Inflation

inflation - інфляція deflation - дефляція relative price - відносна ціна nominal income - номінальний дохід real income - реальний дохід money illusion - грошова ілюзія

Consumer Price Index - індекс споживчих цін inflation rate - темп інфляції price stability - стабільність цін demand-pull inflation - інфляція, спричинена попитом cost-push inflation - інфляція, спричинена вартістю

Most people associate inflation with price increases on specific goods and services. Inflation is an increase in the average level of prices, not a change in any specific price.

We first determine the average price of all output (the average price level), then look for changes in that average. A rise in the average price is referred to as inflation.

The average price level may fall and rise. A decline in average prices - a deflation - occurs when price decreases on some goods and services outweigh price increases on all others. Relative price is the price of one good in comparison with the price of other goods.

Because inflation and deflation are measured in terms of average price levels, it is possible for individual prices to rise or fall continuously without changing the average price level. Nominal income is the amount of money you receive in a particular time period; it is measured in current hryvnias. Real income, by contrast, is the purchasing power of that money, as measured by the quantity of goods and services your hryvnias will buy. If the number of hryvnias you receive every year is always the same, your nominal income doesn't change - but your real income will rise or fall with price changes.

There are two basic lessons about inflation to be learned:

- Not all prices rise at the same rate during an inflation. Some prices increase very rapidly, others only modestly, and still others not at all.

- Not everyone suffers equally from inflation. Those people who consume the goods and services that are rising faster in price bear a greater burden of inflation; their real incomes fall more.

Money illusion is the use of nominal hryvnias rather than real hryvnias to measure changes in one's income or wealth.

The most common measure of inflation is the Consumer Price Index, a mechanism for measuring changes in the average price of consumer goods and services.

Inflation Rate is the annual rate of increase in the average price level.

Price stability is the absence of significant changes in the average price level; officially defined as a rate of inflation of less than 3 percent.

Demand-pull inflation is an increase in the price level because of excessive aggregate demand. If the demand for goods and services rises faster than production, there simply won't be enough goods and services to go around. Cost-push inflation is an increase in the price level because of an increase in the cost of production. In 1979 the Organization of Petroleum Exporting Countries (OPEC) sharply increased the price of oil. For domestic producers, this action meant a significant increase in the cost of producing goods and services. They had to raise prices and the result was a cost-push inflation.

I. Give English equivalents of the following:

підвищення ціни; середній рівень цін; отримати великий прибуток; стабільні ціни; відрізняти явище інфляції від підвищення цін на окремі товари; мати сенс; купувати речі на перепродаж; темп інфляції; виробництво йде на спад.

ІI. Fill in the blanks with: average level of prices; nominal income; price increases; relative price; income; a deflation; real income

1. Most people associate inflation with... on goods and services. 2. Inflation is an increase in the..., not a change in any specific price. 3. A decline in average prices -... - occurs when price decreases on some goods and services outweigh price increases on all others. 4.... is the price of one good in comparison with the price of other goods. 5.... is the amount of money you receive in a particular time period; it is measured in current hryvnias. 6.... is the purchasing power of that money as measured by the quantity of goods and services your hryvnias will buy. 7. Money illusion is the use of nominal money rather than real money to measure changes in one's... or wealth.

ІІІ. Answer the questions:

1. What is inflation? 2. What is deflation? 3. What do we call the price of one good in comparison with the price of other goods? 4. What is the influence of price changes on your nominal and real income? 5. What are the two basic lessons about inflation? 6. What is money illusion? 7. What is the most common measure of inflation? 8. How can we calculate the inflation rate? 9. What do we call the absence of significant changes in the average price level? 10. What happens when the demand for goods and services increases faster than production?

ІV. Translate into English:

1. Явище інфляції треба відрізняти від підвищення цін на окремі товари. 2. Впродовж останнього місяця інфляція на споживчі товари зросла на 5 відсотків. 3. Відносна ціна - це ціна одного товару в порівнянні з ціною інших товарів. 4. Інфляція найчастіше має місце в країнах із нестабільною економікою. 5. Номінальний доход - це кількість грошей, які ви отримуєте за певний період. 6. Він досліджує проблеми інфляції у цій країні вже протягом двох років. 7. Не всі ціни підвищуються однаково під час інфляції: деякі зростають дуже швидко, інші - помірно, а деякі зовсім не змінюються. 8. Темп інфляції - це щорічний середній темп підвищення рівня цін.

Grammar: Passive Tenses – Revision (2)

1 Choose the correct answers. Explain your choice:

1. He knew why he was chosen / had been chosen. 2. He was shocked / had been shocked by his boss's attitude. 3. We are just sent / have just been sent new information. 4. Everything will be done / will have been done by the end of the week. 5. He is interviewed / is being interviewed now. 6. My application is still considered / is still being considered by the managers. 7. The letters has just been brought / have just been brought. 8. He explained that a new job was offered / had been offered to him in May. 9. She was never made / has never been made such an exciting proposal. 10. My computer is repaired / is being repaired now. 11. This cheque was signed / has been signed by the manager an hour ago. 12. Negotiations will have been held / will be held in Kyiv next week. 13. Prices for oil had been increased / have been increased again. 14. Our company was founded / has been founded in 1990. 15. Extra payments are given / are being given to employees with initiative once a month.

2 Complete the sentences using the words in the brackets in the Passive Voice and define their tense:

1. Payment ………………………… (make) in the local bank last week. _____

2. Special training ………………………… (give) to new employees in our company. _____

3. Taxes ………………………… (raise) now. _____

4. The project just ………………………… (complete). _____

5. This new product ………………………… (develop) by the end of the month. _____

6. A lot of the ideas for new products ………………………… (provide) by customers. _____

7. My friend just ………………………… (promote). _____

8. A decision already ………………………… (make) when he came. _____

9. Every product ………………………… (check) for quality. _____

10. Nothing ………………………… (do) since we left the office. _____

11. The first branch of our bank ………………………… (open) in 2000. _____

12. New marketing strategy ………………………… (develop) now. _____

• Verbs with two objects have two possible passive structures:

ACTIVE PASSIVE

They gave the winner a prize. The winner was given a prize.

They gave a prize to the winner. A prize was given to the winner.

We choose the structure which fits best with what comes before and after.

The structure with the person as a subject is probably more common.

3 Change the structure of these sentences:

1 Nothing was sent to me. ………………………………………….

2Papers were brought to us to sign. ………………………………………….

3 A clock was given to Henry when he retired. ………………………………………….

4 Stories were read to the children. ………………………………………….

5 £5,000 is owed to me. ………………………………………….

6 A new job has been offered to me. ………………………………………….

7 French is taught to us by Mrs Lee. ………………………………………….

8 A car has been lent to me for the week. ………………………………………….

9 A full explanation was promised to us. ………………………………………….

10 A lot of lies were told to me by the secretary. ………………………………………….

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