Vocabulary

absolute advantage – абсолютное преимущество

comparative advantage – сравнительное преимущество

customs duty – таможенная пошлина

embargo n – юридический запрет торговой деятельности

export n – экспорт

protectionism n – протекционизм (политика государств направленная на ограждение национальной экономики от иностранной конкуренции)

restriction n – ограничение

specialization n – специализация

tariff n – тариф пошлина расценка

GLOSSARY

• Visible exports and visible imports – trade in goods such as food, raw materials, and manufactured goods.

• Invisible exports or invisible imports – trade in services such as banking, insurance and tourism.

• Absolute advantage is the ability of a country to produce a good using fewer resources than another country.

• Comparative advantage is the ability of a country to produce a good at a lower opportunity cost than another country.

• Protectionism is the government’s use of embargoes, tariffs, quotas, and other restrictions to protect domestic producers from foreign competition.

• Free trade is a system which allows certain countries to buy and sell goods from each other without any financial restrictions.

• Embargo is a law that bars trade with another country.

• Tariff is a tax on an import.

• Quota is a limit on the quantity of a good that may be imported in a given time period.

• WTO – World Trade Organization.

5.2. Global market and developing nations discovering connections

1. How would you define global economy, global market?

2. Do you agree that countries should be divided into industrialized and developing? Give your reasons.

3. What international economic organizations do you know? What are their functions?

4. What is globalization? What do you think about it?

READING

Text 1

The author organizes the following reading by considering industrialized nations, newly industrialized nations, developing nations and less developed nations. While reading pay attention to the problems facing different types of countries.

The World’s Economies

Economists classify the world’s economies as: industrial or developed nations (IN); newly industrialized nations (NIC); developing nations or less developed nations (LDC). Each of these types of countries has fairly specific characteristics, and economic issues.

Industrialized nations: Growing and Growing Old

An industrialized economy has a large base of productive capital, sophisticated banking systems and financial markets, a variety of industries producing a broad range of products, and vigorous and varied international trade. Industrialized nations also have well-established systems of government and law, and provide educational opportunities for their people.

Less than 20% of the world’s population live in industrial nations, and they account for about 70% of world output. The countries in the Group of Seven (G-7) have the most industrialized economies. The G-7 are the United States, Canada, Japan, Germany, France, the United Kingdom, and Italy (with Germany, France, the United Kingdom, and Italy comprising Europe’s so-called Big Four). The G-8 includes G-7 plus Russia, which may best be described as an economy in transition.

The entire EU – which also includes Austria, Belgium, Finland, Greece, Ireland, Luxembourg, the Netherlands, Portugal, and Spain – and some European nations outside the EU, such as Switzerland, Sweden, and Denmark, are also industrialized. So are Australia, New Zealand, and Taiwan.

But there is an income inequality, which creates some of the questions these countries face. The term sustainable growth refers to economic growth based on renewable resources and minimal environmental degradation.

However, the threat of terrorism, mainly from Islamic extremists from less developed counties, may well represent the most difficult and dangerous problem for industrialized nations, particularly the United States.