Profits production privately supply demand provides free enterprise standards services carried out improve

1. In a capitalist or _______ economy, property is _______ owned.

2. Business competes to earn _______.

3. And resources are allocated by the market according to the laws of _______ and _______.

4. In socialist economies the principal means of _______ are owned by the state.

5. Production in socialist countries was _______ in strict accordance with a government prepared plan.

5. The most effective way to improve living _______ in developing nations is to increase farm productivity.

6. Physical infrastructure refers to the facilities needed to provide basic _______ like transportation, communication, sanitation and power.

7. Increasing output _______ people with the goods and services needed to improve their living standards.

8. In order for living standards to _______, a country's economic growth must increase faster than its population.

IV. Read and translate the text:

In this chapter we will learn something about socialism and other economic systems. In a capitalist or free enterprise eco­nomy, property is privately owned, businesses compete to earn profits, and resources are allocated by the market according to the laws of supply and demand. In socialist economies the principal means of production are owned by the state, and resources are allocated according to a plan.

Communism is the form of socialism based on the writings of Karl Marx practiced in the Soviet Union, China and other countries. Socialism had its origins in Europe during the 19th century. Working conditions in the factories of those times were very poor. Wages were low; hours were long; and the work was often performed by men, women and children under physically dangerous conditions. For one group of thinkers, who came to be known as Utopian socialists, the solution to these problems lay in the creation of small, ideal communities in which the factories would be owned by the workers and profits shared by all.

The process of transforming a less-developed country into a modern state typically involves some or all of the following activities:

- Modernizing the agricultural sector.

- Adding to the physical infrastructure.

- Increasing output and foreign trade.

- Improving education and training.

- Slowing population growth.

In order to improve living standards, a country's economic growth must increase faster than its population. In other words, if a nation's output over a period of time increased by 10 percent, while its population increased by 15 percent, living standards would be worse at the end of the period than they were at its beginning.

V. Answer the following questions:

1. What are the differences between capitalist and socialist economies?

2. What is «communism»?

3. When and where had socialism its origin?

4. Who are «Utopian socialists»?

5. What do the less developed countries need to increase production?

VI. Define the terms:

farm productivity

to allocate resources

government prepared plan

physical infrastructure

capitalist economy

socialist economy

free enterprise

living standard

VII. Translate into English:

1. Економіка вільного підприємництва передбачає існування приватної власності. 2. Умови праці на фабриках за тих часів були дуже поганими. 3. Розв'язання цих проблем полягало у створенні маленьких ідеальних товариств, у яких фабриками володіли б робітники, а прибуток розподіляли між усіма. 4. Робота часто виконувалася чоловіками, жінками та дітьми у фізично небезпечних умовах. 5. При соціалізмі основні засоби виробництва належать державі, ресурси розподіляються за планом. 6. Що передбачає процес трансформації з низьким рівнем розвитку країни в сучасну державу? 7. Для підвищення життєвого рівня розвиток економіки країни має передувати зростанню кількості населення. 8. Якщо випуск продукції за певний період часу зріс на 10 відсотків, а чисельність населення збільшилася на 15 відсотків, то життєвий рівень буде гірший, ніж був на початку цього періоду.

VIII. Read and dramatize the following dialogue:

A.: Look, in 1986, my relatives as well as many other music lovers were treated to an extended daylong concert featuring many rock and jazz greats. The Live Aid concert staged simultaneously in London's Wembley Stadium and Philadelphia's JFK Stadium was beamed via satellite to millions of viewers in Europe and America.

C.: I remember the purpose of the concert. It was to raise funds for the starving people of Africa. The sight of the desperately hungry in Ethiopia a few years ago, and before that in the West African region of the Sahel, shocked and helped sensitize television viewers to the tragedy in these lands.

A.: Certainly. Some scholars place the major blame for these conditions on runaway population growth in nations of the undeveloped world.

C.: In what way do they explain it?

A.: They explain that standards of living in many developing nations continue to decline because the growth in population is greater than economic growth.

C.: No doubt. And if world economic growth continues to average about two percent annually, nearly half the world's people will live in countries where population growth exceeds economic growth.

A.: Much of what these writers had to say was foretold by an 18th – century English economist, Thomas Malthus. In his «Essay on Population» (1798) Malthus warned of the dire consequences of uncontrolled population growth.

C.: What was his argument?

A.: His argument was direct and simple. While food supplies can be increased through the addition of land and labor, the rate of growth is in an arithmetic progression (2, 4, 6, 8, 10 and so on). But population growth expands in an geometric progression.

C.: As far as I understood, given the difference between the rate of population growth and that of production, Malthus concluded that a large portion of humanity was doomed to a life of misery.

A.: Worse yet, as the arithmetically increasing food production fell short of satisfying the geometrically increasing population, malnutrition and disease would take their toll until the rising death rate restored the balance between food and population.

C.: Critics of Malthusian theory argue that the focus on population misses the main causes of hunger and starvation. The fact is that the agricultural nations grow enough to feed themselves and the rest of the world. However, not enough food reaches those in need because poor nations do not have the international currency with which to purchase it from world suppliers.