The larger a machine and the more numerous its parts. the greater likelihood of a breakdown and the more expensive to repair. What has been said about market forces and management was necessarily oversimplified. The economies of modern industrial nations are large and very complex. To be sure, there is management, and there are market forces at work, but there are also many other factors that help or hinder economic function.

In modern industrial societies’ governments play a large role. There is a great amount of regulation, most of it meant for the protection of the public. All regulations affect the way businesses operate, often increasing their costs and reducing their profits. Lower profits, in turn, reduce the amount of money which is known as working capital that a company can use for expansion. Auto emission standards, for instance, have had a significant impact on the manufacture and pricing of automobiles. Other government policies such as taxation, budget deficits, and regulation of the money supply have an effect on how much money is available for people to spend on goods and services.

International crises and other conditions also affect the working of an economy. A severe frost in Brazil can ruin a coffee crop and raise the price of that commodity. War can cut off the supply of such resources as petroleum, chromium, or copper. In the United States environmental protests have slowed the development of nuclear energy capacity and the mining of vast tracts of protected land. Weather affects agriculture, a hot, dry summer can damage the wheat crop; floods can destroy thousands of acres of crops suddenly; and insect pests can devastate cropland with a rapid onslaught.

People’s attitudes also have an impact on the marketing of goods. Health-conscious individuals, for example, may stop smoking, curtail their intake of alcohol, and eat less of certain kinds of food. Advertising affects what people buy, and it can create a market where none existed. Style and fashion are significant for many consumers.

There are other economic problems that are more difficult to understand. For centuries economies have been subject to periods of prosperity followed by periods of decline. Although periods of prosperity can be explained rather easily, the reasons for panics, recessions, and depressions are of a complex nature. So many factors contributed to the Great Depression of the 1930s, for example, that no economist has ever been able to account for all of them.

Because the causes of decline are uncertain, the remedies are equally uncertain. In the late 20th century all industrialized societies through their governments have tried to stabilize economies, keep them prosperous, and reduce unemployment. None of the remedies has worked to the extent that was hoped. How economies work and what remedies can be found to keep them operating efficiently are the tasks of economists, who must work together with businessmen and politicians.

31. The chief purpose of the passage is ____.

A. to review the factors that affect economic operation

B. to explore the causes of periodic economic decline

C. to discuss the role governments play in modern industrialized

D. to propose remedies for correcting economic recessions

32. The "machine" in the first sentence of Paragraph 1 is comparable here to ____.

A. the political system of a nation

B. the economy of a nation

C. the market force

D. the government of a nation

33. The example of auto emission standards is here used to make it clear that ____.

A. it is harmful for a government to interfere with economic matters

B. state policies tend to lower profits and discourage investment

C. regulation may affect business operation by increasing the cost

D. most regulations are not meant for the protection of the public

34. Why is it difficult to explain the onset of economic decline?

A. Because no economist knows everything.

B. Because it always follows a period of prosperity.

C. Because there are too many reasons behind it.

D. Because it is hard to predict when it will be coming.

35. The author believes that, to find efficient ways of keeping economy going, economists have to ____.

A. find the exact causes for economic decline

B. find ways to fight unemployment

C. work out all the factors that lead to economic prosperity

D. cooperate with businessmen and politicians
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