of … workers may be made … when an industry declines in the face of

foreign … .

2. In …, the employee is given more things to do within the same job.

3. More important than the actual … of labour is the … of labour.

4. The … is the percentage of the population of working age who declare themselves

to be in the labour force.

5. Some workers prefer extra … to shorter … .

6. Firms are often reluctant to … and … older workers.

7. Some people want to work at the current … but can’t find jobs.

8. The most significant drawback of … is monotony.


1. Moonlighting is quite common because most people like working late.

2. Frictional unemployment can be reduced.

3. The labour force comprises all those employed or willing to find a job.

4. Where there are few incentives labour is less efficient.

5. Demand-deficient unemployment occurs when aggregate demand exceeds full-

employment aggregate demand.

6. Skilled labour tends to be more specific than semi-skilled labour.

7. Structural unemployment is created when the wage is deliberately maintained

above the equilibrium wage rate.

8. Labour is the supply of human resources, both physical and mental, which are avail-

able to engage in the production of goods and services.

9. Classical unemployment is involuntary.

10. All those people who are looking for work will be automat ically included in the

official statistics for the labour force, whether or not they have registered as unem-

ployed.

V. Translate the following sentences into English:

1. В состав рабочей силы не включаются две группы населения: лица нетрудо-

способного возраста, а также лица, которые по к аким-либо причинам не могут

или не хотят трудиться.

2. К наиболее серьезным социальным последствиям безработицы относится

потеря квалификации.

3. Материальное поощрение дает стимул для повышения производительности

труда.

83

4. Структурная безработица возникает в результате изменений в экономике,

приводящих к сокращению спроса на одни профессии и повышению спроса на

другие.

5. Безработные – это люди трудоспособного возраста, которые не имеют рабо-

ты, но активно ее ищут и готовы приступить к работе немедленно.

6. Число фрикционных и структурных безработных в сумме составляет естест-

венный уровень безработицы.

7. В настоящее время многие устраиваются на работу по совместительству,

поскольку она приносит дополнительный доход.

8. В сложившихся экономических условиях большинство людей пенсионного

возраста стараются по возможности продолжать работу.

9. Существует взаимозависимость между повышением эффективности труда и

ростом уровня жизни.

10. Средства, вложенные в образование, со временем окупаются, так как они

позволяют человеку найти более интересную и высокооплачиваемую работу.

84

TEST 3

(Wants and Utilities, Supply and Demand)

I. Match the terms with their definition:

1. marginal utility A. is decided by the interaction of supply and demand

2. price B. are the basic needs of mankind

3. wants C. describes the behaviour of sellers

4. total utility D. is the desire to buy supported by the ability to pay

5. effective demand E. is the utility of one unit of a good or service

6. supply F. is the satisfaction we receive from possessing one

extra unit of a commodity


1. wants, satisfy, which, purpose, economy, to create, mankind’s, the, of, an, is, utili-

ties, will.

2. is, varies, changing, demand, not, but, with, fixed, conditions.

3. the, the, of, of, of, effects, price, enterprise, an, commodity, prospects, profitabili-

ty.

4. “wants”, “wants”, even, we, these, when, other, present, more, themselves, have,

basic, advanced.

5. are, our, by, which, services, attention, intangible, personal, “utilities”, needs,

satisfy.

III. Fill in the gaps with the words in italics:

Scale, commodity, goods, price, requirements, scale, substitutes, services, purchas-

ers, competitor.

1. An increased demand raises … .

2. When the price of a … rises the quantity that is supplied will be increased.

3. … are tangible items which either satisfy the basic … of human life or make that

life fuller and richer.

4. Scale of preferences is an arrangement of things in one’s own mind with the most

preferred items towards the top of the … .

5. Demand is the quantity of goods and … which … are prepared to buy at a given

price in a given period of time.

6. If the goods are close … for one another, the price of one will be seriously af-

fected by a lower price of its … .

85

IV. Are the statements true or false? Correct the false ones:

1. Man’s wants and demands are unlimited.

2. Demand is set.

3. Total utility usually rises while marginal utility always falls.

4. When the price of a commodity rises the quantity that is demanded will be in-

creased.

5. Suppliers don’t vary in their ability to supply.

6. A progressive system of taxation strengthens the purchasing power of consumers.

7. If there is an alternative to a commodity, then it is no longer a necessity.

8. A decreased supply lowers market price.

V. Translate the following terms into English:

1. потребительская корзина

2. предельная полезность

3. человеческие потребности

4. убывающая предельная полезность

5. удовлетворять потребности

6. создавать полезности

7. общая полезность

8. основные требования (запросы) человеческой жизни

9. потребительские товары

10. факторы производства

86

TEST 4

(Market, Markets and Monopolies)


1. Equilibrium A. prices now current in the market

2. Prevailing price B. a state of balance when all the economic forces

present in a situation have an equal influence and there

is no tendency to change

3. Patent C. something which encourages one to greater activity

4. Barriers to entry D. a market with single buyer who has some influence

over the price of his output

5. Incentive E. protection from being copied or sold by those who

do not have a right to do so

6. Franchise F. factors which prevent the entry of new firms into an

industry

7. Monopsony G. privileges

8. Natural monopoly I. a market consisting of two sellers

9. Duopoly J. a situation when a single firm can serve a particular

market at lower cost than any combination of two or

more firms

II. Match the two parts of the sentences:

1. Natural monopoly arises out of … .

2. Monopoly is a situation where … .

3. Monopolies can only continue to exist if … .

4. When there are only a few buyers, … .

5. An oligopoly is a market characterized by a small number of firms … .

6. Oligopoly is distinguished from perfect competition because … .

7. When all firms are of (roughly) equal size, … .

8. A market is simply a mechanism, … .

A. …which allows individuals or organizations to trade with each other

B. …the properties of productive technology

C. …who realize they are independent in their pricing and out p olices

D. …the oligopoly is said to be symmetric

E. …each firm in an oligopoly has to take into account their independence

87

F. …there is a single seller in the market

G. …the market is defined as an oligopsony

H. …there are barriers to entry

III. Fill in the blanks with the words or word combinations in italics:

Aggregate supply, geographic areas, scope, aggregate demand, buyers, transacted,

dimensions, actual, sellers, products, potential

1. Markets can be in “equilibrium” or “disequilibrium” depending on whether or not

… equals … at the prevailing price.

2. Markets may be local, regional, national or international in … and do not neces-

sarily require … and … to meet or communicate directly with each other.

3. Business may be … through the use of intermediaries as well.

4. There are two fundamental … of market definition: the product market, that is,

where … group together and the geographic market, that is, where… group together.

5. Market definition generally includes … and … sellers.


1. When a market functions properly, the quantity of goods and services demanded

and supplied must be equal at some given price.

2. Markets are similar in scope. There are only local markets where buyers and sellers

must meet and communicate directly with each other.

3. To define a relevant market all you need is to identify the number of companies

and products available in the market.

4. Monopolists, being largely immune from competitive pressures, do not have the

appropriate incentives to minimize costs or undertake technological change.

5. An oligopoly is a market characterized by a large number of firms who realize

they are dependent in their pricing and output polices.

88

V. Translate the following sentences into English:

1. Рынок – это открытое для всех место, где покупаются и пр одаются товары

или услуги, напрямую или через посредников.

2. Рынок, где спрос на продукцию больше имеющегося предложения, называ-

ется рынком продавца, а рынок, где предложение превышает спрос, цены низ-

кие, а условия сделок устанавливаются покупателями, называется рынком

покупателя.

3. Монополистическая конкуренция – это ситуация, когда на рынке присутст-

вуют несколько продавцов, каждый из которых способен у станавливать цену,

то есть каждый имеет некоторую монополистическую власть.

4. Монопольное положение позволяет фирме сохранять любые сверхприбыли.

5. Цена, при которой предложение товара равно спросу на него, называется

равновесной ценой.

6. Цены на аналогичные товары могут отличаться и зависеть от времени и

места продажи или его качества.

7. Картель создается для взаимной пользы фирм – членов картеля.

89

TEST 5

(Money, Pricing, The Problem of Inflation)


1. Penetration pricing A. selling a product at a high price, sacrificing

high sales in order to earn high profits

2. Creaming (skimming) B. the quantity of goods or services that money

will buy at a certain time

3. Legal tender C. the bank’s liabilities to its customers

4. Demand inflation D. selling a different price for the same product in

different segments of the market

5. Token money E. the kind of inflation that is caused by rising

costs of labour and materials

6. Price discrimination F. coins in which the metallic content is less valu-

able than the face value

7. Cost inflation G. selling an initial low price for a new product so

that it is attractive to customers

8. Bank deposit H. the form of money in which a person has a

right by law to pay a debt

9. Barter I. the kind of inflation caused by an excess of

demand over supply resulting in a decrease in the

value of money

10. Value of money J. exchange of goods for goods


1. system, trade, until, has, is, full, a, usually, by, on, carried, barter, developed,

money, been.

2. charged, any, needs, carefully, the, by, to think, price, rivals, business, about.

3. be, the, price, must, general, a, form, level, average, of, therefore.

4. acceptable, to be, it, if, tender, is not, legal, generally, will, then, money, cease.

5. is, would, once, in, business, the, a, established, product, raise, its, market, the,

price.

6. of, index, the, price, normal, of, method, is, the, calculation, by, use.


90

Money, creaming, value, cost inflation, losses, demand inflation, increases, barter,

legal tender, price

1. …is setting a high price for a product initially and lowering it later on.

2. Money is only a claim against the real goods that have … .

3. …assumes that the collective upwards “push” of costs is sufficient to raise the

general level of prices.

4. Charging a price similar to competitors is one way to set prices but it might lead

to … .

5. …in the quantity of money were likely to lead to increases in prices.

6. If … is not generally acceptable then it will cease to be money.

7. …is one element of the marketing mix.

8. …is of no use unless the wealth is being created.

9. …takes place when supply cannot respond (i.e. when most of all resources are

already employed) and leads to a rise in prices instead of to extra output.

10. …entails the necessity of a double coincidence of wants.


1. Paper money is convertible into gold.

2. Bank deposits, which are money, are not legal tender.

3. A fall in prices means that the value of money has risen.

4. The value of money changes proportionally with changes in the price level.

5. The price of similar competitive products does not influence pricing.

6. When the price covers both the average fixed and variable costs of the product,

the business is said to be full-cost pricing.

7. The measurement of the inflation does not depend upon the general price level.

8. The selling of the country’s currency often takes place when inflation rates exceed

the tolerances allowed for by the government.


1. стратегия «снятия сливок»

2. стратегия «проникновения на рынок»

3. ценовая дискриминация

4. индекс розничных цен

5. ползущая инфляция

6. поднимать уровень цен

7. средство сохранения стоимости

8. номинальная стоимость

91

9. внутренняя (реальная) стоимость

10. законное платежное средство

92

TEST 6

(Banking, Central Banking, Loans in the UK)


1. Legal tender A. a bank officially appointed by law to work closely

with the government

2. Central bank B. a joint stock bank

3. The balloon loan C. the form of money in which a person has a right by

law to pay a debt

4. Commercial bank D. a loan where the repayments are unevenly distributed

throughout the life of the loan

5. Fund E. an amount of money borrowed by an individual or a

company

6. Loan F. amounts of money


1. The, of, on, to, and, a, its, nature bank, setting, largely, which, according, func-

tion, time, vary, central, depends.

2. Loans, as, and, are, irregularly, such, balloon, bullet, repaid.

3. Rate, as, loan, interest, the, is, the, the, in, market, determined, price, equilibrium.

4. “Legal tender”, coins, of, the, in, and, status, notes, have, circulation.

5. Methods, central, banking, objectives, and, widely, commercial, differing, in-

volve, and, functions.


Transactions, customer, certified, loan, cheque, cash, cheque, currency, balloon

1. The most common means of payment, particularly for significant sums of money,

is the … since it is both safer and more convenient than using … .

2. Central banking is an activity separate from ordinary … banking, because a cen-

tral bank usually has few … with private customers, dealing primarily with com-

mercial bank and with the national government.

3. If a … wishes to make payments of large amounts of money by … and is not

known to the creditor, then he may obtain a “… cheque” from the bank.

4. The hard and the soft … is given by one country to another on condition that the

borrower repays it in the lender’s … or the borrower’s currency.

93

5. The … loan is a loan where the repayments are unevenly distributed throughout

the life of the loan.


1. Paper money consists of notes issued by commercial banks.

2. Coins and bills of every denomination are called legal tender.

3. Central bank is a bank officially appointed by law to work closely with the gov-

ernment.

4. Commercial banking system is profit motivated.

5. Functions of commercial banks are unlimited.

6. Certified cheques are always guaranteed by a bank.

7. Bills of exchange are now used mainly in foreign trade.

8. The interest rate can’t be determined as the equilibrium price in the loan market.


1. законное платежное средство

2. дорожный чек

3. коммерческий банк

4. выплатить по чеку

5. финансовый агент правительства

6. выпускать банкноты

7. льготный заем

8. заемщик

9. закладная на имущество

10. ссудный процент

94

TEST 7

(Market Research, Marketing, Consumer Choice)


1. Market research A. relates quantity demanded of one good to its

own price

2. Secondary data B. the process of gaining information about cus-

tomers, competitors and market trends through

collecting primary and secondary data

3. Engel curve C. maps quantity demanded of one good against

changes in income

4. Objects of consumer D. finding out information from secondary data

choice

5. Desk research E. information which already exists

6. Consumer tastes F. goods and services, yielding utility which can be

ordered and measured

7. Field research G. the process of collecting primary data

8. Demand curve H. can be represented by a map of non-intersecting

indifference curves

9. Marketing I. the process of planning and executing the con-

ception, pricing, promotion and distribution of

ideas, goods and services to create exchanges that

satisfy individual and organizational objectives.


1. Prefers, since, the, more, consumer, to, indifference, less, must, downwards,

curves, slope.

2. Sale, in, every, a, random, respondent, an, potential, has, of, chance, chosen,

equal, being.

3. Reflect, curves, the, indifference, of, principle, a, marginal, diminishing, of, subs-

titution, rate.

4. Can, information, business, which, collect, is, from, sources, available, the, out-

side, business.

95

5. Are, goods, if, the, quantity, normal, will, demanded, increase.

6. May, data, collected, primary, be, observation, survey, through, experiment , and.


Substitute, accounts, tastes of preferences, equilibrium, budget constraint, primary

data, observation, marketing, force, market research

1. The way in which the consumer ranks the alternatives available is called the con-

sumer’s … .

2. The consumer’s … shows how the upper limit on consumption may be allocated

among consumption patterns or goods at given prices.

3. Marketing is a … within the organization that encourages socially and ethically

responsible behaviour in the market place.

4. There is little universal agreement on the best or right definition of … .

5. Finding out about what consumers want and need, and what makes them buy, is

called … .

6. …will give information about the value of sales and costs of production.

7. …are collected through direct investigation.

8. In a two-good world, a good whose quantity purchased moves together with the

changes in the price of the other good is called … .

9. Maximizing consumer utility generates an … where the budget constraint and the

highest possible indifference curve are tangential.

10. …can’t tell the supermarket anything about why shoppers are behaving in this or

that way.


1. When the product is launched, a carefully researched product stands less chance

of failing.

2. Surveys cannot be useful for market research purposes if the questions asked are

appropriate.

3. Research involving asking questions of people or organizations is called a ques-

tionnaire.

4. Product oriented business develops products which have been researched and

designed to meet the needs of consumers.

5. In equilibrium the marginal rate of substitution between goods is equal to their

ratio of prices.

6. The cross elasticity of demand measures the proportional change in the quantity

demanded of one good to a proportional price of another.

96

7. The foundation of exchange is creating or adding value for the buyer.

8. To launch a new product is never very costly.


1. предельная полезность

2. функции маркетинга

3. проводить опрос

4. бороться за покупателей

5. вопросник

6. конкурентные предложения

7. почтовый опрос

8. делать выбор

97

Part III. Resource Tests

ALTERNATIVE MARKET STRUCTURES

I. Read the text. Some parts of the text have been taken out. These e x-

tracts are listed below. Complete each gap with the appropriate extract. One se n-

tence does not belong in any of the gaps.

a) The collective conduct of all the firms in the industry will affect the whole

industry’s performance.

b) Some industries tend more to the competitive extreme, and thus their per-

formance corresponds to some extend to perfect comp etition.

c) The price they face is that determined by the interaction of demand and

supply in the whole market.

d) The market structure under which a firm operates will determine its beha-

viour.

e) Each firm is so small relative to the whole industry that it has no power to

influence price.

It is traditional to divide industries into categories according to the degree of

competition that exists between the firms within the industry. There are four such

categories.

At one extreme is perfect competition, where there are very many firms

competing. ___ (1) It is a price taker. At the other extreme is monopoly, where there

is just one firm in the industry, and hence no competition from within the industry.

In the middle comes monopolistic competition, where there are quite a lot of firms

competing and where there is freedom for new firms to enter the industry, and oli-

gopoly, where there are only a few firms and where entry for new firms is restricted.

___ (2) Firms under perfect competition will behave quite differently from

firms that are monopolists, which will behave differently again from firms under oli-

gopoly and monopolistic competition.

This behaviour (or “conduct”) will in turn affect the firm’s performance: its prices,

profits, efficiency, etc. In many cases it will also affect other firms’ performance: their pric-

es, profits, efficiency, etc. ___ (3)

Economists thus see a causal chain running from market structure to the per-

formance of that industry.

Structure Conduct Performance

First, we shall look at the two extreme market structures: perfect competition

and monopoly. Then we shall turn to look at the two intermediate cases of monop o-

listic competition and oligopoly.

98

These two intermediate cases are sometimes referred to collectively as i m-

perfect competition. The vast majority of firms in the real world operate under im-

perfect competition. It is still worth studying the two extreme cases, however, be-

cause they provide the framework within which to understand the real world.

___ (4) Other industries tend more to the other extreme: for example, when

there is one dominant firm and a few much smaller firms. In such cases, their perfor-

mance corresponds more to monopoly.

II. For each question 1-4, mark one for the answer you choose.

1. Perfect competition is a market structure

A. where each firm produces a differentiated product.

B. where there is freedom of entry to the industry.

C. in which there are a few firms.

2. Monopoly is a market structure

A. where a unique product is produced.

B. where the firm is a price taker.

C. where there are no restrictions to the entry of new firms.

3. Monopolistic competition is a market structure

A. where there are a few firms.

B. where each firm produces a homogeneous product.

C. where each firm has some control over its price.

4. Oligopoly is a market structure

A. where there are a lot of firms.

B. where there are no barriers to the entry of new firms.

C. where firms produce either an undifferentiated product or a differentiated one.

99

FREE-MARKET MEDICINE IN RUSSIA Is the Patient Recovering?

I. Read the text. Some parts of the text have been taken out. These ex-



a) No longer will the state guarantee employment and a moderate standard

of living for all.

b) Many commentators began to wonder whether the economy could escape

the slide into “hyperinflation” when money would become virtually worthless.

c) With the virtual abandonment of price controls, prices soared and by the

end of 1992 inflation had reached a massive 1354 per cent.

d) Consumer choice decreased, too.

e) Such an impressive reduction in inflation was due largely to government

successfully capping its spending.

1. Reforming the old Soviet Union was never going to be easy. To replace

central planning with free-markets and enterprise would involve a radical transfor-

mation of economic life. But following the rise to power of Boris Yeltsin in Russia

in 1991, this is just what was attempted. The following policies were adopted in

early 1992:

– Price controls on 90 per cent of items were abolished. But with shortages

of most goods, it was hardly surprising that prices rose dramatically.

– Business was given easier access to foreign exchange, and foreign comp a-

nies were encouraged to invest in Russia.

– The largest privatisation programme in the world was launched. In many

of the new private companies, workers were to become the principal

shareholders.

These reforms represented a massive shock to the old system. ___ (1) These

huge price increases led to falling demand, but the disruption to the economy also

led to falling supply. In 1992 output fell by nearly 20 per cent and the purchasing

power of wages fell by 40 per cent.

100

2. The government’s budget deficit (the excess of government spending over

government tax receipts) rose from 1.5 per cent of national income in the first quar-

ter of 1992 to 15 per cent by the final quarter. Perhaps most significantly, the money

supply rose nearly 600 per cent between January and October. ___ (2)

3. Critics argued that the costs of reform were intolerably high. The Russian

economy, inherently weak and resistant to change, was unprepared for the radical

nature of the policy and as such the reform programme could not be sustained. They

highlighted the following weaknesses inherited from the old system:

– Many Russian companies are virtual monopoly producers. If they run into

trouble, as many have done, this leads to huge shortages throughout the

economy.

– Industry, being used to taking orders from above, has been slow to adapt to

economic change and the rigours of the marketplace. Much of it is highly

inefficient and wasteful, making a poor use of very scarce resources. Est i-

mates suggest that in 1992 Russia used 15 times as much steel and 6 times

as much energy as the USA per unit of national output.

– With the freeing of prices, many firms in a monopoly position simply

raised prices and reduced output. That way they could increase profits but

with less effort.

Supporters of reform recognised these weaknesses, but maintained that they on-

ly strengthened the arguments for changing the old system. In addition, they argued that

the reform package of 1991/2 did not go far enough. Price controls on certain goods

remained. Price markups in state shops were limited to 25 per cent, oil prices were con-

trolled and imports were subject to a 20 per cent tariff (customs duty).

4. Some supporters of reform argued that an economic slump was the medi-

cine required to drive the old sickness out of the system. It would force inefficient

producers out of the market, and the competition for survival would lead to greater

productivity and ultimately to long-term prosperity.

5. Four years on, it appeared that the supporters of reform may have been

right in their judgements. The Russian economy seemed to have turned the corner.

By mid-1996, annual inflation had fallen to 80 per cent. ___ (3) The government’s

budget deficit was now well within the limits agreed with the International Monetary

Fund. The rouble, after a disastrous collapse in 1994, seemed to have stabilised on

the foreign exchange market. Output, however, was still falling. In 1995 output fell

by 4 per cent. Nevertheless forecasters were predicting growth of upwards of 4 per

cent for 1997 onwards.

101

6. Critics of reform, even in the light of such real gains, still point to the

hardship experienced by many Russians. Official unemployment stands at around 8

per cent, with an estimated additional 6 per cent hidden unemployment. In a fifth of

all Russian regions, unemployment is over 30 per cent, and in a few over 50 per

cent. Those in work have not fared much better. The average real wage fell by some

37 per cent between 1994 and 1996. Many Russians today are faced with severe

hardship.

7. Some, the “New Russians”, have become very wealthy -some legitimately,

but some through criminal activities (the rise of the Russian Mafia has been a disturb-

ing development). The rise of the wealthy further serves to highlight the growing di-

vide between rich and poor.

8. The old certainties have gone. ___ (4) Today’s market sy stem in Russia is

one where the strong gain and the weak lose.

II. Look at statements 1-3. In each statement, which phrase or sentence

is correct?

1. Imports were subject to a 20 per cent tariff.

A. Prices were controlled.

B. Government set up a 20 per cent tariff.

C. Customs duty was 20 per cent.

2. In a fifth of all Russian regions, unemployment is over 30 per cent.

A. In every fifth region unemployment is 30 per cent.

B. In 20 per cent of all Russian regions unemployment rate exceeded 30 per cent.

C. In a few Russian regions unemployment grew up to 50 per cent.

3. Foreign companies were encouraged to invest in Russia.

A. Many new private companies stimulated investment.

B. Business was given easier access to foreign exchange.

C. The special policy was adopted in early 1992.

III. For each question 1-4, mark one for the answer you choose.

1. It was hardly surprising that prices rose dramatically because

A. 90 per cent of items price were abolished.

B. the purchasing power of wages fell.

C. economy was short of most goods.

2. Price mark-ups in state shops

A. could not exceed 25 per cent.

B. was limited to 20 per cent.

102

C. equaled 25 per cent.

3. In “hyperinflation” money

A. would be practically worthless.

B. supply would rise dramatically.

C. is inherently weak for the radical nature of the policy.

4. Some of the “New Russians” have become very wealthy –

A. with the rise of the Russian Mafia.

B. either legally or illegally.

C. to highlight the growing divide between rich and poor.

IV. Match each of these statements with one of the paragraphs num-

bered 1-8.

A. Free-market economy is a medication for central

planning system

B. Introduction of reform policies and their effects

C. Counter-arguments against the transformation

programme

D. The turning point in the economic disaster

V. Are sentences below “Right” or “Wrong”? If there is not enough i n-

formation to answer, choose “Doesn’t say”.

1. Critics of reform ignored its real gains.

A. Right B. Wrong C. Doesn’t say

2. The government’s budget deficit rose by 13.5 p er cent of national income

throughout 1992.


103

3. Critics argued that the cost of reform was too high because of the negative com-

parison with USA national output of steel and energy.


4. IMF agreed with the government’s budget deficit.


5. Reform supporters strengthened the arguments by requiring to abolish the rest of

price controls and enforce competitive producers.


VI. Complete the following table:

A. President at power in 1991

B. Inflation rate in mid-1996

C. Predicted growth for 1997 onwards

D. Average real wage between 1994 and 1996

E. Maximum inflation rate/when

F. Unofficial unemployment rate

VII. The mistakes in the sentences below have been underlined. Write

the corrections in the spaces provided.

1. In 1995 out put had fallen by 4 per cent.

2. In many of the new private companies, principal workers became a shareholders.

3. Four years on, the Russian economy seemed to have being turning the corner.

4. Critics of reform, though in the light of such real gains, still point to the hardship.

5. Such an impressive reduction in inflation was of largely government successfully

capped its spending.

1. _____________________________________________

2. _____________________________________________

3. _____________________________________________

4. _____________________________________________

5. _____________________________________________

104

SHOULD HEALTH CARE PROVISION BE LEFT TO THE MARKET?

1. When you go shopping you may well pay a visit to the chemist and buy a

bottle of paracetamol, some sticking plasters or a tube of ointment. These health-

care products are being sold through the market syst em in much the same way as

other everyday goods and services such as food, household items and petrol.

But many health-care services and products are not allocated through the

market in this way. In the UK, the National Health Service provides free hospital

treatment, a free general practitioner service and free prescriptions for certain cat e-

gories of people (such as pensioners and children). Their marginal cost to the patient

is thus zero. Of course, these services use resources and they thus have to be paid for

out of taxes. In this sense they are not free. (Have you heard the famous saying

“There’s no such thing as a free lunch”?)

But why are these services not sold directly to the patient, thereby saving the

taxpayer money? Why is considered that certain types of health care should be pro-

vided free, whereas food should not? After all, they could both be considered as basic

necessities of life.

The advocates of free health-care provision argue that there are a number of

fundamental objections to relying on a market system of allocation of health care,

many of which do not apply in the case of food, clothing, etc. So what are the rea-

sons why a free market would fail to provide the optimum amount of health care?

2. There is a problem connected with the distribution of income. Because in-

come is unevenly distributed, some people will be able to afford better treatment

than others, and the poorest people may not be able to afford treatment at all. On the

grounds of equity, therefore, it is argued that health care should be provided free – at

least for poor people.

The concept of equity that is usually applied to health care is that of treat-

ment according to medical need rather than according to the ability to pay.

3. If you were suddenly taken ill and required a major operation, or maybe

even several, it could be very expensive indeed for you if you had to pay. On the

other hand, you may go through life requiring very little if any medical treatment. In

other words, there is great uncertainty about your future medical needs. As a result it

would be very difficult to plan your finances and budget for possible future medical

expenses if you had to pay for treatment. Medical insurance is a possible solution to

this problem, but there is still a problem of equity. Would the chronically sick or

very old be able to obtain cover, and if so, would the premiums be very high? Would

105

the poor be able to afford the premiums? Also would insurance cover be comprehen-

sive?

4. There is also the problem of externalities. If you are cured of an infectious

disease, for example, it is not just you who benefits but also others, since you will

not infect them. Also your family and friends benefit from seeing you well; and if

you have a job you will be able to get back to work, thus reducing the disruption

there. These external benefits of health care could be quite large.

If the sick have to pay the cost of their treatment, they may decide not to be

treated – especially if they are poor. They may not take into account the effect that

their illness has on other people. The market, by equating private benefits and costs,

would produce too little health care.

5. Markets only function well to serve consumer wishes if the consumer has

the information to make informed decisions. If you are to buy the right things, you

must know what you want and whether the goods you buy meet these wants. In

practice, consumers do have pretty good knowledge about the things they buy. For

example, when you go to the supermarket you will already have tried most of the

items you that buy, and will therefore know how much you like them. Even with

new products, provided they are the sort you buy more than once, you can learn

from any mistakes.

In the case of health care, “consumers” (i.e. patients) may have very poor

knowledge. If you have a pain in your chest, it may be simple muscular strain, or it

may be a symptom of heart disease. You rely on the doctor (the supplier of the

treatment) to give you the information: to diagnose your condition. Two problems

could arise here if there were a market system of allocation health care.

The first is that unscrupulous doctors might advise more expensive treatment

than is necessary, or drugs companies might persuade you to buy a more expensive

branded product rather than an identical cheaper version.

The second is that patients suffering from the early stages of a serious disease

might not consult their doctor until the symptoms become acute, by which time it

might be too late to treat the disease, or very expensive to do so. With a free health

service, however, there is likely to be an earlier diagnosis of serious conditions. On the

other hand, some patients might consult their doctors over trivial complaints.

6. If doctors and hospitals operated in the free market as profit maximisers, it

is possible that they would collude to fix standard prices for treatment, so as to pro-

tect their incomes.

Even if doctors did compete openly, it is unlikely that consumers would

106

have the information to enable them to “shop around” for the best value. Doctor A

may charge less than doctor B, but is the quality of service the same? Simple bed-

side manner – the thing that may most influence a patient’s choice – may be a poor

indicator of the doctor’s skill and judgment.

7. To argue that the market system will fail to provide an optimal allocation of

health-care resources does not in itself prove that free provision is the best alternative. In

the USA there is much more reliance on private medical insurance. Only the very poor

get free treatment.

Alternatively, the government may simply subsidise the provision of health

care, so as to make it cheaper rather than free. This is the case with prescriptions and

dental treatment in the UK, where many people have to pay part of the cost of treat-

ment. Also the government can regulate the behaviour of the providers of health care,

so as to prevent exploitation of the patient. Thus only people with certain qualifications

are allowed to operate as doctors, nurses, pharmacists, etc.

I. Match each of these statements with one of the parts numbered 1-7:

A. Health care generates a number of benefits external to the patient.

B. There are alternative policies open to a government to tackle market

failings.

C. It is difficult for people to predict their future medical needs.

D. Patients might be at a disadvantage because of their ignorance.

E. It is unlikely that competition would drive down prices charged by

doctors and hospitals.

F. People may not be able to afford treatment.

G. It is important to make a distinction between health care and other

products and services allocated through the market.

II. Say whether the following sentences are “Right” or “Wrong”. If

there is not enough information to answer, choose “Doesn’t say”.

1. The National Health Service provides free medicines for everyone.


2. Health insurance could solve the problem of planning future medical expenses.


3. The market would fail to produce sufficient health care by equating public bene-

107

fits and costs.


4. With a free health service, more people would consult their doctor at the early

stages of a disease.


5. The US government subsidises the provision of health care.


III. For each question 1-5, mark one for the answer you choose.

1. The concept of equity applied to health care implies

A. treatment according to the ability to pay.

B. treatment according to social status.

C. treatment according to medical need.

2. The problem with medical insurance is that

A. the poor might not be able to obtain cover.

B. the premiums might be too high for the poor.

C. it might make it difficult for people to plan their budget.

3. If there were a market system of allocating health care,

A. doctors and drugs companies would probably take advantage of patient ignor-

ance.

B. patients would be better informed.

C. patients would be more willing to buy expensive branded products.

4. In the free market

A. doctors’ fees would be reduced by competition.

B. doctors might charge standard prices for treatment.

C. price would be an indicator of the doctor’s skill.

5. According to the writer, a free health service

A. is sure to provide an optimal allocation of health-care resources.

B. should be restricted to the very poor.

C. is not necessarily the best alternative.

108

CAN THE MARKET PROVIDE ADEQUATE PROTECTION FOR THE ENVIRONMENT?

___ (1)

In recent years people have become acutely aware of the damage being done

to the environment pollution. But if the tipping of chemicals and sewage into the

rivers and seas and the spewing of toxic gases into the atmosphere cause so much

damage, why does it continue? If we all suffer from these activities, both consumers

and producers alike, then why will a pure market system not deal with the problem?

After all, a market should respond to people’s interests.

___ (2)

The reason is that the costs of pollution are largely external costs. They are

borne by society at large and only very slightly (if at all) by the polluter. If, for ex-

ample, 10 000 people suffer from the smoke from a factory (including the factory

owner) then that owner will only bear approximately 1/10 000 of the suffering. That

personal cost may be quite insignificant when the owner is deciding whether the

factory is profitable. And if the owner lives far away, the personal cost of the pollu-

tion will be zero.

Thus the social costs of polluting activities exceed the private costs. If

people behave selfishly and only take into account the effect their actions have on

themselves, there will be an overproduction of polluting activities.

Thus it is argued that governments must intervene to prevent or regulate pol-

lution, or alternatively to tax the polluting activities or subsidise measures to reduce

the pollution.

___ (3)

But if people are purely selfish, why do they buy “green” products? Why do

they buy, for, example, “ozone-friendly” aerosols? After all, the amount of damage

done to the ozone layer from their own personal use of “non-friendly” aerosols would

be absolutely minute. The answer is that many people have a social conscience. They

do sometimes take into account the effect their actions have on other people. They are

not totally selfish. They like to do their own litt le bit, however small, towards protect-

ing the environment.

Nevertheless to rely on people’s consciences may be a very unsatisfactory me-

thod of controlling pollution. In a market environment where people are all the time

being encouraged to consume more and more goods and where materialism is the reli-

gion of the age, there would have to be a massive shift towards “green thinking” if the

market were to be a sufficient answer to the problem of pollution.

109

___ (4)

Certain types of environment problem may get high priority in the media,

like acid rain, the greenhouse effect, damage to the ozone layer and brain damage to

children from leaded petrol. However, the sheer range of polluting activities makes

reliance on people’s awareness of the problems and their social consciences far too

arbitrary.

I. Which text reports on these items?

A. Media priority of the environmental problems.

B. Costs of pollution.

C. A market response to the environmental problem.

D. People’s selfishness and social responsibility.


1. A market system should deal with the problem of pollution because

A. consumers suffer from producers’ activities.

B. people have become acutely aware of the problem.

C. it should react to people’s interests.

2. The costs of pollution

A. are mostly suffered by society.

B. are borne by the polluter.

C. are personal costs of the factory owner.

3. People buy “green” products and “ozone-friendly” aerosols because

A. they are totally selfish.

B. they are aware of the damage they do to the ozone layer from their personal use

of “non-friendly” goods.

C. being socially responsible they take into consideration the possible impact of

their actions on other people.

110

4. A very unsuitable way of controlling pollution could be

A. encouraging people to buy more and more goods.

B. organizing “ green thinking” propaganda.

C. relying on people’s being socially conscious.

III. The mistakes in the sentences below have been underlined. Write


1. Recently people became aware of the damage being done to the environment by

pollution.

2. Personal costs may be quite insignificantly when the owner is deciding whether

the factory is profitable.

3. People take into account the effect their actions have to themselves.

4. They like to do their own little bit, otherwise small, towards protecting the envi-

ronment.

5. To rely on people’s conscious may be a very unsatisfactory method of controlling

pollution.

1. _____________________________________________

2. _____________________________________________

3. _____________________________________________

4. _____________________________________________

5. _____________________________________________

111

STRATEGIC TRADE THEORY An argument for protection?

I. Read the text. Some parts of the text have been taken out. These extracts

are listed below. Complete each gap with the appropriate extract. One sentence

does not belong in any of the gaps.

a) Governments frequently adopt trade protection because it is an easy op-tion politically.

b) These policies include quotas, exchange controls, import licensing, export

taxes, tariffs.

c) Infra-industry occurs because of scale economies and consumer demand

for diversity. d) Reasons for restricting trade that have some validity in a world context

include some arguments.

e) Although international trade can benefit the world as a whole, some countries

will lose out until the gainers compensate the losers.

1. Lester Thurow is Dean of the Sloan School of management at the Massa-chusetts Institute of Technology (MIT). He is also one of the USA’s best -known and

most articulate advocates of “managed trade”.

2. Thurow (and others) have been worried by the growing p enetration of US

markets by imports from Japan, Europe and many developing countries. Their re-

sponse is to call for a carefully worked-out strategy of protection for US industries. ___ (1)

The strategic trade theory that they support argues that the real world is complex. It

is wrong, they claim, to rely on free trade and existing comparative advantage. Particular

industries will require particular policies of protection or promotion tailored to their particu-

lar needs: ___ (2)

3. Some industries will require protection against unfair competition from

abroad – not just to protect the industries themselves, but also to protect the con-

sumer from the oligopolistic power that the foreign companies will gain if they suc-

ceed in driving the domestic producers out of business.

Other industries will need special support in the form of subsidies to enable them to modernize and compete effectively with imports.

New industries may require protection to enable them to get established –

to achieve economics of scale and build a comparative advantage.

If a particular foreign country protects or promotes its own industries, it

may be desirable to retaliate in order to persuade the country to change its mind.

4. Thurow claims that Japan has been following a policy of managed trade

for years – and look how successful it has been!

5. But, despite the enthusiasm of the strategic trade theorists, their views have come in for concerted criticism from economic liberals. If the USA is protected

from cheap Japanese imports, they claim, all that will be achieved is a huge increase

in consumer prices. The car, steel, telecommunications and electrical goods indus-

tries might find their profits bolstered, but this is hardly likely to encourage them to

be more efficient.

112

6. Another criticism of managed trade is the difficulty of identifying just which industries need protection, and how much and for how long. Governments do

not have perfect knowledge. What is more, the political lobbyists from various inter-

ested groups are likely to use all sorts of tactics – legal and illegal – to persuade the

government to look favourably on them. In the face of such pressure will the gov-

ernment remain “objective”? No, say the liberals. ___ (3)

7. So how do the strategic trade theorists reply? If it works for Japan, they

say, it can work for the USA. What is needed is a change in attitudes. ___ (4) Rather

than industry looking on the government as either an enemy to be outwitted or a

potential benefactor to be wooed, and government looking on industry as a source of

votes or tax revenues, both sides should try to develop a partnership – a partnership from which the whole country can gain.

8. But whether sensible, constructive managed trade is possible in the US

democratic system, or the UK for that matter, is a highly debatable point. “Sensible”

managed trade, say the liberals, is just pie in the sky.

II. For each statement 1-3, mark one for the answer you choose. 1. Managed trade relies on:

A. free market.

B. existing comparative advantage.

C. government intervention.

2. Industries might find their profit bolstered because:

A. They are protected from export.

B. They are protected from importation of cheap goods.

C. They are very efficient.

3. The liberals are convinced that sensible constructive managed trade is:

A. possible in the US democratic system.

B. possible in the UK.

C. hardly possible.

III. Are sentences below “right” or “wrong”? If there is not enough i n-


1. Advocates of managed trade claim that governments may intervene in trade.


2. Economic liberals argue that free trade may allow the importation of harmful

goods.


3. Supporters of managed trade insist on legal and administrative barriers.


4. Critics of free trade don’t believe in sensible, constructive managed trade.


113

5. The argument for restricting trade is the danger of the establishment of a foreign-

based monopoly.


IV. Match each of these statements with one of the paragraphs num-

bered 1-8.

A. Although there are many circumstances in which international trade

can make countries better off, international trade can also carry costs.

B. Countries may also promote their own industries by subsidies.

C. The government can’t remain objective in the face of political lob-

byists.

D. Managed trade is a debating point.

114

CONCENTRATION RATIOS Measuring the degree of competition

We can get some indication of how competitive a market is by observing the

number of firms: the more the firms, the more competitive the market would seem to be.

However, this does not tell us anything about how concentrated the market might be.

There may be many firms (suggesting a situation of perfect competition or monopolistic competition), but the largest two firms might produce 95 per cent of total output. This

would make these two firms more like oligopolists.

Thus even though a large number of producers may make the market seem

highly competitive, this could be deceiving. Another approach, therefore, to measur-

ing the degree of competition is to focus on the level of concentration of firms. The simplest measure of industrial concentration involves adding together

the market share of the largest so many firms: e.g. the largest three or the largest

five. This would give what is known as the “3-firm” or “5-firm concentration ratio”.

The table (Fig. 1) shows the 5-firm concentration ratios of selected indus-

tries in the UK. As you can see, there is an enormous variation in the degree of con-centration from one industry to another.

One of the main reasons for this is difference in the percentage of total in-

dustry output at which economies of scale are exhausted. If this occurs at a low level

of output, there will be room for several firms in the industry which are all benefit-

ing from the maximum economies of scale. Differences in the economies of scale are not the only cause of differences in

concentration. The degree of concentration will also depend on the barriers to entry

of other firms into the industry and on various factors such as transport costs and

historical accident. It will also depend on how varied the products are within any

one industrial category. For example, in categories as large as “clothing” and “toys and sports goods” there is room for many firms, each producing a specialized range

of products. Within each sub-category, e.g. tennis racquets, there may be relatively

few firms producing.

So is the degree of concentration a good guide to the degree of competitive-

ness of the industry? The answer is that it is some guide, but on its own it can be misleading. In particular it ignores the degree of competition from abroad, and from

other areas within the country. Thus the five largest UK motor vehicle manufactur-

ers may produce 82.9 per cent of UK vehicle output, but these manufacturers face

considerable competition from imported cars and lorries. On the other hand, the five

largest water suppliers may account for only 49.7 per cent of UK output, but within their own regions of the country they have a monopoly.

Figure 1

Industry 5-firm concentration ratio

Tobacco products 99.5

Iron and steel 95.3

Asbestos goods 89.8

Motor vehicles and engines 82.9

Cement, lime and plaster 77.7

Grain milling 62.3

115

Water supply 49.7

Footwear 48.2

Bread, biscuits, etc. 47.0

Carpets 21.8

Clothing 20.7

Bolts, nuts and springs 11.4

Processing of plastics 8.8

I. Are the sentences below “Right” or “Wrong”? If there is not enough information to answer, choose “Doesn’t say”.

1. The more the firms, the more concentrated the market is.


2. The simplest measure of industrial concentration involves summing up the market

share of the largest companies existing on the market. A. Right B. Wrong C. Doesn’t say

3. The degree of concentration only varies from one industry to another because of

the differences in the extent of economies of scale.


4. In such categories as “clothing” and “toys and sports goods” there is not much room for many firms.


5. The degree of concentration on its own can’t reflect the situation in the market.


II. For each question, mark one for the answer you choose.

1. We can get some indication of how competitive a market is by

A. observing the number of firms.

B. analyzing activities of the companies in the market.

C. measuring the degree of competition.

2. The degree of concentration doesn’t depend on

A. barriers to entry of other firms into the industry.

B. transport costs.

C. history of the company.

3. Within each industrial sub-category

A. the number of companies increases.

B. there may be fewer companies producing similar goods.

C. there is enough space for many companies.

III. In most of the lines below there is one extra word. It is either gram-

matically incorrect or doesn’t fit in with the sense of the text. Some lines, how-

116

ever, are correct. If there is an extra word, write it out in CAPITAL LET-

TERS.

00 So is the degree of firm concentration a good guide to

01 the degree of competitiveness of the industry? The

02 answer is that it is some guide, but on its own it can be

03 misleading. In some particular it ignores the degree of compet ition

04 from abroad, and from others areas within the

05 country. Thus the five largest UK motor car vehicle manufacturers

06 may have produce 82.9 per cent of UK vehicle output,

07 but these manufacturers may face much considerable compet ition

08 from imported cars and lorries. On the other hand, the

09 five largest water suppliers may to account for only 49.7

10 per cent of UK production output, but with their own regions of the

11 country they should have a monopoly.

117

COMPETITIVE ADVANTAGE AND THE SMALL FIRM SECTOR

The fact that many small businesses do survive, and some manage to grow, suggests that they must have some edge over their larger rivals. The following have

been found to be the key competitive advantages that small firms might hold.

___ (1)

Small firms are more able to respond to changes in market conditions and to meet customer requirements effectively. For example, they may be able to develop

or adapt products for specific needs. Small firms may also be able to make decis ions

quickly, avoiding the bureaucrat ic and formal decis ion -making processes that

typify many larger companies.

Quality of serv ice. Small firms are more able to deal wit h cust omers in a personal manner and offer a more effective after-sales service.

Production efficiency and low overhead costs. Small firms can avoid some of

the diseconomies of scale that beset large companies. A small firm can benefit from:

management that avoids waste; good labour relations; the employment of a

skilled and motivated workforce; lower accommodation costs. Product development. As we have seen, many small businesses operate in

niche markers, offering specialist goods or services. The distinctiveness of such

products gives the small firm a crucial advantage over its larger rivals. A success-

ful small business strategy, therefore, would be to produce products that are

clearly differentiated from those of large firms in the market, thereby avoiding head-on competition – competition which the small firm would probably not be

able to survive.

___ (2)

Small businesses, especially those located in high-technology markets, are fre-

quently product or process innovators. Such businesses, usually through entre-preneurial vis ion, manage successfully to mat ch such innovat ions to changing

market needs. Many small bus inesses are, in this respect , path breakers or

market leaders.

Small businesses do, however, suffer from a number of s ignificant limit a-

tions.

Problems facing small businesses

The following points have been found to hinder the success of small firms.

___ (3)

Small firms face many problems in selling and marketing their products, es-

pecially overseas. Small firms are perceived by their customers to be less stable

and reliable than their larger rivals. This lack of credibility is likely to hinder

their ability to trade. This is a particular problem for “new” small firms which

have not had long enough to est ablish a sound reputation.

Funding R&D. Given the specialist nature of many small firms, their long-

run survival may depend upon developing new products and processes in order

118

to keep pace with changing market needs. Such developments may require s ignif-

icant R&D investment. However, the ability of small firms to attract finance is li-

mited, as many of them have virtually no collateral and they are frequently per-

ceived by banks as a highly risky investment.

___ (4)

A crucial element in ensuring that small businesses not only survive but

grow is the quality of management. If key management skills, such as being able to

market a product effectively, are limited, then this will limit the success of the

business.

___ (5)

Small firms will have fewer opportunities and scope to gain economies of

scale, and hence their costs are likely to be somewhat higher than their larger

rivals. This will obviously limit their ability to compete on price.

I. Match each of these headlines with one of the texts above.

A. Innovation _______________

B. Management skills _______________

C. Flexibility _______________

D. Economies of scale _______________

E. Selling and marketing _______________

119


is correct?

1. Small firms must have some edge over their larger rivals.

A. Small firms are far ahead of their large rivals.

B. Small firms have to be better than their large rivals to compete with them.

C. All small firms will soon fail.

2. Small firms are perceived by their customers to be less stable and reliable than

their larger rivals.

A. Small firms are less reliable than their large rivals.

B. Small firms can’t find their customers.

C. Customers think that small firms are less reliable than their large rivals.

3. This lack of credibility is likely to hinder their ability to trade.

A. Customers’ faith in small firms is low which limits their sales.

B. Customers of small firms are lucky.

C. Customers will stop small firms from getting credits.

III. Are sentences below “Right” or “Wrong”? If there is not enough i n-


1. Small firms offer better maintenance support.


2. A small firm can benefit from lower prices.


3. Small firms have less problems selling abroad.


4. Small firms are unable to get credits in the bank.


120

GROWTH THRO UGH DIVERSIFICATION


tracts are listed below. Complete each gap with the appropriate extract. One

sentence does not belong in any of the gaps.

a) There are three principal factors which might encourage a business to di-

versify. b) Alternatively, the business might be in a market where demand is stagnant

or declining.

c) Such products need not cover similar activities.

d) As a result, control over market share is becoming even more crucial.

e) Diversification therefore enables the business to spread risk.

Diversification is the process whereby a firm shifts from b eing a single-

product to a multiproduct producer. ___ (1) We can in fact identity four directions in

which diversification might he undertaken:

Using the existing technological base and market area.

Using the existing technological base and new market area.

Using a new technological base and existing market area.

Using a new technological base and new market area.

Categorising the strategies in this way would suggest that the direction of

diversification is largely dependent upon both the nature of technology and the mar-

ket opportunities open to the firm. But the ability to capitalise on these features de-

pends on the experience, skills and market knowledge of the managers of the busi-

ness. In general, diversification is likely to occur in areas where the business can use and adapt existing technology and knowledge to its advantage.

The diversification of Amstrad, the personal computer manufacturer, into the

mobile telephone market is a good example of where a business’s current technolo-

gy and market knowledge are being applied to a distinct new product.

Why diversification? ___ (2)

Stability. So long as a business produces a single product in a single market,

it is vulnerable to changes in that market’s conditions. If a farmer produces nothing

but potatoes, and the potato harvest fails, the farmer is ruined. If however, the farmer

produces a whole range of vegetable products, or even diversifies into livestock, then he or she is less subject to the forces of nature and the unpredictability of the

market. ___ (3)

Maintaining profitability. Businesses might also be encouraged to diversify

if they wish to protect existing profit levels. It may be that the market in which a

business is currently located is saturated and that current profitability is perceived to be at a maximum. ___ (4) In such cases the business is likely to see a greater return

on its investment by diversifying into new product ranges located in dynamic ex-

panding markets.

Growth. If the current market is saturated, stagnant or in decline, diversifica-

tion might be the only avenue open to the business if it wishes to maintain a high

121

growth performance. In other words, it is not only the level of profits that may be limited in the current market, but also the growth of sales.

II. The mistakes in the sentences below have been underlined. Correct

them.

1. Diversification is the process whereby a firm shifts to being a single-producer.

2. Although a business produces a single product in a single market, it depends on that market.

3. Diversification enable the business to spread risk.

4. Businesses might also have encouraged to spread risk.

5. In other words, it is not only the current markets that may be limited in the level

of profits, but also the growth of sales.

1.

2.

3.

4.

5.

122

THE FIRM AS A LEGAL ENTITY

The legal structure of the firm is likely to have a significant impact on its con-

duct, and subsequent performance, within the market place. There are several types of

firm, each with a distinct legal status.

___ (1)

This is where the business is owned by just one person. Usually such bus i-

nesses are small, with only a few employees. Retailing, building and farming are

typical areas to find sole proprietorships. Such businesses are easy to set up and

may require only a relatively small initial capital investment. They may well flou-

rish if the owner is highly committed to the business, and they can be very flexible

to changing market conditions. They suffer two main disadvantages, however:

Limited scope for expansion. Finance is limited to what the owner can

raise personally. Also there is a limit to the size of an organisation that one person

can effectively control.

Unlimited liability. The owner is personally liable for any losses that the busi-

ness might make. It could result in the owner’s house, car and other assets being seized to

pay off any outstanding debts.

___ (2)

This is where two or more people own the business. In most partnerships

there is a legal limit of 20 partners. Partnerships are common in the same fields as

sole-proprietorships. They are also common in the professions: solicitors, accoun-

tants, surveyors, etc. With more owners, there is more scope for expansion. More

finance can be raised and the partners can each specialise in one aspect of the busi-

ness.

Partners, however, still have unlimited liability. This problem could be very

serious. The mistakes of one partner could jeopardise the personal assets of all the

other partners.

Where large amounts of capital are required and/or when the risks of busi-

ness failure are relatively high, partnerships are not an appropriate form of organi-

sation. In such cases it is best to form a company (or “joint -stock company” to give

it its full title).

123

___ (3) A company is legally separate from its owners. This means that it can en-

ter into contracts and own property. Any debts are its debts, not the owners.

Each owner has a share in the company. The size of their share holdings

will vary from one shareholder to another and will depend on the amount they

invest. Each shareholder will receive his or her share of the company’s distr i-buted profit. The payments to shareholders are called “dividends”.

The owners have only limited liability. This means that, if the company

goes bankrupt, the owners will lose the amount of money they have invested in the

company, but no more. Their personal assets cannot be seized. This has the advan-

tage of encouraging people to become shareholders, and indeed large companies may have thousands of shareholders – some with very small holdings and others,

including institutional shareholders such as pension funds, with very large hold-

ings. Without the protection of limited liability, many of these investors would

never put their money into any company that involved even the slightest risk.

Shareholders often take no part in the running of the firm. They may elect a board of directors which decides broad issues of company policy. The board of

directors in turn appoints managers who make the day -to-day decisions. There

are two types of companies: public and private.

Public limited companies. Don’t be confused by the title. A public limited

company is still a private enterprise: it is not a nationalised industry. It is “pub-lic” because it can offer new shares publicly: by issuing a prospectus, it can in-

vite the public to subscribe to a new share issue. In addition, many public li-

mited companies are quoted on the Stock Exchange. This means that exis ting

shareholders can sell some or all of their shares on the Stock Exchange. The

prices of these shares will be determined by demand and supply. A public li-mited company must hold an annual shareholders’ meeting.

Private limited companies. Private limited companies cannot offer their

shares publicly. Shares have to be sold privately. This makes it more difficult for

private limited companies to raise finance, and consequently they tend to be

smaller than public companies. They are, however, easier to set up than public companies.

___ (4)

It is common, especially in large civil engineering projects that involve

very high risks, for many firms to work together as a consortium. The Channel

Tunnel and Thames Barrier are products of this form of business organisation.

Within the consortium one firm may act as the managing contractor, while the

other members may provide specialist services. Alternatively, management may

be more equally shared.

I. Match each of these headlines with one of the texts above.

A. Consortia of firms ________________

B. The sole proprietor ________________

C. The partnership ________________

124

D. Companies ________________

II. Which text reports on these items?

A. Personal liability for all losses ________________

B. Company’s distributed profit ________________

C. High risk projects ________________

D. Jeopardy of personal assets ________________

III. In most of the lines below there is one extra word. It is either gram-matically incorrect or does not fit in with the sense of the text. Some lines, howev-

er, are correct. If there is an extra word in the line, write out the extra word in

CAPITAL LETTERS.

00 Co-operatives. These are of two types.

01 Consumer co-operatives. These, like the old high street Co-ops, are

02 officially owned by the consumers. Consumers in a fact play no part in

03 the running of these co-ops. They are run by various professional

04 the managers.

05 Producer co-operatives. These are firms that are owned by their workers,

06 who share in the firm’s profit according to some agreed formula. They are

07 sometimes formed by people in the same trade coming together: in

08 example, producers of handicraft goods. At an other times they are formed

09 by workers buying out their factory from the owners; this is most likely if

10 it is due to close, with a resultant loss of jobs. Producer co-operatives,

11 although still relatively few in number, have grown in recent years.

125

IV. Choose the best answer to complete each gap in the text.

Public corporations

These are state-owned enterprises such as the BBC, the Bank of England and

nationalised industries.

They have a legal identity separate ___ (1) the government. The corporation

is run ___ (2) a board, but the members of the board are ___ (3) by the relevant gov-

ernment minister. The boards have to act within various ___ (4) of reference laid

down by Act of Parliament. Profits of public corporations that are not reinvested

accrue to the ___ (5). Since 1980 many public corporations have been “privatised”:

that is, they have been sold directly to other firms in the ___ (6) sector (such as Aus-

tin Rover to British Aerospace) or to the general public through a public issue of

shares (such as British Gas).

1. a) in b) from c) away d) out of

2. a) with b) that c) those d) by

3. a) appointed b) managed c) controlled d) run

4. a) terms b) conditions c) items d) notes

5. a) Central Bank b) Foreign Office c) Treasury d) Cabinet

6. a) industry b) commerce c) private d) manufacturing

126

SHOULD CENTRAL BANK BE INDEPENDENT OF GOVERNMENT?




a) An independent central bank is free from political manipulation.

b) But the Bundesbank was concerned to dampen the inflationary pressures

caused by German reunification.

c) The advocates of independence frequently cite the experience of Germa-

ny.

d) Technology provides both opportunities and threats to the banking co m-

munity.

e) But with an independent central bank committed to monetary st ability, it

may be difficult for the government to achieve such economic policy goals.

In recent years there has been much discussion among both economists and

politicians as to whether the Bank of England should be independent. ___ (1). The

Bundesbank, Germany’s central bank, is fiercely independent, and is credited with

being instrumental in Germany’s economic success. The Bundesbank’s philosophy

is simple: Monetary and price stability are of overriding importance in the pursuit of

growth. Inflation should be tightly controlled at all times.

The arguments in favour of an independent central bank are strong.

– ___ (2) It can devote itself to attaining long-run economic goals, rather

than to helping politicians achieve short-run success in time for the next

election.

– Independence may strengthen the credibility of monetary policy. This may

then play an important part in shaping expectations: workers may put in

moderate wage demands and businesses may be more willing to invest.

– An independent central bank has a clear legal status and set of responsibili-

ties. It is the “protector of the currency” and as such it is not subordinate

to government. This is important given the political nature of economic

policy making in both a domestic and an international context. The Bun-

desbank’s policy concerning the ERM (European Monetary System) is a

good example. In 1992, international pressure mounted on Germany to

cut interest rates as other ERM members faced a deeping recession. ___

(3). It stuck firmly to its statutory obligations and refused to cut interest

rates, except when the domestic economy allowed.

127

The statistics show that the greater the independence of a country’s central

bank, the lower and more stable is its rate of inflation. If this is the goal of economic

policy, it seems that more rather than less independence is desirable.

One of the major arguments against having an independent central bank is that it

makes it more difficult to integrate monetary management into wider economic objec-

tives. On some occasions it may be desirable to accept a higher rate of inflation – if this

were the consequence of a growth stimulus aimed at reducing unemployment. ___ (4).

II. Are sentences below “Right” or “Wrong”? If there is not enough in-


1. Monetary policy does not influence the economic growth.


2. The trustworthiness of monetary policy often depends on the level of indepen-

dence of a central bank.


3. Monetarists believe that controlling money is the only essential function of gov-

ernments.


4. An independent bank should have a clearly set of objectives defined by the gov-

ernment.


5. There might be situations when a sustained rise in the average prices of goods

could lead to reduced unemployment.


6. It should be noted that central banks ordinarily do not provide commercial bank-

ing services for the general public.


128



1. To achieve such goals may be difficult with a central bank committing to mone-

tary stability.

2. In the early 1990s international pressure has mounted on the

country.

3. Recently it has been much discussion of this issue.

4. The Bundesbank is crediting with being helpful in Germany’s

success.

5. The greater the independence of a country’s central bank, lower and more stable

is the rate of inflation.

1. _____________________________________________

2. _____________________________________________

3. _____________________________________________

4. _____________________________________________

5. _____________________________________________

129

ARE THE DAYS OF CASH NUMBERED? EFTPOS versus ATMs

I. Read the text. Some parts of the texts have been taken out. These extracts

are listed below. Complete each gap with the appropriate extract. One sentence does

not belong in any of the gaps.

a) But under some circumstances cheques are more efficient than cash. b) Subsequently your account will be automatically debited and the retai l-

er’s account automatically credited.

c) So are we using more cash or less cash?

d) So are we moving towards a cashless society? Probably not.

e) This is where you pay for goods in the shops by means of a card – either a credit card (like Access or Visa) or a debit card (like Switch or Connect).

f) Banking is becoming increasingly automated, with computer debiting and

crediting of accounts replacing the moving around of pieces of paper.

___ (1) What was once done by a bank clerk is often now done by computer.

One possible outcome of this replacement of labour by computers is the gra-dual elimination of cash from the economy – or so some commentators have

claimed.

The most dramatic example of computerisation in recent years has been EFTPOS

(electronic funds transfer at the point of sale). ___ (2) The card is simply “swiped”

across a machine at the till which may then require you to enter your PIN (personal identification number). The details of the transaction (the amount, the retailer and

your card number) are then transmitted down the line to the EFTPOS UK processing

centre. If necessary, the information is then directed down the line to the card issuer

for authorisation. If the card is valid and the transaction acceptable, then within

seconds the machine will issue a slip for you to sign and the purchase is complete. ___ (3)

The advantage of this system is that it does away with the processing by

hand of pieces of paper. In particular it does away with the need for (a) credit -card

slips when used in conjunction with credit cards and (b) cheques. Both cheques and

credit-card slips have to be physically moved around and then read and processed by people. If this EFTPOS system were to become widely used for small transactions, it

could well reduce the need for cash. But reducing the need for cash is not the prime

purpose of EFTPOS. Its prime purpose is to do away with cheques and credit -card

slips.

____ (4) Cash is still the simplest and most efficient way of paying for a host of items, from your bus ticket to a newspaper to a packet of mints. What is more,

another technical innovation is moving us in the direction of using more cash, not less!

This is the cash machine – or ATM (automated teller machine), to give it its official

title.

____ (5) The evidence suggests a gradual decline in cash in circulation as a proportion of GDP. It fell from just over 5 per cent of GDP in 1980 to just over 2%

per cent in 1997.

130

But although the effects of EFTPOS and ATMs may be quite different in terms of the use of cash, they both have the same advantage to banks: they reduce the need for

bank staff and thereby reduce costs.


is correct?

1. One possible outcome of the replacement of labour by computers is the gradual elimination of cash from the economy – or so some commentators have claimed.

A. It is suggested that cash should be removed from the economy.

B. It is supposed that computers will deal with cash rather than people.

C. It is stated that the economy might get rid of cash as a result of computerisation.

2. If necessary, the information is then directed down the line to the card issuer for authorisation.

A. If there is a need the card issuer is addressed for user identification.

B. If necessary, local authorities are addressed to confirm the information.

C. Every time the card is used, it should be checked by the card issuer.

3. The advantage of this system is that it does away with the processing by hand of pieces of paper.

A. The system has stopped the processing by hand of pieces of paper and this is its

advantage.

B. There is not much paperwork with the introduction of the system.

C. The system has the advantage of completing manual processing of pieces of p a-per.

4. If this EFTPOS system were to become widely used for small transactions, it

could well reduce the need for cash.

A. The application of the EFTPOS system to a greater number of small transactions

is likely to reduce the need for cash. B. Cash will no longer exist, if the EFTPOS system is used for small transactions.

C. Making small transactions people would avoid using cash if the EFTPOS system

were introduced.

III. Choose the best answer to complete each gap in the text.

The ___ (1) of cash machines to virtually ___ (2) bank and building society branch and to many larger stores has been ___ (3) in recent years. The sheer simplic-

ity of ___ (4) cash at all hours from these machines, not only from your ___ (5)

account but also on your credit card, is obviously a huge encouragement to the use

of cash.

1. a) use b) development c) spread d) set-up 2. a) each b) every c) either d) all

3. a) intermediate b) rapid c) instantaneous d) temporary

4. a) achieving b) reaching c) accepting d) obtaining

5. a) current b) every day c) daily d) flow

IV. Are sentences below “Right” or “Wrong”? If there is not enough in-formation to answer, choose “Doesn’t say”’.

131

1. In practice people use a cheque when they want to give a direction to a bank to pay money on demand to a named person or organization.


2. Every time you pay by means of a card you should enter your PIN.


3. Though there are several purposes of the EFTPOS system, the main one is elimi-nation of cheques and credit-card slips.


4. Cash still is used to pay for various items and its use has even grown.


5. Both EFTPOS and ATMs despite their differences might make the activity of banks more economical.


132

REGULATION US -STYLE

In the USA, utilities such as electricity, gas, water and telecommunications

have for the most part always been private companies (although a few are state

owned). To prevent the abuse of monopoly power, the utilities are regulated by fed-

eral or state governments through regulatory commissions. Unlike in the UK, where

prices are regulated according to an “RPI minus X” formula, the prime focus of US regulation is the company’s “rate of return” (i.e. its rate of profit).

The system involves limiting prices to a level which will give a normal rate

of profit. In other words, the company will be allowed to charge a price equal to the

average cost of production, where average cost includes a “fair rate of return on

capital”. The actual calculations are normally done using total revenue and total cost

according to the following formula: TR = TVC + K, where TR is the maximum

permitted total revenue for that year (known as the “revenue requirement”), TVC is

total variable costs (known as “operating expenses”), K is the total replacement cost

of capital (known as the “rate base”) and is the permitted annual rate of return, as a percentage of the rate base.

To give an example: if a firm’s variable costs (TVC) were $4 million, the

rate base (K) were $20 million and a normal rate of return ( ) were judged by the

regulatory commission to be 10 per cent, then according to the formula, the firm

would be permitted to charge a price that would yield a revenue requirement (TR )

of:

$4m + 0.1($20m) = $6m.

There has been growing concern in the USA over the effects of using rate-

of-return regulation. The argument is that it encourages inefficiency. First there is the problem of allocative inefficiency. The US system will en-

tail the company setting a price equal to long-run average cost. The socially efficient

position, however, is where price equals long-run marginal cost.

Then there is the potentially more serious problem of productive or technical in-

efficiency (not using factors in the way that maximises output) and X inefficiency (lack of motivation to cut wasteful expenditure and to introduce cost-cutting measures). What is

the incentive for a regulated firm to produce at a lower cost? If it introduces new technol-

ogy or improved working practices that have the effect of increasing profit, the regulator

will insist on a lower revenue requirement and hence a lower price. The extra profit will

simply be taken away. In fact, there is an incentive for the firms to let costs rise. The costs of higher

salaries and more luxurious offices, for example, can simply be passed on to the

consumer in higher prices!

With unregulated monopolies, at least there is pressure from shareholders

for the firms to be efficient. There is also competition on the market for corporate control: managers are afraid that if their firm is inefficient, other firms may mount a

takeover bid. With the regulated utilities in the USA, however, these pressures are

absent. Shareholders have nothing to gain from increased efficiency if profits are not

allowed to increase as a result. Also there is no benefit to other firms in mounting a

takeover bid. If they were successful, they would merely find themselves the subject of regulation.

133

Then there is the problem of regulatory lag. In periods of rapidly rising costs, it may take some time before the regulatory commission sanctions a price increase

(through a higher revenue requirement). In the meantime the firm may be forced to

operate at a loss.

I. For each question 1-5, mark one for the answer you choose.

1. Utilities in the USA are regulated in order to A. improve their efficiency.

B. raise their profits.

C. restrict monopoly power.

2. Rate-of-return regulation suggests that

A. companies are likely to be in a socially efficient position. B. resources are used in the way that maximizes output.

C. there is no incentive for companies to cut expenditure.

3. If a regulated company introduced advanced technology or better working prac-

tices,

A. its profit would go up. B. it would make no extra profit.

C. the revenue requirement would be higher.

4. The regulated utilities in the USA

A. are under pressure from shareholders.

B. are not exposed to competitive pressures. C. are often taken over by other firms.

5. The regulatory lag leads to

A. delays in setting higher prices.

B. rapidly rising costs.

C. an increase in the revenue requirement.

II. Are sentence below “Right” or “Wrong”? If there is not enough i n-


1. State owned utilities in the USA are regulated.


2. Rate-of-return regulation induces companies to set a price equal to long-run mar-ginal cost.


3. Regulated companies are not encouraged to maximise output.


4. Competition in the market for corporate control has increased. A. Right B. Wrong C. Doesn’t say

5. Firms may have to operate at a loss due to bureaucratic intervention.


III. Find the mistakes in the sentences below and write the corrections

in the spaces provided: 1. Most of the utilities in the USA had been private companies.

134

2. The actual calculations are usually used total revenue and total cost. 3. There has been growing concern in the USA on the effects of rate-of-return regu-

lation.

4. If a company will pay higher salaries, its costs can simply be passed on to the

consumer.

5. The firm may be forced to operate for a loss.

1. ___________________________________________

2. ___________________________________________

3. ___________________________________________

4. ___________________________________________

5. ___________________________________________

135

THE POLITICAL BUSINESS CYCLE


tracts are listed below. Complete each gap with the appropriate extract. One sen-


a) It is less easy in countries like the USA where elections are at fixed times.

b) That would not help the government’s election prospects. c) Inflation takes a time to build up.

d) This is a reduction in frictional unemployment.

e) This “window of opportunity” for the government is in the middle of

phase 2 – the period of rapid expansion.

f) It can then claim to the electorate that its economic policies have been a success.

g) A recession is likely to follow.

Any governments standing for re-election would like the economy to look as

healthy as possible. ___ (1)

Governments are able to engineer booms and recessions by the use of d e-mand-side policies (fiscal and monetary). For example, by cutting taxes and/or in-

creasing government expenditure, and by cutting interest rates, they can generate a

period of economic expansion.

But how is this of any use politically, if the improvement in two of the objectives

is at the cost of a deterioration in the other two? ___ (2) The answer is that there is one point in the business cycle where all four ob-

jectives are likely to be looking good. ___ (3) At this point, growth is at its highest

and unemployment is falling most rapidly. In fact, falling unemployment is probably

more popular with the electorate than simply a low level of unemployment. Three

million unemployed but falling will win more votes than one million and rising ra-pidly!

But what about the other two objectives? Surely, in the middle of phase 2,

inflation and the balance of payments will be deteriorating? The answer is that they

will probably not yet have become a serious problem. ___ (4) It will probably only

really start to rise rapidly as the peak of the business cycle is approached and short-ages and bottlenecks occur. As far as the balance of payments is concerned, this

tends only to become a serious political issue when the current account deficit gets

really severe, or if the exchange rate starts to plummet. In the middle of phase 2, it is

unlikely that this stage will yet have been reached.

By careful economic management, then, the government can get the four ob-jectives to look good at the time of the election. Of course, economic management is

not perfect and policies may take longer (or shorter) to work than the government had

anticipated. Things are made easier for governments in countries like the UK, howev-

er, where the government can choose when to call an election. ___ (5)

Once a government has won an election it can then deflate an economy in order to remove inflationary pressures and improve the balance of payments. ___ (6)

This will probably be highly unpopular with the electorate. But no matter: the gov-

ernment, having created sufficient slack in the economy, can then reflate the econo-

my again in time for the next general election!

136

It is thus possible to observe a political business cycle. Recessions follow elections. Rapid growth precedes elections.


1. The period of economic expansion is characterized by

A. a high level of unemployment.

B. increased government expenditure. C. shortages and bottlenecks.

2. Governments are able to engineer booms and recessions by

A. raising taxes.

B. decreasing government expenditure.

C. cutting interest rates.

3. The balance of payments will not probably become a serious problem if

A. the current account deficit gets severe.

B. the exchange rate starts to plummet.

C. it is improved by the government.

4. In the middle of phase 2 inflation will be deteriorating because A. there are no bottlenecks.

B. the peak of the business cycle is approached.

C. shortages do not occur.

III. There is one mistake in each of the following sentences (either an

underlined word or a phrase); you are to find it. 1. As far as unemployment concerned, it is rapidly falling.

a b c

2. In the middle of the phase 2, inflation and the balance of payments

a b

will be deteriorating. c

3. By careful economic management the government can get the

a

economy to look as healthy as possibly.

b c

4. In the USA the government cannot choose when to call an elections.

a b c

5. Once a government has won an election it can then deflate an

a

economy, thus a recession will likely to follow. b c

6. A political business cycle include recessions following elections

a b

and rapid growth preceding elections.

c

137

MANAGERS AND OWNERS: High Salaries and Corporate Goals

I. Read the text. Some parts of the text have been taken out. These ex-



a) If the share value goes above this level, the manager makes the difference. b) Increasingly there has been greater reliance on payouts of shares and share “op-

tions”, rather than on salaries and short-term bonuses.

c) But in doing this, they will fail to embark on projects which could poten-

tially be very profitable (albeit risky) and thereby fail to add value to investors’

shares. d) Share option schemes are becoming less popular.

e) High rewards are likely to motivate not only top executives, but also those

below them.

In 1995, Jack Welch, chief executive of General Electric, the American con-

glomerate, received earnings of $22 million, making him the highest -paid chief ex-ecutive in the USA.

The high pay awards given to many top managers in both the USA and the

UK has, in recent years, met with a storm of protest. Many have argued that such

pay awards have been excessive, especially when many of the companies they work

for have been cutting their workforce in a process of “rationalization” and workers’ pay has been capped or has risen only slowly.

How can such high pay awards to top executives be justified? The two main argu-

ments put forward to justify such generosity are as follows:

“The best cost money”. Failure to offer high rewards may encourage the top executives within an industry to move elsewhere.

“High rewards motivate”. ___ (1) Managers, especially those in the middle

of the business hierarchy, will compete for promotion and seek to do well with such

high rewards on offer. In addition to using high salaries to motivate managers, shareholders, who

ultimately determine the pay of top executives, have been keen to modify the

manner in which top executives receive their rewards, in order to provide additional

incentives. ___ (2) The justification for such a move is that giving rewards in the

form of shares links an environment, a rational “reward-maximising” manager will always be seeking to enhance share value, and this will be linked to the company’s

success. As such, the need for monitoring managerial activity diminishes.

The drawback of simply giving shares (as opposed to share options) to top

managers concerns how they might respond to risk. They might be “risk averse” and

seek to protect the value of their shares, preferring to avoid risky ventures that might

jeopardize profits and cause share prices to fall. ___ (3) Because of this, the giving

of share options to top managers has become more prevalent.

Share options give top managers the right to buy shares at a set price. ___ (4) If the

share price falls below this level, the manager can exercise the option not to buy. In such

138

circumstances, top managers are shielded from the risks of failure, but encouraged to do as

well as possible.

It was estimated that, in the UK in 1994, the directors and senior executives

of PowerGen and National Power had share options valued at £23 million. The chief

executive of PowerGen alone made a profit of £1.2 million by exercising his option

to buy the shares.

II. Complete the following table: A. The giving of share options to top managers allows them

B. In order to provide additional incentives shareholders

C. High rewards are likely to motivate managers in the middle of the

business hierarchy because

III. The mistakes in the sentences below have been underlined. Write the corrections in the spaces provided.

1. Many argue that such a pay awards have been excessive.

2. If the share value will go above this level, the manager makes difference.

3. Failure to offer high rewards may encourage the top executives within an industry

moving elsewhere. 4. The justification for such a move is what giving rewards in the form of shares link the

interests of managers, owners and investors.

1. _________________________________________________

2. _________________________________________________

3. _________________________________________________ 4. _________________________________________________

139

INEQUALITY AND POVERTY




a) The definition is based on judgments, made by each particular society, as

to what is considered a reasonable and acceptable standard of living, according to the conventions of the day.

b) Poverty as a social phenomenon should be eliminated.

c) A truly socialist society would be a much more equal society.

d) Nevertheless economists do have a major role to play in the analysis of

inequality. e) This may mean that some people are poor, and most on the right argue in

favour of government measures to alleviate poverty.

Inequality is one of the most contentious issues in the world of economics

and politics.

The political right argues that a certain amount of inequality and poverty is the inevitable price paid for an efficient, growing economy. People need the incentives of

high incomes to encourage them to work, train, invest and take risks. ___ (1) Neverthe-

less they worry that any significant redistribution from rich to poor may seriously re-

duce growth and efficiency by undermining incentives. People on the right also argue

from a moral standpoint that the freedom to own property and to pass it on to children, and the freedom to keep the bulk of the income from that property, are fundamental

rights.

The left, not surprisingly, disagrees. A fundamental tenet of socialism is t hat

the distribution of income should be based on need, rather than on private property

ownership and the workings of the market. ___ (2) Most socialists nevertheless do accept that there will have to be incentives for an economy to function, and that

therefore there will have to be some minimum level of inequality.

Whether the current distribution of income is desirable or not is a normative

question. Economists therefore cannot settle the debate between left and right over

how much the government should redistribute incomes from rich to poor. ___ (3) They can do the following:

Identify the extent of inequality and analyse how it has changed over time.

Explain why a particular level of income distribution occurs and what causes inequality to grow or to lessen.

Examine the relationship between equality and other economic objectives

such as efficiency.

Identify various government policies to deal with problems of inequality and poverty.

Examine the effects of these policies, both on inequality itself and on other

questions such as efficiency, inflation and unemployment.

In attempting to solve a social problem such as poverty, it is normal for the policy-making body to adopt the following four-stage approach:

The problem is defined.

140

The problem is measured.

The problem’s causes are identified.

Alternative policies are considered to cure the problem.

The importance of defining the problem of poverty correctly is that it deter-mines the subsequent stages: the number of poor, possible causes of poverty and

ways of tackling the problem.

There are two ways of looking at poverty.

Absolute poverty (or subsistence poverty).

As its name suggests, this definition involves identifying a poverty line measured in terms of those basic items considered essential to life: items such as

adequate clothing, food and shelter.

By defining poverty in absolute terms, it is assumed that all individuals have

similar minimum requirements, and that those whose means fall below the required

minimum are poor. Attempts have been made to include minimum social/cultural needs in such

definitions: for example, adequate leisure and recreation, education and security.

Relative poverty

___ (4) Hence an individual who is unable to attain this reasonable and ac-

ceptable standard is considered poor. For example, if fridges, TVs and videos are considered part of “civilised existence”, then without them you are considered poor!

The standard of living considered to be acceptable by society will differ over time,

and from one society to another.

II. Are sentences below “Right” or “Wrong”? If there is not enough in-


1. The political right is sure that a certain amount of inequality and poverty is the

inevitable price paid for an efficient growing economy.


2. Economists have a major role to play in the analysis of inequality.


3. Relative poverty is a far more stable concept.




1. Economists therefore cannot to settle the debate between left and right.

2. The standard of living considered be acceptable of society will differ over time.

3. Inequality is one of most contentious issues in world of economics and politics.

4. Hence an individual what is unable to attain this reasonable and acceptable stan-

dard is considering poor.

1. _____________________________________________

141

2. _____________________________________________

3. _____________________________________________

4. _____________________________________________

142

TECHNOLOGY AND EMPLOYMENT Does Technological Progress Create or Destroy Jobs?

1. Does technological progress destroy jobs? The obvious answer may seem

to be yes. After all, new technology often involves machines taking over jobs that

were previously done by people.

2. There is another view, however. This argues that a failure to introduce new technology and ultimately to remain competitive will offer an even worse long-

term employment problem. Markets, and hence employment, will be lost to more

efficient competitors.

3. The relative merits of each of these views are difficult to assess, since they

depend greatly upon the type of technology, its organisation in the workplace and the market within which it is located. The diagram isolates four stages in the effects of new

technology on jobs.

(3) Servicing

(4) Market expansion

Four effects of new technology on employment

Source: A. Rajan and G. Cooke. “The impact of IT on employment”. (Na-

tional Westminster Bank Quarterly Review. August 1986).

Stage (1) Design and installation Here labour requirements grow as first designers and then construction workers are

employed. As construction/installation is completed, employment from this source

will then disappear.

Stage (2) Implementation

Here labour requirements decline, especially if the technology is concerned with improving existing processes rather than creating new products.

Stage (3) Servicing

Maintenance and repair may have positive employment effects. This may gradually de-

crease over time as “teething troubles” are eliminated, or it may increase as the stock of

initially new machines begins to grow older. Stage (4) Market expansion

This represents the long-term impact of technology on employment levels as the

improved and/or cheaper products lead to more sales.

Time

(1) Design and

installation

(2) Implementation

Employment

increase

Employment

decrease

143

4. The optimistic view holds that, historically, technology has generated more jobs than it has destroyed. Total employment today is much higher than a hun-

dred years ago, and yet technological progress has allowed many goods and services

to be produced with far fewer workers. What has happened is that increased output

has more than compensated for the growth in labour productivity. There is no rea-

son, say the optimists, why this process should not continue. 5. The pessimists, however, are less certain about the potential employment

benefits of new technology. Even in growth industries, such as pharmaceuticals,

electronics, optical technology and high-value plastics, there has been a decline in

employment. Except in a few parts of the world where a rapid growth in exports has

allowed a huge expansion of output (e.g. certain south-east Asian countries), output growth in high-tech industries has not kept pace with the growth in labour produc-

tivity.

I. Which part of the text reports on these items?

A. The outcome of new technology is risky.

B. The negative influence of technological race on employment.

C. Technological changes improve the potential employment benefits.

D. Technology failure and the nature of employment.

E. How are new technology and jobs shaping their dependence?

II. Choose the best answer to complete each gap in the text.

The impact of technology not only on the ___ (1) of business, but on the economy in

general is ___ (2) illustrated by the development and use of the Internet. By 1997,

___ (3) some 40 million people and 25 000 firms used the Internet, and this figure

was rising ___ (4) over 10 per cent per month. The commercial possibilities of the

Internet ___ (5) from the selling of information and services, to global forms of cat a-

logue shopping where you can ___ (6) through a business’s product range (or surf

the net) and use your credit card number to pay. The Internet is just one example of

how technology and technological change are ___ (7) the whole structure and orga-

nisation of business, the ___ (8) of work for the worker, and the ___ (9) of business

and hence the competitive ___ (10) of national economies.

1. a) practise

2. a) brightly

b) need

b) vividly

c) necessity

c) probably

d) practice

d) evidently

3. a) worldly b) everywhere c) elsewhere d) worldwide

4. a) by b) to c) for d) on

5. a) change b) fluctuation c) range d) drive

6. a) examine b) see c) follow d) browse

7. a) drawing b) finding c) becoming d) shaping

8. a) experiment b) nature c) experience d) ideas

9. a) product b) productivity c) production d) productiveness

10. a) performance b) work c) acting d) action

144

III. In most of the lines below there is one extra word. It is either grammati-

cally incorrect or does not fit in with the sense of the text. Some lines, however, are

correct. If there is an extra word in the line, write out the extra word in CAPITAL

LETTERS.

01 Can workers who are displaced from high-tech

02 industries not as simply find jobs in other parts of the

03 economy? There are two problems over here. The first is

04 that of a structural unemployment. Displaced workers

05 may not have the skills to take up its work elsewhere.

06 Clearly up what is needed is a system of retraining that

07 enables only workers to move to alternative jobs. The

08 second is that of income distribution. If the only

09 alternative jobs are more relatively low-skilled ones in the

10 service sector (cleaners, porters, shelf packers,

11 checkout assistants, etc.), the displaced workers may

12 have to accept for a considerable cut in wages.

145

DO PEOPLE VOLUNTEER TO BE UNEMPLOYED

The distinction between voluntary and

involuntary unemployment

I. Read the text. Some parts of the texts have been taken out. These extracts are listed below. Complete each gap with the appropriate extract. One sentence does

not belong in any of the gaps.

a) “Voluntary” unemployment tends to imply that the blame for unemploy-

ment lies with the unemployed person and not with “market forces” or with inade-

quate government policies. b) Workers want to work at the current wage, but there are not enough jobs

available.

c) It occurs when the demand for certain types of labour fluctuates with the

seasons of the year.

d) Workers can hardly be said to have volunteered for these changes in d e-mand.

e) According to these economists, then, only demand-deficient unemploy-

ment would be classed as involuntary.

A distinction made by some economists is that between voluntary and invo-

luntary unemployment. Many economists would regard equilibrium unemployment as voluntary. If people choose not to accept a job at the going wage, even though

there are jobs available, then in a sense they could be said to have voluntarily chosen

to be unemployed. Disequilibrium unemployment, according to these economists,

would be classed as involuntary. ___ (1)

Some economists would also include classical unemployment as voluntary. If people, through their unions, have chosen to demand a higher wage than the equilibrium

wage, then they could be said to have collectively “volunteered” to make themselves

unemployed. ___ (2)

Some economists go even further and argue that all unemployment should

be classed as voluntary. If the cause of disequilibrium unemployment is a downward stickiness in real wage rates, then workers, either individually or collectively, are

choosing not to accept work at a lower wage.

Other economists would go to the other extreme and claim that all disequil i-

brium unemployment and most equilibrium unemployment is involuntary. Structural

unemployment, for example, results from changes in demand and/or supply patterns in the economy and a resulting mismatching of unemployed workers’ skills to the

person specifications of vacant jobs. ___ (3) True, people can be retrained, but re-

training takes time, and in the meantime they will be unemployed. Similarly with

frictional unemployment, if the cause of some people being unemployed is initial

ignorance of job opportunities and hence the time it t akes to search for a job, they cannot be said to have volunteered to be initially poorly informed.

The terms “voluntary” and “involuntary” unemployment are not only ambi-

guous, they are also unfortunate because they have strong normative overtones. ___ (4)

While in one sense, at a low enough wage rate there would probably be a job for vir-

146

tually any unemployed person, the unemployed cannot be said to be voluntarily unem-ployed if they are choosing to turn down jobs at pitifully low wages.

Although the concepts of voluntary and involuntary unemployment are common-

ly used, for the above reasons we shall avoid them.


1. According to some economists involuntary unemployment takes place when workers

A. choose to work at the equilibrium wage but can’t find a job.

B. can’t accept work at the current wage.

C. are encouraged by their unions to resign because of low wage.

2. One of the extreme viewpoints on unemployment is that A. any unemployment can be classified voluntary and involuntary at the same time.

B. all unemployment can be considered as involuntary.

C. in cases workers make their own decisions if to accept work or not.

3. Some economists claim that

A. changes in demand can lead to involuntary unemployment. B. retraining of people cause voluntary unemployment.

C. if people are initially poorly informed of job opportunities and become unem-

ployed, they are sure to have done it voluntarily.

4. It is stated that the difference between “voluntary” and “involuntary” unemploy-

ment A. is subtle.

B. is obvious.

C. is senseless.

III. Choose the best answer to complete each gap in the text.

Structural unemployment is ___ (1) the structure of the economy changes. Employ-ment in some industries may ___ (2) while in others it contracts. There are two main

reasons ___ (3) this.

A change in the pattern of demand. Some industries ___ (4) declining demand. This

may be ___ (5) to a change in consumer tastes. Certain goods may go ___ (6) fa-

shion. Or it may ___ (7) competition from other industries. For example, consumer demand may ___ (8) from coal and to other fuels.

A change in the methods of production. New techniques of production often allow

the ___ (9) level of output to be produced with fewer workers. Unless output ex-

pands sufficiently to absorb the surplus labour, people will be ___ (10) redundant.

1. a) there b) what c) where d) how 2. a) expand b) extend c) decrease d) reduce

3. a) for b) of c) to d) in

4 a) practice b) undertake c) take up d) experience

5. a) thank b) through c) due d) because

6. a) out of b) away from c) out from d) of 7. a) result in b) be caused by c) be called by d) be result from

8. a) be carried b) shift away c) be turned down d) reject away

9. a) similar b) compatibl c) equal d) same

147

10. a) done b) held c) dismissed d) made

IV. In most of the lines below there is one extra word. It is either gram-

matically incorrect or does not fit in with the sense of the text. Some lines, howe v-

er, are correct. If there is an extra word in the line, wri te out the extra word in

CAPITAL LETTERS.

01. There are two broad approaches to the tackling structural unemployment: 02. market-orientated or interventionist.

03. The first one involves encouraging people to look more active for jobs,

if necessary in

04. the other parts of the country, involves encouraging people to adopt

05. a more willing attitude on retraining, and if necessary 06. to accept some reduction in wages.

07. An interventionist approach involves direct government action to match jobs

to the unemployed.

08. Two examples are providing grants to firms to set back in areas

09. of high unemployment (regional policy), 10. and government-funded trained schemes.

148

Part IV. Fundamentals of Translation Вводное занятие

Порядок слов в английском предложении, характеристика членов

предложения с точки зрения их местоположения в структуре предложе-

ния.

Особенности системы времен английского глагола, общая харак-

теристика групп времен английского глагола, особенности перевода анг-

лийского глагола на русский язык в каждой группе времен.

Многозначность глаголов to be, to have.

Порядок слов простого повествовательного предложения.

Члены предложения

Приступая к чтению и переводу литературы по специальности на анг-

лийском языке, следует помнить о том, что связи между словами в английском

предложении осуществляются не путем изменения формы самих слов (падеж-

ных и личных окончаний, как в русском), а с помощью служебных слов, таких

как предлоги, вспомогательные глаголы, артикли. Каждое слово в английском

предложении несет в себе грамматическую или лексическую информацию.

В отличие от русского предложения (со свободным порядком слов)

английское имеет фиксированный (твердый) порядок слов.

Обязательными членами в английском предложении являются подле-

жащее и сказуемое, поэтому при переводе следует в первую очередь найти

сказуемое и подлежащее, а затем остальные члены предложения.

Найти сказуемое достаточно просто, даже если вы не знаете значения ни

одного слова в предложении, которое вам нужно перевести. Сказуемое просто

определить по наличию окончания или по словам-сигналам, которые его сопро-

вождают.

Внешними признаками английского сказуемого являются:

окончание -s у глагола в единственном числе, третьем лице во време-

ни Present Simple:

149

Profit plays an important role

in determining the allocation

of resources.

Возможность получения прибыли

играет важную роль при размещении

ресурсов.

окончание -ed у правильных глаголов во времени Past Simple:

The classical economists regarded

money as no more than a medium

of exchange.

Экономисты-классики рассматривали

деньги всего лишь как средство

обмена.

наличие глаголов to be, to have в любой из своих форм (am, is, are,

was, were, have, has, had), поскольку они будут являться либо самостоятельны-

ми сказуемыми при использовании их в качестве смысловых глаголов, либо

войдут в состав сказуемого при образовании одного из времен или передаче

модального значения:

Sales are not increasing at the

moment.

Продажи сейчас не увеличиваются.

(часть сказуемого в Present Continuous)

In many countries economic

development has led to periods

of rapid population growth.

Во многих странах рост экономики

привел к быстрому росту населения.

(Часть сказуемого в Present Perfect)

Changes in the rate of interest

had a great effect on share

prices.

Изменения в процентной ставке

существенно повлияли на стоимость

акций.

(Самостоятельное сказуемое)

We had to replace this piece of

equipment.

Мы были вынуждены заменить эту

часть оборудования.

(Часть модального сказуемого)

наличие форм will, would, shall, should, которые вместе со смысловы-

ми глаголами образуют сказуемое:

When population is growing fast

the proportion of the people of

the younger age will be increasing.

Когда население быстро увеличивается,

в нем увеличивается пропорциональное

соотношение людей молодого возраста.

(Часть сказуемого в Future Simple)

наличие модальных глаголов can, could, must, may, might:

All shareholders must receive an Все акционеры должны получить

150

invitation to the meeting. приглашение на собрание.

(Часть модального сказуемого)

Подлежащее в английском предложении обычно расположено слева от

сказуемого (перед сказуемым). Иногда отмечают, что с подлежащего начина-

ется предложение, однако это не всегда так, поскольку перед подлежащим

может находиться один из второстепенных членов предложения, что обуслов-лено «привязанностью» предложения в тексте к предыдущему предложению.

Во всяком случае, следует помнить, что перед подл ежащим никогда не может

стоять предлог .

An increase in price usually means

that the production will become more profitable.

Повышение цен обычно означает

увеличение прибыли.

(An increase – подлежащее данного предложения).

Дополнение зависит от сказуемого. В английском предложении оно

обычно находится справа от сказуемого, непосредственно после него. Чаще все-

го оно выражается именем существительным или местоимением, но может вы-ражаться и ing-формой глагола. Дополнение может иметь перед собой предлог.

На русский язык всегда переводится одним из косвенных падежей.

Competition between firms

will lead to the elimination of

noncompetitive ones

Конкуренция между фирмами

приведет к уменьшению числа

неконкурентоспособных.

(Дополнение the elimination выражено существительным с предлогом и пер е-

водится на русский существительным в дательном падеже).

Определение выражает собой признак предмета, т.е. подлежащего или

дополнения. При наличии определений мы имеем дело уже не просто с подле-

жащим или дополнением, а с группой подлежащего и/или с группой дополне-ния. При этом нужно иметь в виду различие между определением и определи-

телем. В отличие от определения определитель не выражает качественного

признака предмета и является служебным словом. Это прежде всего – фор-

мальный признак существительного. Наиболее характерными определителями

являются артикли, числительные, притяжательные и указательные местоиме-ния. Способы выражения определения весьма разнообразны. Для большего

удобства все определения могут быть разделены, в соответствии с занимаемой

ими позицией, на две группы – левые и правые определения, то есть стоящие

соответственно перед определяемым словом и после него.

Last year the results were not pleasing

В прошлом году результаты были неутешительны.

(Last – определение, относящееся к подлежащему year).

Обстоятельство выражает признак признака, а не предмета (в отличие

от определения). Следовательно, как член предложения обстоятельство может

относиться либо к сказуемому (чаще всего), либо к определению. Выражается обстоятельство обычно наречием или существительным с предлогом.

151

This can be easily done. Это можно легко осуществить.

This method is very difficult. Этот метод очень трудоемкий.

In his report he presented a new

way of this problem solving.

В своем докладе он представил

новый путь решения этой проблемы.

Кроме того, в качестве обстоятельства могут выступать инфинитив и

герундий. В отличие от других членов предложения, обстоятельство – в неко-торых случаях подвижный член предложения. Если оно выражено существи-

тельным с предлогом, оно может перемещаться из начала предложения в ко-

нец и наоборот.

Видо-временная система английского глагола представлена тремя

группами времен: Simple – Continuous – Perfect. Иногда в отдельную группу выделяют Perfect continuous.

Важно отметить, какое основное действие выражает глагол в каждой

группе времен и чем будет характеризоваться перевод глагола в каждой груп-

пе на русский язык.

В группе Simple глагол выражает обычное, повторяющееся действие:

They appraise their employees

once a year.

Раз в год они оценивают

деятельность своих работников.

В группе Continuous – длительное действие, действие как процесс. Перево-

диться глагол будет на русский язык глаголом несовершенного вида (то есть будет

отвечать на вопрос: что делать?):

Economic conditions are changing

all the time.

Экономические условия постоянно

изменяются.

В группе Perfect глагол выражает законченное действие к определен-

ному моменту в настоящем, прошедшем или будущем. Соответственно на

русский язык глагол будет переводиться глаголом совершенного вида (что сделать?):

Turnover has increased by 5%

this year.

В этом году оборот возрос на 5%.

Многозначность глаголов to be, to have.

Данный вопрос интересует нас, поскольку эти глаголы участвуют в об-разовании многих времен, а также в образовании страдательного залога. Они

имеют следующие функции:

1. могут выступать в качестве смысловых глаголов и, соответственно,

являться самостоятельными сказуемыми в предложении;

2. могут выступать в качестве вспомогательных глаголов при образова-нии времен группы Perfect (to have) и Continuous (to be), а также в качестве

вспомогательного глагола при образовании страдательного залога выступает

глагол to be.

3. могут являться заменителями модального глагола must в соответст-

вующих случаях (смотри примеры в признаках ск азуемого).

152

Занятие 1

Случаи отступления от прямого порядка слов

в английском предложении

(инверсии, усилительные конструкции)

Существует несколько случаев отступления от прямого порядка слов, ко-

торое вызывается разными причинами, например:

– необходимостью образования вопросительной формы,

– необходимостью особо выделить (усилить) тот или иной член пред-

ложения,

– необходимостью улучшить ритм предложения.

Для перевода актуальны два последних случая.

В английских предложениях смысловая насыщенность ослабляется к

концу предложения. Поэтому выделяемое слово, если это не нарушает грамма-

тических связей между словами, выносится обычно в начало предложения:

This mistake we observed in this

article.

Именно эту ошибку мы наблюдали

во всех его статьях.

В этом примере дополнение this mistake, которое согласно твердому

порядку слов должно стоять после сказуемого, для смыслового выделения

вынесено вперед, что дает нам право при переводе добавить усиливающее

слово именно.

Отсутствие падежных и личных окончаний, в отличие от русского язы-

ка, делает перестановку слов в английском предложении ограниченным. По-

этому для смыслового выделения разных членов предложения, кроме метода

простой перестановки слов в предложении (инверсия), используется также

метод добавления дополнительных служебных слов (усилительная конструк-

ция it is… that, усилительный do). Остановимся на каждом из способов более

подробно:

1. Инверсия – это нарушения прямого порядка слов без внесения до-

полнительных элементов. Инверсия может быть простой и двойной.

а) при простой инверсии сказуемое (иногда дополнение) выносится в

положение перед подлежащим. При переводе порядок слов английского пред-

ложения следует сохранять (и иногда использовать усиливающее слово).

In the article was a new example. В статье приводился новый пример.

Подобная инверсия с введением дополнительного элемента there на-

блюдается в предложениях с оборотом there to be.

153

б) при двойной инверсии

во-первых, в начало предложения выносится смысловая часть слож-

ного сказуемого, которая может быть выражена прилагательным, причастием

I, причастием II или существительным с предлогом. При этом глагол-связка

или вспомогательный глагол (обычно be) стоит после обстоятельства, которое имеется (или подразумевается) в предложениях такого типа.

во-вторых, подлежащее стоит после глагола be. Перевод следует на-

чинать с обстоятельства (если оно есть), а смысловую часть сказуемого пере-

нести к глаголу be.

Important for this method is decision-making strategy

Для этого метода важным (фактором) является стратегия

принятия решения.

2. Усилительно-выделительная конструкция it is… that (помимо that

могут использоваться which, who, when).

В этом случае для выделения любого члена предложения, кроме ска-зуемого, используются дополнительные элементы it is и that, которые как бы

обрамляют выделяемое слово (ее иногда называют «рамочной» конструкцией).

Первый ее элемент – it is – стоит в начале предложения, а второй – that, who,

which – может находиться далеко от первого, что затрудняет обнаружение

конструкции. Конструкцию (все три служебных слова) заменяют словами типа именно, только, это, как раз и продолжают перевод, сохраняя порядок слов

английского предложения.

It is this last category that is of

interest to us.

Именно эта последняя категория

представляет для нас интерес.

It was not until 1970 that he

published.

И только в 1970 он опубликовал

свою книгу.

3. Усилительный глагол do.

Служебное слово – глагол do – используется в утвердительном предло-

жении для усиления значения сказуемого. В этом случае do стоит непосредст-венно перед смысловым глаголом в форме инфинитива без частицы to и указы-

вает на время, которое при переводе на русский язык переносится на смысловой

глагол. Для передачи усиления в русском переводе можно использовать слова

действительно, все же, наконец и т.п.

The value does seem high in the light of this observation.

В свете этого наблюдения данное значение действительно кажется

высоким.

It did cause some difficulties. Это все же вызвало некоторые

трудности.

Практическое задание 1

Exercise 1. Translate the sentences, paying attention to the inversion.

1. It was in this country that a large scale of production of synthetic rubber was first

organized.

154

2. It is countries with relatively high wage rates which make the most use of labour-saving machinery.

3. It is the act of spending which influences the prices.

4. It is for this reason that the balance of payments figures is subjected to revision in

the months following their original publication.

5. It is because the fixed exchange rate puts the official reserves at risk that most governments favour some more flexible system.

6. It is governmental policies that will help keep interest rates from sinking very far,

say bankers here.

7. It is precisely the unreported holdings that have probably been diversified most.

8. It was then that the industrial economies were hit by the first massive price in-crease.

155

Занятие 2

Пассивный залог в английском языке

Особенности перевода пассивных конструкций

Пассивная форма имеет чрезвычайно широкое распространение в анг-

лийском научном языке. Следовательно, изучение особенностей английских пассивных конструкций является одним из главных грамматических аспектов

перевода.

Пассивную форму (Passive voice) глагола можно отличить от активной

(Active) благодаря наличию вспомогательного глагола to be перед причастием

II от смыслового глагола – be + Participle II (-ed, 3-я форма). Глагол be выражает время, число, лицо и обычно не переводится (кро-

ме тех случаев, когда этого требуют нормы русского языка). Причастие II от

смыслового глагола переводится в том времени, в котором стоит вспомога-

тельный глагол be.

Пассивной формой (страдательным залогом) мы называем такую кон-струкцию предложения, при которой подлежащее не является действующим

лицом (или предметом), а само подверг ается действию со стороны дополнения

(при этом дополнение может подразумеваться, не будучи выражено в предло-

жении):

Microsoft was founded by William H. Gates in 1975.

Компания Майкрософт была основана Уильямом Х. Гейтсом в 1975 г.

При превращении активного оборота в пассивный прямое дополнение

активного оборота становится подлежащим пассивного, а подлежащее актив-

ного оборота превращается в дополнение с предлогом by.

Поскольку подлежащее пассивного оборота является объектом дейст-

вия, в пассивной форме могут употребляться только переходные глаголы, т.е.

такие глаголы, действие которых переходит на объект, выраженный прямым

дополнением, например:

He did the work well. Он сделал эту работу хорошо.

The work was done by him well. Работа была сделана им хорошо.

До настоящего момента мы имели полную аналогию между английской

пассивной формой и русским страдательным залогом. Но существуют и осо-

бенности их употребления:

1. В русском языке только прямо-переходные глаголы употребляются в

страдательном залоге, а косвенно-переходные принимают форму неопреде-

ленно-личной конструкции: о проекте этой компании говорили. В английском

языке в пассивной форме могут употребляться оба вида глаголов:

Особенно часто употребляются в пассивной форме следующие косвен-

но-переходные глаголы:

156

– to account for объяснять

– to agree upon договориться

– to arrive at достигать чего-либо

– to depend on зависеть от, полагаться на

– to dispose of реализовывать

– to insist on настаивать на

– to laugh at смеяться над

– to listen to слушать

– to look at смотреть на

– to provide for предусмотреть

– to refer to ссылаться на

– to speak of говорить о

– to send for посылать за

– to take care of заботиться о

– to lose sight терять из виду

В пассивной конструкции предлог сохраняет свое место после глагола,

но относится к пассивному подлежащему.

The book is often referred to. На эту книгу часто ссылаются.

Перевод таких конструкций должен осуществляться с помощью неоп-

ределенно-личной формы. Если же в пассивной конструкции есть упоминание

о действующем лице, то мы осуществляем перевод предложения в действи-

тельном залоге.

The book was much spoken

about by the economists.

Экономисты много говорили об этой

книге.

2. Второе отличие английской и русской форм страдательного залога

заключается в следующем:

В английском языке не только прямое (или предложное косвенное), но

и беспредложное косвенное дополнение может стать подлежащим пассивного

оборота после некоторых глаголов, типа to give, to pay, to order, to tell, to show

и др. Если в активной форме имеется два дополнения – прямое и беспредлож-

ное косвенное, то любое из них может выполнять роль подлежащего в пассив-

ном обороте. The company offered him a job (job – прямое дополнение, him – бес-

предложное косвенное). Такое предложение может быть перестроено в пас-

сивную форму двумя параллельными способами:

A job was offered to him by the company.

157

He was offered a job by the company.

Перевести такие предложения можно двумя способами:

Неопределенно-личной формой (если нет указания на действующее

лицо):

He was offered a job. Ему предложили работу .

Предложением в действительном залоге (при наличии действующего

лица):

He was offered a job by the

company.

Компания предложила ему работу .

3. Третье отличие английской пассивной формы от русской состоит в

том, что некоторые английские переходные глаголы имеют в русском языке эквиваленты в виде непереходных глаголов, например:

– to enter a room войти в комнату

– to join a society вступить в общество

– to follow the man следовать за человеком – to attend a meeting присутствовать на собрании

Пассивные конструкции с этими глаголами могут переводиться двумя

способами:

1. Неопределенно-личной формой (при отсутствии дополнения с пред-логом by):

The product was launched. Продукт выпустили.

2. Действительным залогом (при наличии указания на действующее лицо):

The product was launched by our

rivals

Продукт выпустили наши конкуренты.

Итак, многообразие возможностей передачи на русский язык англий-

ской пассивной конструкции можно свести к четырем основным способам

перевода.

1. Конструкцией, аналогичной конструкции английского предложения,

т.е. с помощью глагола «быть» и краткой формы стр адательного причастия (в

настоящем времени глагол «быть» опускается):

This decision was made by CEO. Решение было принято исполнительным

директором.

2. Глаголами, оканчивающимися на -ся, (-сь):

Решение принималось исполнительным директором.

3. Неопределенно-личным оборотом в действительном залоге:

Sales representatives were asked Торговых представителей попросили

158

to render an account. сделать отчет.

4. Действительным залогом (возможно только при указании на дейст-

вующее лицо):

These values are influenced by buy-

ers’ experience.

Опыт покупателей оказывает влияние на

эти значения.

Выбор способа перевода диктуется соображениями стиля.


Exercise 1: Translate into Russian.

1. Most government securities are marketable and may be bought and sold on the

Stock Exchange.

2. The precious metals were first used as money on the basis of weight.

3. This question was raised at the last meeting and no conclusion was reached then.

4. These products have been designed by a special team.

5. Based on the total figure, it appears that an error was made in the budget.

6. The price of a product is determined by the interaction of demand and supply.

7. Raw materials and agricultural products are usually sold in open markets, where

the influence of cost on supply is much less pronounced.

8. An industry which is being increasingly mechanised may be employing less la-

bour but increasing its output.

9. The gradual trend towards larger enterprises has not been confined to manufactur-

ing industry.

10. Each individual firm may obtain its components and other requirements at rela-

tively low cost because they are being mass produced for the industry.

11. Units of production are officially referred to as establishment.

12. The ordinary share capital of a company is usually referred to as the equity of the

company.

13. The output of agricultural products is seriously affected by variations in weather

conditions.

14. The management knew what prices were being asked for the commodity in

every part of the market.

159

Занятие 3

Модальные глаголы

Модальные глаголы выражают не действие, а отношение к действию

(возможность, вероятность и необходимость его совершения), поэтому нико-

гда не употребляются самостоятельно, а только в сочетании со смысловыми

глаголами.

При передаче модальности с английского языка на русский язык следу-

ет учитывать, что в русском нет такой разветвленной системы модальных гла-

голов, но он гораздо богаче модальными частицами и словами, а также мо-

дально-временными глагольными формами, которые позволяют выражать

любые модальные оттенки мысли. Выбор способа перевода может быть сделан

лишь на основе анализа всего контекста. Поскольку английские модальные

глаголы многозначны, одному английскому модальному глаголу могут соот-

ветствовать либо несколько русских, либо вообще придется отказаться от их

использования из-за неточного соответствия основному значению английского

глагола и использовать вводные модальные слова и выражения. Например:

The contract must have been signed Контракт, должно быть, уже подписан.

Ниже приводятся модальные глаголы в значениях, наиболее широко употребляемых в финансово-экономических текстах.

Can

1. Предполагаемая возможность выполнения какого-либо действия

благодаря:

а) наличию соответствующих объективных условий:

The plan can be realized now. План теперь может быть выполнен (ве-

роятно, возможно).

б) существующим законам

The agreement can be ratified now. Теперь соглашение может быть рати-

фицировано (как это и предусмотрено законом, т.к. все формальности соблюде-

ны).

2. Сомнение (удивление) в возможности чего-либо:

В вопросительном предложении – can/could + перфектный/неперфектный ин-

финитив.

Can/could it really have happened? Неужели (не может быть; разве может/ мог-

ло…) это действительно случилось?

3. Неуверенность, сомнение (говорящего) в чем-либо:

В отрицательном предложении – can’t/couldn’t have happened.

This can’t/couldn’t have happened. Не может быть (вряд ли; маловероятно, что-

160

бы…; едва ли), чтобы это произошло.

May

1. Допущение возможности осуществления чего-то при определенных

условиях.

The prices may rise again within two

weeks.

Возможно (вероятно; может так случить-

ся, что…; пожалуй…), цены вновь подни-мутся в течение ближайших двух недель.

2. Предположение с оттенком неуверенности, сомнения.

May/might + неперфектный инфинитив.

This proposal may prove to be a solu-

tion.

Может быть (не исключено, что…; воз-

можно…; вероятно…; как будто…; слов-но…) это предложение и окажется реше-

нием проблемы.

Have to

1. Необходимость выполнения действия в силу сложившихся обстоя-

тельств (вынужденность). Have to + неперфектный инфинитив.

The contract has to be revised. Придется контракт пересмотреть

(ничего не остается делать, как…;

надо…; необходимо…; вынуждены).

В этом же значении часто употребляются сочетания: have got + непер-фектный инфинитив, got + неперфектный инфинитив.

The agreement has got to be ap-

proved.

Соглашение еще необходимо

одобрить.

Кроме того, модальный глагол have to может использоваться и для вы-

ражения «достаточности».

You have to look at the current pric-

es to see the present trend in the

monetary supply.

Достаточно посмотреть на современные

цены, чтобы стала ясна ситуация с выпус-

ком денег в обращение.

To be to

Долженствование, обусловленное договоренностью или планом (to be + перфектный инфинитив).

This contract is to be signed early

next week.

Контракт должен быть подписан в нача-

ле следующей недели.

Прошедшая форма модального глагола to be в сочетании с перфектным

инфинитивом означает, что планируемое действие не было выполнено.

The conference was to have started

as planned but…

Конференция должна была начаться, как

и планировалось, но…

161

Must 1. Долженствование в самом широком смысле без какой-либо субъек-

тивной или объективной оценки сообщаемого (must + неперфектный инфини-

тив).

You mustn’t enter a joint venture

unless both parties benefit from the deal.

Вы должны участвовать в

деятельности совместного предприятия только при наличии

выгоды для обеих сторон.

2. Большая степень уверенности (вероятности): must + перфектный ин-

финитив.

The amendment must have been

already approved.

Поправка, должно быть, уже

одобрена (очевидно; по всей

вероятности; явно; скорее всего).

Значение большой степени вероятности выражается также сочетаниями

«to be sure (certain) +инфинитив» Кроме того, значение предложения, гранича-

щего с уверенностью (но выраженного в несколько смягченной форме), переда-

ется в английском языке сочетанием: «will + неперфектный/перфектный инфи-

нитив».

You will have heard the latest re-

sults, I believe.

Я думаю, что Вы, должно быть (конечно

же), уже слышали о последних результа-

тах.

162


Exercise 1: Translate into English, paying attention to modal verbs.

1. What’s more, Americans may have to endure the squeeze of yet another round of

interest rate hikes.

2. Borrowers, he warns, are unlikely to be surprised if the prime rate for commercial

firm, falls as low as 15 per cent.

3. The highly visible financial problems of Mexico have called into question the

stability of other countries and brought to the fore-front a fear that IMF and World

Bank may not be financially equipped to deal with a crises of this kind.

4. Finance ministers from Britain, West Germany, France, Japan and the US are to

discuss with the IMF managing director the coordination of their economic policies.

5. The crisis in the Eurocredit market was mitigated by prospect that it may be some

time before debt service arrears now exceeding $26 bn can be reduced to manageable

proportions.

6. There may still be room for further cuts, and there was some optimism in the City

yesterday that further falls may be close, but the banks seem unlikely to take early

action.

7. The effect of the latest issue is to lift the bank’s gearing from about 12 per cent to 20

per cent – well within the international ceiling.

8. It will be readily appreciated that this practice in bound to cause frustration among

German exporters and banks that cannot be without consequences in the long run.

9. But they (banks) will, more than at present, have to get closer to the realities of

the economic world and take calculated risks.

10. Countries with heavy foreign debt must be able to export if they are to service

their debt without cutting back.

11. The US officials had repeatedly predicted that US interest rates were likely to

climb back to their record levels of about 20 per cent.

163

Занятие 4

Слова-заместители существительных;

слова-заместители глаголов

Слова-заместители – это служебные слова, которые используются

вместо слов, уже упомянутых в данном или предыдущем предложении.

Существуют слова-заместители и для существительных, и для глаго-лов. При переводе на русский язык предложений с такими словами рекомен-

дуется повторить замененное слово.

Слова-заместители существительных.

Кроме личных местоимений в именительном и объектном падежах, вме-

сто существительных используются и другие слова: 1. mine, ours, his, hers, theirs, yours – это особая форма притяжательных

местоимений, которая используется вместо сочетания существительного с

притяжательным местоимением:

Our procedure is more practical than

theirs (their procedure).

Наш метод более практичен, чем их (ме-

тод).

2. that, those – используются вместо существительных, которые имеют

правое определение, поэтому в английском предложении после that, those сле-

дует или предлог (чаще всего of), или причастие (чаще всего Participle II), или

прилагательное, а не существительное, как это бывает в случае, если that, those

являются указательными местоимениями.

This point of view is that of a ma-

thematician rather than an econo-

mist.

Эта точка зрения является точкой зрения

математика, а не экономиста.

These results are more reliable than

those received by our rivals.

Эти результаты надежнее, чем

результаты, полученные нашими конку-рентами.

3. this, these – обычно используются в качестве подлежащего. За ними

поэтому следует глагол. Эти слова-заместители заменяют существительное

предшествующего предложения. Если при переводе невозможно повторить

ранее упомянутые слова, то следует использовать служебные слова типа это, все это, все они, все эти явления и т.д.

164

These were some successive changes

in price.

Они представляли собой несколько по-

следовательных изменений в цене.

This confirms our earlier

suggestion.

Это (явление, открытие) подтверждает

наше раннее предположение.

4. one (ones) – обычно заменяет существительное, которое имеет левое определение. Может заменять существительное во мн. числе. Тогда использу-

ется форма ones.

Among the disadvantages the

following ones can be mentioned.

Среди недостатков можно упомянуть

следующие (недостатки).

5. the former … the latter – эти слова-заместители имеют значение «пер-вый (из них)… последний (из упомянутых)». Однако во многих случаях в рус-

ском предложении следует повторить замененное слово, например:

The latter procedure is much

more complicated than the

former one.

Последняя (из упомянутых)

процедур сложнее, чем первая.

Данные слова-заместители обычно употребляются в паре вместо двух

существительных. Однако они могут использоваться и отдельно друг от друга,

если автора интересует только первый или только последний из всех (необяза-

тельно из двух) предметов, явлений, упомянутых ранее.

In this paper, we shall take the for-mer approach.

В этой статье мы будем использовать первый метод.

This latter case is considerably more

difficult to represent.

Этот последний случай воспроизвести

значительно труднее.

Слова-заместители глаголов-сказуемых.

1. Do – глагол, который ставится вместо выраженного только смысло-вым глаголом сказуемого предыдущего предложения. Он обозначает время и

согласуется с подлежащим. При переводе следует повторить замененный гла-

гол, особенно в тех случаях, когда времена, обозначенные смысловым глаго-

лом и глаголом-заместителем, не совпадают.

We will consider the ways to control business activity as Keynesian eco-

nomics did.

Мы будем рассматривать возможности контроля за деятельностью предприни-

мательства как рассматривала их кине-

зианская экономика.

2. Первый вспомогательный глагол. Если сказуемое является много-

членным, то для замены его используется первый вспомогательный глагол, выражающий временную или модальную характеристики. При переводе на

русский язык следует повторить смысловой глагол, ставя его в том времени, на

которое указывает вспомогательный глагол-заместитель, например:

As science has evolved so has its

meaning.

По мере того как развивается наука,

растѐт и еѐ значение.

165

3. Служебное слово «so». Если сказуемое, которое должно повторяться, является составным и его именная часть выражена прилагательным, существи-

тельным или наречием, то в качестве слова-заместителя (смысловой части) ис-

пользуется so. При переводе следует повторить смысловую часть сказуемого.

Например:

These data are very important for theory, and less so for practice

Эти данные очень важны для теории и менее важны для практики.


Exercise 1: Translate into Russian the following sentences. Mind the differ-

ence in the meaning of the word one.

1. In a small country like the UK where there are strong trade unions, one should not expect to find any very great differences in regional wage rates.

2. One cannot draw any conclusions about the effect of a price change unless one

knows the cause of the price change.

3. One can see that a fall in price may be associated with an increase or decrease in

quantity demanded – it all depends upon what caused the price change. 4. Normally, this period will be a very short one.

5. An increase in the demand for wool by one industry will raise the price and affect the

prices of all the other commodities made from wool.

6. Lead and zinc are found in the same ore so that the extraction of one leads to the

extraction of the other. 7. One very important example of his relationship is to be found in the transport

industry.

8. Where commodities are in joint supply an increase in the demand for one of them

will cause a fall in the price of the other.

9. In a perfect market, there will be one and only one market price which is beyond the control of any one buyer or any one seller.

10. At one time most of world’s nickel was obtained from a certain area in the Rock-

ies.

11. One often hears complains from workers in different industries that they “have

lost out in recent wage settlements”. 12. As one should expect, total output is much greater when the countries specialize.

13. According to many employers older workers are more reliable and loyal than

younger ones.

Exercise 2: Translate the following sentences, paying attention to the words

“that/those”. 1. Although there are more male births than female births, the number of females in

total population exceeds that of males.

2. These rates are higher than those in most Western European countries.

3. The most widely used indicator of monopoly power is that of the market share.

4. Unofficial strikes are those which do not have full support of trade union. 5. The rate of savings in rich countries is much higher than that in poor countries.

6. The aim of monetary policy are the same as those of economic policy generally.

166

7. This is due to the greatest element of risk and the fact that administrative cost of small loans are proportionally greater than those for larger loans.

8. The most common definition of an industry is that used in official statistics which

groups firms into industries according to physical and technical properties of their

principle products.

9. The selling costs of the larger firm will be much greater than those of smaller firm.

10. Internal economies of scale are those which arise from the growth of the firm

independently of what is happening to other firms.

11. The separation of ownership and control in the modern corporation results in p o-

tential conflicts between owners and managers since the objectives of management may differ from those of the shareholders.

167

Занятие 5

Неличные формы глагола:

Причастие I, его функции в предложении

Причастие является неличной формой глагола, то есть не выражает ка-

тегории лица и числа. Поэтому оно не может самостоятельно выполнять

функций сказуемого. Временные отличия причастия имеют относительный

характер.

Present participle (Participle I) выражает действие, одновременное с

действием глагола-сказуемого:

Discussing the problem of

unemployment in this region

they understood that it was not

the main problem.

Обсуждая проблему безработицы в

этом регионе, они поняли, что она

не была основной проблемой.

Perfect participle (Participle II) выражает действие, предшествующее

действию глагола-сказуемого:

Having launched the product, the

company realized that it was not

properly tested.

Осуществив выпуск продукта,

компания поняла, что он был

недостаточно испытан.

Функции причастия в предложении и способы перевода причастия.

1. Составная часть сказуемого, выраженного формой Continuous (в

сочетании с глаголом to be) переводится личной формой глагола.

The advertising campaign

is being discussed now.

Рекламная кампания сейчас

находится в стадии обсуждения.

2. Определение ставится перед существительным и переводится пр и-

частием.

The acting business must pay

taxes.

Работающее предприятие должно

платить налоги.

3. Определительный причастный оборот (ставится после определяемого

слова). Соответствует развернутому придаточному предложению или определи-

тельному причастному обороту.

168

The article contains several

chapters discussing this problem.

а) Статья содержит несколько глав, в кото-

рых обсуждается данная проблема.

б) В статье содержится несколько глав, об-

суждающих тему данной проблемы.

4. Обстоятельственный причастный оборот времени, причины или

образа действия.

Обстоятельственный причастный оборот времени:

Такие обороты соответствуют придаточным предложениям времени,

иногда начинаются союзами while и when, которые на русский язык не перево-

дятся.

Эти обороты можно переводить тремя способами:

а) деепричастным оборотом;

б) существительным с предлогом;

в) развернутым придаточным предложением.

(While) discussing their new project

they found a lot of ways for its im-

plementation.

а) Обсуждая их новый проект, они

нашли множество путей воплощения

его в жизнь.

б) При обсуждении их нового

проекта они нашли множество путей

воплощения его в жизнь.

в) Когда они обсуждали их проект,

они нашли множество путей

воплощения его в жизнь.

Обстоятельственный причастный оборот причины.

Эти обороты соответствуют придаточному предложению причины. Они

не имеют перед собой союза и могут переводиться:

а) деепричастным оборотом;

б) развернутым придаточным предложением.

Knowing the complexity of this

theory, we discussed its main points

with the experts.

а) Зная сложность этой теории, мы

обсудили ее основные положения с

экспертами.

б) Так как мы знали о сложности

этой теории, мы обсудили ее

основные положения с экспертами.

169

Обстоятельственный причастный оборот образа действия.

Переводится деепричастным оборотом.

They managed to gain this

information carrying out market

research.

Им удалось получить эту

информацию, проводя исследование

рынка.


Exercise 1: Translate, paying attention to Participle I and absolute parti-

ciple construction.

1. Increasing concern has been expressed about the continued growth in world popu-

lation.

2. Loan capital is more appropriate to firms operating in stable market.

3. Industries producing steel, paper and chemicals require very large quantities of

water and tend to be found near rivers.

4. With increasing numbers entering the working population, expanding industries

will have little trouble in recruiting labour.

5. In advanced capitalist societies, advertising is a powerful instrument affecting

demand in many markets.

6. Although most of the major money centre banks have emer ged from the first

phase of the liquidity crisis facing developing countries like Mexico in reasonable

shape, the shadow, and some of the risks, remain.

7. Having explored the possible relationship between capacity and expected output,

we now examine the behaviour of costs as actual output changes.

8. Having examined the relationships between outputs and costs, we now show how

the behaviour of cost may be reflected in the supply curve.

170

Занятие 6

Причастие II. Его функции в предложении

Причастие II (Past Participle, или III форма глагола) соответствует рус-

ским причастиям:

настоящего времени с окончаниями -мый, -щийся;

прошедшего времени с окончаниями -нный, -тый, -вшийся. Например: given –

даваемый, данный; taken – берущийся, взятый.

Причастие II представляет собой неличную глагольную форму, которая

не может выступать в функции самостоятельного сказуемого. Она может лишь

входить в состав сказуемого в формах Perfect и Passive.

Обладая свойствами прилагательного и наречия, причастие II, выступая

самостоятельно, выполняет в предложении сл едующие функции:

1. Определение. Обычно в этом качестве занимает место перед опреде-

ляемым словом; переводится отглагольным прилагательным со страдательным

значением:

The described method is widely

used in economics.

Описанный метод широко

применяется в экономике.

Когда причастие выражает глагольное значение, оно занимает место

правого определения, т.е. следует за определяемым словом. Такое причастие

соответствует русскому придаточному предложению и переводится соответст-

венно:

We used all the methods

recommended.

Мы применили все методы,

которые были рекомендованы.

2. Определительный причастный оборот (т.е. причастие с группой за-

висимых слов) всегда следует за определяемым словом и переводится:

а) причастным оборотом;

б) придаточным предложением.

A firm is composed of different

parts called departments

а) Фирма состоит из отдельных подраз-

делений, называемых отделами.

б) Фирма состоит из подразделений, ко-

торые называются отделами.

3. Обстоятельство. Причастие II употребляется также в функции об-

стоятельства времени или причины и занимает место до подлежащего (чаще

всего с поясняющими словами).

171

Considered separately wasn’t diffi-

cult, this question.

При отдельном рассмотрении этот во-

прос не вызвал затруднений.

Часто Причастие II в этой функции сопровождается союзами when или if.

О способах перевода таких предложений смотри в конспекте предыдущего

занятия.

4. Смысловая часть сказуемого.

В этой роли Причастие II стоит после служебных глаголов be и have

(которые выражают время, лицо, число) и образует следующие формы:

a) Passive – в этом случае причастие стоит после вспомогательного глагола be,

который обычно не переводится:

Information was collected from

internal sources.

Информация собрана на основании внут-

ренних источников.

b) Perfect – причастие II стоит после вспомогательного глагола have, который

не переводится, например:

Market researchers have used expe-

rimental techniques.

Исследователи рынка использовали экс-

периментальные техники.


Exercise 1: Translate, paying special attention to rendering Partic iple II :

1. The quantity of labour derived from a given stock of population depends upon

several factors.

2. Put simply, a business process is the set of activities performed to serve a custom-

er.

3. The information obtained is very valuable.

4. Despite their philosophical commitment to private ownership, most of the bankers

interviewed applauded the nationalization as a much-needed step to bolster interna-

tional confidence in Mexico’s banking system.

5. Even when particularly favourable interest rates are arranged, the bank will regu-

larly feel the terms offered are unacceptably high.

6. Foreign trade authorities have not infrequently observed prudent moderation in

arriving at decisions observed more or less uniformly throughout the economic

community.

172

7. This is (the answer to the problem) the switching of capital to the US from other

parts of the world prompted by concern about the possibility of an international

banking collapse.

8. Such interest rates, when combined with falling commodity prices and economic

recession in the industrial world, spell serious trouble for developing countries.

9. Already the number of countries forced to ask banks to reschedule their debts is

expected to grow.

10. The hoped-for consumer boom, promised by the President, hasn’t materialized

yet.

173

Занятие 7

Причастные обороты: зависимые и независимые

Причастия I и II c относящимися к ним словами образуют причастные

обороты, которые можно разделить на две группы – зависимые и независимые.

Зависимые причастные обороты – это такие, в которых перед причас-

тием нет слова, обозначающего действующее лицо или предмет, поэтому при

переводе такого оборота придаточным предложением следует повторить под-

лежащее всего предложения (если оборот играет роль обстоятельства) или

ввести слово-заместитель «который» (если оборот играет роль определения).

Союз, если его нет перед причастием, подбирается по смыслу, исходя из кон-

текста.

The idea can be pronounced true

if tested by experience.

Идея может быть объявлена верной,

если она проверена на опыте.

When speaking about the new

projects the manager

demonstrated different figures.

Когда менеджер говорил о новых

проектах, он показывал различные

графики.

Следует помнить о том, что при переводе союзов if, as, when, unless c

причастием II придаточным предложением не всегда следует повторять под-

лежащее. Это происходит в тех случаях, когда такое сочетание соответствует

конструкциям с формальным подлежащим it типа as it was mentioned, if it is

desired, unless it is stated, в которых опущены слова it is.

If desired the method of survey

may be used together with

observation.

Если нужно, метод опроса может

быть использован вместе с методом

наблюдения.

As mentioned above the

experiment was a success.

Как упоминалось выше, этот опыт

был удачным.

Независимые причастные обороты – это такие, в которых перед при-

частием есть слово, обозначающее действующее лицо или предмет, и которое

при переводе становится подлежащим придаточного предложения. Пользуясь

принятой нами терминологией, к независимым причастным оборотам можно

отнести:

а) абсолютный причастный оборот;

б) дополнение с причастием (Complex Object);

в) подлежащее с причастием (Complex Subject).

174

При переводе этих оборотов придаточными предложениями подлежа-

щее английского предложения не повторяется.

Абсолютный причастный оборот (Absolute Participle Construction).

В этом обороте действие, выражаемое причастием, не обнаруживает

прямой связи с подлежащим данного предложения, а имеет свое собственное

подлежащее.

Переводятся эти обороты тремя способами:

а) Придаточным предложением времени: Когда (после того как) этапы исследо-

вания были определены, проблема решилась.

б) Придаточным предложением причины: Так как этапы исследования были

определены, проблема решилась.

в) Самостоятельным предложением, соединенным союзами причем, в то время

как, а, но, и. Последний способ перевода выбирается в том случае, когда НПО

стоит до запятой.

The stages of research having been

defined, the problem was solved.

а) Когда (после того как) этапы

исследования были определены,

проблема разрешилась.

б) Так как этапы исследования были

определены, проблема разрешилась.

Almost all stages of market

research are expensive, personal

interviews and consumers’

panels being the most expensive

of all.

в) Почти все этапы рыночного

исследования требуют затрат,

но персональное интервью и выбор

группы потребителей являются

самыми дорогостоящими.

Соединительный союз подбирается исходя из контекста.

Абсолютный причастный оборот может вводиться словом with, которое

не переводится. Кроме того, запятая в этом случае может отсутствовать.

With the model reconstructed we

may start rethinking of the whole

process.

Так как модель сконструирована

заново, мы можем начать снова

обдумывать весь процесс.

Причастие, как первое, так и второе, образует несколько предикативных

конструкций, в которых оно находится в отношениях вторичной предикативно-

сти с именным элементом, выраженным, как правило, существительным или

местоимением:

175

Объектный причастный оборот.

Эта конструкция в предложении выступает в функции сложного до-

полнения. Она употребляется:

1. После глаголов чувственного восприятия (Participle I, Participle II): to

see, to feel, to hear, to watch, to notice, to find.

We found the results of random

sampling being very curious.

Мы обнаружили, что результаты

случайной выборки являются очень

интересными.

2. После глаголов желания и побуждения к действию (Participle II): to

make, to get, to like, to want, to have.

The company got the information

tested.

Компания получила проверенную

информацию.

3. После глаголов умственной деятельности (Participle II): to think, to

consider, to know, to understand.

Pepsi considered this design been

the best.

Пепси считала эту форму

(упаковки) лучшей.

Дополнение, стоящее после сказуемого в предложениях с таким обор о-

том, чаще всего выражено существительным в общем падеже или местоиме-

нием в объектном падеже ( it, him, her, them, us, me). Следует помнить о том,

что при переводе местоимение становится подлежащим придаточного пред-

ложения и выражено именительным падежом.

We know him working at this prob-

lem since 2000.

Мы знаем, что он работает над этой

проблемой с 2000 г.

Союз as (если он стоит перед причастием I или II) должен помочь об-

наружить оборот, но при переводе опускается.

They thought the problem of wage

increase as being of the importance.

Они считали, что проблема

повышения заработной платы

была очень важной.

Следует обратить внимание на предложения данной конструкции, в ко-

торых сказуемое выражено глаголом to have.

В этом случае данный глагол имеет значение «заставлять сделать так,

чтобы». Это значение можно передать, не переводя сам глагол.

We have the concept approved. Мы заставили одобрить концепцию.

176

Субъектный причастный оборот.

Эта конструкция в предложении выступает в качестве сложного по д-

лежащего. Она возможна, как правило, только с глаголами чувственного вос-

приятия, при этом они употребляются в страдательном залоге. Порядок слов в

предложениях с таким оборотом такой же, как в предложениях с оборотом

«подлежащее с инфинитивом» (см. занятие 11), только вместо инфинитива

используется причастие I или II, иногда со словом as перед ним.

При переводе предложение с таким оборотом выносится вперед и

оформляется в главное (обычно неопределенно-личное) предложение; подле-

жащее английского предложения становится подлежащим, а причастие – ска-

зуемым придаточного предложения, которое вводится союзами что, чтобы,

как. Слово as, если оно есть в английском предложении, не переводится. При

переводе причастия глаголом-сказуемым придаточного предложения время

его определяется с учетом времени сказуемого и формы причастия.

Values are considered changing as

buyers get more experience.

Считается, что ценности

изменяются по мере приобретения

покупателями опыта.


Exercise 1: Translate the sentences, paying attention to Absolute Participle

Construction.

1. Other things being equal, an increase in wage rates will increase the cost of labour relative to the costs of the other factors.

2. In order to simplify the analysis we can consider two firms, one being represent a-

tive of high-cost producers and the other of low-cost producers.

3. Most industries make use of a variety of machines, each machine carrying out a

different operation. 4. The selling price must relate to the production cost, which in turn, depends on the

quantity sold, this quantity being dependent upon the sales price.

5. It being too late, they decided to stop working.

6. Other things being equal, the demand for commodity will tend to vary directly as

the price of its substitute. 7. The installation was atomised last year, its capacity rising by

20 per cent.

8. All the problems having been solved, they went home.

9. The goods having been loaded, the dockworkers left the port .

10. Member nations are required to subscribe to the capital stock of the World Bank, each being given a quota which is related to the member’s national income and pos i-

tion in the world trade.

177

Exercise 2: Translate the following sentences, paying attention to “Complex Subject” construction.

1. In the industrial nations which account for just under 80 per cent of the oil con-

sumption in the Western world, the savings in the national oil bills can be expected

contracting loan demand.

2. Interest rates for long-term bonds are expected being volatile, even the uncertain outlook for a long-term slow-down in inflation.

3. The new administration appears unlikely getting the early upturn in tax revenues,

and that means it faces further headaches in balancing the federal budget.

4. Meanwhile the Federal Reserve is understood having told Brazil there is no pros-

pect of a bilateral bridging loan from the US, at least for the time being. 5. But Germany is known being opposed to any idea of extending the scope of em-

bargo provisions.

6. The reference to mutual interest is intended making it clear that when the obliga-

tions and burdens on both sides have been considered, both parties must clearly

stand to benefit in equal measure from the arrangements. 7. And Delors (Finance M inister), for one, appears being resisting the talk of treating

banking as a public service.

178

Занятие 8

Герундий

Герундий (the gerund) является неличной формой английского глагола,

то есть не имеет категории лица, числа, наклонения. Поэтому он не согласует-

ся с подлежащим и никогда не выступает в роли простого глагольного сказу е-

мого. Категория времени у неличных глагольных форм имеет относительный

характер. В результате исторического развития герундий обнаруживает тес-

ную связь с существительным. По внешнему виду герундий совпадает с при-

частием I и отглагольным существительным, однако отличается от них спосо-

бом перевода и функциями в предложении. Сравните:

1. Герундий:

Marketing is the process of planning

and executing the conception.

Маркетинг – процесс планирования и

приведения в действие концепции.

2. Причастие I:

Planning and executing the conception we use marketing.

Разрабатывая и приводя в действие концепцию, мы используем

маркетинг.

3. Отглагольное существительное:

The planning and the executing of

the conception is effected by means of marketing.

На планирование и приведение в дейст-

вие концепции оказывает воздействие маркетинг.

Здесь мы имеем дело с явлением грамматической омонимии. Внешняя

форма герундия полностью совпадает с формой причастия I, что видно из при-

веденной ниже таблицы. Active Passive

Simple writing being written

Perfect having written having being written

Простой герундий (в Simple) употребляется, когда действие, которое он

называет, протекает одновременно с действием глагола-сказуемого или еще не

совершилось. We intend using the results of mar-keting research defining the main

concept of management.

Мы намерены использовать результаты исследования рынка при

определении основной концепции

управления.

Перфектный герундий выражает действие, которое предшествует дей-

ствию глагола-сказуемого.

179

I know of his having discussed the items of the agreement with the

board of directors.

Я знаю, что он обсудил основные поло-жения соглашения с советом директоров.

Функции герундия в предложении.

Герундий в предложении может выполнять следующие функции:

подлежащее;

часть сказуемого;

дополнение;

определение;

обстоятельство.

Формы герундия в русском языке нет, поэтому он при переводе выра-

жается либо начальной формой русского глагола, либо русским существи-

тельным.

1. Подлежащее:

Choosing the market research strate-

gy is a difficult task.

Выбор стратегии использования рынка –

трудная задача.

2. Дополнение:

Information from outside the busi-

ness is used for collecting data.

Для сбора данных используется

информация, находящаяся вне

источников фирмы.

3. Часть сказуемого:

Their aim was collecting necessary data.

Их цель состояла в том, чтобы собрать необходимые данные.

4. Определение (всегда только правое):

Some companies have the power of

taking over smaller firms.

Некоторые компании обладают

возможностью поглощения более

мелких фирм.

180

5. Обстоятельство:

В функции обстоятельства герундий переводится:

а) деепричастием;

б) существительным с предлогом;

в) придаточным предложением:

After finishing the experiment we discussed its results.

а) Закончив эксперимент, мы обсудили его результаты.

б) После завершения эксперимента

мы обсудили его результаты.

в) После того как мы завершили

эксперимент, мы обсудили его результаты.


Exercise 1: Translate these sentences into Russian, paying attention to the

functions of Gerund.

1. Discounting is the process of buying a security for less than its face value.

2. We discussed opening a new business.

3. He risks losing all his money.

4. His taking part in the development of the new system was a great help to us.

5. We knew nothing about his being sent to London.

6. We knew nothing about his having been sent to London.

7. The control of the money supply is probably one of the most important instru-

ments for regulating total demand in an economy.

8. By increasing the minimum deposit and reducing the period allowed for repay-

ment, the government has a quick-acting method of reducing the demand for con-

sumer durables.

9. The increase in government spending and borrowing will have some effect on the

rate of interest.

10. We have succeeded in entering a new competitive market.

181

Занятие 9

Герундиальные обороты (зависимые и независимые)

Герундий с относящимися к нему словами образует герундиальные обо-

роты, которые обычно начинаются с предлога, пр итяжательного местоимения

или существительного в притяжательном (иногда общем) падеже. Герундиаль-

ные обороты можно разделить на две группы: зависимые и независимые. Зависимые герундиальные обороты – это такие обороты, в которых пе-

ред герундием (после предлога) нет слова, обозначающего действующее лицо

или предмет. При переводе таких оборотов придаточными предложениями

обычно повторяется подлежащее английского предложения, а герундий стано-

вится сказуемым. При этом предлог, вводящий герундиальный оборот, стано-вится союзным словом, соединяющим главное предложение с придаточным.

Поэтому в русском переводе главное и придаточное предложение соединяются

словами то, что в том падеже, который определяется предлогом.

This method differs from that one by

having other parameters.

Этот метод отличается от того тем, что

он имеет другие параметры.

Перевод некоторых предлогов, вводящих герундиальные обороты, со-

юзными словами:

By – тем, что

Of – о том, что

To – тому, что In – в том, что

In addition to – кроме того, что

In spite of – несмотря на то, что

Besides – кроме того, что

Owing to – благодаря тому, что Due to – вследствие того, что

Независимые герундиальные обороты – это такие обороты, в которых

между предлогом и герундием имеется слово, выражающее лицо (или пред-

мет), совершающее действие, передаваемое герундием. Такое слово может

быть притяжательным местоимением или существительным в общем или при-

тяжательном падеже. При переводе оборота придаточным предложением это

местоимение или существительное становится подлежащим, а герундий – ска-

зуемым придаточного предложения. Перевод герундиального оборота прида-

точным предложением начинается с перевода предлога, стоящего перед геру н-

дием, например:

There is unmistakable proof of

Gates’ having been right.

Имеются несомненные доказательства

того, что Гейтс был прав.

182

Если герундиальный оборот играет роль подлежащего (перед герунди-

ем нет предлога), то перевод его придаточным предложением следует начи-

нать со слов то, что, например:

His having made this experiment is a

known fact.

То, что он уже провел этот экспери-

мент, является известным фактом.

При переводе независимых герундиальных оборотов, в которых перед

герундием стоит притяжательное местоимение, это местоимение становится

личным местоимением в именительном падеже, то есть подлежащим, напр и-

мер:

We know of their having been satis-

fied with CEO’s explanations of the

discrepancies.

Мы знаем, что они были удовлетворены

объяснениями расхождений, предложен-

ными исполнительным директором.

Глаголы, после которых обычно используется герундий:

To start, to begin – начинать

To continue, to go on – продолжать

To stop, to give up – прекращать

To aid in – способствовать, помогать

To aim at – иметь целью, стремиться к

To account for – объяснять

To avoid – избегать

To insist on (upon ) – настаивать на

To object to – возражать против

To be responsible for – быть ответственным за, вызывать

To prevent from – мешать, препятствовать

To succeed in – удаваться (что-то сделать)

183


Exercise 1: Translate these sentences, paying attention to rendering gerun-

dial constructions.

1. No lasting success can be achieved in the fight against inflation without restraining the

trend towards growth in the money supply.

2. The mechanism of wage indexation has prevented workers from shouldering part

of the real costs produced by higher energy prices.

3. The monetarists recommended slowing down and stabilizing money supply

growth in order to restrain inflation.

4. But since the OPEC nations will undoubtedly attempt to offset their revenue losses at

least in part by reducing their imports, the current account shortfall should be considered

lower in actual fact.

5. Although in the early 80s a certain degree of tightening up in the personnel sector

was effected, the basic positive outlook is still unchanged.

6. The large volume of private placements doesn’t seem, however, to be the only, or

even the most important reason for the restraint on the part of some investors in

subscribing to new issues.

7. Only on receiving slightly more positive interest rate signals from the US finan-

cial markets in the second half of the month did activity on the market begin to pick

up.

8. To an increasing extent, borrowing is done not for development purposes but for

servicing debts and for financing heavy trade deficits caused by unequal terms of

trade with big capitalist countries.

9. Business, far from investing, is cutting back plans for expansion.

10. The Euromarket provides an opportunity of raising substantial loans on favoura-

ble terms without the credit facility being linked to individual projects.

11. The commission of experts is in favor of maintaining the Swiss banking secrecy

law.

184

Занятие 10

Неличные формы глагола. Инфинитив.

Функции инфинитива в предложении,

употребление в составе сказуемого

Инфинитив (первая форма глагола) является неличной формой глагола,

отвечающей на вопросы: что делать? что сделать? Формальным признаком

инфинитива является частица to. Инфинитив только называет действие, но не

указывает ни лица, ни числа. Он, как все неличные формы, не может согласо-вываться с подлежащим, следовательно, не может являться самостоятельным

сказуемым. Инфинитив, также как и герундий, произошел от существительно-

го и, подобно герундию, может выполнять в предложении функции существи-

тельного. Функциональная близость инфинитива и герундия сказывается в

том, что во многих случаях возможно употребление одной формы вместо дру-гой.

Выполняя функции существительного, инфинитив вместе с тем имеет и

глагольные свойства. В частности, может присо единять прямое дополнение,

может определяться наречием и имеет залоговые и временные отличия.

Формы Indefinite выражают действие, одновременное с действием гл а-гола-сказуемого. Они не уточняют связи действия, выражаемого инфинити-

вом, со временем, поэтому перевод может осуществляться инфинитивом гла-

гола как совершенного, так и несовершенного вида.

They wanted to introduce a new

system.

Они хотели вводить (ввести) новую сис-

тему.

Формы Perfect выражают действие, предшествующее действию глаго-

ла-сказуемого, переводятся инфинитивом совершенного вида.

He was expected to have done his work.

Предполагали, что он уже сделал свою работу.

Функции в предложении и способы перевода.

1. Подлежащее. В этой роли стоит перед сказуемым в начале предло-жения и может переводиться неопределенной формой русского глагола или

существительным.

To think otherwise would be a mis-

take.

Думать по-другому было бы

ошибкой.

To account for these variations is in

principle straightforward.

Объяснение этих изменений

в принципе является простым.

2. Дополнение. Стоит после сказуемого и переводится на русский нео п-

ределенной формой глагола.

We try to minimize the old

disadvantages.

Мы стараемся свести к минимуму ранее

имевшие место недостатки.

185

3. Обстоятельство. Может стоять в начале или в конце предложения.

В обоих случаях его следует переводить неопределенной формой глагола с

союзами для того чтобы, чтобы. Инфинитив может быть обстоятельством

цели или обстоятельством следствия. Если это обстоятельство цели, то оно

чаще всего стоит в начале предложения, и ему могут предшествовать союзы in

order to, so as, которые помогают безошибочно определить, что перед нами

обстоятельство, а не подлежащее. Если это обстоятельство следствия, то ин-

финитив чаще всего стоит в конце предложения, и ему часто предшествуют

слова too, enough, sufficiently, sufficient.

In order to do a work well one must

learn.

Чтобы сделать какую-то работу

хорошо, нужно научиться делать это.

The term “production” is too com-

plex to be explained in one para-

graph.

Термин «производство» слишком

сложен, чтобы объяснить его в

рамках одного параграфа.

4. Определение.

В этой роли инфинитив обычно стоит после определяемого слова и

обязательно переводится придаточным предложением, вводимым союзом ко-

торый. При этом следует помнить, что инфинитив в форме Indefinite можно

переводить сказуемым в будущем времени и со словами должен, нужно,

можно, независимо от времени сказуемого.

There are many considerations to be

taken into account in

determining marketing strategy.

Существует много соображений,

которые следует принимать

во внимание при выборе стратегии мар-

кетинга.

5. Вводный член предложения.

В этой функции инфинитив стоит обычно в конце предложения, всегда

выделяется запятыми и может переводиться или деепричастием, или неопр е-

деленной формой глагола.

To sum up, we shall present the table

of results.

Подводя итог (чтобы подвести итог),

приведем таблицу результатов.

Употребление инфинитива в составе сказуемого.

В этом случае он выступает в сочетании со служебными глаголами и

может использоваться с частицей to и без нее.

1. Инфинитив с частицей to:

186

а) стоит после глагола-связки be, который переводится словами значит, за-

ключается в том, чтобы, например:

Our task is to launch this product in

time.

Наша задача заключается в том,

чтобы сделать (выпустить) этот про-

дукт вовремя.

б) стоит после глаголов be и have, которые являются эквивалентами модально-

го глагола must и переводятся словами должен, нужно, можно.

The question of the procedure is yet

to be settled.

Вопрос о методе еще нужно

(предстоит) решить.

2. Инфинитив без частицы to употребляется:

а) для образования будущего времени.

All such attempts will fail. Все такие попытки будут

неудачными (ни к чему не приведут).

б) для образования сослагательного наклонения после вспомогательных глаго-

лов и при самостоятельном употреблении в придаточных предложениях.

This would give rise to economic

problem.

Это привело бы к возникновению

экономических проблем.

It is necessary that the model

adequately represent the

problem situation.

Необходимо, чтобы модель

адекватно представляла ситуацию

проблемы.

187

в) для образования повелительного наклонения.

Let us avoid unnecessary

complications.

Давайте избегать ненужных

осложнений.

г) после модальных глаголов.

A decision maker must evaluate the

research and its results.

Человек, принимающий решения, должен

оценить исследование и его результаты.


Exercise 1: Translate the following sentences, paying attention to the fun c-

tions of the infinitive.

1. The purpose of each business process is to offer each customer the right product

or service.

2. More than 200 years ago, the economist Adam Smith formulated a theory to de-

scribe industrial practices that were already centuries old.

3. There are nation-wide schemes to encourage industrial investment.

4. To obtain a Stock Exchange listing, a company must have at least 25% of its

shares held by public.

5. In order to create a supply of loans, people with the necessary financial resources

have to be persuaded to loan.

6. Efforts to increase the productive capacity of poorer nations will only be effective

if these nations are able to increase their exports.

7. At the last moment they decided not to continue with the negotiations.

8. It is important to carry out these changes as quickly as possible.

9. To encourage our employers to develop their skill is one of the prime concerns of

management.

10. We have decided not to advertise this position, but recruit internally.

11. It is impossible for us to accept these terms.

12. The sales director claimed to have found three new customers.

13. After the acquisition they didn’t dare to replace the whole management team

immediately.

188

Занятие 11

Неличные формы глагола. Инфинитивные обороты –

зависимые и независимые

Зависимые инфинитивные обороты – это обороты, в которых перед ин-

финитивом нет слова, обозначающего действующее лицо или предмет, поэтому

при переводе оборота придаточным предложением приходится повторять под-

лежащее английского предложения, а инфинитив сделать сказуемым.

I remembered to have studied the

causes of this firm’s failure.

Я помню, что я изучал причины, по кото-

рым эта фирма потерпела

неудачу.

Независимые инфинитивные обороты – это обороты, в которых перед

инфинитивом есть слово, обозначающее действующее лицо или предмет, и

которое становится подлежащим в придаточном предложении, а инфинитив –

его сказуемым (то есть не зависит от подлежащего).

We know F.H. Sonnenberg to have

written a famous book “Marketing to

win”.

Мы помним, что Ф.Х. Соненнберг напи-

сал знаменитую книгу

«Маркетинг для победы».

Абсолютный (независимый) инфинитивный оборот.

Порядок слов здесь такой же, как и в причастном абсолютном обороте:

есть слово, обозначающее действующее лицо или предмет, за которым стоит

инфинитив (а не причастие, как в причастном обороте). При переводе инфини-

тив становится сказуемым или в форме будущего времени, или со словом

должен.

We asked him to help us, the work to

be done in a week.

Мы попросили его помочь нам, т.к. рабо-

та должна быть сделана через неделю.

Встречается такой оборот реже, чем причастный, и запятая перед сло-

вом with нередко опускается.

We shall make the experiment (with)

the sample to be taken from another

country.

Мы проведем этот эксперимент, причем

группа испытуемых будет выбрана в

другой стране.

189

Сложное дополнение (Complex object).

Данная конструкция состоит из существительного в общем падеже или

местоимения в объектном падеже и инфинитива и представляет собой сложное

дополнение. Употребляется:

а) После глаголов чувственного восприятия (инфинитив без частицы to): see,

hear, feel, watch, perceive, notice, observe.

We noticed him be the most

experienced manager in this

company.

Мы заметили, что он является

самым опытным менеджером в этой

компании.

Местоимение в объектном падеже при переводе становится русским

личным местоимением.

б) После глаголов, выражающих желания, чувства и намерения (инфинитив с час-

тицей to): want, wish, like, hate, desire, intend.

They wanted Pepsi to get

potentially large market with

launching that new product –

Pepsi Max.

Они хотели, чтобы компания Пепси Ко-

ла с помощью выпуска своего

нового продукта Пепси Макс вышла на

потенциально крупный рынок.

в) После глаголов умственной деятельности (инфинитив с частицей to): know,

believe, think, consider, expect.

We believe the market research to

have helped the business to come to

a decision.

Мы полагаем, что исследование рынка

помогло компании принять решение.

г) После глаголов речи (инфинитив с частицей to): ask, order, command, allow.

The head of the department

allowed him to have continued

that project.

Начальник отдела разрешил, чтобы

он продолжил работу над проектом.

д) После глаголов, выражающих побуждение к действию (инфинитив без час-

тицы to): let, make, have, get (to).

She made him solve this problem. Она заставила его решать проблему.

Именительный с инфинитивом (Complex subject).

Эта конструкция не имеет аналогии в русском языке, ее компонентами

являются подлежащее предложения и инфинитив, которые при переводе свя-

заны как подлежащее со сказуемым. Таким образом, инфинитив переводится

190

на русский язык безличным придаточным предложением или вводными сло-

вами, употребляется в следующих случаях:

а) При сказуемом в страдательном залоге, выр аженном глаголами речи, умст-

венной деятельности, чувственного восприятия и побуждения: say, report, an-

nounce, know, believe, think, find, suppose, see, hear, make.

He is known to be the most

experienced manager in this

company.

а) Известно, что он является самым

опытным менеджером в этой

компании.

б) Он, как известно, является самым

опытным менеджером в компании.

б) При сказуемом в действительном залоге, выраженном глаголами happen,

seem, appear, prove, chance, turn out.

He seems to know our business plan

in details.

Кажется, он детально знаком с

нашим бизнес-планом.

в) При сказуемом, выраженном сочетанием глагола-связки с прилагательными

likely, unlikely, sure, certain.

He is unlikely to know our

business plan in details.

Маловероятно, что он знаком с

нашим бизнес-планом в деталях.

For + существительное + Infinitive.

Как во всех независимых оборотах, в этой конструкции перед инфинити-

вом есть слово, обозначающее лицо или предмет, и вводится оно предлогом for.

Это слово становится подлежащим придаточного предложения (вводимого союза-

ми чтобы или что), в котором инфинитив становится сказуемым, например:

For this approach to be valuable it

must be improved.

Чтобы этот подход имел ценность,

его следует усовершенствовать.

There is a tendency for the method

to be used in all the

experiments.

Существует тенденция к тому, чтобы

использовать этот метод во всех

экспериментах.

191


Exercise 1. Translate into Russian, paying attention to the objective infini-

tive construction.

1. I don’t consider him to be a good manager.

2. The manager considers the results to be unsatisfactory.

3. We expected John to be elected. 4. We expect interest rates to rise next week.

5. We assume the market share of these brewing companies not to have increased.

6. The experts find the demand to turn out to be greater than expected.

7. They proved the demand to have been highly elastic when the market was de-

pressed. 8. We show the small firm to specialize in one product.

9. They believe the larger firms to be able to employ buyers who are experienced in

buying particular products.

10. The scientists know the “ownership” of labour to be highly unpop ular politically.

Exercise 2. Translate into Russian, paying attention to the subjective infin i-tive construction.

1. The free market economy is said to be more flexible.

2. The strike is expected to end soon.

3. Complimentarity is said to exist when an increase in the demand of another prod-

uct. 4. Consumers are assumed to wish to maximize their utility of satisfaction.

5. Firms are assumed to maximize their short-run profits.

6. When an increase in the scale of production yields a more than proportionate in-

crease in output, the enterprise is said to be experiencing economies of scale.

7. The company is said to be losing a lot of money. 8. Goods which are close substitutes for one another are said to be in competitive

demand.

9. A good is said to be in composite demand when it is demanded for several differ-

ent uses.

10. The capitalist system is said to be based upon the principle of competition.

192

Занятие 12

Перевод официально-деловых материалов.

Перевод латинских фраз.

Перевод официально-деловых материалов включает в себя перевод

текстов соглашений, контрактов, договоров. Он требует знания характерных

особенностей их построения и передачи.

1. Для официальных документов характерна четкость построения,

обеспечивающая логическую последовательность изложения, отграничение

одной мысли от другой. Большие по размеру документы делятся на:

Разделы – sections

Подразделы – subsections

Главы – chapters

Статьи – articles

Пункты, параграфы – clauses, items, points, counts, paragraphs

Такие термины, как clause, item, point, count, paragraph, часто не имеют

четкой дифференциации значений и при переводе данного документа лишь

необходимо придерживаться того, чтобы одному и тому же английскому тер-

мину постоянно соответствовал один и тот же русский вариант.

Кроме того, в английском тексте официальных документов часто ис-

пользуются буквенные обозначения разделов или пунктов – а), в), с), d) и так

далее. При переводе следует сохранять буквы латинского алфавита, так как это

способствует сохранению точности и облегчает ссылки на соответствующий

документ при переводе с русского языка на английский язык.

2. Для обеспечения аутентичности перевода необходимо обеспечить не

только точную передачу содержания документа, но и точную передачу неко-

торых моментов, которые на первый взгляд могут показаться формальными.

Так, необходимо следить за тем, чтобы в переводе было четкое соответствие

официальных названий, принятых в русском и английском языках:

The USA США

The United Stated of America Соединенные Штаты Америки

3. Для исключения возможности разночтений или неправильной ин-

терпретации перевода текста документа переводчик часто прибегает к дослов-

ному переводу формулировки текста, что ведет к созданию большого количе-ства штампов, которые быстро становятся традиционными и регулярно упот-

ребляются при переводе официально-деловых материалов:

The terms and conditions – сроки и условия

Within the framework – в рамках

193

The contracting parties – договаривающиеся стороны Within prejudice to – без ущерба

4. Одна из основных особенностей официально-деловых материалов –

стремление в максимально сжатой форме изложить содержание документа,

что ведет к изложению в одном предложении самых разнообразных положе-

ний. А это, в свою очередь, вызывает появление внутри одного предложения многочисленных инфинитивных и причастных придаточных оборотов. В та-

ких случаях при переводе на русский язык уместно пользоваться дословным

переводом.

5. В договорах, контрактах, уставах и других официально-деловых ма-

териалах очень часто встречаются случаи употребления глагола shall со 2-м и 3-м лицом единственного числа. При переводе на русский язык в таких случа-

ях употребляется настоящее время, а оттенок долженствования, имеющийся в

английском языке, не передается.

6. В связи с обилием традиционных формулировок, исторически скл а-

дывавшихся в течение длительного времени, для официально-деловых мате-риалов характерно употребление торжественной, а подчас и архаической лек-

сики. При переводе подобных слов нужно использовать соответствующие

слова и фразы, имеющиеся в русском языке. Например:

Aforesaid – вышеуказанный

Abovementioned – вышеупомянутый Herein – при сем, в данном документе

Hereinafter named – здесь и далее именуемый

Передача таких слов, как therein, therewith, there at, there of, there to, за-

висит от контекста.

7. В английских официальных текстах иногда употребляются латин-

ские и французские слова и фразы, как правило, эти исключения переводятся

на русский язык их соответствиями.

Ad hoc – специальный

Bona fide – чистосердечно

Condition sine qua non – непременное условие

En bloc – в целом

Fait accompli – свершившийся факт

Inter a lia – помимо всего прочего

Ipso facto – по самому факту

Mutatis mutandis – с соответствующими изменениями

Modus vivendi – временное решение вопроса

Per capita – на душу населения

Pro tempore – временно

Etc. – и т.д.

194

Некоторые иноязычные слова и фразы, получившие широкое распр о-

странение в разных языках, при переводе на ру сский язык либо сохраняются в

своем иностранном написании, либо транскрибируются. Последний способ

является наиболее распространенным. Например:

Status qvo – статус кво

Quorum – кворум

Persona (non) grate– персона (нон) грата

Tabula rasa – табуля раза

Casus belli – казус белли

A priori – априори

De facto – де-факто

Force majeure – форс-мажор

8. Четкость построения официальных текстов находит свое отражение

и в унифицированной схеме начала и окончания текста.

195


Exercise 1: Translate, paying attention to rendering archaic word.

1. The Banks grant to the Borrower upon the terms and subject to the conditions

hereof a loan facility in the aggregate amount of … or the equivalent thereof in

Deutsche Mark.

2. The Facility is made available severally by each Bank in the amount of its Com-

mitment. The failure of any Bank to carry out its obligations hereunder shall not

relieve any other Bank, the Agent or the Borrow of any Bank be liable for the obli-

gations of any other Bank hereunder.

3. The Facility is available to the Borrower only during the Availability Period. Any

part of the Facility which remains undrawn and uncancelled on the Termination

Date shall be automatically cancelled at the close of business on that date.

4. CONDITIONS PRECEDENT

Notwithstanding anything to the contrary contained or implied in this Agreement,

the Borrower shall not be entitled to give notice of its intention to draw any Advance

hereunder until all the documents listed in the Second Schedule have been received

by the Agent and in from and substance satisfactory to the Agent.

5. The agent shall be under the same obligations and be ent itled to the same rights

and powers in relation to any sums advanced by it hereunder in its capacity as a

Bank as if it were not the Agent nor shall it be obliged by reason of its position as

Agent or otherwise to account to any other Bank for any sum received by it for its

own account hereunder or for the profit element thereof.

6. It shall not be a defence to a claim by any Bank under this Clause that any in-

creased cost, reduction or payment therein referred to could have been avoided by

such Bank.

7. The Borrow will, within forty -five days of the date hereof, pay to the Agent for

account of the Managers a management fee in accordance with the terms of the letter

dated 8th October, 1975 sent by the Borrower to the Managers.

8. The Borrower may not give any notice of its intention to make a drawing he-

reunder until all documents listed in the Second Schedule hereto have been in the

possession of the Agent in sufficient copies for the Agent and each Bank and in

from and substance satisfactory to the Agent for at least five Business Days.

Exercise 2: Translate, paying attention to rendering Latin cliches.

1. Any payment by the Borrower of its obligations under any Note shall discharge

pro tanto the Borrower’s obligations under this Agreement and upon due payment or

196

satisfaction by the Borrower of all its obligations under the Notes, or of the corres-

ponding obligations in this Agreement, the same shall be cancelled and forthwith

returned to the Borrower.

2. B) Any prepayment of the proportion of any Advance lent by any Bank persuant

to Clause 12, 13, or 14 shall reduce pro rata the Borrower’s obligation to repay such

Advance under Clause 9 on each subsequent Repayment Date.

3. Its obligations hereunder are and will be direct, unconditional and general obliga-

tions of the Borrower and will rank at least pari passu with all other indebtedness

and contingent liabilities of he Borrower.

4. Provided, that it shall not be an Event of Default if the Borrower conducts a bona

fide dispute in respect of any such indebtedness to settle such dispute.

197

GLOSSARY

Aggregate demand the proportion of the total demand (for a product) that

is supplied by a particular manufacturer or brand

Aggregate supply the total amount of goods and services resulting from

adding together all the spending power of people in the

complete economy of a country

Barriers to entry actors which prevent the entry of new firms into an

industry

Barter trade by direct exchange of goods for other goods

without using money

Bill of exchange a written order telling one person to pay a certain sum of money to a named person on demand or at a certain

time in the future

Buying power the amount of goods and services that money can buy

at a given time

Capital accumulated wealth or property, used in the production of further wealth, i.e. one of the factors of production,

the others being land and labor

Cheque legally, a bill of exchange drawn on a balance payable

on demand

Command economy an economy where the government makes all decisions about production and consumption

Commodity any article (a good or a service) that can be bought or

sold

Competition based pric-

ing

setting a price based on the prices charged by competi-

tors for similar products

Conglomerate firm a firm that is engaged in a number of unrelated produc-

tive activities, e.g. car assembly and the production of

bread

Conglomerate merger a merger between firms in unrelated business, e.g.

between an automobile manufacturer and a food processing firm

198

Consumer goods goods that satisfy personal needs rather than those re-

quired for the production of other goods

Cost inflation the kind of inflation that is caused by rising costs of

labor and materials, not by increased demand

Costing estimating the cost of making goods or fixing the prices they should be sold at to make a profit

Cost plus pricing fixing a price by adding a percentage profit margin to

the cost of production of the good or service

Creeping inflation a slow rise in the level of prices of below 2 or 3 per

cent a year

Demand the quantity of goods or services which purchasers are

prepared to buy at a given price in a given p eriod of

time

Demand inflation the kind of inflation caused by an excess of demand

over supply resulting in a decrease in the value of money

Denomination a class or unit based on quantity, value or measure

Direct foreign

investment

investment by companies domiciled in one country in

companies a domiciled in another; it usually entails

investor control and managerial involvement

Discount a sum of money allowed for immediate payment of a

sum due to a later date

Discount House a commercial banking firm that discounts bills of ex-

change which have been accepted by accepting houses

Discouraged worker a person who has become depressed about the pros-pects of ever finding a job and decides to stop even

trying

Distribution the arrangements and activities needed for getting goods

from the manufacturer or importer to the consumer

through the channels of distribution which are usually the wholesalers and retailers

Duopoly a market consisting of two sellers

Economic activity the activity relating to commerce and industry

Economic growth the percentage annual charge in the national income of

a country or a group of countries

Economic theory that part of the study of economics that examines and

explains the working of an economic system and how

it is influenced by human behavior, by the natural

forces of the world and by man-made institutions such

as markets, laws and governments

199

Economies of scale the long run reduction in average costs that occurs as the scale of the firm’s output is increased

Economics a social science studying human behavior within the

context of markets, the study of the natural laws go-

verning the production, distribution and consumption

of wealth

Economist a social scientist with special knowledge of economics,

such as a teacher or a writer on the subject or a person

who is employed by a business organization to forecast

movements in prices and in the market demand for

various products and services

Employment the use of labor and capital to produce goods and ser-

vices

Employee a person who works for another person or a business,

especially for money

Employer a person or company that hires workers and provides work

Entrepreneur a person, usually the owner, who organizes, finances and

manages a commercial or industrial business in the expec-

tation of making a profit

Enterprise a business organization

Equilibrium a state of balance when all the economic forces present

in a situation have an equal influence and there is no

tendency to change

Exchange the process of giving and receiving

Fluctuation the rising and falling or changing of prices, numbers,

rates or amounts

Free market economy an economy in which supply and demand regulates

prices, wages, etc., rather than government policy

Funds amounts of money

Hidden inflation the lowering of the quality of products in general in

order to prevent, and so to hide, an increase in price

Horizontal merger a merger between firms that produce and sell the same

products, i.e. between competing firms

Household a group of individuals whose economic decision-

making is interrelated. They enter the market place as

buyers or consumers of goods and services produced

by firms. They provide factor inputs to firms in order

to produce those goods and services

200

Hyper-inflation an extreme form of inflation, when the money supply

is being increased very rapidly, resulting in an increase

of over 20% of the price level annually

Income the money of all kinds coming in regularly, especially

to a person, family, or organization, such as salary or

wages from employment, rent from property, profits

from business and fees for professional services

Inflation a rise in the general level of prices

Inflationary gap that part of government spending which is not covered

by taxes or borrowing from the public, but is met by

issuing new paper money

Inflationary spiral a state of inflation that gets worse and worse, because

higher prices result in demands for higher wages; and

higher wages increase costs and so cause higher prices

Innovation practical application of an idea that has already been

discovered but is only now to be exploited

Interest rate the relation between the payment received by a lender

of money and the amount of money lent, expressed as

a percentage per period of time

Intermediary an individual acting as a link between persons or com-

panies

Labor force or

workforce

1) the total number of people employed by a firm or

some other organization to produce goods and servic-

es; 2) the total number of people in an economy avail-

able to produce goods and services

Laissez-fair loose-rein supervision

Legal tender the form of money in which a person has a right by law

to pay a debt and which the creditor must by law ac-

cept in settlement of the debt

Liabilities the debt owed by a business to its creditors and to its

owner

Loan an amount of money borrowed by an individual or a

company

Macroeconomics part of economic study considering the whole economy

from a national point of view

201

Market oriented

business

a business which develops products which have been

researched and designed to meet the needs of custom-

ers

Mainstream economics the study of how market works

Marginal utility the utility of one unit of a commodity

Market an institutional arrangement that promotes trade or

exchange of goods

Market share the amount of an economic good that will be offered

for sale in the market at a certain price or time

Market oriented

pricing

setting a price based on an analysis of the market

Marketing the action of identifying, satisfying and increasing the

buyer’s demand for a company’s products by means

such as advertising, sales promotion, pricing, carrying

out market research and developing and testing new

products

Market research 1) the systematic and objective classification, collec-

tion, analysis and reporting of information about a

particular marketing problem; 2) the process of gaining

information about customers, competitors and market

trends through collecting primary and secondary data

Mature in business, especially regarding bills of exchange or

insurance in policies, to become due for payment or

repayment

Merger an amalgamation or joining of two or more firms into

an existing firm or to form a new company

Microeconomics part of economic study oferring a detailed treatment of

one aspect of economic behaviour ignoring interactions

with the rest of the economy

Monetary policy the control, by the government, of a country’s currency

and its system for lending and borrowing money, esp e-

cially through the supply of money

Monetary union permanently fixed exchange rates within the union,

free capital movements and a single monetary authori-

ty setting the union’s money supply

202

Money any article or commodity that is generally acceptable

by law and custom as a means of payment

Monopoly a market with a single buyer who has some influence

over the price of his input

Mortgage the advance of a loan to a person or business (the bor-

rower/mortgagor) by other persons or businesses; the

thing given as a security

Multinational

enterprise

A firm that owns production, sales and other revenue-

generating assets in a number of countries

Multiplier effect denotes the phenomenon whereby some initial increase

(or decrease) in the rate of spending will bring about a

more than proportionate increase (or decrease) in na-

tional income

Natural monopoly a market with a single firm which can serve that mar-

ket at lower cost than any combination of two or more

firms

Natural rate of

unemployment

the rate of unemployment when the labour market is in

equilibrium

Non-tariff barriers differences in national regulations or practices which

prevent free movement of goods, services and factors

across countries

Oligopoly a market with a small number of sellers

Participation rate the percentage of the population of working age who

declare themselves to be in the labour force

Payment a transfer of funds in any form between two parties

Prevailing price prices now current in the market

Price the money value of a unit of a good, service, financial

security or assets which a buyer is required to pay a

seller to purchase the item

Prices and incomes poli-

cy

the application of controls on prices and incomes (par-

ticularly wages) in order to stop or slow down inflation

in an economy

Pricing decision-making process involved in setting a price for

a good or a service

203

Primary data information which has been gathered for a specific pur-

pose through direct investigation such as observation,

surveys and through experiment

Product oriented busi-

ness

a business which develops products with little or no

market research and which it hopes will prove success-

ful in the market

Profit margin the extra which is added to the cost of a product to

cover the profit to be made

Production the making of useful goods and services which are

scarce and have a price

Production technique a particular method of combining inputs to make out-

puts

Regional policy a policy concerned with removing significant imbal-

ances between the regions of an economy in respect of

unemployment rates and levels of income per head

Regional

unemployment

a form of structural unemployment associated with the

decline of certain industrial activities

Revenue the money received by a firm from selling its output of

goods or services, or money received by government

from taxation

Resource allocation a list or complete description of who does what and

who gets what

Scale of preferences an arrangement of things in one’s own mind with the

most preferred items towards the top of the scale

Secondary data information which already exists, such as accounts and

sales records, government statistics, newspaper articles

or reports from advertising agencies

Shareholders the individuals and institutions who contribute funds to

finance a joint-stock company in return for shares in

that company

Substitute products any goods or services that are considered to be eco-

nomically interchangable by buyers

Supply the total quantity of a good or a service available to the

general public

Suppressed inflation inflation that would be much greater if the government

204

were to remove controls on prices and wages

Takeover the acquisition of control of one company by another

or occasionally by an individual or group of investors

Total utility total satisfaction derived from the possession of a

commodity

Trade the business of buying and selling goods for money or

of exchanging goods for goods

Transaction a business deal, especially a sale or a purchase, by

business

Treasury the department responsible for the finances, the man-

agement of the monetary system, etc.

Unemployment rate the percentage of the labour force without a job but

registered as being willing and available for work

Utility the ability to satisfy wants

Vertical merger a merger between firms operating at different stages of

production, e.g. from raw materials to finished prod-

ucts to distribution

Wage the money paid, usually in cash each week, to a worker

for work done

Wants the basic needs of people

Wealth a stock of goods that are useful, scarce and can be ex-

changed for a money price

205

BIBLIOGRAPHY

1. W. D. Barndt, Jr. – Marketing. – The Hartford Graduate Center. School of Man-

agement, 1991.

2. T. E. Benson. – Beyond Niche Marketing. Industry Week, Sept. 17, 1990.

3. Business and Economics for GCSE. – Harper Collins Publishers Ltd, 1996.

4. Economic Analysis. A Workbook. – Department of Social Sciences and Languag-

es. Sunderland Polytechnic. London Butterworths, 1971.

5. Economics, Business: Student’s Book. – Nuffield, Longman group Ltd, 1994.

6. K. Hoyle, G. Whitehead. – Business, Economics: Made Simple. – 1970.

7. G. Whitehead. – Economics: Made Simple. – W. H. Allen&Co. Ltd, 1970.

8. Дроздова Т.Ю., Берестова А.И., Маилова В.Г. – English grammar. Reference

and practice. – СПб., 2001. – 357 с.

9. Дроздова Т.Ю. Зайцева И.К. Лабораторные работы по грамматике английско-

го языка для студентов I курса. – Л., 1989. – 62 с.

10. Португалов В.Д. Economics: Учебник по английскому языку. – М.: 1998. –

303 с.

206

Для заметок

207

Учебное издание

English for Economics

Учебное пособие для студентов

экономических специальностей вузов

Компьютерная верстка Т. В. Новиковой

Подписано в печать 17.04.2006. Формат 60х84/16. Бум. ВХИ.

Печать офсетная. Гарнитура Times. Усл. печ. л. 12,6.

Тираж 556 экз. Заказ 1005.

Отпечатано в ОАО «Издательско-полиграфический комплекс «Звезда» 614990, ГСП-131, Пермь, ул. Дружбы, 34

460775

Documents

Transcript of 460775