Government Expenditure. Расходы государства
Government' expenditure takes many forms and, particularly over the last 50 years or so, has been a very substantial total. This heading covers spendings by both central government and local authorities. Government spending results in an injection of funds into the circular flow.
Let us take as an example a decision by the Department of Transport to build a new motorway. This will lead to a variety of spending, which would not have taken place otherwise. The authorities will have to employ surveyors, lawyers, accountants and construction workers and will have to purchase large quantities of construction materials. All of the spending generated in this way will be an addition or an injection to the circular flow.
Government spending can, of course, take many other forms. Major financial items are the provision of health and social security benefits. The latter tends to put money directly into the hands of people who need it badly and who are, therefore, likely to spend all or most of it in the near future. If it so wishes the government can use its own expenditure to rapidly affect the level of injections and thus the circular flow. Pursuing such policies, however, can have undesirable side-effects.
Exports. Экспорт
Exports are an injection because they result in income entering the UK's circular flow as a result of the spending decisions of foreign households, firms and governments. Notice that this spending by foreign households is a loss (or withdrawal from) their domestic circular flows.
Britain is a major trading nation and, as such, can be described as an open economy. It exports approximately one-third of all the goods and services it produces. The amount of the UK imports varies but over time will be roughly the same proportion. The UK's trade is recorded in the balance of payments figures, which are published monthly and then collected into annual accounts. If you look at the UK's trade figures you will see that rarely, if ever, does the value of exports equal the value of imports.
The balance of payments accounts are split into two broad sections: the current account, which records imports and exports of goods and services; and the capital account, which records international monetary flows in and out of the UK, such as foreign loans and investment in the UK.
Exports have always been important to the UK economy and are indisputably an engine of economic growth. They provide domestic employment not only in the exporting industry but also in the industries, which supply components and raw materials to that industry. Exports bolster the circular flow and promote employment in a range of industries. They also stimulate innovation and competition and generate a satisfying standard of living. Most of the world's most prosperous economies are successful exporters, notably Japan and Germany. Few isolated economies have been economically successful.
VOCABULARY NOTES
injection –инъекция, вливание (напр., денег в экономику)
to arise from –проистекать, являться результатом
to assume –предполагать, считать
thus –таким образом
they can be generated through –это может происходить посредством...
assets – имущество, активы
layman –непрофессионал, неспециалист
an economist referring to investment –говоря о вложениях, экономист...
paper financial assets – имущество, вложенное в ценные бумаги
stock –акция, ценная бумага; запас, ассортимент
there is no overall impact on the economy –большого влияния на экономику это не окажет
net investment – чистые инвестиции
gross investment –валовые капиталовложения
worn out –изношенный
depreciation –обесценение (денег), снашивание (в результате износа и морального устаревания)
total –целое, сумма, итог
to term (syn.to call) –называть
rate of interest –процентная ставка
rate of growth –скорость роста
decade –десятилетие
the level... has fluctuated – уровень колебался
has been a very substantial total –составило очень значительную сумму
this heading covers –под этим заголовком рассказывается
to result in (syn.to lead to, to cause, to entail) –приводить к чему-либо;
иметь своим результатом
this will lead to a variety of spending –это повлечет за собой самые разнообразные затраты
surveyor –землемер, топограф
major financial items –основные статьи расходов
social security benefits –льготы социального обеспечения
to tend to –иметь тенденцию
rapidly –быстро, скоро
pursuing such policies –проведение такой политики
undesirable side-effects –нежелательные побочные явления
as a result of the spending decisions –как результат решения покупать или нет
withdrawal –утечка, изъятие
the amount ... varies — количество ... бывает различным
over time –иногда, время от времени
roughly –приблизительно
the UK's trade is recorded in the balance of payments figures –торговля Великобритании отображена в данных платежного баланса
annual accounts –ежегодные отчеты
rarely, if ever – редко или почти никогда
the balance of payments accounts are split into –статьи (разделы) платежного баланса разделяются на
current account –счет текущих операций
capital account –счет движения капиталов
indisputably –бесспорно
to bolster –поддерживать, укреплять
promote employment in a range of industries –обеспечивают занятость в ряде отраслей
innovation –новшество, нововведение
notably –особенно
Assignments
I. Suggest the Russian equivalents
which does not arise from; they can be generated through; government spending (expenditure); an economist referring to investment; paper financial assets; capital stock; extra spending that has not originated in the circular flow; the level... has fluctuated; a very substantial total; government spending results in...; construction workers (materials); social security benefits; the current (capital) account; domestic employment; they generate a satisfying standard of living
II. Replace the parts initalics by synonyms
does not arise from the spending; it was unrealistic to assume; increase the size of the circular flow; there are three recognized ways; there is no overall impact on the economy; to replace capital stock that is worn out or obsolete; this heading covers; this will lead to a variety of spending; rapidly; over time;
accounts are split into; indisputably; exports bolster the circular flow and promote employment
III. Fill in the gaps with the words and expressions from the text
1. An injection is simply an addition to __, which does not arise from the spending of households.
2. Investment is __ on productive capital goods.
3. An economist referring to investment doesn't mean the purchase of __, such as __ or __.
4. Some investment is necessary to replace capital stock that is __ or __.
5. Economic statistics show us that the level of __ in the UK economy __ over the recent years.
6. A decision to build a new motorway will lead to __, which would not have taken place otherwise.
7. Major financial items are the provision of __ and __.
8. The amount the UK imports varies but __ will be roughly the same proportion.
9. If you look at the UK's trade figures you will see that __ does the value of exports equal the value of imports.
10. Exports __ the circular flow and __ employment in __ of industries.
IV. Find in the text English equivalents for the following
предполагать; товары производственного назначения, основные фонды; неспециалист; чистые инвестиции, валовые инвестиции; объем основных фондов; изношенный; делать вложения; за последние несколько десятилетий; имеет много форм; это потребует значительных затрат; основные статьи финансирования; побочные явления; очень редко; платежный баланс; промышленность, работающая на экспорт; обесценение основных фондов, амортизация
V. Give explanations in English
physical assets; paper financial assets; stock; shares; capital goods; capital stock; social security benefits; the balance of payments accounts
VI. Answer the questions
1. What is an injection?
2. What is expenditure?
3. What are net and gross investments?
4. What are the main influences on the amount of investment? Can you add anything else?
5. Speak on government expenditure and its forms.
6. What have you learnt about the UK's exports and imports?
7. Why arc exports an engine of economic growth?
VII. Translate the following sentences using all the active possible
1. В последнее время процентная ставка крупных банков сильно колеблется и это влияет на состояние инвестиций в промышленности.
2. Неспециалисту трудно понять, что такое товары производственного назначения и основных фондов.
3. Создание новых отраслей, работающих на экспорт, потребует больших затрат, включая социальную защиту работников. Но именно это и обеспечивает занятость населения страны.
4. В Великобритании ежегодно публикуются статистические данные о состоянии платежного баланса страны.
5. Чтобы создать новые рабочие места, нужны немалые капиталовложения.
6. Конкуренция способствует развитию технического прогресса.
7. Что увеличивает кругооборот доходов?
8. Инъекции – это потоки денежных средств, направленные на приобретение национального продукта, созданного внутри страны, и не связанные с потребительскими расходами населения на его покупку. Такие потоки образуются капиталовложениями, правительственными закупками и платежами за товары и услуги, проданные за границу.
WITHDRAWALS (ИЗЪЯТИЯ ДЕНЕГ ИЗ КРУГООБОРОТА)
Withdrawals (or leakages) are that part of the circular How, which are not passed on as spending with UK firms. This is income, which individuals, firms or governments take out of the circular flow with the likely result that the level of economic activity in the economy declines. The three forms that withdrawals can take arc:
· Savings
· Imports
· Taxation
Savings. Сбережения
Both businesses and individual citizens can take the decision not to spend all of the income that they receive. A number of factors are thought to determine the level of savings at any one time. Interest rates obviously influence the saver's decision since they represent the return on his or her savings. Many economists believe that decisions to save arc taken in response to periods of economic uncertainty: the more worried people arc about interest rates, job security and so on, the more they arc likely to save. Alternatively, there is evidence that when money is losing value quickly, as in a period of inflation, people tend to purchase consumer durable goods such as televisions and washing machines.
Another factor is social change. Previous generations placed great store by saving in order to carry out major purchases; this is less common today perhaps due to the ready availability of credit.
Imports. Импорт
You will know that expenditure by UK inhabitants on goods and services imported from abroad -will remove those funds from the domestic circular flow and will cause a decrease in the level of economic activity. Periodically, the UK has spent too freely on imports and earnings from exports have been insufficient to cover this. Many factors encourage us to purchase imports: some are favourable to the economy in the long term, whilst others are harmful. If imports of raw materials increase due to the growth of a domestic industry, then this indicates an expanding economy, which should sell more exports in the future in order to pay for the increased expenditure. However, if the imports are the consequence of UK citizens preferring foreign goods on grounds of, for example, price or quality, then the impact may be harmful as jobs are lost in domestic industries.
Taxation. Налогообложение
Funds are withdrawn from the circular flow in the form of taxation by the government. It levies two types of tax:
· Direct taxes, such as income tax, corporation tax (on profits) and other taxes on income or wealth;
· Indirect taxes, such as VAT and customs and excise duties, which are levied on spending by all of us;
If the authorities withdraw funds through taxation and then fail to spend this tax revenue, the circular flow will reduce the levelof activity in the economy.
Taxation policy has been substantially altered by the Conservative government in the 1980s and early 1990s. It has reduced direct taxes because of the belief that taxation of this kind reduces the incentive to work and so dampens the spirit of enterprise in the economy. Indirect taxes, such as VAT, have been increased to make up for some of the revenue lost from direct taxes. The government has thus transferred the tax burden from direct to indirect taxes. The total burden of taxation has hardly altered.
VOCABULARY NOTES
leakage –утечка
which are not passed on as –которые рассматриваются не как...
with the likely result that –в результате чего может; результатом чего может
savings –сбережения, накопления
a number of factors are thought to determine –считается, что ряд факторов определяет
the return on his or her savings – отдача, процент, доход от... сбережений
there is evidence that –очевидно, что
to place great store by –придавать большое значение
due to –благодаря, из-за
to remove from –удалить, изъять
insufficient to cover –недостаточный для покрытия (расходов)
to encourage smb to do smth –побуждать кого-то сделать что-то
in the long term (ant.in the short term) –в (отдаленном) будущем
domestic industry –национальная промышленность
to withdraw –изымать, выводить, удалять
to levy –взимать, облагать (о налогах)
direct (indirect) taxes- прямые (косвенные) налоги
income tax –подоходный налог
corporation tax (on profits) –налог с прибыли (доходов) корпораций
VAT (value added tax) –НДС (налог на добавленную стоимость)
customs duty –таможенная пошлина
excise duty –акцизный сбор
and then fail to spend this tax revenue –а затем не могут распорядиться (потратить) этими налоговыми поступлениями
has been substantially altered – была значительно изменена
and so dampens the spirit of enterprise –и таким образом подавляет дух предпринимательства
to make up for –компенсировать, восполнять tax burden –бремя налогов
Assignments
I. Suggest the Russian equivalents
withdrawals, which are not passed on as spending with UK firms; a number of factors are thought to determine the level of savings; job security; another factor is social change; generations placed great store by saving; will remove those funds from the domestic circular flow and will cause a decrease; direct (indirect, corporation, income) taxes; the tax revenue; taxation of this kind reduces the incentive to work and so dampens the spirit of enterprise; the tax burden
II. Replace the parts initalics by synonyms
with the likely result that...; decisions are taken in response to economic uncertainty; alternatively; consume durable goods; UK Inhabitants; if the authorities fail to spend this tax revenue; will cause a decrease on the level of economic activity; earnings from exports have been insufficient; if imports increase due to the growth of industry; substantially; because of the belief that.
III. Fill in the gaps with the words and expressions from the text
1. Interest rates influence the saver's decision since they represent __ on his savings.
2. Previous generations __ saving in order to cany out major purchases.
3. Expenditures on goods and services imported- from abroad __ those funds from __ and will cause __ in the level of economic activity.
4. If imports of raw materials increase due to the growth of __, then this indicates __.
5. Funds are withdrawn from the __ by the government, which __ two types of tax.
6. Indirect taxes include VAT and __.
7. Direct taxes reduce __ to work and so dampen __ in the economy.
8. The government has transferred __ from direct to indirect taxes.
IV. Find in the text English equivalents for the following
доходы от сбережений; очевидно, что...; подталкивать, побуждать; в конце концов; это означает рост экономики; на том основании, что; налог на добавленную стоимость; акцизный сбор; Восполнять
V. Find English explanations
the return on one's savings; taxes (direct, indirect, income, corporation, on wealth, VAT); excise duties; the tax revenue
VI. Answer the questions
1. What are withdrawals? Name their forms.
2. When do people decide to save?
3. What is the reason for purchasing imports?
4. Why can buying imports be harmful?
5. What are direct and indirect taxes?
6. Why did the Conservative government reduce direct taxes in the 1980s and increase indirect ones?
7. Make conclusions from the Circular Flow Model. VII. Translate into English using all the active possible
1. В ответ на увеличение правительством налогов предприниматели приняли решение поднять цены на потребительские товары. Подобное налогообложение явно не способствует развитию торговли.
2. Считается, что на решение покупать или не покупать импортные товары влияет целый ряд факторов: цены, качество и т. д.
3. Выпуская хорошие товары, предприниматели побуждают население покупать их, а не откладывать деньги, что может привести к падению уровня экономической активности.
4. Многие люди, пытавшиеся получить большой процент со своих денег, положенных на депозит в разные сомнительные банки, оказались обманутыми.
5. В некоторых странах акцизный сбор с продажи алкогольных напитков является очень доходной статьей.
6. В России налог на добавленную стоимость был введен в январе 1992 года.
7. Изъятия – это часть национального дохода, которая не используется населением для покупки потребительских благ, произведенных в стране. Изъятия состоят, таким образом, из сбережений, чистых налогов и затрат на покупку импортных товаров. Изъятия равны инъекциям.
INFLATION (ИНФЛЯЦИЯ)
Inflation is generally defined as a persistent rise in the general price level with no corresponding rise in output, which leads to a corresponding fall in the purchasing power of money.
In this section we shall look briefly at the problems that inflation causes for business and consider whether there are any potential benefits for an enterprise from an inflationary period.
Inflation varies considerably in its extent and severity. Hence, the consequences for the business community differ according to circumstances. Mild inflation of a few per cent each year may pose few difficulties for business. However, hyperinflation, which entails enormously high rates of inflation, can create almost insurmountable problems for the government, business, consumers and workers. In post-war Hungary, the cost of living was published each day and workers were paid daily so as to avoid the value of their earnings falling. Businesses would have experienced great difficulty in costing and pricing their production while the incentive for people to save would have been removed.
Economists argue at length about the causes of, and "cures" for, inflation. They would, however, recognize that two general types of inflation exist:
* Demand-pull inflation
* Cost-push inflation