to be accepted as — бути принятымкак.

3. to discourage — отговаривать

4.... tends to be stagnant — имеет тенденцию к застою 5.... fails to grow over time — не может развиваться дальше

Other societies have a command economy — one where a central authority makes most of the What, How and for Whom decisions.

Economic decisions are made at the top and people are expected to go along with choices made by their leaders. It means that major economic choices are made by the government. It decides goals for the economy and determines needs and production quotas for major industries. If the planning body wants to stress growth of heavy manufacturing, it can shift resources from consumer goods to that sector. Or, if it wants to strengthen national defence, it can direct resources from consumer goods or heavy manufacturing to the production of military equipment and supplies The major advantage of a command system is that it can change direction drastically in a relatively short time. The major disadvantage of the command system is that it does not always meet the wants and needs of individuals. The second disadvantage of the command economy is the lack of incentives that encourage people to work hard. In most command economies today workers with different degrees of responsibility receive similar wages. In addition, people seldom lose their jobs regardless of the quality of their work. As a result, there is a tendency for some to work just hard enough to fill production quotas set by planners.

The command economy requires a large decision-making bureaucracy. Many clerks, planners, and others are needed to operate the system. As a result, most decisions cannot be made until a number of people are consulted, б or a large amount of paperwork is processed. This causes production costs to increase and decision-making to slow down. Thus, a command system does not have the flexibility to deal with day-to-day problems.

COMMENTS

1... people are expected to go along with — ожидается что люди присоединятся

2. to shift resources — переместить ресурсы

3. the lack of incentives — недостаток стимулов

4. in addition — кроме того

5. regardless of — несмотря на

6. production costs — затраты производства

In a market economy, the questions of What, How and for Whom to produce are made by individuals and firms acting in their own best interests. In economic term a market is an arrangement that allows buyers and sellers to come together to conduct transactions. Since consumers like products with low prices and high quality, producers in a market economy will try to supply such products. Those who make the best products for the lowest prices will make profits and stay in business. Other producers will either go out of business or switch to different products consumer can buy. A market economy has several major advantages that traditional and command economies do not have. First, a market economy is flexible and can adjust to change over time.

When gas prices in the United States began to level off in 1985 and then decline in 1986, the trend slowly began to reverse. The second major advantage of the market economy is the freedom that exists for everyone involved. Producers are free to make whatever they think will sell. They are also free to produce their products in the most efficient manner. Consumers on the other hand are free to spend their money or buy whatever goods and services they wish to have.

The third advantage of the market economy is the lack of significant government intervention. Except for national defense, the government tries to stay out of the way. As long as there is competition among producers, the market economy generally takes care of itself. The final advantage of the market economy is the incredible variety of goods and services available to consumers. In fact, almost any product can and will be produced so long as there is a buyer for it.

COMMENTS

1. to conduct transactions — проводить деловые операции

2. to make profits — получать прибыль

3. to stay in business — оставаться в бизнесе

4. to switch to — переориентироваться

5. to stay out of the way — не вмешиваться

6. incredible variety — неимоверное многообразие

Business Organizations

One of the major economic institutions is the business organization, a profit-seeking enterprise that serves as the main link between scarce resources and consumer satisfaction. These businesses compete with one another for the chance to satisfy people's wants. There are three major kinds of business organizations: the sole proprietorship, the partnership and the corporation. The most common form of business organization is the sole proprietorship — a business owned and run by one

person. The main advantage of a sole proprietorship is that it is the easiest form of business to start and run. There is almost no red tape involved. Most proprietorships are able to open for business as soon as they set up operations. In the event that the owner wants to dissolve the business, a sole proprietorship is as easily dissolved as it is formed.

Sole proprietors own all the profits of their enterprises and are free to make whatever changes they please. They have minimal legal restrictions and do not have to pay the special taxes placed on corporations. They also have the opportunity to achieve success and recognition through their individual efforts. Sole proprietorships are generally found in small-scale retail and service businesses such as beauty salons, repair shops, or service stations. The major disadvantage of a sole proprietorship is the unlimited liability that each proprietor faces. Since the business and the owner are legally the same, the sole proprietor is liable for all financial losses or debts that the business may incur. If a business fails, the owner must personally assume the debts. This could mean the loss of personal property such as automobiles, homes and savings.

A second disadvantage of the sole proprietorship is that it has limited financial resources. The money that a proprietor can raise is limited by the amount of savings and ability to borrow. Another serious problem faced by the sole proprietorship is the lack of continuity of the business. When the owner dies, the business also legally terminates.

COMMENTS

1. a profit-seeking enterprise— прибыльное предприятие

2. sole proprietorship/sole trader/one-man firm — частная
собственность

3. partnership — партнерство

4. corporation — корпорация

5. red tape — бюрократизм

6. to dissolve the business — прекратить деятельность предприятия

7. to achieve success — достичь успеха

8. unlimited liability— неограниченная юридическая
ответственность

9. to be liable for — быть ответственным за

10. to assume the debts — брать на себя долги

11. Savings — сбережения

A partnership is a business that is jointly owned by two or more people who have combined their talents and resources for the purpose of earning a profit Partnerships are most common in such professional fields as medicine, law, accounting, stockbrokerage, but they are also found in

manufacturing, wholesaling and retailing.

The most common form of partnership is a general partnership. General partners own the business, work in it and share the profits and losses. They are responsible for the management of the business and usually agree with each other before making any major decisions There may be a special type of partnership, called limited partnership. Limited partners are only liable for the amount they have invested in the business. They are usually not involved in the management of the firm Partnerships have more advantages than sole proprietorships Like sole proprietorship they are easy to form and often get tax benefits from the government.

Partnerships have certain disadvantages too The major disadvantage is unlimited financial liability It means that each partner is responsible for all debts and is legally responsible for the whole business. But one of the greatest problems in partnerships is that partners may disagree with each other causing management conflicts.

COMMENTS

1. stockbrokerage / stockbroking — биржевое маклерство

2. wholesaling and retailing — оптовая и розничная торговля

3. general partnership —товарищество с неограниченной
ответственностью

4. limited partnership— товарищество с ограниченной
ответственностью

5. tax benefits — налоговые выгоды

Nearly 90 per cent of all business is done by corporations. A business corporation is an institution established for the purpose of making profit. It is operated by individuals. People, who would like to form a corporation, must file for permission` in the state where the business will have its headquarters. If approved, a charter, government document that gives permission to create a corporation, is granted. The charter states the name of the company, address, purpose of business etc. The charter specifies the number of shares of stock, or ownership parts of the firm. These shares are certificates of ownership and are sold to investors called shareholders or stockholders. The money is then used to set up corporation If the corporation is profitable it will eventually issue dividend or a check, representing a portion of the corporate profits to shareholders.

There are several advantages of the corporate form of ownership. The major advantage is the ability to acquire greater financial resources than other forms of ownership. The next advantage is that the corporation attracts a large amount of capital and can invest it in plants, equipment and research. It can offer higher salaries and thus attract talented

managers and specialists. Corporations have great capacity for growth and expansion.

Corporations face some major disadvantages. It is difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Most small firms prefer to avoid these expenses by forming proprietorships and partnerships. There is also an extra tax on corporate profits The government taxes corporate income in addition to the taxes paid by shareholders on their dividends.

COMMENTS

1. file for permission — обратиться за разрешением

2. the number of shares of stock — число акций основного капитала

3. certificates of ownership — удостоверение про собственность

4. shareholder/stockholder— акционер, собственник акции

Markets and Market Structures

Economists classify markets according to conditions that prevail in them. They ask questions like the following: How many supplies are there? How large are they? Do they have any influence over price? How much competition is there between firms? What kind of economic product is involved? Are all firms in the market selling exactly the same product, or simply similar one? Is it easy or difficult for new firms to enter the market? The answer to these questions helps to determine market structure, or the nature and degree of competition among firms operating in the same market. For example, one market may be highly competitive because a large number of firms produce similar products. Another may be less competitive because of fewer firms, or because the products made by each are different or unique.

In short, markets can be classified according to certain structural characteristics that are shared by most firms in the market. Economists have names for these different market structures: pure competition, monopolistic competition, oligopoly, and monopoly. An important category of economic markets is pure competition. This is a market situation in which there are many independent and well-informed buyers and sellers of exactly the same economic products. Each buyer and seller acts independently. They depend on forces in the market to determine price. If they are not willing to accept this price, they do not have to do business.

To monopolize means to keep something for oneself. A person who monopolized a conversation, for example, generally is trying to stand out from everyone else and thus attract attention.

A situation much like this often exists in economic markets. For example, all the conditions of pure competition may be met except that the products for sale are not exactly the same. By making its product a little different, a firm may try to attract more customers and take over the economic market. When this happens, the market situation is called monopolistic competition.

The one thing that separates monopolistic competition from pure competition is product differentiation⁷. The differences among the products may be real, or imaginary. If the seller can differentiate a product, the price may be raised a little above the market price, but not too much.

COMMENTS

1. pure competition — чистая конкуренция

2. monopolistic competition — монополистическая конкуренция

3. to keep something for oneself — задержать что ни будь для себя

4. to stand out from — отделится от

5. to attract attention — привлечь внимание

6. to take over the economic market — принимать экономический
рынок

7. product differentiation— дифференциация продукции

The term market, as used by economists, is an extension of the ancient idea of a market as a place where people gather to buy and sell goods. In former days part of a town was kept as the market or marketplace, and people would travel many kilometres on special market-days in order to buy and sell various commodities. Today, however, markets such as the world sugar market, the gold market and the cotton market do not need to have any fixed geographical location. Such a market is simply a set of conditions permitting buyers and sellers to work together. In a free market, competition takes place among sellers of the same commodity, and among those who wish to buy that commodity. Such competition influences the prices prevailing in the market. Prices inevitably fluctuate, and such fluctuations are also affected by current supply and demand.

Whenever people who are willing to sell a commodity contact people who are willing to buy it, a market for that commodity is created- Buyers and sellers may meet in person, or they may communicate in some other way: by telephone or through their agents. In a perfect market, communications are easy, buyers and sellers are numerous and competition is completely free. In a perfect market there can be only one price for any given commodity: the lowest price which sellers will accept

and the highest which consumers will pay. There are, however, no really perfect markets, and each commodity market is subject to special conditions. It can be said, however, that the price ruling in a market indicates the point where supply and demand meet.

COMMENTS

1. gold market — рынок золота

2. free market — рынок, свободный от ограничений

3. commodity market — товарная биржа

Although in a perfect market competition is unrestricted and sellers

are numerous, free competition and large numbers of sellers are not always available in the real world. In some markets there may only be one seller or a very limited number of sellers. Such a situation is called a mo­nopoly, and may arise from a variety of different causes. It is possible to distinguish in practice four kinds of monopoly.

State planning and central control of the economy often mean that a state government has the monopoly of important goods and services. Some countries have state monopolies in basic commodities like steel and transport, while other countries have monopolies in such comparatively unimportant commodities as matches. Most national authorities monopolize the postal services within their borders.

A different kind of monopoly arises when a country, through geographical and geological circumstances, has control over major natural resources or important services, as for example with Canadian nickel and the

Egyptian ownership of the Suez Canal. Such monopolies can be called natural monopolies.

They are very different from legal monopolies, where the law of a country permits certain producers, authors and inventors a full monopoly over the sale of their own products.

These three types of monopoly are distinct from the sole trading opportunities which take place because certain companies have obtained complete control over particular commodities. This action is often called «cornering the market» and is illegal in many countries. In the USA anti­trust laws operate to restrict such activities, while in Britain the Monopolies

Commission examines all special arrangements and mergers which might lead to undesirable monopolies.

COMMENTS

1. perfect market —совершенный рынок

2. free competition — свободная конкуренция

3. natural monopoly — природная монополия

4. cornering the market — спекулятивное контролирование рынка

5. merger— объединение, слитие

Money and Financial Institutions

Basically, money is what money does. This means that money can be any substance that functions as a Medium of Exchange, a Measure of Value, and a Store of Value. As a medium of exchange, money is something generally accepted as payment for goods and services As a measure of value, money expresses worth in terms that most individuals understand. Money also serves as a store of value. This means goods or services can be converted into money that is easily stored until some future time. The different forms of money are in use in the United States today. The most familiar are coin and currency. The term coin refers to metallic forms of money. The term currency refers to paper money issued by government. While money has changed in shape, kind or size over the years, modem money still shares many of the same characteristics of primitive money. Modern money is very portable when people carry checkbooks. For example, they really are carrying very large sums of money since checks can be written in almost any amount. Modem money is very durable. Metallic coins last a long time under normal use and generally do not go out of circulation unless they are lost. Paper currency also is reasonably durable. Modern money also rates high in divisibility. The penny which is the smallest denomination of coin, is more than small enough, for almost any purchase. In addition checks almost always can be written for the exact amount. Modern money, however, is not as stable in value. The fact, that the money supply often grew at a rate 10 to 12 per cent a year was considered as major cause of inflation.

COMMENTS

1. to be any substance — быть какой- нибудь субстанцией

2. to be accepted as — бути принятым как...

3. payment— плата

4. to be converted into — быть конвертированным в...

5. to be very portable — тут легко переносить

6. to be very durable — тут долго пользоваться

7.... last a long time under normal use — при нормальном использовании долго находится в обращении

8. to go out of circulation — выходить из обращения

9. to rate high in divisibility — высоко оценивать за возможность
делится

10. denomination of coin — стоимость монеты

11. money supply — денежная масса

Banks fulfil two distinct needs in a community. For one they provide a safe place for people to deposit their money. For another, they lend excess funds to individuals and business temporarily in need of cash. In effect, banks act as functional institutions that bring savers and borrowers together. To gain a clear understanding of the way in which a bank operates,

let us examine the bank's liabilities and assets. Its liabilities are the debts and obligations to others. Its assets are the properties, possessions, and claims on others. These liabilities and assets generally are put together in the form of a balance sheet — condensed statement showing all assets and liabilities at a given point of time. The balance sheet also reflects net worth — the excess of assets over liabilities, which is a measure of the value of a business. Most bank deposits return to the community in the form of loans. The bank, however, might invest some of the cash in bonds. The bonds would be a good investment for two reasons. One is that they earn the interest and therefore are more attractive than cash. The other is that they have a high degree of liquidity, that is they can be converted into cash in a very short period of time. The liquidity adds to the bank's ability to serve its customers. When the demand for loans increases, the bonds can be sold and the cash loaned to customers.

In time, the bank would grow and prosper diversifying its assets and

liabilities in the process. It might use some of its excess funds to buy state or local bonds. It might loan some funds on a short-term basis to other banks. Then, too, a bank might use some of its assets to buy an interest in another business. The bank also might try to attract more depositors by introducing different kinds of accounts. Once the bank attracts more funds, it can make more loans and more profits.

COMMENTS

1. to deposit their money — для сохранения вкладов

2. to lend excess funds — давать кредит

3.... in need of cash — когда нужны наличные 4.... that bring savers and borrowers together — который объединяет кредитора с дебитором

5. to gain a clear understanding — чтобы иметь чёткое
представление

6. liabilities — пассив

7. assets— актив

8. the excess of assets over liabilities — превышение пассивов над
активами

9.... they earn the interest — на них насчитываются проценты 10. liquidity — ликвидность

7. Прочитайте, переведите и устно перескажите следующие темы:

1. Economic Systems.

2. Business Organizations.

3. Market and Market Structures.

4. Money and Financial Institutions.

Темы к контрольной работе №3 Economic Systems

The survival of any society depends on its ability to provide food, clothing and shelter for its people. Since these societies are also faced with scarcity decisions concerning What. How and or Whom to produce must be made.

All societies have something else in common. They have an economic system or an organized way of providing for the wants and needs of their people. The way in which these decisions are made will determine the type of economic system they have. There are three major kinds of economic systems: traditional, command and market.

Traditional Economy In a society with a traditional economy nearly all economic activity is the result of ritual and custom. Habit and custom also prescribe most social behavior. Individuals are not free to make decisions based on what they want or would like to have. Instead, their roles are defined. They know what goods and services will be produced, how to produce them, and how such goods and services will be distributed. An example of traditional economy is the society of polar Eskimo of the last century. For generations, parents taught their children how to survive in a harsh climate, make tools, fish and hunt. Their children, in turn, taught these skills to the next generation. The main advantage of the traditional economy is that everyone has a role in it This helps keep economic life stable and community life continuous. The main disadvantage of the traditional economy is that it tends to discourage new ideas and even punishes people for breaking rules or doing things differently. So it tends to be stagnant or fails to grow over time.

COMMENTS

1. social behavior — социальное поведение

3. to discourage — отговаривать

4.... tends to be stagnant — имеет тенденцию к застою 5.... fails to grow over time — не может развиваться дальше

Other societies have a command economy — one where a central authority makes most of the What, How and for Whom decisions.

Economic decisions are made at the top and people are expected to go along with choices made by their leaders. It means that major economic choices are made by the government. It decides goals for the economy and determines needs and production quotas for major industries. If the planning body wants to stress growth of heavy manufacturing, it can shift resources from consumer goods to that sector. Or, if it wants to strengthen national defence, it can direct resources from consumer goods or heavy manufacturing to the production of military equipment and supplies The major advantage of a command system is that it can change direction drastically in a relatively short time. The major disadvantage of the command system is that it does not always meet the wants and needs of individuals. The second disadvantage of the command economy is the lack of incentives that encourage people to work hard. In most command economies today workers with different degrees of responsibility receive similar wages. i n addition, people seldom lose their jobs regardless of the quality of their work. As a result, there is a tendency for some to work just hard enough to fill production quotas set by planners.

The command economy requires a large decision-making bureaucracy. Many clerks, planners, and others are needed to operate the system. As a result, most decisions cannot be made until a number of people are consulted, б or a large amount of paperwork is processed. This causes production costs to increase and decision-making to slow down. Thus, a command system does not have the flexibility to deal with day-to-day problems.

COMMENTS

1... people are expected to go along with — ожидается что люди присоединятся

2. to shift resources — переместить ресурсы

3. the lack of incentives — недостаток стимулов

4. in addition — кроме того

5. regardless of — несмотря на

6. production costs — затраты производства

In a market economy, the questions of What, How and for Whom to produce are made by individuals and firms acting in their own best interests. In economic term a market is an arrangement that allows buyers and sellers to come together to conduct transactions. Since consumers like products with low prices and high quality, producers in a market economy will try to supply such products. Those who make the best products for the lowest prices will make profits and stay in business. Other producers will either go out of business or switch to different products consumer can buy. A market economy has several major advantages that traditional and command economies do not have. First, a market economy is flexible and can adjust to change over time.

When gas prices in the United States began to level off in 1985 and then decline in 1986, the trend slowly began to reverse. The second major advantage of the market economy is the freedom that exists for everyone involved. Producers are free to make whatever they think will sell. They are also free to produce their products in the most efficient manner. Consumers on the other hand are free to spend their money or buy whatever goods and services they wish to have.

The third advantage of the market economy is the lack of significant government intervention. Except for national defense, the government tries to stay out of the way. As long as there is competition among producers, the market economy generally takes care of itself. The final advantage of the market economy is the incredible variety of goods and services available to consumers. In fact, almost any product can and will be produced so long as there is a buyer for it.

COMMENTS

1. to conduct transactions — проводить деловые операции

2. to make profits — получать прибыль

3. to stay in business — оставаться в бизнесе

4. to switch to — переориентироваться

5. to stay out of the way — не вмешиваться

6. incredible variety — неимоверное многообразие

Business Organizations

One of the major economic institutions is the business organization, a profit-seeking enterprise that serves as the main link between scarce resources and consumer satisfaction. These businesses compete with one another for the chance to satisfy people's wants. There are three major kinds of business organizations: the sole proprietorship, the partnership and the corporation. The most common form of business organization is the sole proprietorship — a business owned and run by one

person. The main advantage of a sole proprietorship is that it is the easiest form of business to start and run. There is almost no red tape involved. Most proprietorships are able to open for business as soon as they set up operations. In the event that the owner wants to dissolve the business, a sole proprietorship is as easily dissolved as it is formed.

Sole proprietors own all the profits of their enterprises and are free to make whatever changes they please. They have minimal legal restrictions and do not have to pay the special taxes placed on corporations. They also have the opportunity to achieve success and recognition through their individual efforts. Sole proprietorships are generally found in small-scale retail and service businesses such as beauty salons, repair shops, or service stations. The major disadvantage of a sole proprietorship is the unlimited liability that each proprietor faces. Since the business and the owner are legally the same, the sole proprietor is liable for all financial losses or debts that the business may incur. If a business fails, the owner must personally assume the debts. This could mean the loss of personal property such as automobiles, homes and savings.

A second disadvantage of the sole proprietorship is that it has limited financial resources. The money that a proprietor can raise is limited by the amount of savings and ability to borrow. Another serious problem faced by the sole proprietorship is the lack of continuity of the business. When the owner dies, the business also legally terminates.

COMMENTS

1. a profit-seeking enterprise —прибыльное предприятие

2. sole proprietorship/sole trader/one-man firm — частная
собственность

3. partnership — партнерство

4. corporation — корпорация

5. red tape — бюрократизм

6. to dissolve the business — прекратить деятельность предприятия

7. to achieve success — достичь успеха

8. unlimited liability — неограниченная юридическая
ответственность

9. to be liable for —быть ответственным за

10. to assume the debts — брать на себя долги

11. Savings — сбережения

A partnership is a business that is jointly owned by two or more people who have combined their talents and resources for the purpose of earning a profit Partnerships are most common in such professional fields as medicine, law, accounting, stockbrokerage, but they are also found in

manufacturing, wholesaling and retailing.

The most common form of partnership is a general partnership. General partners own the business, work in it and share the profits and losses. They are responsible for the management of the business and usually agree with each other before making any major decisions There may be a special type of partnership, called limited partnership. Limited partners are only liable for the amount they have invested in the business. They are usually not involved in the management of the firm Partnerships have more advantages than sole proprietorships Like sole proprietorship they are easy to form and often get tax benefits from the government.

Partnerships have certain disadvantages too The major disadvantage is unlimited financial liability It means that each partner is responsible for all debts and is legally responsible for the whole business. But one of the greatest problems in partnerships is that partners may disagree with each other causing management conflicts.

COMMENTS

1. stockbrokerage / stockbroking — биржевое маклерство

2. wholesaling and retailing — оптовая и розничная торговля

3. general partnership —товарищество с неограниченной
ответственностью

4. limited partnership — товарищество с ограниченной
ответственностью

5. tax benefits — налоговые выгоды

Nearly 90 per cent of all business is done by corporations. A business corporation is an institution established for the purpose of making profit. It is operated by individuals. People, who would like to form a corporation, must file for permission` in the state where the business will have its headquarters. If approved, a charter, government document that gives permission to create a corporation, is granted. The charter states the name of the company, address, purpose of business etc. The charter specifies the number of shares of stock, or ownership parts of the firm. These shares are certificates of ownership and are sold to investors called shareholders or stockholders. The money is then used to set up corporation If the corporation is profitable it will eventually issue dividend or a check, representing a portion of the corporate profits to shareholders.

There are several advantages of the corporate form of ownership. The major advantage is the ability to acquire greater financial resources than other forms of ownership. The next advantage is that the corporation attracts a large amount of capital and can invest it in plants, equipment and research. It can offer higher salaries and thus attract talented

managers and specialists. Corporations have great capacity for growth and expansion.

Corporations face some major disadvantages. It is difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Most small firms prefer to avoid these expenses by forming proprietorships and partnerships. There is also an extra tax on corporate profits The government taxes corporate income in addition to the taxes paid by shareholders on their dividends.

COMMENTS

1. file for permission — обратиться за разрешением

2. the number of shares of stock — число акций основного капитала

3. certificates of ownership — удостоверение про собственность

4. shareholder/stockholder—акционер, собственник акции

Markets and Market Structures

Economists classify markets according to conditions that prevail in them. They ask questions like the following: How many supplies are there? How large are they? Do they have any influence over price? How much competition is there between firms? What kind of economic product is involved? Are all firms in the market selling exactly the same product, or simply similar one? Is it easy or difficult for new firms to enter the market? The answer to these questions helps to determine market structure, or the nature and degree of competition among firms operating in the same market. For example, one market may be highly competitive because a large number of firms produce similar products. Another may be less competitive because of fewer firms, or because the products made by each are different or unique.

In short, markets can be classified according to certain structural characteristics that are shared by most firms in the market. Economists have names for these different market structures: pure competition, monopolistic competition, oligopoly, and monopoly. An important category of economic markets is pure competition. This is a market situation in which there are many independent and well-informed buyers and sellers of exactly the same economic products. Each buyer and seller acts independently. They depend on forces in the market to determine price. If they are not willing to accept this price, they do not have to do business.

То monopolize means to keep something for oneself. A person who monopolized a conversation, for example, generally is trying to stand out from everyone else and thus attract attention.

A situation much like this often exists in economic markets. For example, all the conditions of pure competition may be met except that the products for sale are not exactly the same. By making its product a little different, a firm may try to attract more customers and take over the economic market. When this happens, the market situation is called monopolistic competition.

The one thing that separates monopolistic competition from pure competition is product differentiation⁷. The differences among the products may be real, or imaginary. If the seller can differentiate a product, the price may be raised a little above the market price, but not too much.

COMMENTS

1. pure competition — чистая конкуренция

2. monopolistic competition — монополистическая конкуренция

3. to keep something for oneself — задержать что ни будь для себя

4. to stand out from — отделится от

5. to attract attention — привлечь внимание

6. to take over the economic market — принимать экономический
рынок

7. product differentiation —дифференциация продукции

The term market, as used by economists, is an extension of the ancient idea of a market as a place where people gather to buy and sell goods. In former days part of a town was kept as the market or marketplace, and people would travel many kilometres on special market-days in order to buy and sell various commodities. Today, however, markets such as the world sugar market, the gold market and the cotton market do not need to have any fixed geographical location. Such a market is simply a set of conditions permitting buyers and sellers to work together. In a free market, competition takes place among sellers of the same commodity, and among those who wish to buy that commodity. Such competition influences the prices prevailing in the market. Prices inevitably fluctuate, and such fluctuations are also affected by current supply and demand.

Whenever people who are willing to sell a commodity contact people who are willing to buy it, a market for that commodity is created- Buyers and sellers may meet in person, or they may communicate in some other way: by telephone or through their agents. In a perfect market, communications are easy, buyers and sellers are numerous and competition is completely free. In a perfect market there can be only one price for any given commodity: the lowest price which sellers will accept

and the highest which consumers will pay. There are, however, no really perfect markets, and each commodity market is subject to special conditions. It can be said, however, that the price ruling in a market indicates the point where supply and demand meet.

COMMENTS

1. gold market — рынок золота

2. free market — рынок, свободный от ограничений

3. commodity market — товарная биржа

Although in a perfect market competition is unrestricted and sellers

are numerous, free competition arid large numbers of sellers are not always available in the real world. In some markets there may only be one seller or a very limited number of sellers. Such a situation is called a mo­nopoly, and may arise from a variety of different causes. It is possible to distinguish in practice four kinds of monopoly.

State planning and central control of the economy often mean that a state government has the monopoly of important goods and services. Some countries have state monopolies in basic commodities like steel and transport, while other countries have monopolies in such comparatively unimportant commodities as matches. Most national authorities monopolize the postal services within their borders.

A different kind of monopoly arises when a country, through geographical and geological circumstances, has control over major natural resources or important services, as for example with Canadian nickel and the

Egyptian ownership of the Suez Canal. Such monopolies can be called natural monopolies.

They are very different from legal monopolies, where the law of a country permits certain producers, authors and inventors a full monopoly over the sale of their own products.

These three types of monopoly are distinct from the sole trading opportunities which take place because certain companies have obtained complete control over particular commodities. This action is often called «cornering the market» and is illegal in many countries. In the USA anti­trust laws operate to restrict such activities, while in Britain the Monopolies

Commission examines all special arrangements and mergers which might lead to undesirable monopolies.

COMMENTS

1. perfect market —совершенный рынок

2. free competition — свободная конкуренция

3. natural monopoly — природная монополия

4. cornering the market — спекулятивное контролирование рынка

5. merger — объединение, слитие

Money and Financial Institutions

Basically, money is what money does. This means that money can be any substance that functions as a Medium of Exchange, a Measure of Value, and a Store of Value. As a medium of exchange, money is something generally accepted as payment for goods and services As a measure of value, money expresses worth in terms that most individuals understand. Money also serves as a store of value. This means goods or services can be converted into money that is easily stored until some future time. The different forms of money are in use in the United States today The most familiar are coin and currency. The term coin refers to metallic forms of money. The term currency refers to paper money issued by government. While money has changed in shape, kind or size over the years, modem money still shares many of the same characteristics of primitive money. Modern money is very portable when people carry checkbooks. For example, they really are carrying very large sums of money since checks can be written in almost any amount. Modem money is very durable. Metallic coins last a long time under normal use and generally do not go out of circulation unless they are lost. Paper currency also is reasonably durable. Modern money also rates high in divisibility. The penny which is the smallest denomination of coin, is more than small enough, for almost any purchase. In addition checks almost always can be written for the exact amount. Modern money, however, is not as stable in value. The fact, that the money supply often grew at a rate 10 to 12 per cent a year was considered as major cause of inflation.

COMMENTS

1. to be any substance — быть какой- нибудь субстанцией

to be accepted as — бути принятымкак...

3. payment— плата

4. to be converted into — быть конвертированным в...

5. to be very portable — тут легко переносить

6. to be very durable — тут долго пользоваться

7.... last a long time under normal use — при нормальном использовании долго находится в обращении

8. to go out of circulation — выходить из обращения

9. to rate high in divisibility — высоко оценивать за возможность
делится

10. denomination of coin — стоимость монеты

11. money supply — денежная масса

Banks fulfil two distinct needs in a community. For one they provide a safe place for people to deposit their money. For another, they lend excess funds to individuals and business temporarily in need of cash. In effect, banks act as functional institutions that bring savers and borrowers together. To gain a clear understanding of the way in which a bank operates,

let us examine the bank's liabilities and assets. Its liabilities are the debts and obligations to others. Its assets are the properties, possessions, and claims on others. These liabilities and assets generally are put together in the form of a balance sheet — condensed statement showing all assets and liabilities at a given point of time. The balance sheet also reflects net worth — the excess of assets over liabilities, which is a measure of the value of a business. Most bank deposits return to the community in the form of loans. The bank, however, might invest some of the cash in bonds. The bonds would be a good investment for two reasons. One is that they earn the interest and therefore are more attractive than cash. The other is that they have a high degree of liquidity, that is they can be converted into cash in a very short period of time. The liquidity adds to the bank's ability to serve its customers. When the demand for bans increases, the bonds can be sold and the cash loaned to customers.

In time, the bank would grow and prosper diversifying its assets and

liabilities in the process. It might use some of its excess funds to buy state or local bonds. It might loan some funds on a short-term basis to other banks. Then, too, a bank might use some of its assets to buy an interest in another business. The bank also might try to attract more depositors by introducing different kinds of accounts. Once the bank attracts more funds, it can make more loans and more profits.

COMMENTS

1. to deposit their money — для сохранения вкладов

2. to lend excess funds — давать кредит

3.... in need of cash — когда нужны наличные

4.... that bring savers and borrowers together — который объединяет

кредитора с дебитором

5. to gain a clear understanding — чтобы иметь чёткое
представление

6. liabilities — пассив

7. assets— актив

8. the excess of assets over liabilities — превышение пассивов над

активами

9.... they earn the interest — на них насчитываются проценты 10. liquidity — ликвидность