Economic literacy and society

There are two senses in which increasing economic literacy contributes greatly to the functioning of our society. First, a free market economy works well only when the participants — producers, consumers, savers, investors — have the information they need to make intelligent decisions. People need to understand what banks do and how to deal with them; how insurance works and how to think about how much they need; why saving is important and what instruments are available for saving; what in-vesting means, how to do it and what the risks are; and the concept of investing in themselves and how to get a good job. Most important, participants in the economy need to know how to think about the economic choices they face and how to get the information they need to make intelligent decisions.

Second, democracy works well only when citizens participate, vote and make their views known to public officials. In this respect, we seem to be living with a paradox. On the one hand, the revolution in communications means that citizens have access to far more information on public issues than ever before. Radio, television and the Internet are flooding all of us with news, analysis, opinions and debate on public issues, large and small.

Citizens have more education and more ways of communicating their views to public officials than they had in the past. They can write, call, visit or email their members of parliament or their local legislative representative. Citizen opinions are constantly being sought in polls or on talk radio. On the other hand, public issues, especially economic issues, seem to have become more complex and harder to understand. Globalization and rapid advances in technology mean that events in remote parts of the world that we do not know much about can affect economic life in Russia, Great Britain or the United States, and vice versa. Markets in distant places are intimately interrelated; huge amounts of money move around the world in seconds. The interactions and interrelations of markets and economic institutions in different parts of the globe are complex and unpredictable.

Adding to the complexity of the issues is the fact that we now have a whole new class of experts, sometimes known as policy wonks, with charts and equations, statistics and data sets, models and printouts. They are supposed to help the public understand issues better and make more intelligent decisions. But they often talk in a jargon-filled specialized language of their own and sometimes seem more concerned with impressing each other on talk shows, at legislative hearings or in public forums, than with enlightening the public.

Exercise 1. Answer the following questions:

1. Is it important to be economically-literate?

2. Should economics become a compulsory subject at school?

3. How to increase people’s economic awareness?

4. What are the advantages and disadvantages of globalization?

5. What is democracy? When does it work well?

6. When does a free market economy work well?

7. Why have economic issues become more complex and harder to understand?

8. What adds to the complexity of issues?

9. What constitutes the fundamental challenge to the problem?

10. Why are interrelations between global markets characterized as unpredictable?

Exercise 2. Give Russian equivalents to the following English ones:

1. economic literacy

2. a free market economy

3. a producer

4. an investor

5. insurance

6. citizens

7. public issues

8. a poll

9. advances in technology

10. a straightforward problem

Exercise 3. Translate the sentences into English:

1. Необходимо повышать экономическую грамотность общества.

2. Конкуренция играет значительную роль в странах со свободной рыночной экономикой.

3. Демократическое обществ – это общество, в котором граждане имеют возможность свободно выражать свои взгляды.

4. Глобализация и развитие технологий оказывают большое влияние на национальные рынки.

5. Свободная рыночная экономика эффективно функционирует лишь в том случае, если все участники рынка – производители, потребители, инвесторы обладают достаточными знаниями для принятия рациональных решений.

6. В условиях демократии граждане активно участвуют в голосованиях, имеют возможность свободно и активно выражать свое мнение.

7. Радио, телевидение и Интернет предоставляют огромное количество информации экономического характера, включающей в себя экономические новости, анализ экономических ситуаций, мнения экспертов.

8. Глобализация и стремительное развитие технологий способствуют установлению более тесных экономических отношений между странами. Подобное экономическое сближение может быть опасным, например, в случае возникновения кризисной ситуации на том или ином мировом рынке.

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