II. Comprehension exersices

1. Complete the statements:

1. Economics is

a) the study of the countries of the world and of the seas, rivers, towns, etc.,

on the earth’s surface

b) the study of societies and human behavior in groups

c) the study of how resources are distributed for the production of goods

and services within a social system

2. A society’s way of producing, distributing, and marketing the goods and

services desired by its population is called

a) a free-market system

b) an economic system

c) capitalism, or free enterprise

3. An economic system without private property is

a) socialism

b) communism

c) capitalism

4. An economic system in which the government owns and operates key

industries but allows private ownership of many businesses is known as

a) communism

b) socialism

c) capitalism

5. The most basic freedom under the free enterprise system is

a) the right to freedom of choice

b) the right to competition

c) the right to private property

6. Most nations operate as

a) natural economies

b) planned economies

c) mixed economies

7. The developed countries, also known as industrial nations, include

a) India, China, and Thailand

b) Germany, Japan, and Australia

c) North Korea, Sudan, and Colombia

8. Developing countries are very much concentrated in

a) North America and Western Europe

b) Asia, Africa, and South America

c) Eastern Europe

9. The examples of middle-income countries are

a) France, Switzerland, and Norway

b) Uzbekistan, Afghanistan, and Zambia

c) Russia, Egypt, and Turkey

10. In a free-enterprise system, the distribution of resources and products is

determined by

a) supply and demand

b) economic expansion and contraction

c) competition

11. Competition is the rivalry among businesses for

a) natural resources

b) foreign markets

c) potential customers

12. Expansion, recession, depression, and recovery are various stages of a

a) business plan

b) business game

c) business cycle

13. Rapid economic expansion may result in

a) unemployment

b) inflation

c) exhausting price wars

14. A severe recession may turn into

a) prosperity

b) recovery

c) a depression

15. The sum of all goods and services produced by a country during a year

excluding profits from the overseas operations of companies is called

a) gross domestic product

b) gross national product

c) gross profit

16. Per capita income shows

a) the difference between our exports and our imports

b) changes in prices of goods and services

c) how much money consumers spend and how much money they are

earning

2. Scan the text to determine whether these statements are true or false. If a statement is false, correct it. Give your reasons, using such expressions, as:

That’s quite right; I can’t agree with this statement because..;

In my opinion it is true that…; I’m afraid it is false that… because…;

1. Economics, the exact science, is the study of how resources are distributed for the production of goods and services within a social system.

2. Macroeconomics deals with a “big picture”, as looking down at a country from a plane.

3. Planned economies exist in such countries as the United States, Canada, Germany, Japan, and Australia.

4. Countries which have high standards of living – mainly industrialized countries – are described as developing countries.

5. The low-income developing countries are often called First World countries.

6. The total population in middle-income countries is over 3 billion.

7. Demand describes the behavior of buyers, whereas supply refers to the behavior of sellers.

8. Companies compete in one of three ways: price, quality, or innovation.

9.. Economic expansion occurs when an economy is declining and people spend less money.

10. Recessions are often characterized by rising levels of unemployment.

11. GDP shows the sum of all goods and services produced by a country during a month.