Give extensive answers to the questions using the following phrases below.

In order to grow/expand (get bigger) and thrive/prosper (do well / be successful) many companies want or need the following:

- low inflation, so prices do not go up

- low interest rates, so the company can borrow money without paying a lot of interest

- economic and political stability (things remain steady and stable and there are no sudden changes in the economic and political situation)

- a healthy/strong economy (in good condition), and not an economy in recession (in a period of reduced and slow business activity)

- tax cuts (tax reductions / lower taxes), so they can keep more of their profit. This often depends on government expenditure, e.g. the government will not be able to reduce taxes if public expenditure continues to rise.

1. What is the current inflation rate? How has it changed over recent years?

2. If you borrowed $10 000 from your bank, what would the interest rate be approximate ?

3. What is the state of the economy at the moment? Is it strong? Is it in recession? What changes have been observed in recent years?

4. Do you think businesses are optimistic about the future?

5. Has the government reduced company taxes or personal taxes in the last twelve months?

6. Has public expenditure risen or fallen in the last twelve months?

7. Is Ukraine attractive to foreign businessmen and investors?

17. a) Scan through the article on economic policy and prospects of economic development. What are the achievements of the policy? Are the forecasts favourable?

Economic policy

The Chancellors policies are designed to combine sustainable growth with low inflation to create jobs and raise living standards year after year. Achieving this depends on a responsible approach to public finances and making the economy work better.

Economies work best when inflation is low and stable. Interest rates are set to achieve an underlying rate of 2 1/2 per cent or less and then keep it there year after year.

A commitment to responsible public finances means keeping public borrowing on a clear downward path, in line with the objective of moving back towardsbalance over the medium term.

Within a stable macro-economic framework, making the economy work better depends on making markets work more flexibly. The Government has pursued this through privatisation, deregulation, labour market reform, education reform, training reform, helping the unemployed back to work and tax changes to sharpen incentives and promote enterprise.

Economic prospects

Growth

The economy is now well into its fifth successive year of economic growth. Growth is expected to reach 2 1/2 per cent in 1996 and rise to 3 1/2 per cent in 1997. The IMF and OECD expect the UK to be the fastest growing major European economy in both 1996 and 1997.

Inflation

Recent inflation performance has been the best for almost half a century. Underlying inflation went up to 3.3 per cent in October, but this increase is expected to be temporary and inflation is forecast to resume a downward path to meet the Governments target of 2 1/2 per cent or less.

Unemployment

Unemployment has fallen to its lowest level for over 5 1/2 years. The UK has a greater proportion of its peope in work and a lower rate of unemployment than any other major European country. Unemployment has fallen by nearly one million since December 1992 and now stands at 2,030,000.

Consumer expenditure

Consumer confidence is at its highest level for more thaneight years. Consumer expenditure is forecast to rise by 3 per cent this year and by 4 1/4 per cent in 1997.

Business investment

Business investment is increasing. It is expected to rise by 6 per cent in 1996 and 9 1/4 per cent next year.

Current account

The current account is in its strongest position fornine years, reflecting strong export growth and income from overseas investments. It is expected to remain close to balance

Date: 2016-04-22; view: 1466