Finance and financial system

1.   TRUE / FALSE: Read the headline. Guess if  a-h  below are true (T) or false (F).

 

a.	A British court said women must pay the same car insurance as men.	T / F
b.	U.K. men have always paid higher insurance premiums than women.	T / F
c.	The recent ruling is unlikely to be welcomed by British women.	T / F

d.      Male motorists will now have to pay up to 40% more for car insurance.   T / F

e.	The court passed the ruling to end sexual discrimination against men.	T / F
f.	Insurance companies in Britain believe the new system is much fairer.	T / F
g.	Men in their late teens and early twenties are the highest risk drivers.	T / F
h.	A website said the new insurance premiums is a tax on women.	T / F

 

 

2.   SYNONYM MATCH: Match the following synonyms from the article.

 

1.	sex	a.	inequality
2	comply with	b.	drop
3.	analysts	c.	gender
4.	jump	d.	angry
5.	fall	e.	opposites
6.	discrimination	f.	follow
7.	up in arms	g.	increase
8.	stupidity	h.	greet
9.	counterparts	i.	experts
10.	welcome	j.	foolishness

 

3.   PHRASE MATCH: (Sometimes more than one choice is possible.)

1.	turned on	a.	to have accidents
2	paid insurance premiums	b.	premiums
3.	far more likely	c.	as much as 40 per cent
4.	comply with	d.	discrimination
5.	could jump by	e.	in arms
6.	gender	f.	bracket
7.	insurance companies are up	g.	its head
8.	those in the 17-26 age	h.	on women
9.	higher	i.	based on their sex
10.	a gender tax	j.	the new ruling

LANGUAGE – MULTIPLE CHOICE

Britain’s system of car insurance has been turned on its (1) ____ by the European Court of Justice. For decades, British motorists have paid insurance premiums based (2) ____ their sex. The rationale for this was that men were (3) ____ more likely to have accidents than women, and the average repair bill for men was higher. Britain’s insurance industry has until December 2012 to comply (4) ____ the new ruling. The court’s decision is bad news for women, who are expected to pay an extra 25 per cent for their motor insurance. Young female drivers aged between 17 and 26 are (5) ____ to be hit hardest. Industry analysts (6) ____ their premiums could jump by as much as 40 per cent. It’s good news for men as they will see their rates fall by 10 per cent.

 The  insurance  (7)  ____  was  designed  to  end  what  the  court  saw  as  gender discrimination in Britain’s car insurance industry. However, many insurance companies are up in (8) ____ at the decision with one insurer calling it “breathtaking (9) ____”. They say statistics clearly show that men, especially thosein the 17-26 age bracket, cause the most accidents and are therefore a higher risk.

 In all other (10) ____ of insurance high risk automatically carries higher premiums.

 The  website  confused.com  wrote  women   drivers,  “cause  (11)  ____    serious accidents and make less expensive claims than their male counterparts” and called the ruling a "gender tax (12) ____ women". Another site, GoCompare.com, said: "Few drivers will welcome this ruling."

Put the correct words from the table below in the above article.

1.	(a)	feet	(b)	body	(c)	back	(d)	head
2.	(a)	at	(b)	by	(c)	on	(d)	in
3.	(a)	farther	(b)	far	(c)	further	(d)	fur
4.	(a)	with	(b)	at	(c)	on	(d)	for
5.	(a)	liked	(b)	likelihood	(c)	likely	(d)	likes
6.	(a)	reclaim	(b)	lame	(c)	unclaimed	(d)	claim
7.	(a)	rules	(b)	ruling	(c)	ruled	(d)	ruler
8.	(a)	arms	(b)	armies	(c)	armed	(d)	armful
9.	(a)	stupidly	(b)	stupidity	(c)	stupid	(d)	stupider
10.	(a)	regions	(b)	districts	(c)	areas	(d)	states
11.	(a)	less	(b)	low	(c)	fall	(d)	below
12.	(a)	with	(b)	at	(c)	by	(d)	on

8.The role of government

Попытка: 3

The role of government in economy

A. Preliminary discussion

1. What is the role of the government in the economy?

2. Should government interfere in all branches of the economy? If not, which ones it shouldn't.

3. What role does the government play in your country?

4. What do you think about the economic policy of your government?

B. Pre-reading exercises

B.l. Skim the text and give its key idea.

B.2. Scan the text for the following information.

1. What three points of view are presented in the text on the role of government in the economy?

2. Whose point of view is the most proper?

3. What is the principle difference in views of Samuelson and Friedman?

С Reading

C.l. Read the text and answer the questions.

1. What is the essence of Keynesians approach to the role of state in the economy?

2. What is the difference in the role of state in a country with market and command economy?

3. What do the classical economists think about the role of government?

4. Do you think that market itself can run economy properly?

What Role Should the State Play in the Economy?

Plenty of economists provided intellectual support for state intervention during the era of big government, particularly from the 1930s to the 1980s. Keynesians argued that the state should manage the amount of demand in the economy to maintain full employment. Others advocated a command economy, in which the government would decide price levels, oversee the allocation of scarce resources and run the most important parts of the economy (the "commanding heights") or, in communist countries, the entire economy. The role of the state increased at the expense of market forces. Economists provided plenty of examples of market failure that seemed to justify this.

Since the 1950s, there has been growing evidence that government intervention can also be flawed, and can often impose even greater costs on an economy than market failure. One reason is that when a government acts, it usually does so as a monopoly, with all the attendant economic inefficiencies this implies. In practice, policies of Keynesian demand management often resulted in inflation, and thus lost much of their credibility.

There was growing concern that public investment was crowding out superior private investment, and that other public spending on things such as health care, education and pensions was similarly discouraging private provision. Government management of commercial enterprises was often seen to be inefficient and, starting in the 1980s, nationalization gave way to privatization. Even when the state was not directly responsible for economic activity, but instead set the rules governing private behaviour, there was evidence of regulatory failure. High rates of taxation started to discourage people and companies from undertaking economic activities that would, without the tax, have been profitable; wealth creation suffered.

Most economists agree that there is a need for some government role in the economy. A market economy can function only if there is an adequate legal system, and, in particular, clearly defined, enforceable property rights. The legal system is probably an example of what economists call a public good (although the existence in many countries and industries of some self-regulation shows it is not always so).

Although politicians in many countries spent the 1980s and 1990s talking about the need to reduce the role of the state in the economy, and in many cases introduced policies of privatization, deregulation and liberalization to help this happen, public spending continued to increase as a share of GDP.

Classical economists had long recognized the need of government to provide goods and services that would not or could not be provided by the private sector. But they urged that this participation be kept to a minimum.

Paul Samuelson and Milton Friedman have different views on what role the government should play in the economy. Samuelson argues that too many of the problems the classical economists wanted to leave to the marketplace were not subject to its influence. These externalities, affecting things like public health, education, and environmental pollution, were not subject to the laws of supply and demand. Consequently, it was up to government to establish goals for the economy and use its powers to achieve them.

Milton Friedman sees things differently. Like the classical economists of old, he regards supply and demand as the most powerful and potentially beneficial economic forces. The best that government can do to help the economy, in Friedman's view, is to keep its hands off business and allow the market to "do its thing." The minimum wage laws are a case in point.

Whereas Samuelson endorses minimum wage laws as a means of helping workers at the bottom of the income ladder, Friedman would argue that by adding to unemployment, they harm the very people they were designed to help. That is, he explains, by increasing labour costs, minimum wages laws make it too expensive for many firms to hire low-wage workers. As a result, those who might otherwise be employed are laid off.

On the one hand, Samuelson endorses the concept of government-sponsored programs such as public housing and food stamps as means of reducing poverty. Friedman, on the other hand, would prefer to give the poor additional income and allow them to use the funds to solve their problems without government interference. To apply this concept, Friedman suggested the "negative income tax," which would apply a sliding scale of payments to those whose income from work fell below a stated minimum.

C.2. Read the text again and complete the sentences using your own words as much as possible.

1. Others advocated a command economy in which ...

2. The reason that government intervention can impose even greater

cost on economy than market failure is that...

3. High rates of taxation started to ...

4. A market economy can function only if...

5. Classical economists urged that ...

6. Samuelson argues that...

7. Friedman sees things differently,...

8. Whereas Samuelson endorses minimum wage laws as a means of helping workers ...

9. Friedman suggested the "negative income tax," which ...