B) Translate the text into Russian.

The Components of GDP

GDP can be expressed as: GDP = C + I + G + NX where:

• C is private consumption (or Consumer expenditures) in the economy. This includes most personal expenditures of households such as food, rent, medical expenses and so on.

• I is defined as business investments in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. 'Investment' in GDP is meant very specifically as non-financial product purchases. Buying financial products is classed as saving in macroeconomics, as opposed to investment (which, in the GDP formula is a form of spending). The distinction is (in theory) clear: if money is converted into goods or services, without a repayment liability it is investment. For example, if you buy a bond or a share, the ownership of the money has only nominally changed hands, and this transfer payment is excluded from the GDP sum. Although such purchases would be called investments in normal speech, from the total-economy point of view, this is simply swapping of deeds, and not part of the real economy or the GDP formula.

• G is the sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such as social security or unemployment benefits. The relative size of government expenditure compared to GDP as a whole is critical in the theory of crowding out, and the Keynesian cross.

• NX are "net exports" in the economy (accounts for gross exports – gross imports; also (X – M)). GDP captures the amount a country produces, including goods and services produced for overseas consumption, therefore exports are added. Imports are subtracted since imported goods will be included in the terms G, I, or C, and must be deducted to avoid counting foreign supply as domestic.

Ex. 11. a) Read the text and answer the following questions:

• What purpose are price indexes used for?

• What is the most widely used index? Why?

• How is CPI calculated?

b) Translate the text into Russian.

The Consumer Price Index (CPI). Anyone who is going to compare "levels of economic activity" from one year to another needs to know something about price indexes. The best known and most widely used index is — the consumer price index, also called the "cost of living index." What it does is make up a list of all the things that the "average consumer" would buy and in what quantities in the average year. This list will include postal services, medical services, tires and gasoline, meat and potatoes, clothing and everything else bought by "the average family."

It isn't always easy to decide exactly how much of which things to put into this list. But the government statisticians make the best estimates they can and go ahead. Then they add up all the costs of all the things. This gives them the "cost of living" of the "average family" in the base year. That's the first step.

The next step is to take the same list of things and assign the present cost of each item on the list, then add up the total. This shows the "cost of living" of an "average family" at the present time (present month, or week). Then the base year cost is divided into the present cost to get the consumer price (cost of living) index.