Inflation

Inflation is a steady rise in the average price and wage level. The rise in wages being high enough to raise costs of production, prices grow further re­sulting in a higher rate of inflation and, finally, in an inflationary spiral. Peri­ods when inflation rates are very large are referred to as' hyperinflation.

The causes of inflation are rather complicated, and there is a number of theories explaining them. Monetarists, such as Milton Friedman, say that inflation is caused by too rapid increase in money supply and the correspond­ing excess demand for goods.

Therefore, monetarists consider due government control of money supply to be able to restrict inflation rates. They also believe the high rate of unem­ployment to be likely to restrain claims for higher wages. People having jobs accept the wages they are being paid, the inflationary spiral being kept under control. This situation also accounts for rather slow increase in aggregate demand.

On the other hand, Keynesians, that is, economists following the theory of John M. Keynes, suppose inflation to be due to processes occurring in money circulation. They say that low inflation and unemployment rates can be ensured by adopting a tight incomes policy.

Incomes policies, though, monetarists argue, may temporarily speed up the transition to a lower inflation rate but they are unlikely to succeed in the long run².

The costs of inflation depend on whether it was anticipated and on the extent to which the economy's institutions allow complete inflation adjustment.

The longer inflation continues, the more the economy learns to live with it. Indexation is a means to reduce the costs of some inflation effects. In­dexed wages or loans mean that the amount to be paid or repaid will rise with the price level. Indexation has already been introduced in countries that had to live with inflation rates of 30 or 40 percent for years. And the more coun­tries adjust their economies to cope with inflation, the closer they come to hyperinflation. Indexation means that high rates of inflation are much more likely to continue and even to increase.

Задание 2. Выпишите из каждого предложения текста грамматическую основу (подлежащее+ сказуемое), определите видовременную форму глагола и залог, определите начальную форму глагола.

Задание 3. Задайте вопросы к первому предложению:

· общий

· специальный

· к подлежащему

· альтернативный

разделительный

Задание 4. Заполните пропуски в предложениях, употребив следующие слова и словосо­четания в соответствующей форме и переведите пред­ложения на русский язык:

temporary, tight, to account for, to mean, inflation rate, to adjust (2), adjustment, to anticipate, indexation, to speed up, hyperinflation, to cope with, to argue, money supply

1. The incomes policy is known to be a... means of......the... of wages to growing money supply.

2.... regulation of the Central Bank, it is argued, will prevent (предотвра­щать) sudden increases in.......

3. The situation is referred to as..., provided the......per month is about 50 percent for several months in succession (подряд).

4. Before 1971 banks rarely... interest rates on deposits. This... that a rise in inflation reduced the real interest rate on all deposits with fixed interest rate.

5. Even when inflation is perfectly..., and the economy is fully... to infla­tion, it is impossible to......all its costs.

6.... cannot cope with all the costs of high inflation.

7. The rich industrial countries comprising the United States, Western Europe, Canada, and Japan...... 16 percent of world population.

8. The report... that many of the world's resources were in limited supply and would be used up within 100 years.

Задание 5. Найдите в тексте неличные формы глаголов (герундий, причастие настоящего времени, причастие прошедшего времени, отглагольное существительное, инфинитив, сложное подлежащее, сложное дополнение) и выпишите их.