English for Economics_Unit 3_The Planned Economy

English for Economics

UNIT 3: THE PLANNED ECONOMY

M.A. Hoai Nguyen

​Objectives of the lesson

​After this lesson, you should be able to:

​1. understand and use some concepts related to the planned economy.

​2. Have some understanding of the planned economy.

​3. Complete a listening task about the life of a person living in a planned economy.

Poll

In a planned economy, the government decides how products are made.

• True

• False

Poll

In a planned economy, suppliers can sell anything that is in demand.

• True

• False

Poll

In a planned economy, a doctor should get paid more than a footballer.

• True

• False

Poll

Planned economies grow more slowly than market economies.

• True

• False

Poll

In a market economy, greater demand for something makes it cheaper.

• True

• False

Poll

Planned economies are difficult to run in countries with large populations.

• True

• False

​READING COMPREHENSION

​Read the text and choose True or False for the given statement.

Multiple Choice

1. In a planned economy, the government decides how products are made.

THE PLANNED ECONOMY

In many ways, the planned economy is the direct opposite of the market economy. In the market economy, the forces of supply and demand decide everything: what is produced, how much is produced, the methods of production and the price. In the planned economy, all of this is decided by the government. In every way that the market economy is free, the planned economy is controlled. Unfortunately, no economic system is perfect. If there was a perfect system, economists wouldn’t have anything to argue about! Market economics have their strenghts. But they have their problems, too.

• True

• False

Multiple Choice

2. In a planned economy, suppliers can sell anything that is in demand.

Planned economics try to provide solution to these problems. For example, the free market supplies the things that people want. However, what people want and what they need are not always the same. Fast food is always in demand, but it’s bad for us. In a planned economy, the government could decide to stop fast food restaurants operating in the market.

• True

• False

Multiple Choice

3. In a planned economy, a doctor should get paid more than a footballer.

A second problem with free markets is that producers always wat the highest price. Often the poor can’t afford things. In a planned economy, the government sets prices. They make sure that everyone can afford basic commodities. This is one way that planned economies try to share things equally. Another is to control how much people get paid. In a planned economy, workers’ wages depend on the service they provide to society. If people can live without their service, you get paid less. This is very diffirent from the free market. In the free market, someone’ salary mostly depends in the demand for his or her work.If people like what you do, you get paid more.

• True

• False

Multiple Choice

4. Planned economies grow more slowly than market economies.

Before 1900, there were few examples of planned economies. During the 20^th century, however, the planned economy became the standard for socialist governments like the USSR and China. These countries experienced amazing economic growth in a very short time. In a market economy, it takes a long time for big industries to grow from small companies. In a planned economy, however, huge industries can grow overnight. The government simply decides to spend money on factories and factories appear. Britain, for example, took centuries to develop her steel industry in a free market economy. China developed hers in a few decades.

• True

• False

Multiple Choice

5. In a market economy, greater demand for something makes it cheaper.

But, as we said, no economics system is perfect. The planned economy has many drawbacks is problems with supply. It is difficult for government of planned economies to know exactly how much to produce to meet demand. In a market economy, when the price of a commodity rise in demand. Companies then supply more to the market. This warning system doesn’t work in a planned economy because price is controlled by the government. The result is shortages.

• True

• False

Multiple Choice

6. Planned economies are difficult to run in countries with large populations.

When shortages happen, government can do two things: ration goods or raise prices. In this situation, people then start to hoard things, and the problem gets even worse. As the population gets bigger, shortages like this become more common. For this reason, China – once the world’s biggest planned economy – is rapidly moving towards another system: the mixed economy.

• True

• False

​

Read the text below about lif​e in a planned economy, and then answer the questions in the next slide.

This country! It’s getting worse every day. I just spent over an hour queuing in the rain for cooking oil. Can you believe it? An hour! Last week it was cheese. What next? I know, I know. At least we’ve got money to buy food... when there is some. And we’ve all got jobs. I mean, I don’t know anyone in my neighbourhood without work. But then everyone here works in the steel factory. I never wanted to work there, but what can I do?

There are no other jobs here. There are just the government industries. It’s so boring. There are no other job opportunities. Anyway, I suppose we

have enough money to live on. But the problem is there’s nothing to buy. There are no nice things in the shops — do you know what I mean? No

nice furniture, no CD players or digital cameras. We’ve got what we need... but not what we want!

Multiple Select

Rita lives in a country with a planned economy. Tick the problems she mentions in the list below. 

• 1. Food shortage

• 2. Low wages

• 3. Unemployment

• 4. Lack of career opportunities

• 5. Lack of luxury items