given time period.

S.:  It is something. But you should distinguish between nominal GNP and real

      GNP.

B.: What do you mean by that?

S.: Nominal GNP is the value of final output produced in a given period,

      measured in the prices of that period, whe­reas real GNP is the value of

      output measured in constant prices.

В.: Although prices serve as a convenient measure of market value, they can

      also distort our perceptions of real output.

S.: You are right. Imagine what would happen to our cal­culations of GNP if all

      prices were to double from one year to the next. Suppose, for example, that 

      the price of oranges rose from 20 cents to 40 cents, the price of bicycles to

      100 dollars and the price of airplanes to 2 million dollars each.

В.: How would such price changes affect this year's GNP?

S.: Obviously, the price increases would double the value of final output.

      Measured GNP would rise from 1.400 million dollars to 2.800 million

      dollars. Such a rise in GNP does not reflect an increase in the quantity of

      goods and services available to us. We are still producing the same

      quantities only the prices of those goods have changed.

В.: Now I understand, changes in GNP brought about by changes in the price

      level can give us a distorted view of economic reality.

S.: Surely we would not want to assert that our standard of living had improved

      just because price increases raised measured GNP from 1.400 million

      dollars to 2.800 million dollars.

В.: Thank you very much for your help. It's very useful in­formation.

S.: Not at all. See you later.

Unit 5. Negotiating

Active Vocabulary

A successful negotiating is when two persons (or teams) reach agreement on something which they are both happy with.  There shouldn’t be a winner and loser. The negotiating should end win-win situation. To be a good negotiator takes a lot of skills and preparation. You need to: