Name : Muhartsal Raihan

NIM : 2102055003

Class : 1A Ekonomi Islam

3rd Meeting

Reading Comprehension

Different Economic Systems

Economic system is any system that involves the mechanism for production, distribution, and exchange
of goods apart from consumption of the goods and services within the different entities. There are differ
ent kinds of economic systems and not all economic systems are the same. The economic system of the
USA differs greatly from the system of the USSR (Russia).

The American system is based on private enterprise with private ownership of the means of production .
In this system, the capital is privately owned and distributed. The distribution mechanism is left to the m
arket to allocate the resources. The state is expected to have regulatory mechanism in place and ensure
that the market corrections are supervised and the state steps in whenever there is a crisis of liquidity or
other market failures.

On the other hand, the Russian system is communistic and is based upon the principles of Karl Marx, the
19th century political economist. The state takes upon itself the allocation and production functions as w
ell as distribution of the goods and services. In this system, capital cannot be privately held and there is c
ommunal ownership or what is known as ‘Communism”.

Britain is similar to the USA. It has an economic system based on private enterprise and private supplies
of capital, which can be defined as surplus income available for investment in new business activities.
Property in both the US and Britain can be owned by individual citizens and these citizens exercise
considerable economic freedom of choice. They can choose what they want to do and how they want to
earn their living, but are not of course entirely free to do as they wish. They must obey the law.
Otherwise, however, they can use their time, money and effort as they wish.

(managementstudyguide.com)

Reading Comprehension

Exercise 1: Answer the following questions.

1. What is economic system?

Economic system is any system that involves the mechanism for production, distribution, and exchange
of goods apart from consumption of the goods and services within the different entities.

2. How many kinds of economic systems? What are they?

There are 3 kinds of economic system, american, russian, and britain.

- The American system is based on private enterprise with private ownership of the means of production .
In this system, the capital is privately owned and distributed.

- The Russian system is communistic and is based upon the principles of Karl Marx, the 19 th century
political economist. The state takes upon itself the allocation and production functions as well as distribu
tion of the goods and services

- Britain is similar to the USA. It has an economic system based on private enterprise and private
supplies of capital, which can be defined as surplus income available for investment in new business
activities.

3. What is the role of government in capitalistic economic system?

The goverment is expected to have regulatory mechanism in place and ensure that the market correctio
ns are supervised and the state steps in whenever there is a crisis of liquidity or other market failures.

4. What is the role of government in communistic economic system?

The goverment takes upon itself the allocation and production functions as well as distribution of the go
ods and services.

5. What must citizen of Britain do to the law?

They must obey the law. Otherwise, however, they can use their time, money and effort as they wish.

Exercise 2. Give a brief explanation.

1. Capitalistic economic system: Capitalistic economy system is based on private enterprise with
private ownership of the means of production , the capital is privately owned and distributed .

2. Communistic economic system: Communistic economy system is based upon the principles of
Karl Marx, capital cannot be privately held and there is communal ownership or what is known as ‘Com
munism”.

3. Mixed economic system: Mixed economy system is a system that combines aspects of both
capitalistism and socialitism. A mixed economic system protects private property and allows a level of
economic freedom in the use of capital, but also allows for governments to interfere in economic
activities in order to achieve social aims.

Vocabulary

Exercise 1: Find the right synonym.

1. Mechanism : (C) a. comply with the command

2. Private enterprise: (B) b. free ownership

3. Step in: (D) c. instrument

4. Capital;(E) d. interfere

5. Obey: (A) e. asset

Exercise 2. Complete the sentences with the noun and verb forms provided.

1. Sales/sells

A. An annual report includes the sales figures of the company for current fiscal year.

B. An auto dealership sells cars, trucks, vans, and sometimes recreational vehicles.

2. Distribution/distribute

A. Some companies hold exclusive distribution rights for specific products.

B. Factory representatives distribute products to wholesalers and retailers.

3. Production/produces

A. How efficiently a company produces its products will in large measure determine i
ts success.

B. The production of high-technology instruments is one of the most rapidly growing

industries in the 1990s.

4. Conversion/convert

A. When traveling from country to country, people convert one currency to another.

B. The production process often involves the conversion of raw materials into finishe
d products.

Grammar

Exercise 1: Underline subject, verb and object.

1. The American system is based on private enterprise with private ownership of the means
of production.

Subject: The American System

Linking verb: is

Object: The means of production

2. The distribution mechanism is left to the market to allocate the resources.

Subject: The Market

Verb: allocate

Linking Verb: is

Object: the resources

3. The state takes upon itself the allocation and production functions.

Subject: The state

Verb: takes

Object: the allocation and production functions

4. Property in both the US and Britain can be owned by individual citizens.

Subject: Individual citizens

Verb: owned

Object: Property

5. They can choose what they want to do and how they want to earn their living.

Subject: They

Verb: choose, earn, do

6. The science of economics is based upon the facts of our everyday lives.

Subject: The science of economics

Verb: lives

7. They try to describe the facts of the economy in which we live.

Subject: They

Verb: try,describe

Object: the facts of the economy

8. We need food, clothes and shelter.

Subject: We

Verb: need

Object: food, clothes, shelter

9. Economists focus on the way in which individuals, groups, business enterprises,

and governments seek to achieve.

Subject: Economists

Verb: focus, achieve

Object: individuals, groups, business enterprises, and governments

10. Macroeconomics deals with modern explanations of national income and
employment.

Subject: Macroeconomics

Verb: deals

Object: modern explanations

Exercise 2: Which of the two sentences below shows correct English word order.

1. She speaks well English

She speaks English well (correct)

2. Sometimes I play tennis on Sunday (correct)

I play sometimes tennis on Sunday

3. I did quickly my homework

I quickly did my homework (correct)

4. He drew for his mother a picture

He drew a picture for his mother (correct)

5. I did my homework in a hurry (correct)

In a hurry I did my homework

Exercise 3: Scrambled words.

1. Things-of-couple-I-want-to-buy-a

 I want to buy a things of couple

 I want to buy a couple of things

2. Same-hotel-we-at-are-the-staying-both

 We are staying at both same the hotel

3. The-loud-do-too-is-you-think-music-?

 Do you think the music is too loud?

4. Pronounce-it-hard-to-my-name-is-?

 My name is hard to pronounce it?

 Is my name hard to pronounce it

5. A-is-street-this-there-cheap-hotel-on

 There is a cheap hotel on this street

6. To-be-going-are-party-at-you-Megan’s

 You are be going to party at megan’s

 You are going to be at megansparty

7. Get-out-air-let’s-some-go-fresh-and

 Let’s go out and get some fresh air

8. Why-cars-all-so-are-the-moving-slowly-?

 Why all the cars are moving so slowly?

 Why are all the cars moving slowly

9. No-show-see-to-the-we-time-have

 We have no time to see the show

10. To-a-want-does-see-go-she-movie-?

 Does she want to go see a movie?