2017-12-16
187Aggregate supply
| supply – постачання aggregate supply – сукупна пропозиція capital goods – засоби виробництва to be productive – щоб бути продуктивною affect – впливати (на) | national income accounting – облік національного доходу keeps track of production – слідкує за economy’s performance – функціонування економіки |
Just as economists study the amount of goods and services brought to market by a single producer, they also study the total amount of goods and services produced by the economy as a whole. Thus, they examine aggregate supply – the total amount of goods and services produced by the economy in a given period, usually one year.
A number of factors affect an economy’s aggregate supply. Two of these are the quantity of resources used in production and the quality of those resources. For example, an economy must have an adequate supply of natural resources and capital goods to be productive. It also needs a skilled and highly motivated labour force.
A third factor affecting aggregate supply is the efficiency with which the resources are combined. If they are combined in a productive way, aggregate supply will increase.
In order to measure aggregate supply, statistics must be kept. To keep with this task economists use national income accounting – a system of statistics that keeps track of production, consumption, saving and investment in the economy. National income accounting also makes it possible to trace long-run trends in the economy and to form new public policies to improve the economy.
The most important economic statistics kept in the national income accounts is Gross National Product (GNP). This is the dollar measure of the total amount of final goods and services produced in a year. It is one of the most important and comprehensive statistics kept on the economy’s performance.
1 What do economists study? 2 What is aggregate supply? 3 What factors affect an economy’s aggregate supply? 4 When will aggregate supply increase? 5 What must be kept in order to measure aggregate supply? 6 What is national income accounting? 7 What helps to trace long-run trends in the economy and form new public policies? What is it aimed at? 8 What is GNP?
I. Find equivalents:
| adequate supply of natural resources keep with a task final goods trace long-run trends in the economy skilled labour force national income accounting capital goods improve the economy aggregate supply total amount of goods and services single producer Gross National Product the quantity and the quality | a b c d e f g h i j k l m | загальна кількість товарів та послуг кваліфікована робоча сила засоби виробництва відповідний (достатній) запас природних багатств сукупна пропозиція поліпшувати стан економіки валовий національний продукт виконувати завдання кількість і якість облік національного доходу окремий виробник готова продукція намічати перспективні напрямки в економіці |
II. Match the synonyms:
Adequate, to grow, skilful, to affect, goods, merchandise, amount, trend, to ameliorate, consider, to improve, sufficient, to trace, to increase, to influence, examine, manufacturer, tendency, total, quantity, to track, producer, aggregate, skilled.
III. Fill in the blanks with prepositions or adverbs if necessary:
1 Economists examine aggregate supply – the total amount... goods and services produced... the economy... a given period. 2 A number... factors affect... an economy’s aggregate supply. 3 Two... these are the quantity... resources used... production and the quality... those resources. 4... order to measure aggregate supply, statistics must be kept. 5 One... the factors affecting... aggregate supply is the efficiency... which the resources are combined. 6 The most important economic statistics kept... the national income accounts is Gross National Product. 7 This is the dollar measure... the total amount... final goods and services produced... a year.
IV. Match the terms with their definitions:
| 1. efficiency | а. Goods ultimately bought and used by consumers. |
| 2. capital goods | b. A measure of the nation’s total output of goods and services per year. |
| 3. services | c. Something created to produce other goods and services. |
| 4. final goods | d. Intangible item of value, such as the work of physicians, lawyers, teachers, actors. |
| 5. labour force | e. A measure of how much we get what we use. |
| 6. Gross National Product | f. All the goods and services provided by the economy. |
| 7. Aggregate Supply | g. A system of statistics, that keeps track of production, consumption, saving and investment in the economy. |
| 8. national income accounting | h. Individuals, 16 years of age or older, working or looking for work. |
V. Define which of the following items best completes the statement:
1) The GNP can best be described as a measure of...
| a. the nation’s economic welfare b. the value of all goods and services produced in the country | c. the retail value of all market production in the nation d. goods and services produced by the government |
2) A nation’s standard of living will rise if...
| a. GNP and population increase at the same rate b. GNP increases faster than population | c. population increases faster than GNP d. production and consumption decrease |
3) Assume that prices are rising while production remains unchanged. In these circumstances, GNP measured in current dollars will...
| a. increase b. remain the same | c. decrease d. cause prices to fall |
VI. Complete the following sentences:
1 Economists examine aggregate supply... 2 The factors affecting aggregate supply are... 3 In order to measure aggregate supply... 4 National income accounting is... 5 National income accounting also makes it possible... 6 The most important economic statistics kept in the national income accounts are... 7 GNP is...
VIII. Translate into English:
1 Економісти розглядають сукупну пропозицію як загальну кількість товарів та послуг, вироблених, як правило, за один рік. 2 На сукупну пропозицію впливає кількість цих ресурсів. 3 Щоб бути продуктивною, економіка повинна мати відповідний (достатній) запас природних багатств та засобів виробництва. 4 Третій фактор, який впливає на сукупну пропозицію, – це ефективність, з якою комбінуються ресурси. 5 Розрахунок національного прибутку дає можливість накреслити перспективні напрямки в економіці і виробити нові напрямки державної політики, щоб поліпшити стан економіки. 6 Валовий національний продукт – це вартість у доларах усієї сукупності готової продукції та послуг, вироблених і наданих за рік.
Aggregate demand
| decision-making units – самостійна господарча одиниця, наділена правом приймати рішення aggregate demand – сукупний попит | expenditures – витрати, видатки household–домашнє господарство, сім’я purchases – закупівлі |
The economy of any advanced country is very complex. It involves millions of individual decision-making units – individuals, business and governments make billions of decisions daily.
Microeconomics is the branch of economics that deals with decision-making and other behaviour by these individual units. Another branch of economics, known as macroeconomics, deals with large groups or aggregates. Because GNP deals with the output of the country as a whole, it is macroeconomic concept.
As a first step in understanding the macroeconomics we think of the economy as being made up of several different parts called sectors. These sectors represent individuals, business, government and foreign markets. The sum of expenditures of these sectors is known as aggregate demand. When aggregate demand or spending falls over a period of one to two years, the economy tends to go into recession, while a rise in aggregate demand tends to lead to booms in the economy.
One part of the economy is the consumer sector. The basic unit in this sector is the household, which is made up of all persons who occupy a house, flat, or room.
The business or investment sector is made up of proprietorships, partnerships, and corporations. It is the productive sector responsible for bringing the factors of production together to produce output.
The public sector is the part of the economy of a country that is owned or controlled by the government. It includes the local, regional and state levels of government.
The foreign sector includes all consumers and producersoutside the country.
Ukraine, for example, exports aeroplanes and farm products to foreign buyers. It also imports a large number of different items from foreign countries. It makes no difference whether foreign buyers are governments or private investors or if purchases are made from governments or private individuals. They are all part of the foreign sector.
1 What does microeconomics deal with? 2 Macroeconomics deals with large groups or aggregates, doesn’t it? 3 Why is GNP considered as macroeconomic concept? 4 What do the sectors of the economy represent? 5 What is the basic unit in the consumer sector? 6 What is the business or investment sector made up of? 7 Is the business sector of the economy responsible for bringing the factors of production together to produce output? 8 What does the public sector include? 9 Does the foreign sector include all consumers and producersoutside Ukraine?
I. Match the antonyms:
To export, income, to import, demand, to consume, to produce, supply, private sector, expenditure, buyer, external, microeconomics, public sector, macroeconomics, boom, unlike, native, internal, different, recession, similar, like, foreign, seller.
ІI. Match the terms with their definitions:
| 1. microeconomics | a. A fall in business activity lasting more than a few months, causing stagnation in a country’s output. |
| 2. macroeconomics | b. Quantity of goods and services produced or provided by a business organization or economy. |
| 3. aggregate demand | c. The study of the individual parts of the economy, with special attention to the market process and how it works. |
| 4. recession | d. The total demand for goods and services in the economy. |
| 5. boom | e. The peak of the business cycle; the economy is expanding and aggregate demand is rising quickly. |
| 6. output | f. The study of the economy as a whole. |
| 7. public sector | g. Regular fluctuations in the level of economic activity in an economy. |
| 8. investment | h. Part of the economy that is owned and controlled by the state, namely central government, local government, and government enterprises. |
| 9. business cycle | i. Using money to purchase real capital (equipment, new tools, industrial buildings) to be used in the production of goods and services. |
ІІІ. Define which of the following items best completes the statement:
1 An increase in aggregate demand would most likely mean an increase in spending by...
| a. business b. government | c. consumers d. all of them |
2 The macroeconomics is:
| a. government’s share of the nation’s output b. goods and services that are produced but not sold in the marketplace | c. everything produced in the nation d. none of these |
3 Rising unemployment, together with a reduction in business spending and production, is characteristic of..
| a. boom b. contraction | c. recession d. expansion |
ІV. Fill in the blanks below with the most appropriate terms from the list:
| aggregate demand; recession; decision-making; economics; corporations; consumers; items; services; proprietorships; the public sector; producers; goods; booms; the private sector |
1 Microeconomics is the branch of ________ that deals with ________ and other behaviour by these individual units. 2 The sum of expenditures of these sectors is known as _________. 3 When aggregate demand or spending falls over a period of one to two years, the economy tends to go into ________, while a rise in aggregate demand tends to lead to ___________ in the economy. 4 The business or investment sector is made up of __________, partnerships, and ___________. 5 In a free market economy, __________ is responsible for allocating most of the resources within the economy. 6 Most _________ and __________ provided by __________ in any economy are allocated on the basis of need rather than on ability to pay. 7 Foreign sector includes all _________ and _______ outside the country. 8 Ukraine imports a large number of different _________ from foreign countries.
V. Complete the following sentences:
1 Microeconomics is.... 2 Macroeconomics deals with.... 3 As a first step in understanding the macroeconomics we think of the economy as.... 4 These sectors represent.... 5 The sum of expenditures of these sectors is known as.... 6 One sector of the macroeconomics is.... 7 The basic unit in this sector is.... 8 Another sector is.... 9 It is the productive sector responsible for.... 10 The public sector includes.... 11 The foreign sector includes....
VI. Translate into English:
1 Мікроекономіка – це галузь економіки, зв’язана із прийняттям рішень та іншими діями самостійних господарських одиниць, які наділені правом приймати рішення. 2 Сума витрат секторів макроекономіки відома як сукупний попит. 3 Основна одиниця споживчого сектору – домашнє господарство. 4 До складу сектору бізнесу або капіталовкладень входять одноосібна власність, партнерство та корпорації. 5 Іще один сектор макроекономіки – це державний сектор, який включає місцевий, регіональний та державний уряд. 6 До складу зовнішнього сектору входять усі споживачі та виробники за межами країни.
VII. Replace the Ukrainian words and phrases by their English equivalents in the correct form:
(Макроекономіка) is the study of the functioning (економіки в цілому), and it deals mainly with the total output and income of the economy, (загальним рівнем занятості), and movements in the average level of all prices. The heart of macroeconomics consists of analyzing the determinants of (сукупної пропозиції) and (сукупного попиту). In the short run, the main problem in macroeconomics is why (сукупний попит) sometimes exceeds (сукупну пропозицію), thereby bringing on (інфляцію), and why aggregate demand sometimes falls short of aggregate supply, thereby bringing on (безробіття) and deflation – or at least less inflation. Over the long run, macroeconomics is concerned primarily with (економічним зростанням) – increases in the productive capacity of the economy and in average (реальним доходом) per person.
