Free-enterprise or market economy

There are two forms of economic organization, the free- enterprise, ore market economy, and the centrally planned economy. The main principles of free-enterprise economy were formulated in the 18-th century by British economist Adam Smith. According to Smith, people acting in their own economic interests will maximize the economic situation of society as a whole. A free-enterprise economy consists of households and firms that are free to do as they please. There is private property of consumer goods as well as producers’ goods. Firms sell consumer goods to households, and producers’ goods to other firms. Households sell their services – manual labor for an example – to firms. Buying and selling constitute markets, and prices are formed in such markets according to demand and supply.

Many people believe that free market gives individual responsibility to make decisions and economic freedom. But free-market economy does not solve the problem of poverty, and many people become too rich. They can become so powerful, that it can be dangerous for society. Market forces are indifferent to social values and can be manipulated by a few owners of wealth. Market economy can’t guarantee full employment, and use all the resources of the state. Nowadays only about 25% of world economy is functioning in the conditions of free market.

II. Answer the following questions.

1. What forms of economic organization are there nowadays?

2. Who and when formulated the main principles of free-enterprise economy?

3. What does a free-enterprise economy consist of?

4. How do firms and houses function?

5. What advantages has free market economy?

6. Can free market solve all economic problems of the society?

III. Translate the text.

IV. Grammar tasks.

Ex.1. Transform the following sentences as in the pattern: I have anEnglish book in my bag. There is an English book in my bag.

He has some mistakes in his dictation. 2. She has many books in her study. 3. I have beautiful flowers in my garden. 4. We have some meat in the kitchen. 5. He has an old computer in his office. 6. I have a new fridge in my flat. 7. She has a blue vase on the table. 8. They have a little garden around their house. 9. We have a new TV in the cottage.

Дата добавления: 2015-07-20