12. 1. Memorize the following words and word-combinations:

13. to consume	споживати	потреблять
    to earn	заробляти	зарабатывать
    earnings	заробітки	заработки
    Wealth	багатство, матеріальна цінність	богатство, материальная ценность
    to refer to	відноситись до, стосуватись	относиться к, касаться
    Wage	заробітна платня (робітників)	заработная плата (рабочих)
    Salary	платня	жалованье, оклад
    Possessions	майно, власність	pl. имущество, собственность
    Savings	заощадження	pl. сбережения
    to loan	позичати	давать взаймы, ссужать
    Rent	дохід з нерухомості чи капіталу	pl. доход с недвижимости и капитала
    a fee	плата за послуги	плата за услуги
    and the like	і таке інше	и тому подобное
    capital gains	приріст капітальної вартості	прирост капитальной стоимости

15. 2. Read and translate the text.

Before people can consume anything, however, they must do two things. First they must earn the income to buy the things they want. Then they must decide how the money will be spent. There are two ways to earn income: from work and from the use of wealth.

Most of the income comes from work. In return for working, people receive a wage or a salary. The term «wage» typically refers to the earnings of workers paid by the hour or unit of production. «Salary» refers to earnings paid on a weekly or monthly basis. How much you earn will depend on the kind of job, the abilities, the performance, and a number of other factors.

Wealth can be expressed as the value of the things you own. Adding the value of all your possessions, bank accounts, savings, and the like will give you the total amount of your wealth.

Used in certain ways, wealth can earn income. If you owned a house, you might be able to let others use it for a fee. In that instance economists would say that you used your wealth to earn «rent». Wealth, in the form of money that is loaned to others or deposited in a savings account, will earn interest. As you can see, interest and rent are two forms of income that can be earned by wealth.

Other types of income are dividends and capital gains that can be generated from the wealth.

1. 3. Complete the sentences using the text:

1. The main two ways to earn …

2. Wage is the earnings …

3. The total amount of your wealth is …

4. Interest and rent are …

1. 4. Answer the questions.

1. What are two ways to earn income?

2. Who gets wages?

3. Who gets salaries?

4. What is wealth?

5. How can wealth earn income?

6. What is «rent»?

7. What is interest?

8. What are other types of income?

Lesson 4 gross domestic product and gross national product

18. 1. Memorize the following words and word-combinations:

gross national product	валовий національний продукт	валовой национальный продукт
the total value	загальна вартість	общая стоимость
intermediate input	проміжний	промежуточный
to include	включати, містити	включать, содержать в себе
to exclude	виключати, вилучати	исключать
current prices	поточні ціни	текущие цены
constant prices	постійні ціни	постоянные цены
leisure	дозвілля	досуг
to remedy	відшкодувати, виправляти	возмещать, восстанавливать
net national welfare	чистий національний прибуток	чистый национальный доход
welfare	добробут	благосостояние
well-being	благополуччя, процвітання	благополучие, процветание
per capita	на душу населення	на душу населения
resident	мешканець, постійний житель	постоянный житель

20. 2. Read and translate the text.

Gross Domestic Product (GDP) is the total value, at current prices, of all domestically produced final goods and services during a specific period of time (year, quarter).

GDP counts only goods and services produced within the borders of the country regardless of who owns the factors of production.

GDP excludes intermediate goods and services that are used up in the production of other goods.

Gross National Product (GNP) & Gross National Income (GNI) is the total value, at current or at constant prices, of all final goods and services produced by the factors of production that are supplied (owned) by the residents of a country during a specific period of time.

GNP represents the total income of all residents of a nation including income earned by participating in production taking place in foreign countries (mostly interest and dividends earned by resident owners of capital that is used in a foreign country).

The concepts of GDP & GNP are used by many economists as a measure of economic welfare. If GDP &/or GNP is large and growing then the country is “rich and growing richer.”

The GN at current prices is called the “nominal GNP”, the GNP at constant prices the “real GNP”.

A more informative measure of economic well-being is per capita GNP which measures GNP per person.

In order to calculate the GNP, government economists add the amounts that were spent by the three elements of the economy (households, business and government) to purchase the finished products. We can express this mathematically as C + I + G = GNP, where:

C — consumer household spending;

I — investment, or business;

G — government purchases of goods and services.

Although the GNP is a very useful concept, its usefulness as a measure of national welfare and in international comparisons is increasingly being called into doubt by economists. The GNP has been criticised because it fails to include the value added by non-market activities (e.g., the work of housewives) and value of leisure, etc. To remedy some of these defects, different measures of national welfare have been developed, of which the most important are NNW (net national welfare) and indices based on social indicators (e.g., number of cars and telephones, suicides, child mortality, etc.).

2. 3. Complete the sentences using the text:

1. The gross national product is the total … .

2. The GNP at current prices is called … .

3. The GNP fails to … .

4. To remedy some of these defects … .

2. 4. Answer these questions, basing your answers on the text:

1. What is the definition of GNP?

2. How is the GNP at current prices called?

3. How is the GNP at constant prices called?

4. How may the real GNP be calculated?

5. Why has the GNP been criticised?

6. What different measures of national welfare have been developed to remedy these defects?

1. 5. Say whether these statements are true or false and if they are false, say why.

1. The gross national product is the total value at current or at constant prices – of all final goods and services produced by a nation's economy in a year.

2. The GNP at current prices is called the "nominal GNP".

3. The GNP at constant prices is called the "real GNP".

4. The GNP is a very useful concept.

5. The GNP has no defects.