Bakı 2002 N. Ş. Nəbiyev Rəy verən: b m. G. M. Mustafayeva Redaktor: b m. S. X.Ələsgərova

N. Ş. Nəbiyev

English for Economists

Bakı - 2002

N. Ş. Nəbiyev

Rəy verən: b.m. G.M.Mustafayeva

Redaktor: b.m. S.X.Ələsgərova

Vəsait üç əsas hissədən ibarətdir. Birinci hissədə oxuculara təqdim olunan mətnlər iqtisadiyyatın bir elm kimi formalaşmasında Adam Smitin rolu və bazar iqtisadiyyatının başlıca xüsusiyyətlərinə həsr edilmişdir.

İkinci hissədə Beynəlxalq maliyyə institutları: Beynəlxalq Valyuta Fondu, Dünya Bankı və London Maliyyə və Bank sisteminə aid mətnlər diqqəti cəlb edir. Nəhayət, üçüncü hissədə Azərbaycan iqtisadiyyatının müxtəlif sahələrini əhatə edən maraqlı materiallar təqdim olunur. Hər bir mətndən sonra mətnə aid söz və ifadələr, çalışmalar verilmişdir.

Vəsait İqtisad Universitetinin tələbələri, magistr və aspirantları, eyni zamanda işgüzar ingilis dili ilə maraqlanan digər oxucular üçün nəzərdə tutulmuşdur.

CONTENTS

PART 1. ECONOMIC NOTION

What is Economics? … 4 - 9

Macroeconomics … 10 - 14

Microeconomics … 15 - 20

The vision of Adam Smith … 21 - 26

Market economies …27 - 34

PART 2. INTERNATIONAL FINANCIAL INSTITUTIONS

International Monetary Fund …35 - 40

World Bank …41 - 45

Britain’s banking and financial institutions …46 -50

Banking and finance in Great Britain …50 - 56

PART 3. ECONOMY OF THE AZERBAIJAN REPUBLIC

Azerbaijan economy …57 - 63

The development of oil and gas industry in Azerbaijan …64 - 71

PU “Azerneftyag” …72 - 77

What is today’s energy industry? …78 - 84

The gas resource of Azerbaijan Caspian sector …85 - 92

Azerbaijan’s first profit oil …93 - 99

Main industries …100 - 105

Employment, wages and inflation …106 - 112

Finances and Banks …113 - 118

Taxation. Types of tax …119 - 125

Foreign relations of Azerbaijan …126 – 132

Acknowledgements …133

Lesson 1

What is economics?

Economics is a vast subject and precise definitions are usually very complex, it is not a difficult matter to give a simple and sensible answer to the basic question. Economics is essentially a study of the ways in which people apply their knowledge, skills, and efforts to the gifts of nature in order to satisfy their material wants.

Economics limits itself to the study of the material aspects of live , and while it is true that man cannot live by bread alone, it is equally true that he cannot live without it. An underlying problem in economics is that of survival and we must examine how people have solved or are trying to solve this problem .In the more advanced countries this may seem a very remote problem – few people are conscious of a life or death struggle for existence . In many other countries, however, the continuity of human existence is by no means assured–starvation is a very real prospect for millions of human beings.

Even in the prosperous, economically advanced countries there is an aspect of survival which attracts little or no attention from those of us fortunate enough to live in these areas.This is our relative helplessness as ‘economic’ individuals. The Indian peasants have an extremely low standard of living, yet, left completely to their own devices, they can survive. Such people have the abilities to sustain life without outside assistance. A large percentage of the human race still lives in very small self–sufficient peasant communities.These people experience great poverty, but they can provide on an individual basis, for their own survival .They have a degree of economic independence.

If we now turn to the inhabitants of New York, London, or any other great metropolitan area we must observe the opposite situation–a high standard of living together with an extreme economic dependence.The inhabitants of cities are totally incapable of providing for themselves directly, the means of their survival. They could not feed themselves, or build their own houses . Such people depend, each and every day of their lives, on the efforts and cooperation of many thousands of specialist workers.In industrialized societies a high standard of living is possible only if the organized cooperation of large numbers of people can be guaranteed. In the economically developed countries we are rich, not as individuals, but only as members of a complex economic organization.

Vocabulary:

apply (v.) - tətbiq etmək, istifadə etmək

completely – tamamilə, bütövlüklə

depend on (v.) - asılı olmaq

directly - bilavasitə

effort – jəhd

equally - eyni dərəjədə, bərabər

essentially - başlıja olaraq

examine (v.) - baxmaq, yoxlamaq

inhabitant - sakin

means - vasitələr

opposite - əks

poverty - kasıblıq

provide (v.) – tə’min etmək

remote - uzaq, bilavasitə əlaqəsi olmayan

satisfy wants - tələbatı ödəmək

self-sufficient - iqtisadi jəhətdən asılı olmayan

to solve a problem - məsələni həll etmək

skill - bajarıq, ustalıq, qabiliyyət

standard of living - həyat səviyyəsi

struggle for survival - yaşayış uğrunda mübarizə

sustain(v.) - dəstəkləmək

totally – bütövlükdə

vast – geniş

way - yol, üsul.

Exercises:

I. Aşağıdakı söz və ifadələri oxuyun və tərjümə edin.

Sensible, equally, survival, economics, conscious, continuity, fortunate, sustain, peasant, directly, a vast subject, the basic question, an underlying problem, struggle, for existence, standard of living, a large percentage, self- sufficient communities, advanced countries.

II. Aşağıdakı söz və ifadələrdən istifadə edərək jümlələr düzəldin.

1. people, great, experience, poverty, these.

2. they , degree , a, have, economic, of ,independence.

3. limits, of,economics, to, study, the, of , aspects, the, material, itself, life

4. then , economics, is , about, material wants, the satisfaction

5. if, commit , we , for example, resources, to , houses the building, then, of, these houses, the real cost, is , output, the potential, of , schools.

6. starvation, very, a, prospect, millions, for, real, human being, is, of.

7. an , is , problem , underlying, economics, in , that, survival, of .

8. an, Indian ,peasants, have, living , of, the, low, extremely, standard.

III. Söz və ifadələri ingilis dilinə tərjümə edin.

Əsas məsələ, həyat səviyyəsinin öyrənilməsi, insanların ehtiyajları, yaşayış uğrunda mübarizə, iqtisadi müstəqillik, minlərlə mütəxəssislər, kasıblıq, inkişaf etmiş ölkələr, inkişaf etməkdə olan ölkələr, təbbii sərvətlər, kənardan kömək olmadan, şəhər sakinləri, iqtisadi çətinliklər.

IV. Aşağıdakı sözlər arasında sinonimləri tapın.

Advanced, completely, help, community, totally, assistants, society, build, gift, construct, present, matter, basically, mainly, apply, developed, examine, study, precise, complex, subject, essentially, use, exact.

Y. Sözlər arasında antonimləri tapın.

Small, indirectly, independence, large, directly, incapable, low, prosperous, outside, poverty, capable, dependence, begin, difficult, high, poor, inside, wealth, finish, easy.

YI. Suallara javab verin.

1. What does Economics study?

2. Why aren't the inhabitants of big cities economically independent?

3. What is an underlying problem of Economics ?

4. What categories of people can survive without outside assistance?

5. Why do they have a very low standard of living?

6. Why is a high standard of living impossible without a cooperation of large numbers of people?

YII. Nöqtələrin yerinə uyğun gələn sözönüləri yazın.

1. It is people’s wants rather than their needs… provide the motive… economic activity.2. We go to work … obtain income … will buy us the things we want rather the things we need. 3. It is not possible to define ‘need’ in terms… any particular quantity …a commodity, … this would imply that a certain level … consumption is ‘right’ … an individual. 4. Economists tend to avoid this kind … value judgement which tries to specify how much people ought to consume. Whatever the reason the fact is that we find ourselves … a situation …scarcity. 6. The resources available to satisfy our wants, are … any time, limited … supply. 7. Our incomes are insufficient … us to buy all the things we would like to have.

VIII. Nöqtələrin yerinə uyğun gələn sözləri tapıb yazın.

1. A large … of the human race still lives in small self – sufficient peasant

communities.

2. The … of cities are totally incapable of providing for themselves the … of their survival.

3. Economics is a …subject and … definitions are very complex.

4. The Indian peasants have an extremely low … of living.

5. Starvation is a very real … for millions of … beings.

IX. Jümlələri “past simple” və “future simple” zaman formasında yazın.

1. 
   They receive shares according to an ancient custom.
   
2. 
   Tradition plays some part in economical processes.
   
3. 
   The distribution problem is solved in a similar manner .
   
4. 
   A son follows in the footsteps of his father and uses the same skills and tools.
   
5. 
   These methods are based on tradition.
   
6. 
   It is possible to group these structures into four broad categories.
   

Test yourself

X.Mətni diqqətlə oxuyun, verilmiş javablardan hansının doğru olduğunu tapın.

Even though the 1968 presidential election in the United States is long past, there is much that Americans can learn by studying it. That was the year when Richard Nixon became president, defeating Hubert Humphrey by less than 1 percent of the vote.

Nixon’s strategy seemed simple: end the war and restore law and order at home. In fact, his strategy, which has since been termed the Southern Strategy, was more complex. No national politician since 1968 has ignored the lessons learned by use of the Southern Strategy. The easiest way to describe the strategy is to say that Nixon ignored party affiliation and appealed to voters who lived in southern or rural areas-country people instead of city people. He won the election even though the industrialized states with the largest cities voted for Humphrey.

What is the topic of this talk?

Richard Nixon

Hubert Humphrey

The Southern Strategy in the election of 1968

Country people.

XI. Altından xətt çəkilmiş söz və ya ifadələrdən biri səhvdir, verilmiş jümlədə onu tapıb, düzgün variantı yazın.

1. Beautiful is in the eye of the beholder.

2. The baby showed a noticeable distaste for these kind of prepared baby food.

3. They cannot go camping right now because they are taking care of a three - weeks–old baby.

4.They went into the Superstition Mountains in search for the Lost Dutchman’s Mine and were never heard from again.

5. The young girl dreamed a dream that she was being carried away

by monsters.

6. If it will rain this afternoon, we will have to cancel the picnic.

7. Are you familiar of the latest scientific developments in the field?

8. Henry is the sort of a man who will give you the shirt off his back.

Jokes, Laughs, Smiles.

I. George Washington, the first President of the United States, had a secretary, a young man. One morning the secretary came late, and found Washington waiting. He tried to excuse himself by saying that his watch was wrong. Washington replied quitely. “ I am afraid you will have to get another watch, or I another secretary”.

II. “What is your age?” asked the judge. “Remember you are under oath”.

“Twenty one years and some months”, the lady answered.

“ how many months?” the judge persisted (inad etdi).

“ one hundred and eight”.

Lesson 2

What is macroeconomics?

The word macroeconomics means economics in the large.The macroeconomist's concerns are with such global questions as total production, total employment, the rate of change of overall prices, the rate of economic growth, and so on. The questions asked by the macroeconomist are in terms of broad aggregates-what determines the spending of all consumers as opposed to the microeconomic question of how the spending decisions of individual households are made; what determines the capital spending of all firms combined as opposed to the decision to build a new factory by a single firm; what determines total unemployment in the economy as opposed to why

there have been layoffs in a specific industry.

Macroeconomists measure overall economic activity; analyze the determinants of such activity by the use of macroeconomic theory: forecast future economic activity; and attempt to formulate policy responses designed to reconcile forecasts with target values of production, employment, and prices.

An important task of macroeconomics is to develop ways of aggregating the values of the economic activities of individuals and firms into meaningful totals.To this end such concepts as gross domestic product (GDP), national income, personal income, and personal disponsable income have been developed.

Macroeconomic analysis attempts to explain how the magnitudes of the principal macroeconomic variables are determined and how they interact. And through the development of theories of the business cycle and economic growth, macroeconomics helps to explain the dynamics of how these aggregates move over time.

Macroeconomics is concerned with such major policy issues as the attainment and maintenance of full employment and price stability. Considerable effort must first be expended to determine what goals could be achieved. Experience teaches that it would not be possible to eliminate inflation entirely without inducing a major recession combined with high unemployment.Similarly, an overambitions employment target would produce labor shortages and wage inflation.

During the 1960s it was believed that unemployment could be reduced to 4 percent of the labor force without causing inflation. More recent experience suggests that reduction of unemployment to 5.5 percent of the labor force is about as well as we can do.

Vocabulary:

total production - ümumi məhsuldarlıq

total employment - ümumi məşğulluq

the rate of change of overall prices - son qiymətlərin dəyişmə dərəjəsi

the rate of economic growth - iqtisadi inkişaf tempi

broad aggregate – geniş miqyasda

consumers – istehlakçılar

individual households - fərdi təsərrüfatlar

layoffs - işdən çıxarılma

economic activity - iqtisadi fəaliyyət

determinants – göstəricilər

to reconcile - 1) qaydasına qoymaq 2) razılaşmaq

target - 1) məqsəd 2)plan, tapşırıq

value – dəyər

meaningful totals - əsaslı nətijələr

national income - milli gəlir

personal disposable income - vergini ödədikdən sonra qalan şəxsi gəlir

business cycle – iqtisadi mərhələ

attainment – nailiyyət

maintenance – saxlanma

price stability – qiymət sabitliyi

to eliminate inflation entirely – inflyasiyanı tamamilə aradan qaldırmaq

induce (v.) – stimullaşdırmaq

recession – 1) dərinləşmə 2) aradan qaldırma

labor shortages - işçi qüvvəsinin çatışmaması

labor force – işçi qüvvəsi

reduction of unemployment- işsizliyin azalması

Exercises:

I. Suallara javab verin:

1. What are the concerns of the macroeconomist?

2. What does the word macroeconomics mean?

3. What is the difference between the questions asked by macroeconomists and microeconomics?

4. What does macroeconomic analysis attempt to explain?

5. What is, according to the text, the important task of macroeconomist?

6. What are the concepts of macroeconomics?

7. What are the most important theories of macroeconomics?

8.What is said about the correlation between the inflation and unemployment?

II. Hər bir söz və ya ifadəyə aid jümlə düzəldin:

The rate of economic growth, consumers, individual households, to oppose to the decision, to build a new factory, total unemployment, specific industry, an important task, meaningful totals, gross domestic product, personal income, economic growth, price stability, to eliminate inflation entirely, high unemployment, labor shortages, labor force, the reduction of unemployment.

III. Verilmiş fikirlərdən hansı makroiqtisadiyyat sahəsinə aiddir?

1. Macroeconomics means economics in the large because it asks more questions than microeconomics.

2. Macroeconomics deals with global questions only.

3. Such concepts as gross domestic product, national income and personal disposable income serve as meaningful totals.

4. Macroeconomic analysis shows the development of the economic theory.

5. More recent experience proves that macroeconomists of 60s were wrong.

6.Inflation could not be eliminated without some negative changes in economics.

7.Theory of business cycles concerns business.That is why this is a microeconomic theory.

IV. Azərbayjan dilinə tərjümə edin :

1. Experience teaches that it would not be possible to eliminate inflation entirely.

2. More recent experience suggests the reduction of unemployment to 5.5. percent of the labor force.

3. Considerable effort must first be expended to determine what goals could be achieved.

4. Macroeconomic analysis attempts to explain how the magnitudes of the principal macroeconomic variables are determined.

5.Macroeconomists measure overall economic activity; analyze the determinants of such activity by the use of macroeconomic theory.

6. What determines the capital spending of all firms combined as opposed to the decision to build a new factory by a single firm?

V. Sualları müzakirə edin:

1. Is there a difference in analyzing macroeconomic and microeconomic problems?

2. What is more important for economy in general-microeconomics or macroeconomics?

3. Was there such a difference between macroeconomics and microeconomics in the Soviet economics?

VI. Jümlələri tamamlayın:

1. The principal tools of macroeconomic policy are monetary policy and …

2. Monetary policy in the United States is under …

3. The principal vehicle of fiscal policy is the federal …

4. Macroeconomists measure overall …

5. The word macroeconomics means economics …

6. The macroeconomist's concerns are with such global questions as …

7. During the 1960s it was believed that unemployment could be reduced to 4 percent of the …

VII. Nöqtələrin yerinə müvafiq sözönüləri yazın :

1. Beginning … 1983, the economy experienced mammoth budget deficits that, … five … the next eight years, exceeded $200 billion.

2. These huge deficits make it very difficult to use fiscal policy as a tool … economic stabilization … as much as tax cuts to stimulate the economy would further add to the size .. the deficit.

3. A third group believes that the policies … to be effective, should be carefully coordinated.

4. If the tax cut were accompanied … open - market purchases … the Federal Reserve, this expansionary monetary policy could prevent the rise … interest rates.

5. Credit lightening, … example, may be accomplished … an open - market system.

6. It may raise or lower the interest rate … which it lends the funds, there by discouraging or encouraging bank borrowing.

Test yourself

VIII. Altından xətt əçkilmiş sözlərdən biri səhv verilmişdir. Onun düzgün variantını tapın:

1. There were never any secrets among my sister and me when we were growing up.

2. Dr.Lacey was the kind of administrator which tried to maintain high morale among his staff by encouraging open communication.

3. Samuel's new position as head of the editorial staff is certainly a more demanding one than Henry.

4. Susan was determined to leave the office by 4:30 for catching the early train home.

5. Those who had already purchased tickets were instructed to go to gate first immediately.

6. The cost of gasoline has raised tremendously in the last eight-month period.

7. It is important that you turned off the heater every morning before you leave for class.

Bilirsinizmi ?

- In France you shouldn’t sit down in a cafe until you’ve shaken hands with everyone you know.

- In Afganistan you should spend at least five minutes saying hello.

- In the Middle East you must never use the left hand for greeting, eating, drinking, or smoking. Also you should take care not to admire anything in your host’s home. They will feel that they have to give it to you.

- In Thailand you should clasp your hands together and lower your head and your eyes when you greet someone.

Lesson 3

Microeconomics

The word "micro" means small, and microeconomics means economics in the small.

The optimizing behavior of individual units such as households and firms provides the foundation for microeconomics.

Microeconomists may investigate individual markets or even the economy as a whole, but their analyses are derived from the aggregation of the behavior of individual units. Microeconomic theory is used extensively in many areas of applied economics. For example, it is used in industrial organization, labor economics, international trade, cost-benefit analysis, and many other economic subfields. The tools and analyses of microeconomics provide a common ground, and even a language, for economists interested in a wide range of problems.

At one time there was a sharp distinction in both methodology and subject matter between microeconomics and macroeconomics.The methodological distinction became somewhat blurred during the 1970s as more and more macroeconomic analyses were built upon microeconomic foundations. Nonetheless, major distinctions remain between the two major branches of economics. For example, microeconomist is interested in the determination of individual prices and relative prices (i.e., exchange ratios between goods), where as the macroeconomist is interested more in the general price level and its change over time. Optimization plays a key role in microeconomics. The consumer is assumed to maximize utility or satisfaction subject to the constraints imposed by income or income earning power. The producer is assumed to maximize profit or minimize cost subject to the technological constraints under which the firm operates. Optimization of social welfare sometimes is the criterion for the determination of public policy.

Opportunity cost is on important concept in microeconomics. Many courses of action are valued in terms of what is sacrificed so that they might be undertaken. For example, the opportunity cost of a public project is the value of the additional goods that the private sector would have produced with the resources used for the public project.

Vocabulary:

behavior - davranış, özünü aparma

investigate (v.) - tədqiqat aparmaq

to be derived - yaranmaq,

extensively - çox böyük, çox geniş

applied economics - tətbiqi iqtisadiyyat

economic subfields - iqtisadiyyatın ayrı –ayrı sahələri

distinction – fərq

subject matter - söhbətin mövzusu

to blur - qaranlıq qalmaq

to remain - qalmaq

exchange ratios - mübadilə tarifi

optimization – optimallaşma

utility – əhəmiyyət

satisfaction - qaneediji

constraints - məhdudlaşma

criterion – kriteriya

public policy - ijtimai siyasət

opportunity cost – alternativ xərjlər

to be sacrificed - qurban verilmək

to be undertaken - öhdəsinə verilmək

Exercises:

I. Verilmiş ifadələrin azərbayjan dilində ekvivalentini tapın:

optimizing behavior of individual units, industrial organization, labor economics, international trade, cost-benefit analysis, sharp distinction in both methodology and subject matter, subjective rate of substitution.

II. Aşağıdakı anlayışları ingilisjə izah edin:

a) microeconomics and macroeconomics

b) applied economics

c) optimization

d) opportunity action

e) utility maximization

III. Suallara javab verin:

1) What is microeconomics?

2) Where is microeconomic theory used?

3) What is "optimization"?

4) What is meant by "economics in the small"?

5) What economic phenomena are of microeconomists' attention?

IV. Aşağıdakı mövzularda söhbət aparın:

1) What areas of applied economics are of the most importance?

2) What distinction in methodology between macro-and microeconomics is the most distinctive?

V. Azərbayjan dilinə tərjümə edin:

1. 
   Under pure competition, the producer is a price taker who may sell at the going market price whatever has been produced.
   

2) The producer recognizes that price declines as sales are expanded.

3) The producer equates marginal cost of production to the going market price.

4) The consumer is free to choose whatever quantities income allows but has no influence over prevailing market prices.

5) The consumer then selects a bundle that gives the highest possible level of utility.

6) Microeconomic theory is used extensively in many areas of applied economics.

7) Their analysis are derived from the aggregation of the behavior of individual units.

VI. Nöqtələrin yerinə müvafiq sözönüləri yazın:

1)The consumer's income or income-earning power determines bundles are available to the consumer.

2)The consumer then selects a bundle that gives the highest possible level . . . utility.

3). . . few exceptions, the consumer is treated as a price taker-that is, the consumer is free to choose whatever quantities income allows but has no influence . . . prevailing market prices.

4)Profit is the difference . . . revenue and cost.

5). . . pure competition, marginal revenue equals price.

6) Consequently, the producer equates marginal cost . . . production . . . the going market price.

7)The producer is assumed to maximize profits subject . . . the technology given . . the production function.

Test yourself

VII. Nöqtələrin yerinə uyğun gələn sözləri yazın:

1.The company adopted an environmental policy in order to reduce the damage that may .. . from its various activities.

a) result b) cause c) due

2.We are proud of the fact that last year 25% of the company's total waste . . .

a)was recycling b) was recycled c)has been recycled

3. Many companies do research to . . . ways of reducing air and water pollution.

a)protest b)develop c)contribute

4.An environmental group organized a . . . against dumping of waste into the river.

a) supply b)measure c)protest

5.The firm attempted … its nearest competitor.

a)taking over b)to take over c) take over

6.We had to delay . . . the new product.

a)launching b) to launch c)launch

7.Every year we make a . . . to a wellknown wild life association.

a)supplement b)order c) contribution

8.The German "Die Grunen" party has a strong influence in green . . . everywhere.

a)politics b)services c) demands

9.We don't expect conditions . . . for some time.

a)to improve b) improving c) improve

YIII. Bunları bilmək maraqlıdır.

Why do woman live longer than men?

Women generally live about six years longer than men. Evidence suggests that boys are the weaker sex birth, which means that more die in infancy. Also women do not have as much heart disease as men. In terms of lifestyle, men smoke more than woman and thus more die of smoking related diseases. They drink more and are more aggressive in behaviour, particularly when driving cars, so they are more likely to die in accidents. Also, they generally have more dangerous occupations, such as building work.. The country with the highest life expectancy is Japan, where the average age for men is 76 and for women 82.

Lesson 4

The vision of Adam Smith

The 1776 the Scottish moral philosopher Adam Smith published the first edition of his monumental Inquiry into the Nature and Causes of the Wealth of Nations, and economics soon became an independent science.

Smith lived in an age when the right of rulers to impose arbitrary and oppressive restrictions on the political and economic liberties of their subjects was coming under strong attack throughout the civilized word. As other men of that time were arguing that democracy could and should replace autocracy in the sphere of politics, so Adam Smith argued that laissez–faire could and should replace government direction and regulation in economics.

The “should” was so mixed with the “could” portion of Smith’s analysis that much of his book seemed almost as much a political tract as work of science. What gave the book lasting significance was the Smith’s strong arguments that the economic activities of individuals would be more effectively coordinated through the indirect and impersonal action of natural forces of self-interest and competition than through the direct and frequently ill-conceived actions of government authorities. Smith opened minds to the existence of a “grand design” in economic affairs similar to that which Newton had earlier shown to exist in the realm of physical phenomena. The impact of Smith’s ideas upon his contemporaries was widespread and immediate. As one modern scientist observed: «Before Adam Smith there had been much economic discussion; with him we reach the stage of discussing economics”.

That Smith’s vision of the economy should ever have been considered original might seem strange to modern minds, but that would be because we now see economic phenomena in the light of his conception. As two leading scholars recently remarked, “The immediate common sense” answer to the question, “ What will an economy motivated by greed and controlled by a large number of different agents look like? ‘’ is probably: There will be chaos”. That is certainly the answer that would have been given by most of Smith’s contemporaries-before they read his book. The greatness of Smith’s accomplishment lies precisely in the fact that he unlike his predecessors, was able to think away extraneous complications and so perceive an order in economic affairs that common sense did not reveal.

It is one thing, of course, to say that Smith’s conception of economic phenomena is original, another to suggest that it corresponds to contemporary experience. According to Smith, society in its economic aspect is a vast concourse of people held together by the desire of each to exchange goods and services with others. Each person is concerned directly only to further his own self-interest, but in pursuing that aim each “is led by an invisible hand” to promote the interests of others. Forbidden by law and social custom to acquire the property of other people by force, fraud, or stealth, each person attempts to maximize his own gains from trade by specializing in the production of goods and services for which he has a comparative advantage, trading part of his produce for the produce of others on the best terms he can obtain. As a consequence, the “natural forces” of market competition–the result of each person attempting to “buy cheap and sell dear”–come into play to establish equality between demand and supply for each commodity at rates of exchange (prices).

The economic system (so Smith and later writers argued) is an essentially self regulating mechanism that, like the human body, tends naturally toward a state of equilibrium if left to itself.

Vocabulary:

arbitrary – 1) əsassız, inandırıjı olmayan 2) sərbəst

to impose – fikrini qəbul etdirmək

restriction – məhdudiyyət

to argue – mübahisə etmək

significance - əhəmiyyət

to conceive – fikrini dəyişmək

realm – sahə

impact - təsir

contemporar – müasir

predecessor - sələf

to perceive - qəbul etmək

reveal - aşkar etmək

desire - istək

forbidden - qadağan olunmuş

acquire (v.) - əldə etmək

fraud - saxtakarlıq, aldatma

stealth - oğurluq

to attempt – jəhd etmək

to obtain – əldə etmək

consequence - nətijə

equilibrium - bərabərlik

commodity - mal, məhsul, əmtəə

Exercises:

I. Suallara javab verin:

1.When did economics, according to the text, become “an independent science”?

2.In what “age” did Adam Smith live?

3.What was Smith’s point of view on the role of government in economics?

4.Why does the author refer to Smith’s work as a “political tract”?

5.What was Smith's great "accomplishment"?

6.What, according to the author, gave the book "lasting significance"?

7.What was Smith's vision of "society", «each person», «economic system»?

II. Verilmiş ifadələrin azərbayjan dilində ekvivalentini tapın:

The right of rulers, to impose arbitrary and oppressive restrictions, under strong attack, laissez-faire, strong arguments, effectively coordinated, natural forces, government authorities, physical phenomena, his vision, modern minds, in the light of this conception, unlike his predecessors, extraneous complications, to exchange goods, to acquire the property, to maximize his own gains from trade, a comparative advantage, as a consequence, at rates of exchange.

III. Jümlələri tamamlayın:

1.Economics, like every other intellectual discipline, …

2.Economics was first considered as a branch of …

3.By the beginning of the eighteenth century, the subject had last …

4.Adam Smith argued that laissez-faire could and should replace government direction and …

5.According to the author, Smith and Newton ….

6.According to Smith, people are motivated by …

7.Before Adam Smith there had been much economic discussion; with him we reach …

8.The immediate «common sense» answer to the question, «what will an economy motivated by”…

IV. Verilmiş söz və ifadələrdən jümlələr düzəldin:

Home economics, moral philosophy, economic affairs, independent science, laissez-faire, natural forces of self-interest and competition, society, rate of exchange (prices), branch of science, academic discipline, first edition, to acquire, authorities, government.

V. Altından xətt çəkilmiş sözü və ya ifadəni əvəz edə biləjək söz və ya söz birləşməsini tapın:

1.The building where our company is located has been just reconstructed.

a)our premises have b) our headquarters have c) our warehouse has

2.The company went bankrupt and had to sell its buildings and land that it owned.

a) liabilities b) debts c) property

3.The company's properties that can be easily sold for money were bought by its competitors

a)current liabilities b) net profits c) liquid assets

4.Last week we got a few urgent requests from our customers for the equipment, which we recently put on the market.

a) complaints b) orders c) invoices

5.We have just made an agreement which lets our company to use a few warehouses outside the town for 15 years with rent reviews every five years.

a)got the 15 -year lease for b)got the 15-year contract c)got the 15-year order

6.The sum of money we pay to the owner of the building, where our office is located, is very high.

a)capital for b) rent for c) interest for

7.The seminar was organized for young people who start their own business.

a)accountants b) entrepreneurs c)shopkeepers

8. The presentation of the Marketing Manager made a great impression on all the Board.

a)had a great impact b)had a great performance c)had a great strength

VI. Verilmiş javablardan birini əlavə edərək jümlələri tamamlayın:

1.One should be careful to check the grease and oil in ______ periodically.

a) their car b) one's car c) our car d) your

2.I wish I had not signed that contract without _______

a) first having consulted a lawyer b)not first having consulted a lawyer

c) first having consulted lawyer d) first having consulting a lawyer

3.He likes ______ classical music on the piano.

a)only to play b)to only play c)only playing d)to play only

4.The reason they are not coming is _______

a)because they are angry with the hosts b)that they are mad at the hosts

c)that they are angry with the hosts d)because they are mad at the hosts

5.I went to my adviser to ask him ________

a)what courses should I take b)should I take what courses

c)I should take what courses d)What courses I should take

6.Learning to do routine car maintenance oneself is often easier _____ competent people to do it.

a)as finding b) than to find c)than finding d) as to find

VII. Good manners:

I. Imagine you have arranged a meeting at four o’clock. What time should you expect your foreign business colleagues to arrive?

If they are German, they will be bang on time. If they are American, they’ll probably be 15 minutes early. If they’re British, they”ll be 15 minutes late, and you should allow up to an hour for the Italians.

II. The British are happy to have a business lunch and discuss business matters with a drink during the meal ; The japanese prefer not to work while eating. Lunch is a time to relax and get to know one another, and they rarely drink at lunchtime. The Germans like to talk business before dinner, the French like to eat first and talk afterwards.

Lesson 5

Market economies

A society may attempt to deal with the basic economic problems by allowing free play to what are known as market forces. The state plays little or no part in economic activity. Most of the people in the non-communist world earn and spend in societies which are still fundamentally market economies.

The market system of economic organization is also commonly described as a free enterprise or laissez-faire, or capitalism system. We shall use all these terms to stand for a market economy. Strictly speaking the pure market of laissez-faire system has never existed. Whenever there has been some form of political organization, the political authority has exercised some economic functions. It is useful, however, to consider the way in which a true market system would operate because it provides us with a simplified model, and by making modifications to the model we can approach the more realistic situations step by step.

The framework of a market or capitalism system contains six essential features. They are:

private property

freedom of choice and enterprise

self-interest as the dominating motive

competition

a reliance on the price system

a very limited role for government