Study the following and write a composition (about 300 words).

ECONOMIC ACTIVITIES

Practice saying the following words. Pay attention on the stress.

system, equal, solid, liquid, mobile, complex, regular, similar, rapid, service, different, level, valuable, hospital.

provide, example, belong, maintain, perhaps, replace, result, occur, obtain, police, arrange, appear, concern, describe, explain

tomorrow, together, activity, commodity, productive, particular, equality, complexity, enjoyable, description, objective, necessity, liquidity.

Study the diagram and complete the following sentences.

econom	y
ics
ic	al	ly
ist

Marx and Keynes are two famous _______ s.

Those people are studying the science of _______.

We sometimes call a person’s work his _______ activity.

People should be very ______ with the money they earn.

The economic system of a country is usually called the national _____.

The people in that town live very ______.

The table shows how words are formed around the verb produce. List all the words you can make from the table and use them in suitable blanks in the sentences.

produc	e	r
t	iv(e)	ity
ion

The company _______ a new commodity every year.

The company’s newest ________ is a special blue soap powder.

The ______ of soap powders met last year to discuss prices.

That factory is not as ______ now as it was five years ago.

The ______ of that factory has gone down over the last five years.

The manager of the factory has decided that they must increase their _______ of packets of soap powder.

Seven words can be formed from the basic word nation. This table shows how to do it. Put each word in its suitable place in the sentences.

nation	al	ise	d
ation
ism
ist	ic

The USA is the homeland of the American _____.

Most countries have ________ banks, such as the Bank of England.

The Socialist Party has plans to _______ various privately owned industries.

British Rail is already a _______ industry, because it is publicly owned.

The name given to the change from private to public ownership is _______.

In the last twenty years _______ has been a strong political force leading to the formation of many new nations.

A person who is interested in the progress and history of his own country may be called a _______.

Many governments have certain policies which are not international but simply _______.

Change these sentences by changing certain adjectives into verbs.

EXAMPLE: They made the economy regular.

They regulated the economy.

They made the subject complex. They made the subject simple. They made the businesses “solid” (by bringing them together). They made the business “liquid” (by breaking it up or “dissolving” it).

They made the economy active. They made the economy active again (or for a second time). They made the industry national. They made the industry public. They made the business international.

Combine some of the words in these sentences in order to make new compound nouns.

EXAMPLE: He owns a house. He is a house-owner.

They breed pigs. They are pig-breeders.

He owns a car. That man owns some land. They breed horses. Some capitalists own factories. That man earns his wages.

Those men mine for coal. Those women grow fruit. Mr Smith makes shoes. Mr Jones works with steel. Mr Brown packs meat in that factory.

Read and translate the text.

I

Most people work to earn a living, and produce goods and services. Goods are either agricultural (produced on farms) like maize and milk, or manufactured (produced in factories) like cars and paper. Services are such things as education, medicine and commerce. Some people provide goods; some provide services. Other people provide both goods and services. For example, in the same garage a man may buy a car or some service which helps him maintain his car.

The work people do is called economic activity. All economic activities taken together make up the economic system of a town, a city, a country or the world. Such an economic system is the sum-total of what people do and what they want. The work people undertake either provides what they need or provides the money with which they can buy essential commodities. Of course, most people hope to have enough money to buy commodities and services which are 'non-essential but which provide some particular personal satisfaction, such as toys for children, visits to the cinema and books.

II

The science of economics is based upon the facts of our everyday lives. Economists study our everyday lives and the general life of our communities in order to understand the whole economic system of which we are part. They try to describe the facts of the economy in which we live, and to explain how it works. The economist's methods should of course be strictly objective and scientific.

We need food, clothes and shelter. We probably would not go to work if we could satisfy these basic needs without working. But even when we have satisfied such basic needs, we may still want other things, such as the toys, visits to the cinema and books mentioned above. Our lives might be more enjoyable if we had such things. Human beings undoubtedly have a wide and very complex range of wants. The science of economics is concerned with all our needs: with the desire to have a radio as well as the basic necessity of having enough food to eat.

III

So far we have suggested that economic systems are the same everywhere. This is not entirely true. Not all economic systems in the world are the same. The economic system of the USA differs greatly from the system of the former USSR. The American system is based on private enterprise with private ownership of the means of production and is essentially capitalistic, while the Russian system was communistic and based on the principles of Karl Marx, the 19th century political economist. The economic systems and ideologies of these two nations contrast very strongly.

Britain is similar to the USA. It has an economic system based on private enterprise and private supplies of capital. An important form of capital is surplus income available for investment in new business activities. Property in both the US and Britain can be and is owned by individual citizens and these citizens exercise considerable economic freedom of choice. They can choose what they want to do and how they want to earn their living, but are not of course entirely free to do as they wish. They must obey the law. Otherwise, however, they can use their time, money and effort as they wish. If a person can do this, then economists say that he is economically free.

IV

In all communities, of course, limits are imposed upon personal freedom, limits which are sometimes very complex. Complete economic freedom of action can create great difficulties, because the freedoms exercised by various individuals inevitably conflict. If citizens were completely free, some landowners might build factories in unsuitable places, while some factory owners might make their employees work too long each day. If they were completely free, workers might stop working when they got their first pay, and come back only when they needed more money. Such economic anarchy could create instability in the entire economy of a country.

Laws which relate to economic conditions are sometimes concerned with contracts between employers and employees. Sometimes they are concerned with workers' health, wages and pensions, and sometimes with the location of places of work. Sometimes they protect the interests principally of the workers, while at others they may be beneficial to the employers. The government policy towards both employees and employers will depend very much upon, the political and economic ideology which the government adopts, and may be biased towards employers and capital on the one hand, or workers and the problems of labour on the other.

V

In states which have a communistic system, private property and private enterprise are reduced to a minimum. They exist, but are limited to a small area of the economy. Karl Marx conceived of a world in which there would be no private property whatsoever. Communism in theory states that all property should belong to the State. In practice, however, the citizens of states like the former USSR were permitted to have personal effects.

The important thing about the communist system is central planning. The State organizes the whole economic effort of the nation. A central authority with complete power decides what goods and services will be produced. The authority decides what quantities of goods will be produced, and also controls their quality, and decides where they will go and what prices will be charged for them. Addi­tionally, the State provides all (or most of) the services which the citizens require. It is responsible for the economy and is therefore concerned with methods of production as well as quality and quantity. The national economy must be planned ahead over a number of years.

Marxist economies are planned. The system is related to the needs of the State as a whole, not the needs of the private person. The emphasis is collective and not individual, so that the individual is subordinated to the needs of the collective State.

The central authority in communist countries performs the function of the price system in capitalistic economies. Under capitalism the prices of goods and services are related to supply and demand. The system operates freely, dependent upon the quantities available and what people want. Therefore we say that in private enterprise systems the production of goods tends to follow price movements, to rise when prices rise and fall when prices fall. This rise and fall is not however normal in communist countries. The control exercised by the State prevents any such fluctuation of prices. Government planners under communism therefore know what goods are available and what prices will be charged, but economists in non-communist systems do not always know this.

No state today is completely communistic or completely capitalistic. The various national economic systems tend towards one type or the other, but many are difficult to classify. It has been found necessary in many countries to exercise some degree of control over national economic conditions, and under-developed nations particularly are interested in longterm plans. Countries like India have had a number of plans guided by the government. India makes a clear distinction between the public sector and the private sector of its economy and so has a system called a mixed economy.

Britain today has a mixed economy. In the public sector are the nationalized industries likе coal and steel, British Rail and BOAC (British Overseas Airways Corporation). In the private sector are the majority of the nation's industries, from giants like ICI (Imperial Chemical Industries) and BP (British Petroleum) down to small family businesses. In 1962 the British government set up an official planning body known as the National Economic Development Council, a body which would help plan national production and set up production targets. The members of the NEDC are representatives of both the employers' federations and the TUC (Trades Union Congress), together with members of the government, eminent industrialists and leading economists.

The main function of the NEDC is planning national production and setting up production targets. It is however a very difficult matter to plan ahead in a mixed economy. It is not possible to plan ahead with any certainty even in a rigidly controlled economy, because natural disasters, political changes and other factors can affect the general plan in unexpected ways.

Answer the questions about passages I and II.

1.Why do most people work? 2.What do they produce? 3.Where are goods produced? 4.What do schools, hospitals and shops provide? 5.What two different things can a man buy in, for example, a garage? 6.What do we call the work which people do? 7.What is an economic system the sum-total of? 8.What two things can work provide for the worker? 9.What can people buy with money?

10. What is economics? 11. What is it based on? 12. What two things do economists study? 13. What do they try to do? 14. What do they try to explain? 15. What should the methods of the economists be like? 16. What three essential things do we need? 17. What would happen if we could get these essentials without working? 18. What might make life more enjoyable? 19. What is economics concerned with?

Say if these statements are true or false, and why.

1. Most people produce either goods or services. 2. Services are either agricultural or manufactured. 3. Education and medicine are provided by schools and hospitals. 4. Cars and paper are agricultural goods. 5. Paper is a non-agricultural commodity. 6. The work which people do is called an economic system. 7. A city has its own economic system. 8. Economic activity is the sum-total of what people do and want. 9. The work people undertake provides them with money, or with what they need.

14. Radios, books and toys are basic commodities. 10. Most people do not want to buy non-essential commodities and services. 11. Economics is a scientific study. 12. Economists try to understand only part of the economic system. 13. If we could satisfy our basic needs without working, we would still work. 15. The range of human wants is very complex. 16. Clothes and shelter are non-essential human needs. 17. Economic studies are essentially non-scientific. 18. Economists study the general life of our communities.

Provide missing words from passage I.

1. Transport systems like railways, buses and aeroplanes provide the public with important ………….

2. They told him to look at the ………. and then do the exercises.

3. There is usually a lot of ……….. at any railway station or airport that handles a lot of traffic.

4. He decided to …………. the work in order to make some money.

5. It was ………… for him to go to the city as soon as possible.

6. They had ………. money to buy most of the things they needed.

7. It was a ………….matter and he did not wish to tell anyone about it.

Answer the questions about passages III and IV.

1. What does the economic system of the USA differ from? 2. What is the American system based on? 3. What was the USSR system based on? 4. When did Karl Marx live? 5. On what two things is the British system based? 6. What economic system is the British system similar to? 7. Who can own property in the US and Britain? 8. What must British and American citizens obey? 9. What three things can Britons and Americans use as they wish? 10. Under what conditions is the person economically free? 11. What is the opposite of “simple”? 12. What are all citizens are required to do?

13. Why does complete economic freedom of action cause great difficulties? 14. What three things might happen if citizens were completely free? 15. What kind of economy might complete economic freedom create? 16. What three workers’ needs are sometimes the concern of the law? 17. Between whom are contracts arranged? 18. What else might the laws relate to, besides workers’ needs and work contracts? 19. What other important point should we note about laws related to economic conditions?

Say if these statements are true or false, and why.

1. Economists say that a man is economically free if he can do what he wishes with his own property, time and energy. 2. Governments usually require all individuals to conform to the laws which they make. 3. Complete economic freedom of action does not create many difficulties. 4. If citizens were completely free, some landowners and factory-owners might act in unsatisfactory ways. 5. Complete economic freedom could lead to economic anarchy. 6. Anarchy is a satisfactory and desirable thing in any economic system. 7. Laws related to economic conditions are sometimes concerned with the health of employers. 8. Government policy does not depend on the political and economic ideology of the government. 9. Some ideologies are biased towards labour and

others towards capital. 10. The economic systems of the US and the Soviet Union are the same. 11. In the United States the means of production are privately owned. 12. Karl Marx was an eighteenth century economic thinker. 13. The British economic system is based on the principles of Karl Marx. 14. Because Britain has a system of private enterprise, we can say that its economy is similar to the American economy. 15. Capital is essentially surplus income used for new business activities. 16. Individual citizens in Britain and the United States have complete economic freedom. 17. British citizens can choose what they want to do as long as they obey the law.

Find single words in passage III for which these words can be substituted.

founded, possession, main teachings, countries, stores, described, extra, single, have and use, selection, pick, completely, follow, physical power.

Find words in passage IV for which these words could be substituted.

societies, cause, enjoyed, frequently, unsatisfactory, lawlessness, written agreement, regular pay in old age, mainly, inclined

Answer the questions about passage V.

1. What two things are greatly reduced in communistic system? 2. What area do they occupy in the economy? 3. What did Karl Marx propose about private property? 4. What is the theoretical communist view on property? 5. What is the position in practice? 6. What does the State do in the communist system of central planning? 7. What two decisions does the central authority make? 8. What does the authority control? 9. What can authority do about prices? 10. What is the State responsible for and what must it do? 11. Are there any completely communistic states? 12. Are there any completely capitalistic states? 13. Do the various national economies tend towards one or other ideology? 14. Are the various economic systems difficult to classify? 15. Have most countries found economic control necessary? 16. Has the US felt the same need? 17. Are the under-developed countries interested in control and planning? 18. Has India had a number of national economic plans?

19. Is the Indian economy based entirely on private enterprise? 20. Does the Indian economy have two distinct sectors? 21. Is the Indian system a mixed economy? 22. Is BOAC a nationalised British industry? 23. Is ICI a nationalised British industry? 24. Was the NEDC set up by the British government? 25. Are both employers and employees represented on the NEDC? 26. Why is it difficult to classify many national economic systems? 27. What are the under-developed countries? 28. What is Indian system sometimes called? 29. In which sector are the majority of British industries? 30. What did the British government set up in 1962? 31. What performs the function of the capitalistic price system in communist countries? 32. What are prices in a capitalistic system related to? 33. What does the price system depend upon? 34. In a capitalistic system, what does production follow? 35. When does production fall? 36. In a communistic system, what does the control exercised by the State prevent from happening?

Say if these statements are true or false, and why.

1. The USSR was completely communistic. 2. The USA is not completely capitalistic. 3. Many economic systems in the world are not difficult to classify. 4. Even the United States finds it necessary to control national economic conditions to a certain extent. 5. The interest of the under-developed countries in long-term planning is inevitable. 6. India makes a clear distinction between the two sectors of its typically mixed economy. 7. The nationalised industries in Britain are inevitably in the private sector of the economy. 8. Giants like ICI and BP are not publicly owned. 9. The British government controls the economy very strictly through the NEDC. 10. Planning ahead in a mixed economy is not particularly difficult.

11. Private property in a capitalistic state is reduced to a minimum. 12. Karl Marx wanted a world in which there would be no private property. 13. Communist theory and practice are not exactly the same as regards property. 14. Central planning by the State is an essential part of the communist system. 15. The central authority decides on the quantity, quality, price and place of sale of any commodity. 16. The central authority is responsible for the economy but is not concerned with methods of production. 17. The word “Marxist” is very similar in meaning to the word “communist”. 18. Marxism is concerned with the needs of the private individual. 19. Collective needs are more important in a communist state than the needs of the individual.

Provide missing words.

8. The USSR was a ……….. of communism.

9. The Americans are ………… to a system of private enterprise.

10. To control an economy is much the same as to ……….. it.

11. The work was carefully …………. by the authorities for five years.

12. It is necessary to make a sharp …………. between planned and unplanned economies.

13. He does not work in this ………… of the economy but in the public one.

14. A mixed economy possesses some of the qualities of the two main ………… of economic system.

15. Coal, steel and farming are very important national ………...

16. The ………… of the workers were happy about the new plan, but a small number were not.

17. Some industrial …………, like BP and ICI, are international as well as national in their activities.

Arrange the following sentences in their proper order.

1. It meets regularly, under the chairmanship of the Prime-Minister.

2. Each committee is concerned with an individual industry and is composed of members from management, the trade unions, government committees and three independent members.

3. The NEDC, which was set up in 1962, brings together representatives of government, management and the trade unions, and provides a meeting place for the discussion of future policy and planning.

4. The EDCs study measures to improve efficiency and competitive power in each industry.

5. Other members are the ministers of the main economic departments of the government, representatives of management and trade unions and the nationalised industries, independent members and other interested people.

6. The NEDC has set up twenty-one Economic Development Committees.

Put prepositions in the blanks of these sentences.

1. The central authority is concerned _______ methods of production.

2. His capital was finally reduced ______ nothing.

3. They charged quite a lot of money ______ that commodity.

4. The government is usually responsible _____ the people ______ the condition of the national economy.

5. Citizens are required to conform _______ the law.

6. He agreed _____ the other economists that the system was unusual.

7. He was paid well ______ the government _______ the work he did.

8. The people hoped _______ a reduction in the price _______ essential goods.

9. That man subscribed ________ a number of important newspapers and magazines containing information ______ economics.

10. The consumption _______ coal and steel has increased greatly ______ recent years.

11. They have provided many services _____ the citizens _____ that town and do not charge very much ___ the services.

Decide which suffix is necessary to change these words from activities etc. to the people who engage in them.

teaching	politics	working	science
statistics	electric (repairs)	mathematics	labouring
banking	mining	music	driving
economics	ecology	farming	technical (work)
chemistry	agronomy

21. Make these adjectives negative by adding the prefix un– and complete with them the following sentences.

economic	economical	satisfactory	systematic
necessary	scientific	enjoyable	available
suitable	equal	productive	conditional
important	usual	desirable

1. People do not like working in _______ conditions.

2. The employers decided to close that factory because it was ______.

3. Complete economic freedom is an ______ situation.

4. Compared with our need for food, clothes and shelter, some of our wants are quite _____.

5. We say that goods are sold at ______ prices, when the price is less than the cost of producing them.

6. The goods which he wanted were ______ at the price which he was willing to pay.

22. Make these adjectives negative by adding the prefix in– and complete with them the following sentences.

active	activity	secure	security
organic	sufficient	definite	adequate
distinct	complete	solvent	expert
frequent	conclusive	dependent

1. Metals are ______ substances.

2. Most nations like to be economically ______.

3. The services which they provided were quite _____.

4. If an economy becomes unstable, people begin to feel ______.

5. The men were rather ______ at the kind of work which they had been asked to do.

23. Make these words negative by adding prefix in– and altering it to suit the consonant which follows (il–; im–; ir–).

legal	mobile	proper	personal
probable	legible	logical	rational
regular	relevant	responsible	possible
practical

24. Make each word below negative by adding a suitable prefix: non–; un–; or in– (or il–; im–; ir– as required).

economic active distinct legal systematic public definite dependent secure

industrial practical scientific relevant satisfactory frequent available probable regular

mobile productive legible important logical adequate proper rational suitable

personal enjoyable responsible organic sufficient conditional complete desirable essential

usual stable equal communist solvent conclusive political expert necessary

Study the following and write a composition (about 300 words).

Most people work in order to earn their living, and they produce goods and services. This fact can be shown as a diagram:

Most people produce

goods or services

The things which people produce are called their products. So the diagram can be drawn as:

products

goods services

Below are 20 kinds of people. Ten of them produce goods; ten produce services. Use these as examples in your composition.

cattle-breeder pilot shoemaker horse-breeder builder

coal-maker teacher steelworker shopkeeper electrician

musician doctor nurse cook policeman

farmer banker fruit-grower fisherman iron-ore miner

26. Write about 400 words and make presentations on the topics:

1) Economy, economics; 2) Different economic systems; 3) Mixed economies; 4) Command economies;

5) Free economies; 6) RF economic system; 7) Economic system of any other country.

Your work should be in two parts: (i) an introduction on economic systems in general; (ii) types of economies in particular. Use the material provided in the texts and exercises.

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