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That will leave inflation higher than many had hoped. True, as raw energy prices stop rising, year-on-year
comparisons mean inflation will shrink almost mechanically throughout 2023. But some energy prices are
capped or set using long-term contracts, and so have yet to rise fully. In the rest of the economy, the energy-
price shock will continue to push prices up. Wages will increase to make up for lost real income, adding to
firms’ costs. Businesses will pass higher costs on to customers to protect profit margins. And rising prices for
services, which are largely unrelated to energy, will take time to slow.
Consumers and businesses will feel the brunt and start to hold back. In 2022, a year of post-covid recovery,
pent-up demand for sunny holidays and fancy restaurants boosted the economy. Industry benefited from
overflowing order books from the post-covid surge in demand and the supply-chain disruptions that came with
it. But in 2023, household budgets will face a double whammy: higher energy bills and increased mortgage
payments as interest rates remain high to fight inflation. Firms will also be squeezed, and so will cut back on
investment. All of this will tip Europe’s economy into recession.
Unlike in previous slumps, the global economy cannot come to Europe’s rescue. Export orders for its
industry will remain low during 2023, as higher interest rates, the global energy crunch and the strong dollar
weaken growth and demand throughout the world. Only once energy prices have come down, and inflation in
America has been brought under control, will global growth be able to support Europe’s recovery. But that will
not happen in 2023.
36 What is the main idea of this passage?
The disaster of inflation will be brooding over Europe throughout 2023.
The 2022 post-covid recovery will continue in 2023.
There are some innovative ways to stop inflation in Europe.
The global economy can come to Europe’s rescue.
37 According to this passage, what is the possible solution to the economic crisis in Europe?
People try to cut down their expenses and prevent themselves from joining public activities.
Scientists work out some good medication or vaccine to fight against the pandemic.
Energy prices can come down and inflation in America is brought under control.
The international community should encourage global tourism to boost world economy.
38 According to this passage, which of the following can be one cause for the current high inflation?
Oil-producing countries keep oil price high and make it not easy to get.
Export orders for the industry remain prosperous for a long time.
The prices for services are falling over the past three years.
Many people who are infected with the corona virus are unwilling to work.
39 Based on this passage, which statement is NOT true?
Unlike in previous slumps, the global economy cannot come to Europe’s rescue.
Europe’s economic recovery will not happen in 2023.
French nuclear plants will resume output, but not enough to bring power costs down much.
Rising prices for services, which are largely unrelated to energy, will soon slow down.
40 What is the best title for this passage?
The Scourge of Inflation for Europe.
The World’s Economy Ruined by the Pandemic.
High Interest Rates and Inflation.
New Energy Supply for Europe’s Recovery.