Exercises

1. Questions for Economic Reasoning and Discussion.

1. In 1776, with the publication of the Wealth of Nations, Adam Smith laid the foundation for free enterprise system.

1. What did Adam mean by the “invisible hand” ?

2. What did Adam Smith mean by the phrase “division of Labor”?

3. Why did Smith favor a policy of “laissez faire”?

4. Compare Adam Smith’s views with those of mercantilists. Do some of the views of the mercantilists still influence government

5. What else is the year 1776 associated with?

6. Do these two works have more in common than a birthday? Why?

II. Match each item in Column A with its definition in Column B:

	Column A		Column B
	influence on/upon		to show support
	to earn		to strengthen, help/smb. or smth. to continue, provide for financially
	to argue with smb. about (over) smth.		to get in return for work
	source		quantity of goods
	to supply smb. with smth.		to help to organize and start
	to promote		to express disagreement, quarrel
	to favor		power to affect smb’s character, beliefs or action through example
	to support		to give or provide
	output		place from which smth. comes or is got
	merchant		trader

III. Complete the phrases with prepositions (where it is necessary) and say in what situations they are used in the text. Use them in sentences of your own.

1. declaration … Independence

2. to mark… the publication

3. to object…

4. to differ…

5. to disagree…

6. to call…

7. to be dependent…

8. … providing it…

9. to turn … the pin industry

10. to deal…

IV. Give Russian equivalents for the following words or word combinations from the text:

1. to associate smth. with smth.

2. influential books

3. economic beliefs of his day

4. to promote a favorable balance of trade

5. the more efficient

6. government regulation

7. in those circumstances

8. self-interest

9. at the lowest prices

10. supply and demand

11. the invisible hand.

V. Discuss the following:

1. “The Wealth of Nations” written by Adam Smith earned the author the title “The father of economics”.

2. Adam Smith sharply disagreed with the mercantilists.

VI. Complete the table. Work out your point of view on Adam Smith’s theory.

Appraisal Ideas and Beliefs	Still Relevant	Needs Modification	Should be Rejected
1.See the model on p. 2….

Give your reasons.