The Role of Government in the Economy.

Although based largely on the concept of free enterprise and organizing economic activity through open and competitive markets, the US economy has a tradition of government intervention for specific economic purposes – including limiting monopoly, protecting the consumer, providing for the poor, handicapped and elderly, and presenting the environment.

There is virtually nothing a person can buy in the United States that is not affected by some kind of government regulation. Food manufacturers must tell exactly what is in a can or box or jar. No pharmaceutical drug can be sold until it is thoroughly tested and then approved by a federal agency. Many types of businesses must pass inspections by government workers for compliance with health, safety or both types of regulations. Automobiles must be built according to safety standards, and must carry pollution – control devices. Prices for goods must be clearly marked and advertising must be honest.

Laws and regulations protect American workers in many ways. Laws prohibit discrimination in hiring; forbid hiring children for most jobs and set rules for using children in others (such as acting); set standards for working conditions; and protect the rights of independent labor unions to organize, bargain and strike peacefully.

Each level of government provides direct services. The postal system, for example, is a federal system serving the entire nation, as is the large military establishment. The construction and maintenance of most highways is the responsibility of individual state governments. The public education systems are primarily paid for by the state, county or city governments. In general, police and fire protection are also the responsibilities of local government.

The government regulates and controls private enterprise in many ways in order to ensure that business serves the best interests of the people as a whole. Regulation is considered necessary in areas where private enterprise has been granted a monopoly, such as in electric or local telephone service, or in other areas where there is limited such companies to make reasonable profits, but limits their ability to raise prices "un fairly" (as defined by the regulators) because the public depends on their services. Often control is exercised to protect the public, for example, when the Food and Drug Administration bans harmful drugs, or requires standards of quality in food. In other industries, government sets guidelines to ensure fair competition without using direct control.

Branches of government, including Congress and such entities as the Federal Reserve System, attempt to control the extremes of boom and bust, and of inflation and depression, by adjusting fax rates, the money supply and the use of credit. They can also affect the economy by changing the amount of public spending by the government itself. Normally, the aim is a balanced federal budget.

The government provides many kinds of help to businesses and individuals. For example, tariffs permit certain products to remain relatively free from

foreign competition; imports are sometimes faxed or limited by volume so that American products can better aid to farmers by subsidizing prices they receive for their crops.

In quite a different area, government supports individuals who cannot adequately care for themselves by making grants to low – income parents with dependent children, by providing medical care for the aged and indigent, and through social insurance programs that assist the unemployed and retirees.

Ex. 3. Choose the correct preposition in the following sentences:

1. The theoretical basis of government … American business has been provided

… more than 200 years by "Laisser – faire" ("Leave-it-alone").

a) of, with; b) forward, for; c) to, in.

2. Many private property owners in the U.S. have turned … the government …

help … numerous occasions.

a) for, with, by; b) to, on, at; c) to, for, on.

3. Manufacturers and bankers have sought government assistance … many

forms.

a) of; b) by; c) in.

4. There has been a constant demand … government help … specific

economic to satisfy government rules costs money and adds.. the prices

businessmen must charge.

a) in, on; b) out, to; c) out, up;

Ex. 4. Complete the sentences:

1. Laws and regulations protect American workers ….

2. Food manufactures must tell exactly ….

3. Prices for goods must be ….

4. The public education systems ….

5. The government controls private enterprises in order to ….

Ex. 5. Fill in the gaps with the words given below:

maintenance, compliance, insist, harmful, interaction, handicapped,

environment, virtually, competitive, purpose;

1. There are special schools for children who are mentally ….

2. Many new laws were enacted to prevent the pollution of the ….

3. Their … was to raise money for medical supplies.

4. The once elegant temple is … in ruins now.

5. General Motors has definitely succeeded in designing a … car.

6. I … on a contract that will give us some sort of security.

7. The rays of the sun, in excess, can be very ….

8. He acted in … with her wish.

9. There is a need for more … between our staff and the public.

10.Who is responsible for the … and care of the buildings?

Ex. 6. Open the brackets, using Present or Past Simple, Active or Passive

Voice:

1. The U.S. economy (to base) largely or the concept of free enterprise.

2. In order (to sell) any drug must (to test) and (to approve) by a federal agency.

3. Since 1930s the government intervention in the U.S. economy (to begin, to

increase) rapidly.

4. The laws and regulations which (to enact) since 1930s (to alter) the shape of

the American economy.

5. In the 19^th century, the railroad building association (to accept) grants of land

and public subsidies.

4. Many Americans (to believe) that strict regulations (to need) (to keep) businesses from cheating.

5. A conservative (to define) as one who (to favor) private initiative and (to oppose) government intervention.

6. The Laws (to pass) (to make sure) that food and drugs (to label) correctly and that meat (to inspect) before (to sell).

Ex. 7. Translate into English:

1. Одной из целей вмешательства правительства в экономику страны

является защита окружающей среды.

2. Япония является конкурентоспособной рыночной системой.

3. Любой производимый в США продукт тщательно проверяется и

получает одобрение федеральным агентством.

4. Правительство, не прибегая к прямому контролю, определяет основные

направления развития экономики.

5. Сокращение расходов на социальные нужды вызвало резкий протест

общественности.

6. Импортируемые в США автомобили должны соответствовать

установленным нормам безопасности.

6. Этот человек заслужил репутацию честного бизнесмена.

7. Закон в США запрещает дискриминацию человека при его найме на работу.

Ex. 8. Answer the questions:

1. What is the role of government intervention in the American economy?

2. What are the ways in which the government protects consumers?

3. In what ways do laws and regulations protect American workers?

4. What direct services does each level of government provide?

5. What's the purpose of the government's regulation and control of private

enterprise?

6. In what areas and why is regulation usually considered necessary by the

government?

7. What's the role played by the government and the Federal Reserve System to

control the extremes of boom and bust, and of inflation and depression?

8. What sort of help does the government provide to businesses and individuals?

Learn the vocabulary:

concept - понятие, представление

enterprise - предприятие

competitive - конкурентоспособный

consumer - потребитель

handicapped - страдающий каким-либо

недостатком

(умственным или физическим)

to affect - воздействовать, влиять

thoroughly - зд. - тщательно

to approve - утверждать, санкционировать

in compliance with - в соответствии с

advertising - рекламирование, реклама

to prohibit - запрещать

condition - условие

to protect - зд. юридическое лицо,

организация

to maintain - поддерживать, содержать

responsibility - ответственность

reasonable - разумный

profit - доход

to require - требовать

boom and bust - расцвет и банкротство

(развитие)

to adjust - приспосабливаться,

устанавливать

to subsidize - субсидировать, ассигновать

indigent - нуждающийся, бедный

retiree - ушедший в отставку

dependent - зд. - находящийся на

иждивении, (зависящий (от))

to assist - 1) оказывать поддержку,

сoдействовать

2) принимать участие (in)

PRICE. SUPPLY and DEMAND

Ex. 1. Learn the pronunciation of the following words:

supply [ ] commodity [ ]

increase [ ] consumer [ ]

decrease [ ] preference [ ]

curve [ ] insurance [ ]

straight [ ] equilibrium [ ]

easy [ ] low [ ]

luxury [ ] demand [ ]

adjust [ ] various [ ]

services [ ] review [ ]

pleasure [ ] key [ ]

measure [ ] determine [ ]

priority [ ] government [ ]

equal [ ] surplus [ ]

high [ ] shortage [ ]

toward [ ]

Ex. 2. Read and translate the text:

Supply

Supply refers to the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time. Generally speaking, the amount supplied will increase as the price increases. Economists usually show this relationship on a graph. Figure 1 shows a simple supply curve (such lines are usually curved, but are shown straight to keep the example easier to understand). The various points on the graph indicate how much fish a fisherman would provide at different prices. All things being equal, the higher the price, the more a fishermen will be willing to supply.

Supplies of many commodities can generally be adjusted to suit market conditions. This means that changes in prices lead to changes in the quantity of a particular commodity which is made available to consumers. Household goods and furniture belong to this category. In such instances supply is said to be "elastic", because it can be increased or decreased rapidly in response to market prices.

Figure 1

(supply)

Demand

Demand refers to the quantity of products that people are willing to buy at different prices at a specific time. Generally speaking, the quantity demanded will decrease as the price increases. Figure 2 shows a simple demand curve. The various points on the graph indicate the quantity demanded at various prices. We can see that the higher the price the less the quantity of goods is demanded.

Elasticity of supply, as a response to changes in price, is related to demand. Economists say that demand is indicated by our willingness to offer money for particular goods or services.

People very seldom have everything they want. When we exercise our choice for buying these or those commodities, we do so according to our personal scale of preferences. Essential commodities come first (food, clothing, shelter, medical expenses, etc), then the kind of luxuries which help us to be comfortable (telephone, insurance, etc), and finally those non-essentials which give us personal pleasure (theatres, cinemas, parties, holidays, etc). So our decisions indicate our scale of preferences and therefore our priorities.

Elasticity of demand is a measure of the change in the quantity of a good in response to demand. The change in demand results from a change in price. Demand for essential commodities is inelastic, but it is particularly elastic for non-essential commodities. Accordingly, we buy basic necessities even if the prices rise steeply but we buy other things only when they are relatively cheap.

Figure 2

(Demand)

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