Vocabulary Focus

Ex. 1. Which preposition? Complete each sentence with a suitable preposition.

1. Companies invest ….. new equipment that will increase production.

2. The government can use its spending and taxing programs to reduce the demand ….. goods and services.

3. A tax increase reduces the demand ….. goods and services and relieves the pressure ….. prices.

4. The overall level of economic activity depends ….. effective demand – that is, total spending by individuals, businesses, and government.

5. The government takes ….. more ….. taxes or spends less.

6. The economy is faced ….. the problem ….. controlling inflation.

Ex. 2. What kind of movement do the verbs below describe? Match them to the symbols. Then compare your answers with a partner. (Use some symbols more than once.)

decline	gain	drop	increase	rocket	plummet
double	fall	halve	level off	triple	recover
decrease	fluctuate	improve	peak	rise	zoom

Ex. 3. Match the following Russian common collocations with their English equivalents:

A	B
собирать налоги	fiscal policy
дискреционная фискальная политика	aggregate demand
совокупный спрос	take in taxes
фискальная политика	discretionary fiscal policy
стабилизировать экономику	to reduce the demand for goods and services
потребительский спрос	to depend on effective demand
ликвидировать безработицу и инфляцию	to stabilize the economy
сократить спрос на товары и услуги	government spending
стимулирующая фискальная политика	consumer spendings
дефицит федерального бюджета	consumer demand
зависеть от платежеспособного баланса	expansionary fiscal policy
государственные расходы	to eliminate unemployment or inflation
потребительские расходы	income tax
подоходный налог	federal budget deficit

Ex. 4. Choose the words with opposite meaning from two columns and arrange them in pairs.

A	B
cut	collective
exogenous	contraction
expansion	demand
flexible	endogenous
individual	increase
nominal	poverty
private	public
save	real
supply	rigid
wealth	spend

Ex. 6. Make the following words negative by using one of the following prefixes:

de-

dis-

im-

in-

un-

1) … accelerating	4) …natural
2) … intended	5) …stabilize
3) …prove	6) …effective
7) …desirable	10) …perfect
8) … stable	11) …predictable
9) … efficiency	12) …voluntary

Comprehension

Ex. 1. Complete the sentences.

1. Sometimes the economy zooms … .

2. But there have also been periods … .

3. Until the 1930's, the government …

4. Policy aimed at … .

5. Keynes maintained that governments … .

6. If aggregate income is too low … .

7. If aggregate income is too high … .

8. Expansionary and concretionary fiscal policies are … .

9. The fundamental purpose of fiscal policy … .

10. A contractionary policy is composed of … .

11. Monetarists question whether … .

Ex. 2. Comment on the following issues.

1. What periods of business activity are mentioned in the text?

2. What happens to an economy during a boom?

3. How can the government influence the demand for goods and services?

4. Who invented fiscal policy? What kind of policy is it?

5. How do contractionary and expansionary fiscal policies differ?

6. What did economists blame Keynesian policies for?

Text 2

Look at the title of the text and say what problems might be discussed in the text.