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ЗАНЯТИЕ 1.

Text . LESS DEVELOPED COUNTRIES
What do we mean when we say a country is developed? The United Nations uses three measures: life expectancy, education and real individual income. If we use these measures to describe the world, we quickly understand that only a privileged few live in developed countries. Poverty, for instance, causes the deaths of about 30,000 children every day. Over a billion people cannot read or write. Half the world earns less than $2 a day. Clearly, most of the world's population live in less developed countries. But why is development so difficult for these nations?
There are many reasons. Some countries lack the raw materials and capital needed for growth. Others regularly suffer from natural disasters such as droughts and floods. Diseases such as cholera and AIDS are widespread in many less developed countries. This causes suffering to millions of individuals and families, but it is also disastrous for the economies of these nations. Lack of education also holds back development. This may be because governments cannot afford to provide schools and colleges. However, millions of families in these nations are caught in a poverty trap. This prevents their children from getting a basic education even when it is available. Without quality human capital, these economies cannot grow.
Political insecurity is another reason for underdevelopment. Many of these countries belonged to colonies in the past. When the foreign powers finally left, these countries often fell into years of political instability and war. Even when peace comes to these countries, political corruption makes development difficult as there is still a climate of political instability. Foreign companies do not want to invest in a country which suffers from corruption. Similarly, foreign governments are reluctant to give aid when they see that their money is spent badly or simply disappears.
All of these problems make it very difficult for less developed countries to improve their economies. However, there are other more complex issues which hamper development. The first of these is debt. The second is unfair trading. Many people believe that these two problems are the cause of all the other problems that developing countries face.
Many of the world's poorest countries are trapped in a cycle of debt. This is because they need to borrow money in order to pay the interest on debts they already have. The poorest 60 countries owe many hundreds of billions of dollars. However, they spend more money paying off debts than they receive in aid. Unless these debts are cancelled, these countries will never escape the cycle.
After years of slow development, it is hard for poorer countries to compete with developed countries for international trade. Without mature industries of their own, they must rely on exports of primary goods. These primary goods do not earn as much money as the products that developed countries export. What's more, because poor countries rely on grants from rich countries, they are often forced to spend the money on manufactured imports. This means they cannot buy the things they really need: capital 
goods to help their economies grow.

I. Vocabulary: Choose the correct word.
1. Many African countries were _____________  of European countries until the 20th century.
A. nations
B. colonies
С. protectorate
2. If your debt is  _____________  , you don't need to pay the money back.
A. stopped
B. unsettled
С. cancelled
3. A  _____________ person is able to have things that others cannot have.
A. privileged
B. reluctant
С. indigent
4. Political  _____________ happens when a country's political system does not work properly.
A. instability
B. disorders
С. stability
5. A  _____________  is money given to someone (or a country) without them having to pay it back.
A. loan
B. credit
С. grant
6. When something  _____________ you it stops you from doing what you want to do.
A. gives support to
B. hampers
С. aids
7. _____________ goods are goods which are used in order to produce other goods, or things which can be consumed without being processed.
A. Essential
B. Primary
С. Capital

II. Comprehension: Сhoose the best answer А, В or С to complete each sentence.
1. The majority of people in the world live ...
A. in developed countries.
B. in less developed countries.
С. on less than a dollar a day.
2. Natural disasters and disease ...
A. happen more often in less developed countries.
B. are worse in less developed countries.
С. have a serious impact on the economy of less developed countries.
3. Children often can't get an education because ...
A. there's not enough human capital.
B. governments don't -wish to provide it.
С. their families are poor.
4. Political instability...
A. prevents investment.
B. causes war.
С. causes corruption. 
5. The poorest 60 countries ...
A. receive many hundreds of billions of dollars in aid annually.
B. receive less money in aid than they spend on repayments.
С. spend less money on repayments than they receive in aid.
6.  Less developed countries аrе not able to spend enough money on ... 
A. primary needs.
B. capital goods.
С. imported goods.

III. Match the words and phrases in columns A with their definitions in column B.

IV. Match each paragraph with the correct heading.
 

V. Find in the text English equivalents to the following expressions:

VI. Decide if the following statements are FALSE or TRUE:

1. It is very difficult for undeveloped states to enter the world market. 
2. Only a few of the world's poorest countries have debts. 
3. Unfair trading is the only issue which hamper development. 
4. Political insecurity is one of the main reasons for underdevelopment. 
5. The level of education of the population doesn’t influence the development. 
   
   
   
   
    

ЗАНЯТИЕ 2.

Text . EXCHANGE RATE MECHANISMS
If you're planning a holiday abroad, one of the things you won't forget to do is to buy some of the local currency. You will probably visit a few banks to see which one offers the best exchange rate. But holidaymakers aren't the only ones who are interested in exchange rates. Governments are watching them all the time. This is because a change in the exchange rate of the national currency can affect the whole economy. Interest rates, balance of payments and economic growth will all feel the effects of a change in exchange rates.
But can governments do anything about exchange rates apart from watch them? Well, yes, they can. They can use something called exchange rate mechanisms. These are ways to control the value of the national currency against other currencies. There are different types of mechanism, but they are all variations on two extreme mechanisms: free floating exchange rate and fully fixed exchange rate.
When a currency's exchange rate is free floating, the government doesn't try to control the price of the currency. Remember that, just like any other price, the exchange rate changes when demand and supply change. When governments allow the currency to be free floating, they are saying, 'let the market decide the price of our currency'. In contrast, a fully fixed exchange rate is strictly controlled by the government. For example, the UK government might decide that they want sterling to remain at a constant exchange rate against the euro of £1 = €1.50. This is sometimes called pegging. In this example, sterling is pegged against the euro at that rate, although in actual fact sterling is a free floating currency.
However, there is a problem. If demand on the money market rises for sterling, then the exchange rate will rise also. How can the government maintain the exchange rate they want? The only way is to change the level of supply of sterling on the money market. The government can increase the amount of sterling on the international market by selling it. This means they buy foreign currencies and sell sterling. Alternatively, if they want to increase demand for sterling, the government needs to reduce the supply on the money market. To do this, they sell their reserves of foreign currencies and buy sterling. This way, they keep the exchange rate (the price) of sterling at a constant rate.
So which system is best – fixed or floating? It depends on lots of things. Each system has its benefits and drawbacks. A free floating mechanism often makes it easier to keep a steady balance of payments. Also, the government can make any changes it wants to interest rates without worrying about the exchange rate (the market looks after that). On the other hand, a fixed rate mechanism makes industry feel more secure. They know what the value of their exports will be, and so they can plan for the future more easily. This is good for the local economy and for international trade.

I. Vocabulary: Choose the correct word.
1. _______________ is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy.
A. Currency
B. Exchange
С. Funds
2. ________________ change when the demand for a currency goes up or down.
A. Pegging
B. National currency
С. Tourist exchange rates
3. You should always try to find the best possible ______________  that you can find anywhere. 
A. balance of payments
B. interest rate
С. local currency
4. Basically, the choice of ____________ depends on your situation and how much risk you can take.
A. “fixed” or “floating” rate
B. national currency
С. the price of the currency
5. Price is derived by the interaction of_______________. The resultant market price depends upon both of these fundamental components of a market.
A. price and value
B. supply and demand.
С. loan and credit
6.  A government using _______________ has linked the value of its currency to the value of another country’s currency, or the price of gold.
A. a free floating exchange rate
B. interest rate
С. a fixed exchange rate
7.  _______________is commonly used in international transactions and often considered a hard currency.
A. The reserve currency
B. Interest rate
С. Exchange  rate

II. Comprehension: Сhoose the best answer А, В or С to complete each sentence.
1. The official exchange rates of foreign currencies against the ruble are set by ….
A. the Central Bank of the Russian Federation.
B. all commercial banks working in this country.
С. the government of the Russian Federation.
2. A fixed exchange rate is...
A. controlled by the foreign exchange market.
B. controlled by the government.
С. controlled by commercial banks.
3. When demand on the foreign exchange market falls for some national currency, the exchange rate will...
A. rise.
B. also fall.
С. not change.
4. The government can maintain the exchange rate they want by...
A. by selling national currency.
B. by buying national currency.
С. by setting the exchange rate. 
5. One of the advantages of a free floating mechanism is that ...
A. it introduces instability or uncertainty into trade.
B. it can cause inflation. 
С. it allows a country to readjust the balance of payments more easily.
6.  A change in the exchange rate of the national currency... 
A. always depresses the economy of the country.
B. always improves the economy of the country.
С. can influence the economy of the country.

III. Match the words and phrases with the definitions.  

IV. Which mechanism is being described?
 

V. Find in the text English equivalents to the following expressions:

VI. Decide if the following statements are FALSE or TRUE:

1. Only tourists are interested in exchange rates. 
2. Governments can do nothing but watch exchange rates the time. 
3. When a free floating mechanism is used, the price of the currency is not controlled. 
4. The only way to maintain the desirable exchange rate is to change the level of supply of the national currency on the money market. 
5. The governments can’t sell their reserves of foreign currencies. 
   
   
    

ЗАНЯТИЕ 3. 

Text . ECONOMIC GROWTH
Many millions of people enjoy a quality of life today that previous generations could not have dreamed of. Home ownership, private cars and holidays are now standard for most families in industrialised countries. And yet at the same time, billions of people in other countries live without even clean drinking water. How can this be? The answer is that the fortunate few live in countries with sustained economic growth.
An economy is growing when the gross national product is increasing year after year. When economists calculate economic growth, though, they must take into account the effects of inflation. For example, imagine that the gross national product of a country increased from $500 billion to $510 billion from one year to another. That's an increase of two per cent in output. Very impressive! However, if the rate of inflation was two per cent, then there has been no real growth at all.
The other thing to remember about economic growth is that not all growth is good. Governments want steady, sustainable growth. Sudden, sharp increases in growth – a boom – can cause the economy to overheat and fall into recession. For many economies, the long run growth over many years is steady, but the short run is a roller-coaster ride of boom and depression. For instance, the long run growth of the UK economy since 1950 has been a steady 2.5% per year. However, if you look closely at any decade you'll see that there is a cycle of growth, recession and recovery. The truth is, steady growth in the short term is very hard to achieve.
Nevertheless, many countries are still struggling to achieve any kind of growth at all. Why is this? What is necessary for growth to happen? Many economists have tried to find the answer to this question, and there are plenty of theories to choose from. However, most economists agree that three things are essential for economic growth to occur: capital growth, savings and technological progress.
Capital refers to the factories and machinery that the labour force uses to turn raw materials into products. More workers and more raw materials will only lead to a certain amount of growth. Eventually, the economy needs more capital for the labour to use. Capital growth can also include training and education for the labour force. This makes the workforce more efficient, creative and productive.
Of course, someone has to pay for the new machines and training. In other words, capital growth needs investment. Money for investment needs to be borrowed from banks. Banks can only lend if customers make savings. This is why savings are so important for growth. However, the economy will not grow if everyone is saving and no one is spending. Getting the right balance between consumption and saving is another part of the challenge of economic growth.
But above all, technology is the real miracle worker of economic growth. An 
advance in technology can increase productivity from the same amount of capital and resources: just what the chancellor ordered!

I. Vocabulary: Choose the correct word.
1. In many ways life for previous _____________  was much  more difficult.
A people
B enerations
C family 
2. Home _____________ has increased in many parts of Europe.
A ownership
B having
C belonging 
3. When the economy grows dangerously fast, we say it boils _____________ .
A over
B overheats
C warms up 
4. A _____________ is when the economy is growing quickly.
A bang
B boom
C balloon 
5. _____________ in technology in the last 30 years has been incredible.
A Growth
B Increase
C Progress 
6. _____________  is when you get better after something bad like an illness - or economic depression.
A Discovery
B Recovery
C Slump 
7. When _____________ you fight or work hard for something.
A overheat
B recover
C struggle

II. Comprehension: Choose the sentence which best summarises each paragraph.
PARAGRAPH 1

1. Economic growth does not happen everywhere.
2. Economic growth did not happen in the past. 
3. Economic growth happens only in industrialized countries.

PARAGRAPH 2

1. GNP and economic growth are the same thing. 
2. An increase in GNP always moans the economy is growing.
3. An increase in GNP may not show economic growth. 

PARAGRAPH 3

1. All growth is good.
2. Fast growth is good.
3. Steady growth is good 

PARAGRAPH 4

1. The majority of economists believe three factors positively influence economic growth.
2. Economists are sure about what causes economic growth.
3. Economists have no idea about what causes economic growth.

PARAGRAPH 5

1. The economy needs more raw materials to grow.
2. The economy needs more machines and factories in order to grow.
3. The economy needs more labour to grow. 

PARAGRAPH 6

1. For economic growth there needs to be more spending and less saving.
2. For economic growth there needs to be more saving and less spending.
3. For economic growth there needs to be the right amount of saving and spending. 

PARAGRAPH 7

1. Technology creates more raw materials with less labour.
2. Technology creates greater output from the same amount of capital, labour and materials. 
3. Technology creates more labour with fewer raw materials.

III. Match the words and phrases in columns A with their definitions in column B.

IV. Match each paragraph with the correct heading. One heading is not used.
 

V. Find in the text English equivalents to the following expressions:

VI. Decide if the following statements are FALSE or TRUE:

1. An economy is growing when the growth of gross national product is steady. 
2. Any economic growth is good 
3. An increase of two per cent in output of a country is negligible. 
4. The long run growth of the UK economy has been steady for more than 50 years. 
5. The amount of workers and raw materials will not influence the economic growth.