UNIT THREE
| BRANCHES OF ECONOMICS |
ESSENTIAL VOCABULARY
1. Activity n things that people do to achieve a particular goal , . Business activity / ; economic activity .
2. Average adj having qualities that are typical of most people or things , , , .
3. Consume v to buy and use goods, services, energy, or natural resources .
4. Determine v to settle or decide (an argument, question, etc.) conclusively, as by referring to an authority , . Todetermine/establish a price / .
5. Develop v to make a new idea, product, system etc over a period of time , .
6. Distinction n a clear difference or separation between two similar things , , ; , . To make a distinction . Syn. a difference.
7. Employment n ; ( ), , ; ; . Thelevel of employment .
8. Focus on v to give special attention to a particular person or thing or to make people do this (). Syn. to concentrate on.
9. Involve v to include or contain as a necessary part ( ), , . Syn. to contain, to include. comprise
10. Indicator n a fact, measurement, or condition that shows what something is like or how it is changing , , . Economic indicator . Syn. a measure, index (pl -es, indices).
11. Interact v to act on or in close relation with each other ; ; .Syn. to interrelate, to relate.
12. Interaction n a process by which two or more things affect each other ; . Syn. interrelation, relationship.
13. On the other hand (side) from that point of view , , . On the one hand (side) on the other hand (side) . Syn. in contrast, on the contrary (to).
14. Output n the total amount of goods and services produced in the economy or a part of the economy during a particular time period , .
15. Overall adj including or covering everything , , . Syn. total, aggregate..
16. Price n the amount of money for which something is bought, sold, or offered . Price level/level of prices .
17. Principal adj first in order of importance, most important , ; , . Syn. chief, main.
18. Principle n a fundamental rule concerning a natural phenomenon or the behaviour of a system , . Syn. a law.
19. Produce v to make something in large quantities to be sold, bought, used, or enjoyed by people . Syn. to make, to manufacture.
20. Solve v to find the explanation for or solution to a problem, etc. , , . Syn. to decide.
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21. Seek v attempt to find (something) , . Syn. to search for, look for.
22. Statement n that someone says or writes, especially publicly or officially , ; , ; ; ; . Policy statement . Syn. an assertion.
23. Study n an investigation and analysis to find out about a particular subject, problem, situation, etc , ; ; . Syn. investigation, inquiry, research, examination.
24. Study v investigate and analyze (a subject or situation) in detail , : ; , . Syn. to examine, to look into/over, to investigate.
TEXT
We have already known that economics deals with the problems of scarcity and choice that face all the societies and nations throughout history. But it must be admitted * that the development of modern economics began in the 17th century. Since that time economists have developed methods for studying and explaining how individuals, businesses and nations use their available economic resources.
So, what is economics? There are many various opinions concerning economics, but, in general, economics is the systematic study of choosing which goods and services will be produced and consumed to satisfy societys wants. Since economics involves interactions among members of society it is a social science that studies the behaviour of people in producing, distributing, exchanging, and consuming goods and services. Understanding economic behaviour and the ways in which economic activity is organized and coordinated are at the heart of economics.
The discipline of economics is divided into two interrelated branches: macroeconomics and microeconomics.
Microeconomics is the study of individual consumers and business firms who make choices on such matters as what to buy and what to sell, how much to work and how much to pay, how much to borrow and how much to save. Microeconomics focuses on how individuals and firms behave, how they interact in the market, and how these interrelations determine a price and allocate scarce resources. Microeconomics is not used to determine how a specific individual will act, since it examines how an average individual will probably behave under a certain set of conditions. It tracks cause-and-effect relationships that influence choices of individuals, businesses and society and is concerned with issues such as scarcity, choice and opportunity costs, and with production and consumption. The principal emphasis is given by microeconomists to the study of prices and their relationship to any economic units.
Macroeconomics is the study of the economy as a whole. Macroeconomics seeks solutions to macroeconomic problems such as how fasttheeconomy is growing, how employment can be increased, how much total income is, how inflation will effect economic growth and how different governmental policies can be used to stabilize the level of business activity in the economy. Macroeconomics looks into the total effect of individual choices on the overall productive efficiencyof the economy reflected by such economic indicators as the nations price level, total output, and level of employment.
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Everyone should realize that economists deal with two worlds: the world that is, and the world that ought to be. Economists have developed and generally agree on basic economic principles and economicmodels that try to explain or describe the world that is. In many cases, however, economic issues cannot be solved with theories and models alone. Solutions to these problems include opinions, politics, and personal values.
Economists make a distinction between positive economics and normative economics. To the economists the positive-normative distinction is useful because it helps people with very different views about what is desirable to communicate with each other.
Positive economics looks at/on the facts and the economy as they actually are, avoiding value judgements* and attempting to seek scientific bases about economic activities. It is an approach that deals with what is rather than* with what ought to be and contains no indication of approval or disapproval. What are the causes of poverty in the country? What will be the effect of higher cigarette taxes on the number of smokers? These questions can be solved only on the basis of facts.
Normative economics, on the other hand, is concerned about what ought to be. It comprises ethical precepts and value judgments* about whether economic policies are good or bad. Normative economics is used to take decisions as for issues of equity, equality, and fairness, since these concepts include judgments about what ought to be.
Should the government give money to poor people? Should the budget deficit be reduced by higher taxes or by lower spending? There are no right or wrong answers to these questions as they involve ethics and values rather than facts. Thus, these issues can be debated, but they can never be decided by using facts as they are solved by political decisions, not by economic science.
Since most assertions are not easily classified as purely positive or purely normative statements, they must be combined to make a good policy statement. One must decide what goals are desirable (the normative part), and choose a way of attaining those goals (the positive part).
COMMENTS
it must be admitted ;
value judgement ᒺ ;
rather than ;
value judgment .
VOCABULARY EXERCISES
Exercise 1. Read, translate into Ukrainian in written form and memorize the definitions of the following key economic terms and concepts:
| 1. Economist:an expert in economics. | _______ |
| 2. Economic model:any simplified statement, diagram or formula used to understand economic events | ____________________________________________ |
| 3. Economics:the study of a man in his attempts to make a living by using his scarce resources. | ____________________________________________ |
| 4. Macroeconomics:the branch of economics that studies behaviour and overall productive efficiency of the economy as a whole. | ___________________________________________ ___________________________________ |
| 5. Microeconomics:the study of the individual parts of the economy, with special attention to the market price and how it works. | ___________________________________ ________ ___________________________________ |
| 6. Normative economics:an econo-mic analysis that includes value judgments about what ought to be done, rather than simply developing a theory. | ____________________________________________________ |
| 7. Positive economics: an economic analysis that is purely based on facts rather than opinions and studies why the economy operates as it does. | ____________ |
Exercise 2. Give the Ukrainian equivalents for the following.
1. to develop methods for studying and explaining __________________________ ________________________________________________________________
2. in producing, distributing, exchanging, and consuming _____________________ _________________________________________________________________
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3. a specificindividual _______________________________________________
4. the principal emphasis is given by microeconomists _______________________ ________________________________________________________________
5. to seek solutions to macroeconomic problems ___________________________ ________________________________________________________________
6. reflected by such economic indicators ________________________________
7. to contain no indication of approval ____________________________________
8. to comprise ethical precepts __________________________________________
9. to involve ethics and values rather than facts _____________________________ ________________________________________________________________
10. most assertions are not easily classified _________________________________
Exercise 3. Find the English equivalents for the following.
1. 䳿 ______________________________ _________________________________________________________________
2. __________________________________________
3. ______________________________________________
4. __________________________________________________
5. / , , ______________ ___________________________________________________________________
6. ____________________________________________
7. ________ _________________________________________________________________
8. ___________________________________________________
9. ______________________________________
10. ____________________________________
11. , ____
Exercise 4. Match the verbs/verbal phrases, prepositions/adverbs and nouns/noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.
| 1. | to agree | theories and models | |
| 2. | to allocate | about | the level of business activity |
| 3. | to trace | political decisions | |
| 4. | to be concerned | on | scarce resources |
| 5. | to be divided | by | all the societies and nations |
| 6. | to be solved | the facts and the economy | |
| 7. | to be solved | at | basic economic principles |
| 8. | to stabilize | into | cause-and-effect relationships |
| 9. | to face | higher taxes | |
| 10. | to look | with | two interrelated branches |
| 11. | to look | what ought to be | |
| 12. | to be reduced | the total effect |
Exercise 5. Copy out from the texts the sentences containing the following words and word-combinations and translate these sentences into Ukrainian.
1. to satisfy societys wants _____________________________________________
________________________________________________________________________________________
2. the study of individual consumers ______________________________________
____________________________
3. cause-and-effect relationships _________________________________________
__________________________________________________________________________________________
4. how much total income is _____________________________________________
__________________________________________________________________________________________________
5. deal with two worlds _______________________________________________
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6. what is desirable ____________________________________________________
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7. since these concepts _________________________________________________ ____________________
8. to make a good policy statement _______________________________________
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Exercise 6. Find in the box the English equivalents to the words listed below. More than one is possible.
1. (4) ______________________________________________________
2. (3) _____________________________________________________
3. (3) ____________________________________________________
4. (4) __________________________________________________
5. (3) __________________________________________________
6. (2) _________________________________________________________
7. (2)________________________________________________
8. (3) ______________________________________________________
9. (2) ___________________________________________________
10. (3) ______________________________________________________
11. (2) ____________________________________________________
12. (2) ____________________________________________________
13. (3) ____________________________________________________
14. (3) ______________________________________________________
15. (3) ______________________________________________________
| to concentrate on | to contain | to study | to relate | an indicator | a study |
| an investigation | to decide | to make | to examine | a statement | overall |
| on the other hand | total | a measure | a principle | to involve | main |
| interrelation | an index | an assertion | distinction | a difference | in contrast |
| to manufacture | to solve | to include | interaction | to interrelate | to produce |
| to investigate | a law | to focus on | to look into | on the contrary | aggregate |
| examination | principal | research | to interact | relationship | chief |
Exercise 7. Find words in the text synonymous in meaning to the following. Read the sentences containing them.
| word | synonym | word | synonym |
| progress | in general | ||
| a view | to define | ||
| different | helpful | ||
| regular | though | ||
| a subject | really | ||
| to act | base | ||
| special | incorrect | ||
| on the whole | necessary |
Exercise 8. Replace the words or word combinations in bold type with their synonyms.
1. The principles of economics help solve problems in a wide variety of areas. 2. Economics helps us examine trade-offs between various goals. 3. Almost all issues of governmental policies involve economics. 4. Studying economics helps people realize the difference between statements of fact and expressions of opinion. 5. Microeconomics focuses on determining why individuals purchase one product instead of another. 6. Macroeconomics, on the other hand, looks into behaviour and the overall production efficiency of the economy as a whole. 7. Macroeconomics usually includes such issues as the effects of full employment on the economy, total output and general price levels. 8. Economics is the systematic study of how the decisions made by individuals, business firms and the government affect the way in which resources are distributed in society. 9. Good economic indicators show a nations high living standards.
Exercise 9. What economic terms given in the text do the following definitions refer to?
| 1. The branch of economics that deals with large-scale economic phenomena, particularly inflation, unemployment and economic growth. | |
| 2. Economic analysis that is concerned with what ought to be rather that with what is. | |
| 3. The study of the behavior of individual units such as consumers, firms and resource owners. | |
| 4. The area of economics that deals with facts and relationships among them. | |
| 5. The representation of the essential features of a theory expressed in the form of words, diagrams, graphs used to understand economic events. | |
| 6. The organization that brings together and coordinates factors of production for the purpose of producing goods and services. | |
| 7. The study of how people choose to use scarce productive recourses, to produce various goods and services, and to distribute them among consumers. |
Exercise 10. Pair the halves of the sentences and translate them into Ukrainian.
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| 1.Economic laws are used to solve a number of different issues | a.that enables an individual to be a better producer, consumer and citizen. |
| 2.The macro approach and the micro approach are two ways of looking at | b.a value judgment about whether a situation is desirable or undesirable. |
| 3.Microeconomics looks at the behaviour of individual economic units and | c.often used to look into cause-and-effect relationships carefully. |
| 4.Macroeconomics concentrates on the nations total output of goods and services, | d.economics and the economy that economists have. |
| 5.A normative statement expresses | e.overall price level, level of employment, and economic growth. |
| 6.Positive economics is the study of "what is" in economic matters, while | f.that, generally, seem unrelated to economics. |
| 7.An economic model is a representation of a theory or a part of a theory, | g.macroeconomics, on the other hand, concentrates on the behaviour of entire economies. |
| 8.Cultural, ethical and political values are at the heart of economics | h.examines how prices are determined in a specific market |
| 9.Microeconomics focuses on the decisions of individual consumers and producers, | i.normative economics is the study of "what ought to be" in economic matters. |
| ________________________________________________________________________________________ ____________________________________ |
Exercise 11. Translate the words in brackets into Ukrainian.
Economics is ( ) that analyzes and describes (), (), and () of wealth.
( ) has two broad branches: () and ().
Microeconomics ( ) of specific factors such as businesses and individuals with a view * to realize ( ) in the face of () and ( ) of ( ) on other participants. One of the goals of microeconomics is to analyze market mechanisms that ( ) for goods and services and ( ) among many alternative uses.
Macroeconomics ( ) as a whole with a view of understanding (䳿) between ( ) such as national income, ( ), ( ) and (). Macroeconomics can be used to analyze how best ( ) of different governmental policies such as ( ), price stability, ( ) and others.
*with a view of/to / ; , .
Exercise 12. Translate the texts into Ukrainian.
| To some economists, economics as a social science may be divided into positive and normative ones. | ____________________________________________ |
| Positive economics looks at facts and avoids value judgements. | ________ |
| Positive economics attempts to set forth* scientific statements about economic behavior | ____________________________________________ |
| Normative economics, in contrast, involves ethical precepts and value judgments about what the economy should be like or what particular policy should be recommended on the basis of a given economic generalization* or relationship. | ____________________________________________________________ |
| Positive economics looks into what the economy is actually like; normative economics examines whether certain conditions or aspects of the economy are desirable or not. | ________________________ |
*to set forth -
*generalization -
