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Title: Azerbaijan State Economic University


1
Azerbaijan State Economic University
  • ENGLISH ON ECONOMICS

2
Lesson 1What 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 life, 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 problemfew 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 assuredstarvation is a
    very real prospect for millions of human beings.
  • 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 selfsufficient 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 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.

3
Vocabulary
  • apply (v.) - ?????? ?????, ???????? ?????
  • completely ????????, ??????????
  • depend on (v.) - ????? ?????
  • directly - ??????????
  • effort ????
  • equally - ???? ????????, ???????
  • essentially - ??????? ??????
  • examine (v.) - ??????, ????????, ??????? ?????
  • inhabitant - ?????
  • means - ?????????
  • opposite - ???, ???????
  • poverty ?????????
  • provide (v.) ????? ?????
  • remote - ????, ?????????? ??????? ???????
  • satisfy (v.) wants - ???????? ??????
  • self-sufficient - ???????? ???????? ????? ???????
  • to solve a problem - ???????? ???? ?????
  • skill - ???????, ???????, ??????????
  • standard of living - ??????? ?????

4
Answer the Questions
  • 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?

5
?????????? ?????? ????????? ??????????? ?????
???????? ?????
  • a) to look at b) to look out
    c) to look up to
  • d) to look for f) to look after
    g) To look up
  • h) to look through i) to look down on j)
    to look forward to
  • k) to look to l) to look into
    m) to look over
  • The police the past record of the suspect.
  • the drawer to see if I could find my keys.
  • The house the south.
  • Weve always our parents.
  • Could you help me to my glasses, please
  • We are seeing them again.
  • Why is it wrong to those who are less fortunate
    than ourselves?
  • I like to walk out and the stars at night.
  • for the cars turning in your direction.
  • Who is going to your correspondence while you
    are away?
  • the words in the dictionary, and try to
    remember their spelling.
  • Ill your carelessness this time, but be more
    careful in future.

6
Lesson 2What is macroeconomics?
  • The word macroeconomics means economics in the
    large. The macroeconomists 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.
    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 disposable 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 over ambitions
    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.

7
Vocabulary
  • total production - ????? ????????????
  • total employment - ????? ?????????
  • the rate of change of overall prices - ???
    ??????????? ??????? ?????
  • the rate of economic growth - ???????? ???????
    ?????
  • broad aggregate ????? ????????
  • consumers ?????????????
  • individual households - ????? ?????????????
  • layoffs - ????? ?????????
  • economic activity - ???????? ?????????
  • determinants - ????????????
  • to reconcile - 1) ????????? ?????? 2)
    ??????????
  • target - 1) ?????? 2) ????, ????????
  • value ?????
  • meaningful totals - ?????? ?????????
  • national income - ????? ?????
  • personal disposable income - ??????? ?????????
    ????? ????? ????? ?????
  • business cycle ???????? ???????
  • attainment ?????????
  • maintenance ????????

8
Vocabulary
  • meaningful totals - ?????? ?????????
  • national income - ????? ?????
  • personal disposable income - ??????? ?????????
    ????? ????? ????? ?????
  • business cycle ???????? ???????
  • attainment ?????????
  • maintenance ????????
  • price stability ?????? ?????????
  • to eliminate inflation entirely ????????????
    ???????? ?????? ?????????
  • induce (v.) ???????????????
  • recession 1) ?????????? 2) ?????? ????????
  • labor shortages - ???? ?????????? ???????????
  • labor force ???? ???????
  • reduction of unemployment- ?????????? ???????????

9
Answer the Questions
  • 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?

10
?????????? ?????? ????????? ??????????? ?????
???????? ?????
  • a) out e) back i) in
  • b) off f) together k) ones foot in it
  • c) up with g) down l) on
  • d) up h) aside m) before
  • If you put the boy all those tall children, he
    looks even shorter.
  • She put her sewing when the telephone rang.
  • Its going to rain. Wed better put our things
    and go indoors.
  • Put the book where you found it when you have
    finished reading it.
  • Your suggestion will be put the board of
    directors at the next meeting.
  • He put his heavy suitcase on the ground and
    rested for a few minutes.
  • May I put a word or two?

11
Lesson 3Microeconomics
  • 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 an 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.

12
Vocabulary
  • behavior - ????????, ????? ??????
  • investigate (v.) - ???????? ???????
  • to be derived - ????????,
  • extensively - ??? ?????, ??? ?????
  • applied economics - ??????? ????????????
  • economic subfields - ?????????????? ????????
    ????????
  • distinction ????
  • subject matter - ???????? ???????
  • blur (v.) - ???????? ??????
  • remain (v.) - ??????
  • exchange ratios - ???????? ??????
  • optimization ????????????
  • utility ?????????
  • satisfaction - ???? ?????
  • constraints - ???????????
  • criterion ?????????
  • public policy - ??????? ???????
  • opportunity cost ?????????? ???????
  • to be sacrificed - ?????? ????????

13
?????????? ?????? ????? ????? ??????? ?????
  • 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 well known
    wild life association.

14
Lesson 4The 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
    world. 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 laissezfaire could and should replace
    government direction and regulation in economics.
  • 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
    Smiths 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 Smiths 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
    Smiths contemporaries-before they read his book.
    The greatness of Smiths 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.

15
The vision of Adam Smith
  • It is one thing, of course, to say that Smiths
    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. As a
    consequence, the natural forces of market
    competitionthe result of each person attempting
    to buy cheap and sell dearcome 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.

16
Vocabulary
  • arbitrary 1) ???????, ?????????? ??????? 2)
    ???????
  • to impose ??????? ????? ????????
  • restriction ???????????
  • to argue ???????? ?????
  • significance - ?????????
  • to conceive ??????? ????????
  • realm ????
  • impact - ?????
  • contemporary ??????
  • predecessor - ????f
  • perceive (v.) - ????? ?????
  • reveal (v.)- ????? ?????
  • desire - ?????
  • forbidden - ??????? ???????
  • acquire (v.) - ???? ?????
  • fraud - ???????????, ???????
  • stealth - ???????
  • attempt (v.) ???? ?????
  • obtain (v.) ???? ?????

17
Answer the Questions
  • 1. When did economics, according to the text,
    become an independent science?
  • 2. In what age did Adam Smith live?
  • 3. What was Smiths point of view on the role of
    government in economics?
  • 4. Why does the author refer to Smiths work as a
    political tract?
  • 5. What was Smiths 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?

18
Lesson 5Market 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

19
Vocabulary
  • according to ??????? ??????
  • appearance ????? ????
  • argue (v.) ???????? ?????
  • arise (v.) ??????? ??????
  • bargain (v.) ???????? ??????
  • backward ???? ??????
  • broad ?????
  • carry out (v.) ?????? ????????
  • custom ????
  • determine (v.) ????? ?????
  • develop (v.) ??????? ????????
  • devise (v.) ??????? ????????
  • distant ??????
  • distribution ?????
  • division ???????
  • exist (v.) ?????? ?????
  • equal pay ??????? ??????
  • fairly ???????
  • familiar ?????

20
Answer the Questions
  • 1. How are the production problems (What? and
    How?) solved in traditional societies?
  • 2. What does economic society present itself for
    an economist?
  • 3. What broad categories can different economic
    systems are grouped into?
  • 4. What methods of production and distribution do
    people in traditional societies use?
  • 5. What part does tradition play in advanced
    countries?

21
Lesson 6 Evolution of the marketing concept
  • Until the early twentieth century, business was
    directed mainly toward the production of goods.
    Consumer demand for manufactured products was so
    great that manufacturers could almost sell
    everything they produced. Business had a strong
    production orientation, in which emphasis was
    placed on increased output and production
    efficiency. Marketing was limited to taking
    orders and distributing finished goods.
  • In the 1920s, production began to catch up
    with demand. Now producers had to direct their
    efforts toward selling goods to consumers whose
    basic wants were already satisfied. This new
    sales orientation was characterized by increased
    advertising, enlarged sales forces, and selling
    techniques. Manufacturers produced the goods they
    expected consumers to want, and marketing
    consisted primarily of taking orders and
    delivering goods, along with personal selling and
    advertising.
  • During the 1950s, however, business people
    started to realize that even enormous advertising
    expenditures and the most thoroughly proven sales
    techniques were not enough. Something else was
    needed if products were to sell as well as
    expected. It was then that business managers
    recognized that they were not primarily producers
    or sellers but rather were in business of
    satisfying customers wants. Marketers realized
    that the best approach was to adopt a customer
    orientation-in other words, the organization had
    to first determine what customers need and then
    develop goods and services to fill those
    particular needs.
  • This marketing concept is a business
    philosophy that involves the entire organization
    in the process of satisfying customers needs and
    achieving the organizations goals. All
    functional areas-research and development,
    production, finance, human resources, and, of
    course, marketing are viewed as playing a role in
    providing customer satisfaction.
  • Finally, the firm must always obtain
    marketing information-this time regarding the
    effectiveness of its efforts. Can the product be
    improved? Is it being promoted properly? Is it
    being distributed efficiently? Is the price too
    high? The firm must be ready to modify any or all
    of its marketing activities on the basis of his
    feedback.

22
Vocabulary
  • Marketing concept ????????? ????????????
  • Assess (v.) ??????? ?????, ???????????????
  • Satisfy (v.) ???? ?????, ?????????? ??????
  • Production orientation ???????? ??????????,
    ??????
  • Production efficiency ?????????? ????????????
  • Finished goods ??? ??????
  • Catch (v.) up with demand ??????? ??????????
  • Basic wants ??????? ??????????
  • Sales forces ????? ?????????
  • Sales techniques ????? ?????????
  • Customers wants ??????????????? ???????????
  • Customer satisfaction ??????????????? ????
    ????????

23
Answer the Questions
  • How was marketing limited untill the early
    twentieth century?
  • When did production begin to catch up with
    demand?
  • Did advertising play a certain role at that time?
  • When did business managers recognize that they
    were not primarily producers or sellers but
    rather were in the business of satisfying
    customers wants?
  • What are the disadvantages of Production
    Orientation as compared to Customer Orientation?

24
Lesson 7Major Marketing Functions
  • Exchange Functions All companies such as
    manufacturers, wholesalers, and retailers buy and
    sell to market their merchandise.
  • Buying includes such functions as obtaining raw
    materials to make products, knowing how much
    merchandise to keep on hand, and selecting
    suppliers.
  • Selling creates possession utility by
    transferring the title of a product from seller
    to customer.
  • Physical Distribution Functions These functions
    involve the flow of goods from producers to
    customers. Transportation and storage provide
    time utility, and place utility, and require
    careful management of inventory.
  • Transporting involves selecting a mode of
    transport that provides an acceptable delivery
    schedule at an acceptable price.
  • Storing goods is often necessary to sell them at
    the best selling time.
  • Facilitating Functions These functions help the
    other functions take place.
  • Financing helps at all stages of marketing. To
    buy raw materials, manufacturers often borrow
    from banks or receive credit from suppliers.
    Wholesalers may be financed by manufacturers, and
    retailers may receive financing from the
    wholesaler or manufacturer. Finally, retailers
    often provide financing to customers.
  • Standardizing sets uniform specifications for
    products or services.
  • Grading classifiers products by size and quality,
    usually through a sorting process. Together,
    standardization and grading facilitate
    production, transportation, storage, and selling.
  • Risk taking even though competent management
    and insurance can minimize risks as a constant
    reality of marketing because of such losses as
    bad debt expense, obsolescence of products, theft
    by employees, and product-liability lawsuits.
  • Gathering market information is necessary for
    making all marketing decisions.

25
Vocabulary
  • Major ????, ???????
  • Function ????????
  • Manufacturer ??????????
  • Wholesaler ?????? ?????
  • Retailer ????????? ??????? ?????? ????
  • Merchandise ?????, ???
  • Obtain (v.) ???? ?????
  • Raw materials ??????
  • Keep (v.) on hand ???? ????????
  • Supplier ??? ????????
  • Distribution ?????
  • Involve (v.) ???? ?????
  • Flow of goods ????? ?????
  • Storage ????? ??????????
  • Careful management ??????????? ???????? ????
  • Provide (v.) ????? ?????
  • Acceptable ????? ??????
  • Delivery schedule ???????? ?????????? ???????
  • Storing ????????

26
Vocabulary
  • Facilitating function ??????? ????????
  • Stage ???????
  • Borrow (v.) ???? ?????
  • Finally ???????
  • Standardizing ?????????????
  • Uniform specifications ?????????? ?????????????
  • Grading ???????? ??????? ?????????
  • Facilitate (v.) ?????????????
  • Risk taking ???? ??????
  • Insurance ???????
  • Loss ????
  • Bad debt expense ????? ???????? ????? ????
  • Obsolescence ????? ??????????
  • Theft ???????
  • Product-liability ????? ???????????? ????????
    ????
  • Law-suit ??????? ???????
  • Gathering ???????

27
Answer the Questions
  • What does buying include?
  • Why is storing goods necessary?
  • Why is risk taking a constant reality of
    marketing?
  • Why is gathering market information necessary?

28
Lesson 8Channels for consumer products
  • Producer to consumer. This channel, which is
    often called the direct channel, includes no
    marketing intermediaries. Practically all
    services, but very few consumer goods, are
    distributed through the direct channel.
  • Producers sell directly to consumers for several
    reasons. They can better control the quality and
    price of their products. They dont have to pay
    for the services of intermediaries. And they can
    maintain closer ties with consumers.
  • Producer-retailer-consumer channel. A retailer is
    a middleman that buys from producers or other
    middlemen and sells to consumers. Producers sell
    directly to retailers can buy in large
    quantities. This channel is most often used for
    products that are bulky, such as furniture and
    automobiles, for which additional handling would
    increase selling costs. It is also the usual
    channel for perishable products, such as fruits
    and vegetables, and for high-fashion products
    that must reach the consumer in the shortest
    possible time.
  • Producer-wholesaler-retailer-consumer channel.
    This channel is known as the traditional channel,
    because most consumer goods (especially
    convenience goods) pass through wholesalers to
    retailers. A wholesaler is a middleman that sells
    products to other firms. These firms may be
    retailers, industrial users, or other wholesalers
    when its products are carried by so many
    retailers that the producer cannot deal with all
    of them.
  • Producer-agent-wholesaler-retailer-consumer.
    Producers may use agents to reach wholesalers.
    Agents are functional middlemen that are
    compensated by commissions paid by producers.
    This channel is used for products that are sold
    through thousands of outlets to millions of
    consumers. Often, these products are inexpensive,
    frequently purchased items. For exemple, millions
    of consumers buy candies, which are sold through
    numerous outlets. Some candies are sold through
    agents to wholesalers who, in turn, supply them
    to retail stores and vending machines. This
    channel is also used for highly seasonal products
    (such as Christmas tree decorations and by
    producers that do not have their own sales forces.

29
Channels for consumer products
  • Multiple channels for consumer goods. Often a
    manufacturer uses different distribution channels
    to reach different market segments. A
    manufacturer uses multiple channels, for exemple,
    when the same product is sold to consumers and
    industrial users. Multiple channels are also used
    to increase sales or to capture a larger share of
    the market. With the goal of selling as much
    merchandise as possible, market their tires
    through their own retail outlets as well as
    through independent service stations and
    department stores.
  • CHANNEL FOR INDUSTRIAL PRODUCTS. Producers of
    industrial products generally tend to use short
    channels. Here are the two that are most commonly
    used.
  • Producer to industrial user. In this direct
    channel, the manufacturers own sales force sells
    directly to industrial useres. Heavy machinery,
    large computers, and major equipment are usually
    distributed in this way. The very short channel
    allows the producer to provide customers with
    expert and timely services, such as delivery,
    machinery installation, and repairs.
  • Manufacturer to agent middleman to industrial
    user. This channel employed by manufacturers to
    distribute such items as, accessory equipment,
    small tools, and standardized parts. The agent is
    an independent intermediary between the producer
    and the user. Generally, agents represent
    sellers.

30
Vocabulary
  • Direct channel ??????? ?????
  • Intermediary ????????
  • Tie ?????
  • Middleman ????????
  • Handling ??????, ??????
  • Bulky ??? ??? ?????, ????
  • Perishable product ??? ????? ???? ??????
  • High fashion ?????? ????
  • Convenience goods ???????? ??????? ???????
  • Wholesaler ?????? ??????? ?????? ????
  • Deal (v.) with ?? ??????, ???? ?????
  • Commission 1) ?????????? 2) ????????? ?????
  • Candy ??????
  • Numerous ????????
  • Outlet ??????? ????
  • In turn ?? ??????????
  • Vending machines ????? ?????????
  • Decorations ?????
  • Multiple channels ????? ????????

31
Vocabulary
  • Tire ???, ?????
  • Provide (with) ?????? ?????
  • Timely services ???????? ?????? ??????, ??????
  • Installation ???????????
  • Repairs ?????
  • Accessory equipment ??????? ????????????
  • Small tools ????? ???????
  • Relevant factors ??????? ?????????
  • Production capability ????????????
  • Buying pattern ???? ?????????
  • Evaluate (v.) ???????????????

32
???????? ???? ???????? ???? ?? ?? ??????? ????
??? ??????? ??????? ?????
  • 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

33
Lesson 9Advertising in modern marketing
  • It is not possible to live in any modern western
    country, and remain unware of advertising. In the
    streets, in buses and trains, even, with the
    commercial television, in the privacy of our own
    homes, the advertisers thrust their claims upon
    us. The level of artistic and technical skill
    displayed in advertisements is often very high.
    The use of colour and design is so forceful that
    it has a great impact on our behavior.
  • Advertising and public relations.
  • Public relations officers and public relations
    counselors help corporations and individuals to
    maintain acceptable and attractive images.They
    perform a valuable service for their employers
    and sometimes for the public. Public relations
    activities are not considered as advertising and
    will not be discussed further in this book.
  • The functions of advertising.
  • Advertising affects the consumer in
    the following ways
  • Information. A distinction is often made
    between informative and persuasive advertising.
    Informative advertising announces a product and
    gives potential buyers the details they need. If
    consumers are to exercise freedom of choice,
    informative advertising is necessary so that they
    can know what goods are available and where they
    can be bought.
  • Persuasion. Human memory is short and failable
    and repetition is necessary to keep customers
    aware of a product. Excessive repetition,
    however, is intended to persuade, not to inform.
    The borderline is indefinable and all
    advertisements contain both persuasive and
    informative elements. The advertising of many
    consumer goods is almost entirely persuasive in
    character. The information given is small, but
    all possible pressure is put on the consumer to
    buy the advertised product rather than other
    goods.
  • Maintenance of demand. It is arguable that
    advertising is necessary to maintain demand at a
    sufficiently high level to provide full
    employment.

34
Advertising in modern marketing
  • Without the prodding of the advertisers,
    consumers would settle for a lower standard
    of living and far less energy would be put into
    the task of increasing material well-being.
  • Creating mass markets. The use of mass-production
    methods often results in lower unit costs. Large
    scale production requires large markets, however,
    and forceful advertising and sales promotion can
    provide lower costs and eventually lower prices.
  • Quality. The fact that a good has been widely
    advertised may compel (?????? ?????) a
    manufacturer to maintain high standards of
    quality.
  • Advertising and competition.
  • Advertising may be used as a weapon of
    competition, particularly in a situation where
    there are only a few sellers, each of whom is
    trying to increase his share of the market. It
    may also serve to reduce competition and to reach
    a degree of monopoly power. Advertisements that
    try to persuade consumers that there is no
    substitute for their product are attempting to
    create a sub-market in which they will be free
    from competitive pressures.

35
Vocabulary
  • Advertising ??????
  • Pervasiveness ???????? ?????????
  • Be unaware (of) ????????
  • Thrust (v.) claims (upon) ?????????? ?????????
  • skill ?????, ???????
  • forceful ???????
  • impact ?????
  • influence (v.) ????? ?????
  • behavior ????????
  • public relations ??????? ????????????
  • officer ?????? ??????
  • councellor ???????, ??????????
  • maintain (v.) ??????? ?????
  • acceptable ????? ??????
  • image ?????
  • valuable service ???????? ??????
  • employer ??????, ??? ???????
  • activities ?????????
  • be considered ????? ???????

36
Vocabulary
  • persuasion ??????
  • human memory ????? ???????
  • failable ??????????
  • keep (v.) aware (of) ???????????
  • borderline ?????? ?????
  • indefinable ?????-???????
  • entirely ??????????
  • maintenance of demand ???????? ?????
  • it is arguable that ?????????? ??????
  • employment ?????????
  • podding ??????
  • well-being ????? ????
  • result in (v.) ??????? ????????
  • forceful advertising ??????? ??????
  • sales promotion ??????? ???????
  • compel (v.) ?????? ?????
  • compettition ???????
  • weapon ??????, ?????
  • particularly ????????

37
Answer the Questions
  • In what situation may advertising be used as a
    weapon of competition?
  • Can it (advertising) also serve to reduce
    competition?
  • What is the benefit for competitors to have a
    submarket free from
  • competitive pressures?
  • What are advertisement attempting to create when
    they try to persuade consumers that there is no
    substitute for their product?

38
Lesson 10Finance and financial system
  • Finance is the provision of money at the time
    when it is needed. It is a system of monetary
    relations leading to formation, distribution and
    use of money in the process of its turnover
    between economic entities. The financial system
    is the network of institutions through which
    firms, households and units of government get the
    funds they need and put surplus funds to work.
  • Savers and borrowers are connected by
    financial intermediaries including banks, thrift
    institutions, insurance companies, pension funds,
    mutual funds, and finance companies. Finance in
    an economic system comprises two parts public
    finance and finance of economic entities. Public
    finance is the provision of money by the
    community through taxes to be spent by national
    and local benefit. It is a collective term for
    the financial flows and also the financial
    institutions of the public sector.
  • Public finance has the following four
    functions 1) the provision of essential
    services 2) the encouragement or control of
    particular sectors of the economy 3) the
    implementation of social policy in sectors of the
    economy
  • 4) the implementation of social policy in respect
    of social services, and 5) the encouragement of
    the growth of economy as a whole.
  • The major instrument of any financial system
    is the budget. In a market-oriented economy, the
    budget is the most important tool for achieving
    national priorities and goals through the
    allocation and distribution of resources, and the
    maintenance of a stable macroeconomic
    environment. The budget is an estimate of
    national revenue and expenditure exceeds the
    revenue the budget has a deficit. Revenue and
    expenditure forecasting is the most fundamental
    step in the process of budget preparation.
    Adequate planning of recurrent and capital
    expenditure depends critically on an accurate
    forecast of revenue availability. The
    determination of the expected overall deficit in
    the public sector and therefore the macroeconomic
    impact of fiscal policy requires accurate
    forecast of tax collection and expenditures.
  • Budget preparation involves a number of
    institutions. The Ministry of Finance is the
    central coordinating institution in charge of
    compiling and presenting the budget. It has major
    input from ministries in various sectors of the
    economy and the state tax bodies.

39
Vocabulary
  • Public finance ?????? ?????????
  • Provision ???????
  • Monetary relations ??? ????????
  • Turnover ??? ??????????
  • Economic entity ???????? ???????
  • Surplus ?????
  • Saver ?????? ????????
  • Intermediary ?????
  • Thrift institution ?????? ????????????
  • Pension fund ?????? ?????
  • Benefit ???????, ?????
  • Financial flows ??????? ?????
  • Encouragement ??????
  • Implementation ?????? ???????
  • Social policy ?????? ???????
  • Goal ??????, ????????
  • Maintenance of a stable macroeconomic environment
    ????? ????????????? ?????????? ??????? ????????

40
Vocabulary
  • Estimate ??????, ?????
  • Fiscal year ??????? ???
  • Forecasting - ????????????
  • Fundamental step ???? ?????
  • Adequate planning ???????? ?????????
  • Tax collection ????? ??????
  • Extrabudgetery and reserve funds ???????? ?????
    ?? ?????? ???????
  • Availability ????
  • Accurate forecast ????? ???????
  • It has major inputs from ?, ???? ??????? ????
  • Tax bodies ????? ?????????????
  • Subnational governments ??????? ?????????

41
Answer the Questions
  • 1. What is finance and financial system?
  • 2. What parts does finance comprise?
  • 3. What functions does public finance perform?
  • 4. What is countrys budget?
  • 5. What does the process of budget preparation
    include?
  • 6. What is the budget organization of the
    Azerbaijan Republic?

42
Lesson 11International Monetary Fund
  • The purpose of International Monetary Fund is to
    promote international monetary cooperation
    through a permanent institution that provides the
    machinery for consultation and collaboration on
    international monetary problems. Specifically,
    the function of IMF is to facilitate the
    expansion and balanced growth of international
    trade, to promote orderly and stable foreign
    currency exchange market, and to contribute to
    balance of payments adjustment. To further these
    objectives, the IMF monitors members
    macroeconomic policies, makes financial resources
    available to them in times of balance of payments
    difficulties, and provides them with technical
    assistance in a number of areas.
  • Much of the IMFs work is centered on annual
    consultations with each member country to ensure
    that its national policies in the area of
    economic growth, price stability, financial
    conditions and exchange rates take into account
    their consequences for the world economy and
    avoid unfair exchange policies. To ensure
    compliance with these basic tenets, the Fund is
    empowered to exercise firm surveillance over the
    exchange rate policies of member countries.
  • History.
  • The IMFs charter, embodied in the articles of
    Agreement, was agreed upon at the International
    Monetary and Financial Conference held at Bretton
    Woods, New Hampshire, in July 1944. In December
    1945 the required member of countries had
    ratified the agreements, and in March 1946 the
    first meeting of the Board of Governors was held.
    The IMF commenced operations on March 1, 1947, at
    its headquarters in Washington, D.C. Other
    milestones in the history of the IMF include
  • - May 1948, first drawing of foreign exchange by
    a member country
  • - January 1962, adoption of the general
    agreements to borrow (GAB), which constituted an
    important supplement to the IMFs financial
    resources

43
International Monetary Fund
  • - February 1963, establishment of the
    compensatory financing facilities, designed to
    assist countries that experience a temporary
    shortfall in export earnings
  • - June 1969, inception of the buffer stock
    financing facility, which can be used to finance
    commodity stockpiles
  • - July 1969, adoption of the first amendment to
    the Articles of Agreement, providing for the
    allocation of special drawing rights (SDRs) to
    member countries, with the first allocation of
    SDRs made on January 1,1970
  • - September 1974, implementation of the extended
    fund facility, which provides medium-term
    assistance to member countries seeking to
    overcome structural balance of payments problems
  • - April 1975, establishment of an oil facility to
    help oil-importing countries finance the increase
    in petroleum prices
  • - February 1976, establishment of the Trust Fund,
    funded by revenues from gold sales, to aid
    developing countries with low interest
    assistance
  • - April 1978, adoption of the second amendment to
    the articles providing for liberalized exchange
    arrangements, the legalization of floating
    exchange rates, steps designed to eliminate the
    role of gold in the international monetary
    system, and enunciation of the goal to make the
    SDR the central international monetary reserve
    asset
  • - August 1988, expansion of the compensatory
    financing facility to include a contingency
    financing element under which additional
    financing may be provided to support adjustment
    programs that might be thrown off track by
    adverse exogenous developments.

44
Vocabulary
  • permanent ?????
  • machinery ?????? ????????
  • collaboration ??????????
  • specifically ?????? ??????
  • facilitate (v.) ????? ????? ?????????????
  • orderly ??????????
  • adjustment ???????????
  • monitor (v.) ??????? ?????
  • annual ?????
  • avoid (v.) ??????
  • compliance ??????? ????? ????
  • tenet ???? ???????
  • empower (v.) 1) ????? ?????? 2) ????? ??????
  • surveillance ??????? ???? ???????? ????
  • embodied ???????? ??????? ?????? ???????
  • ratify (v.) ???????????? ?????
  • commence (v.) ????????
  • milestones ???????? ???????
  • shortfall ???????????

45
Vocabulary
  • buffer ??????
  • stockpile ?????????
  • amendment ???????
  • allocation 1) ???????, ??????? 2) ??????????
  • overcome (v.) ???? ?????, ????? ??????
  • trust fund ?????? ?????
  • enunciation ????? ??????
  • contingency ?????
  • track 1) ?? 2) ???
  • exogenous ?????? ?????????? ?????? ??? ???????

46
Answer the Questions
  • 1. What is the function of International Monetary
    Fund?
  • 2. What do IMF monitors members do?
  • 3. What are the most important milestones in the
    history of IMF?
  • 4. When was IMF established?
  • 5. What are the daily affairs in IMF?

47
Lesson 12Azerbaijans relations with the
International Monetary Fund
  • Azerbaijan joined the IMF on September 18, 1992.
    Following the break up of the Soviet Union,
    Azerbaijans economy suffered from serious
    macroeconomic imbalances. Real Gross Domestic
    Product declined by around 60 percent between
    1991 and 1995, by which time high inflation had
    eroded real incomes, the exchange rate had
    weakened and international reserves were nearly
    depleted.
  • During the mid- and late 1990s the Azeri
    authorities implemented a comprehensive
    stabilization program supported by a series of
    financial arrangements with the IMF. Fiscal and
    credit policies were tightened, while a number of
    structural reforms were introduced, mainly in the
    areas of exchange and trade liberalization, the
    privatization of small scale enterprises, and the
    privatization of agricultural land. The result
    was strong economic growth, drive largely by
    foreign investment in the oil and oil-related
    sectors, and combined with low inflation, as the
    budget deficit was reduced and monetary policy
    was directed at stabilizing the exchange rate and
    restoring confidence in the manat.
  • The authorities have also made substantial
    progress in economic reforms in a number of
    areas. These include, the restructuring and
    merger of the four state-owned banks and the
    strengthening of banking supervision the
    establishment of the Chamber of Accounts the
    passing of a modern Tax Code and a Budget System
    Law the creation of a transparent Oil Fund and,
    significant improvements in customs and tax
    administration. Initial steps have also been
    taken in energy sector reform, for example, the
    privatization of the countrys electricity
    distribution network. Finally, the authorities
    have recently launched the Poverty Reduction
    Program consistent with a medium term expenditure
    framework and a prioritized public investment
    program.
  • The IMF is currently negotiating with the
    authorities in an effort to conclude the second
    review of the PRGF program and is urging the
    government to take additional measures to
    strengthen the management of Oil Fund resources,
    to ensure the maintenance of macroeconomic
    stability, and its asset management rules. While
    the country is implementing economic reforms the
    progress is evident, however the IMF believes
    much remains to be done to encourage growth in
    the non-oil sector and to alleviate poverty. The
    authorities need to press ahead with critical
    structural reforms in a number of areas,
    including improving the financial discipline of
    the energy sector, restructuring the Cabinet of
    Ministers, and implementing civil service and
    pension reforms.
  • The IMF has provided Azerbaijan with technical
    assistance in a number of areas, including public
    expenditure management, tax and customs
    administration, bank supervision, central bank
    management, monetary policy advice, a statistical
    support in balance of payments, government
    finance, money and banking, and national accounts
    and price statistics. In addition, the IMF
    Institute has offered a variety of training
    courses and seminars to Azerbaijani officials in
    economic policy and related disciplines.

48
Vocabulary
  • Purchase ????, ????
  • Loan ????????, ????, ??????
  • Agreement ???????
  • Arrangement ??????? ?????
  • Growth facility ??????? ??????????
  • To break up ?????? (??????????), ????????????
  • To suffer ??????? ??????, ?????? ??????
  • Serious imbalances ????? ?????????????,
    ???????????
  • Decline (v.) ????? ??????, ???????
  • High inflation ?????? ??????????
  • Deplete (v.) ???? ?????, ???? ???? ?????????
  • To be tightened ????????????, ????????
  • Trade liberalization ????????? ??????????????
  • Small scale enterprise ????? ????????
  • monetary policy ??? ????????
  • restore (v.) confidence ???-?????? ??????????
    ??????? ????? ?????
  • strengthening of banking supervision ?????
    ??????????? ???????????????
  • tax code ????? ????
  • transparent Oil Fund ?????? ???? ?????

49
???????? ???? ???????? ???? ?? ?? ??????? ????
??? ??????? ??????? ?????
  • 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

50
Lesson 13World Bank.
  • The World Bank is the Worlds foremost
    intergovernmental organization concerned with the
    external financing of the economic growth of
    developing countries. The official title of the
    institution is the International Bank for
    Reconstruction and Development (IBRD).
  • Before recommending a Bank loan, the staff of the
    Bank must be reasonably satisfied that the
    productivity of the borrowing country will be
    increased and that the prospects for repayment
    are good. A country must be judged creditworthy.
    Engineering investigations are frequently carried
    out to determine the probable relation of a
    proposed project to benefits and costs.
    Increasingly, however, the Bank has shifted
    somewhat away from project lending (e.g., for a
    highway or a port) it has become concerned with
    education and other human services, the
    environment, and through structural adjustment
    loans, the modification of governmental policies
    that are thought to have impeded long-run growth.
    The Bank has also paid increasing attention to
    the evaluation of previous lending. Recently,
    moreover, it has acceded to the requests of the
    American secretary of the treasury to help to
    ease the huge, outstanding, largely commercial
    bank debt.
  • Voting power in the Bank is determined by the
    size of each member nations subscription.
    Subscriptions, in turn based on a formula that
    takes into account such variables as the value of
    each nations foreign trade and its total output.
    Ultimate power, through weighted voting, rests
    with the Board of Governors of the Bank. The
    governors meet annually in September. The
    day-to-day affairs of the Bank are determined
    however by executive directors who live
    permanently in Washington D.C. they hire a
    president, who, in turn, hires a staff. By
    tradition, rather than law, the president of the
    Bank is an American, usually a banker, proposed
    by the president of the United States.
  • Because of the size of their subscriptions, five
    nations the United States, Japan, Germany, the
    United Kingdom and France are entitled to
    appoint executive directors the remaining
    seventeen directors are elected by some
    combination of the votes of the other nations.
    There are 156 member nations, but, with the
    independence of the Baltic States and the
    devolution of the Soviet Union into separate
    republics, the membership could increase to over
    170, thereby including all the independent
    nations in the world.
  • The Soviet Union was one of the forty-four
    governments whose representatives signed the
    original Bretton Woods Pact it chose not to join
    the Bank or the Fund when these organizations
    were formally incorporated in 1946. Poland and
    Czechoslovakia joined the Bank and the Fund
    initially but withdrew when the cold war began in
    earnest and a loan to Poland was blocked by the
    United States.

51
Vocabulary
  • foremost ??????? ??????
  • reasonably ??????, ???????????????, ?????
  • prospects for repayment ?????? ?????????
    ???????????
  • carry (v.) out ?????? ????????
  • shift (v.) ????????
  • lending ???? ?????
  • accede (v.) ??????????, ???? ?????
  • ease (v.) ?????????????
  • subscription ?????
  • ultimate power ??????? ???
  • day-to-day affairs ???????? ?????
  • appoint (v.) ????? ?????
  • devolution ???????, ?????
  • in earnest ????? ???????

52
Answer the Questions
  • 1. What is the procedure of getting a loan from
    the World Bank?
  • 2. What is the World Bank?
  • 3. How is the voting power determined?
  • 4. What are the latest trends in the policy of
    the World Bank?
  • 5. What countries are the largest subscribers of
    the World Bank?

53
Lesson 14World Bank in Azerbaijan
  • Azerbaijan Republic became a member of the World
    Bank in September 1992 and of the International
    Development Association in March 1995.
  • A limited Country Assistance Strategy (CAS), a
    major document guiding the Banks work in any
    beneficiary country was discussed by the Board in
    1995, at the time the Bank groups first
    operation was presented to the Board, and a full
    CAS was discussed in 1996. Since then, the World
    Bank Group has emphasized support to Azerbaijans
    reform program aimed at the transition to a
    market economy macroeconomic stabilization and
    the related management of oil inflows dealing
    with the problem of refugees and internally
    displaced persons rehabilitation of
    infrastructure (water, irrigation, highways
    education and health measures to attract foreign
    investment in the energy sector public sector
    reforms, reviving growth and generating
    employment in agriculture and, more generally, in
    the non-oil economy.
  • As the underlying thrust of World Bank assistance
    is poverty alleviation, the Banks new Country
    Assistance Strategy for Fiscal Years of 2003-2005
    will be focused on achieving the objectives of
    the Poverty reduction Strategy Paper (PRSP) known
    in Azerbaijan as state Program on Poverty
    Reduction and economic Development that has been
    prepared in close consultation with development
    partners, including the Bank and UNDP. The broad
    elements of the new Country Assistance Strategy,
    presently under preparation, are likely to
    include assistance in the following areas
  • - Managing the oil boom
  • - Development of the non-oil economy and
    generation of employment on a sustainable basis.
  • - Improved quantity and quality of delivery of
    key social and economic services critical to
    poverty reduction.

54
World Bank in Azerbaijan
  • Major impact of the World Banks assistance to
    the country
  • - Management of the Oil Fund has been receiving
    assistance as a central element of the reform
    program supported by Second Structural Adjustment
    Credit. The preparation of the Oil Funds budget
    is carried out in consultation with the Ministry
    of Finance and endorsed by the Supervisory Board
    of the Fund, prior to approval by the President.
    Oil Fund expenditures take place within a
    medium-term expenditure framework and use of oil
    Fund resources is audited and published
    regularly.
  • Farms have been privatized and land
    redistributed. With Bank
  • assistance, 99 percent of the land of former
    state and collective farms has been privatized
    and distributed among 860.000 families. Real
    growth in agriculture was over 10 percent per
    year in 2000 and 2001.
  • Critical infrastructure is being rehabilitated.
    The deterioration of the
  • supply of irrigation water to 90.000 hectares of
    land has been stopped through works under the
    Irrigation Project. The water supply system of
    Baku has improved and the gas distribution system
    rehabilitated.
  • The resettlement and rehabilitation of internally
    displaced persons
  • (IDPs) and refugees is being supported. A Joint
    Program for the Reconstruction and resettlement
    of the Liberated Areas (Terter, Fizuli, Agdam
    regions) of Azerbaijan has rebuilt infrastructure
    and encouraged resettlement of IDPs and refugees.
    The Banks portion of this joint program has
    directly benefited 20.000 persons. The Bank is
    also supporting a Social Fund which mainly
    finances water supply, local roads and civil
    works that now reach 35.000 beneficiaries.
  • The quality of education is being improved. World
    Bank assistance, 20
  • pilot schools and several other education
    institutes have been rehabilitated and
    appropriately equipped in 5 regions. The national
    curriculum is being revised in the primary
    grades and more than 2.000 teachers have received
    some form in training.
  • The environmental management system has been
    strengthened. Under
  • the urgent Environment Investment Project the
    State Committees of Ecology, Geology and
    Hydrometry, and the Forestry and Fisheries
    services, have been merged into a new Ministry of
    Environment and Natural resources, strengthening
    overall the environmental management system.

55
Vocabulary
  • Beneficiary country ?????? ?????? ????
  • Support (v.) ???????????
  • Aim (v.) ??????? ?????
  • Stabilization ??????????
  • Oil inflows ???? ??
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