VOCABULARY
a function
poverty
inflation
unemployment
to make decisions
a growth
an increase
to increase
an economic growth
Gross Domestic Product
total
an indicator
an improvement
to take into account
a transition
a decline ,
to decline
THE FUNCTIONS OF EVERY ECONOMIC SYSTEM
There are many economic problems poverty, inflation, unemployment, etc. People in different modern societies solve these problems in different ways.
The great American economist Paul Samuelson said that every economic society has to answer three main questions:
1. What to produce?
2. How to produce?
3. Who gets the product?
These questions are universal. They are true for any economic system. So, it has the three functions.
The first function is to make a right decision what goods we are going to produce with the given resources - clothes, food, cars, television sets, books, etc?
The second function is to decide how we are going to produce goods and services with the basic resources of labour, land, etc. What methods are best and the most effective is an important question here.
The third function. Once we have produced goods and services we now have to decide how these will be divided, distributed among the people in the economy.
WHAT IS ECONOMIC GROWTH?
When we speak of economic growth we mean an increase in the GDP of a nation. The Gross Domestic Product is the total value of all production in an economy in a year. The GDP is a basic indicator. It shows how well a country's economy performs. The main features that cause such growth are the following:
♦ increases in natural resources;
♦ increases in the production of goods and services;
♦ improvements in technology;
♦ improvements in human resource.
However, there is the difference between real and nominal increases. Let us consider a real, historic example. Between 1968 and 1989 the GDP of the UK increased from £38 billion to 439 billion. It means an increase of 1045 per cent. But if we take into account inflation an increase is only about 60 per cent.
Many examples of this kind may be given concerning Eastern European countries during their transition period.
The GDP is also effected by the indicator of population growth. Say, the GDP grows at 5 per cent and the population grows at 10 per cent. In this case the GDP is declining.
12. THE STRUCTURE OF A COMPANY
VOCABULARY
a relation
relationship ,
o hold a position
an organisation structure
an employee
senior ,
Board of Directors
|
|
|
to account
middle
an officer - ; ;
a department , ; (.)
personnel ,
an objective (an aim, a purpose, a task) , ,
cost ,
costs
to cost
Organisation structure in business is very important. People in a company, its employees hold different positions.
The relationship between those employees with different positions makes organisation structure. At present most firms are divided into three major parts:
♦ capital (shareholders)
♦ management
♦ labour.
Let us take a typical company.
There is a director who is a senior manager. He sits on the Board under the authority of the President. The Board decides what company policy and expenditure must be.
The chief executive officer (CED) is the link between the Board and senior management.
As for middle managers, they run departments of a firm. They account to senior management for their area of work done.
There is a difference between executive directors and non-executive ones.
The directors who run their firm on day-to-day basis are called executive directors.
Those who sit on the Board and do not run the firm directly are called non
executive directors. In modern American English they use also the term inside
directors for executive and outside directors for non-executive ones.
