Areas of Economics

There are three main approaches to economics: microeconomics, macroeconomics, and development economics.

Microeconomics focuses on individual economic units. The economic behavior of either individual consumers or firms or industries is studied by microeconomics. The distribution of products and income among all these units is also analyzed by microeconomics. In this field of economics individuals are considered both as suppliers of labour and as consumers of goods. Firms are also studied both as suppliers of products and as consumers of labour and capital.

There was a long period in the 19^th and early in the 20^th centuries when microeconomic questions dominated in economics. In the20th century economists’ interests in forces that affect income, employment and prices grew. They considered economy in all its relationships.

The term “macroeconomics” was first used in the 1930s. The world depression that began in 1929 required the study of such macroeconomic questions as achievement of full employment and economic growth by means of proper government policies. This area of economics was developed by the British economist John Keynes.

The third main field of economics, that is, development economics, studies the factors of economic growth and how these factors are used by governments in order to achieve high living standards.

Ответьте на вопросы к тексту.

1. What does microeconomics study?

2. Whose economic behaviour is studied by microeconomics?

3. How are individuals considered by microeconomics?

4. When did microeconomics dominate in economics?

5. When did economists’ interest in macroeconomics grow?

6. How is economy considered in macroeconomics?

7. What stimulated the development of macroeconomics?

8. What problems were analyzed in the1930s?

9. What is studied by development economics?

Вставьте слова из активного словаря.

1. Goods and services … by government decisions in the Soviet Union.

2. Agricultural products are … bought by consumers … processed into other goods.

3. Not many workers … in the depression years.

4. There is no … agricultural policy in Russia now.

5. Many factors affect the … of income in an economy.

6. The government … a proper policy to achieve high living standards.

7. We know they have great … in their work.

8. People use their … to buy food, clothes, and other things.

9. The … are very high in some European countries.

Употребите глагол в утвердительной или отрицательной форме.

1. The term “macroeconomics” (to use) in the 19^th century.

2. The British economist J.M. Keynes (to develop) microeconomics. He (to write) a book on macroeconomic problems in 1935.

3. Macroeconomics (to consider) economy in all its relationships.

4. Microeconomics (to analyze) distribution of products and income among consumers and firms.

5. There (to be) an economic depression early in the 1930s. It (to require) the development of economic theory.

6. Development economics (to be) one of the three main approaches to economics.

7. High living standards (to achieve) by means of proper government policies.

8. Foreign firms (to dominate) tobacco industry in Russia in the1990s.

9. Russia’s economy (to grow) fast in the 1990s.

10. Prices for fuel and energy (to grow) in this country now.

11. Resources (to use) in order to produce goods and services.

Составьте предложения из следующих слов.

1. approach, in, 19^th, the, was, the, microeconomics, century, economics, to, main.

2. economic, are, microeconomics, individual, by, considered, units.

3. both, economics, macroeconomics, and, includes, microeconomics.

4. by means of, future, possible, is, to, situations, economic, economic, it, predict, analysis.

5. prices, affected, resources, of, by, of, goods, and, are, prices, labour.

UNIT 4