Traditionally economists believed that there was a positive relationship between people\'s consumption and their current income. The rational expectation theory debates this issue stating that people consume out of their «permanent income,» which can be defined as the level of consumption that can be sustained while leaving wealth intact. This has changed the way economists think about short-term stabilization policies, such as temporary tax cuts, designed to stimulate the economy. Formerly economists believed that tax cuts would increase disposable income, thus causing people to consume more. Now, in accord with the permanent income model, it is believed that temporary tax cuts have little effect on consumption because people are relating their consumption decision to their wealth, not their current disposable income.
conform – согласовывать(ся), приспосабливать(ся)
continual – продолжающийся, постоянный
contribute – прибавлять, доставлять, привносить
current – текущий, современный
disposable – имеющийся в наличии
dynamics – динамика
error – ошибка
evident – очевидный
expect – ожидать
expectation – ожидание
feedback – обратная связь
formerly – раньше, изначально
happen – случаться
hurry – спешить
hyperinflation – гиперинфляция
intact – нетронутый
occur – случаться, происходить
outcome – результат, исход
partly – частично
persistently – настойчиво, постоянно
positive – позитивный, положительный
provided – при условии (что)
rational – рациональный
recurrent – вновь повторяющийся
smoothing – смягчающий
stabilization – стабилизация
sustain – поддерживать, длить(ся)
temporary – временный
thereby – посредством этого
traditionally – традиционно
trustworthy – надежный
unfold – раскрыть(ся)
wealth – богатство, состояние, благосостояние
to a great extent – в значительной степени
rate of depreciation – степень обесценивания, норма амортизации
two-fold – двусторонняя
random walk – подчиняющееся случайности движение ( наименование теории ценообразования на фондовом рынке )
permanent income – постоянный доход
current income – текущий доход
tax cuts – сокращение налогов
in accord with – в соответствии сExercise 10
Answer the questions:
1. What assumption is the theory of rational expectations based on?
2. What does the value of a currency depend on, according to this theory?
3. What do the prices of shares depend on, in the context of this theory?
4. What is the relation between expectations and outcomes?
5. What does the rational expectation theory provide a trustworthy basis for?
6. What is people\'s consumption positively related to, in the traditional economics?
7. What is people\'s consumption related to, in the rational expectations theory context?
8. What did the traditional economics think about temporary tax cuts in relation to their effect on consumption?
9. What sort of income are people relating their consumption decisions to?
10. What is permanent income?3. Факторы производства (Productive Forces)
Labour Force and Human Capital
Question: How many people does it take to make the economy work?
Answer: Only one, and it\'s me.
Proof:
The population of the United States is 180 million, but there are 64 million over 60 years of age, leaving 116 million to do the work.
People under 21 total 59 million which leaves 57 million people to do the work.
Because of the 31 million government employees, there are only 26 million left to do the work.
Six million in the armed forces leave twenty million workers.
Deduct 17 million State, county, and city employees, and we are left with three million to do the work.
There are 2,500,000 people in hospitals, asylums, and treatment facilities leaving half a million workers.
However, 450,000 of these are bums or others who will not work, leaving 50,000 to do the work.
Now, it may interest you to know that there are 49,998 people in jail so that leaves just 2 people to do all the work, and that is you and me, and I\'m getting tired of doing everything myself!
Слова и выражения:
total – составлять в целом
deduct – вычитать
asylum – сумасшедший дом
bum – бродяга, лодырь
jail – тюремная камера
armed forces – вооруженные силы
treatment facilities – лечебные учреждения
Exercise 1
Answer the questions:
1. What is the population of the USA?
2. How many elderly people who do not work live in the USA?
3. How many people serve in the army?
4. How many people are State, county, and city employees?
5. What can one man do for the entire economy to make it work?Labour Force
Labour force is one of the key points in each economy. It consists of a large part of what is called population. So, the amount and quality of labour force depend largely on the tendencies that affect population, which, in its turn, influences production.
In the years from 1950 to 1990 the world\'s population doubled, and now it is over 5,500 billion people. Only about 14 percent of the population growth was in developed countries, with around 86 percent in less developed countries. In developed countries this growth was caused by fertility and age distribution, while in less developed countries the main reasons were higher life expectancies and high birthrates. Life expectancy in developed countries was 74.0 years in 1990 as compared to 65.7 years in 1955 (62.0 and 41.0 respectively in less developed countries). By the 1900 the birthrate in developed countries fell to 1.9 births per woman. In the less developed countries it is 3.9 births per woman, which is still high enough to contribute substantially to population growth.