General economics
A Supply and demand
Look at the words in the list, and then use them to complete the text. Note that there are 12
words in the list but only 10 blanks in the text.
level – side – law – return – competitive – resources – sacrifice – part – market – hand – offer
– services
The … of demand in economics says that the higher the price of goods or … the less will be
the demand for them. This is because a higher price requires a greater … on the … of the
consumer.
The law of supply, on the other …, says that the higher the price of goods or services, the
more of them will be produced or offered. This is because … are most profitably put to work
where the … are greatest.
It is obvious that any price other than a … price which equates supply and demand will cause
… pressures between producers and consumers. These will have the effect of forcing the
price back to its market … . This is known in economics as equilibrium.
B Inflation
Find words or phrases in the text below to fit the descriptions and definitions.
There is no doubt that inflation is one of the most serious economic problems for many
countries, especially those in the Third World. It can have several causes. Frequently, it is the
result of increases in the prices of the raw materials which industry needs to produce goods.
These cost increases are passed on to the customers, who have to pay more for the products
that they buy in the shops. To compensate for the resulting loss of buying power, workers
ask for wage rises which in turn increase the production costs and lead to a further rise in
the cost of living.
When the pay and prices inflation spiral has started, it is often accompanied by a loss of
confidence in the value of paper money. The value of the local currency falls and it costs
more to import goods and raw materials from other countries. Prices increase even more
and the vicious circle is complete.
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The natural substances from which something is made: …
To give to someone else; to transfer: …
To make up for the loss of or damage to something: …
The amount of money required to buy the goods and services that we need to live: …
The opposite of profit or gain: …
Faith and trust in something: …
Money used in a particular country: …
A series of unpleasant events in which cause and effect change places in a never
ending sequence: …
C Bank services
Complete the text. For each of the missing words you have been given the initial letter and
the number of letters the word contains.
Banks offer their customers two types of a _ _ _ _ _ _ : a checking or c _ _ _ _ _ _ _ account
on which no interest is paid, and a d _ _ _ _ _ _ or savings account on which interest is
earned.
It is possible to borrow money from the bank in the form of a l _ _ _ or an o _ __ _ _ _ _ _ .
For both of these services the bank charges interest.
The t _ _ _ _ _ _ _ of money from one bank account at another can take place by standing o
_ _ _ _ (for regular payments and on condition that the amount to be paid is the same each
time), or by direct d _ _ _ _ , when the creditor is given permission to book the money
directly from the debitor’s account, or by bank giro.