5.5. Match the following terms (a–f) with their definitions (1–6):
a) classical unemployment; b) seasonal unemployment; c) cyclical unemployment; d) structural unemployment; e) frictional unemployment; f) voluntary unemployment
1. … exists in trades or occupations where work fluctuates according to the time of year.
2. … exists when people choose not to work, often because they can’t find jobs that pay enough money.
3. … is temporary unemployment that arises when people voluntarily leave a job to look for another one.
4. … is the loss of jobs caused when the wages are too high. 5. … occurs during recessions, when the overall demand for
labour declines.
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6. … occurs when the skills of available workers don’t match the jobs vacant.
5.6. Discuss the following questions in groups. Be ready to write an essay on one of these problems:
1. What is the inflation rate in your country at present?
2. Can you give current examples of double and triple-digit inflation?
3. What is your government’s policy at the moment? Does it seem to be more concerned with price stability or with reducing unemployment?
4. What can you suggest to improve economic situation in your country?
UNIT X. SECURITIES
1. SHARE CAPITAL AND DEBT
Text 1
Read the text. Remember the definitions and the vocabulary in bold type:
a) Capital
Capital
is
the
money
that
a
company
uses
to
operate
and
de-velop.
There
are
two
main
ways
in
which
a
company
can
raise
cap-ital,
that
is,
find
the
money
it
needs:
it
can
use
share
capital
or
loan
capital,
from
investors.
These
are
people
or
organizations
who
invest
in
the
company;
they
put
money
in
hoping
to
make
more
money.
-
(Share capital)
Loans
SHAREHOLDERS
COMPANY
LENDERS
(Dividends)
|
|
Repayments and interest
|
|
|
|
b) Share capital
Share capital is contributed by shareholders who put up money and hold shares in the company.
Each share represents ownership of a small proportion of the company. Shareholders receive periodic payments called divi-dends, usually based on the company's profit during the relevant period. Capital in the form of shares is also called equity.
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A venture capitalist is someone who puts up money for a lot of new companies.
c) Loan capital
Investors can also lend money, but then they do not own a small part of the company. This is loan capital, and an investor or a financial institution lending money in this way is a lender. The company borrowing it is the borrower and may refer to the money as borrowing or debt. The total amount of debt that a company has is its indebtedness.
The sum of money borrowed is the principal. The company has to pay interest, a percentage of the principal, to the borrower, whether it has made a profit in the relevant period or not.
d) Security
Lending to companies is often in the form of bonds or de-bentures, loans with special conditions. One condition is that the borrower must have collateral or security: that is, if the borrower cannot repay the loan, the lender can take equipment or property, and sell it in order to get their money back. This may be an asset which was bought with the loan.