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3. Аill in the gaps using the correct form of the verbs that are used.
1. So we’ve agreed on the price.
Now if you pay cash,
A. no one will recognize the name of
your products.
2. It’s a fact of life. If you don’t adver-
tise,
B. you’ll lose the sale.
3. It’s well-known that if you give your
client too much time to think,
4. According to the public relations people, if you sponsored a charity,
D. you wouldn’t be able to contact head
office so easy.
5. Times are hard. If it saved my job,
E. you’d improve your reputation.
6. I know they can be a nuisance but if
you didn’t have a mobile phone.
F. I’d take a cut in salary.
1. If I (borrow) 3000, how much (I pay back)?
2. If you (take) a three-year option, that (be) 106 per month.
3. If you (die), (your family be able to) pay back this loan?
4. So if anything (happen) to you, you (not have to) worry about repayments.
4. Рut the verbs into the correct forms. Which sentences are realistic and
which are hypothetical?
1. What (you do) if it (rain) this weekend?
2. What (you do) if another company (offer) you a job with a much bigger
salary?
3. What (you do) if your boss (ask) you to work late tomorrow?
4. What (you do) if you (find) a burglar in your house after work this even-
ing?
5. What (happen) to your company if the price of oil (double)?
5. Match the two halves of the sentences.
6. Put the verbs in brackets into the correct forms.
1. If share prices continue to fall, we (lose) a lot of money.
2. If we (pay) the transport costs, would you reduce the unit price?
3. If the men call off the strike, we (negotiate).
4. If our competitor (go) bankrupt, we’ll increase our marker share?
5. If we (change) the packaging, we’d sell more.
6. If we asked for easy credit terms, they (not agree).
7. If a firm (offer) me a bribe to get an important contract, I’d ask ‘How
much’?
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SOCIAL AND BUSINESS SKILLS
Bargaining
Why negotiate? Discuss which of these statements you most agree with.
Explain why.
1. In any negotiation, you should always try to get the most for yourself.
2. A negotiation is an opportunity to create a long-term business relationship.
3. A negotiation should bring benefits to both sides.
Handling a difficult customer. Patrick Ellis is an international expert on
sales. Here are some of his ideas on handling a difficult situation with a customer.
Situation
You are selling a product for $1800, but your customer only wants to pay
$1500.
Here are three things that you could say to the customer.
1. ‘If I were in your position I would also want to get the best possible price.
But we’ve both in business to make a profit and we’re only talking about a $300
difference. If you meet me half way, I’ll work out a nice little deal for you. What do
you sat?’
2. ‘This is crazy. If we were criminals we would try to help each other. But
we’re not. We’re honest businesspeople and we can’t reach an agreement. Now I
want to help you, so this is what I’ll do. I’m going to take a coin out of my pocket
and toss it. You can call “Heads” or “Tails”. If you call correctly I’ll give you the
product for $1750. but if you call incorrectly you’ll pay me the whole price. How
does that sound to you?’
3. ‘If you make me a reasonable offer, say $1750 then we can shake hands. If
I accepted anything less I wouldn’t make a profit. If you don’t want to pay that
much for it then I’m sorry but I won’t sell to you.’
1. Discuss these points.
1. Which of the three approaches do you think would be most effective? Give
your reasons.
2. Can you think of any other ways of dealing with the situation? Decide what
you would say to this customer.
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2. Look at the three solutions offered by Patrick Ellis and underline the
А
B
1. Offers $8000.
2. Refuses offer.
3. Offers $8350. Condition: free car
radio is included.
4. Refuses offer.
5. Offers $8450. Condition: free car
radio and a two-year guarantee.
6. Agrees to a free car radio and twoyear guarantee.
7. Offers $8500. Condition: He can
take the car that day.
8. Agrees.
eight conditional sentences that are used. Which of these sentences describe
hypothetical situations?
3. Listen and fill in the blank spaces with the correct forms of the verbs.
1. If you (buy) this copier from me today I (give) you a two-year guarantee
and 15% off the normal purchase price.
2. If I (buy) a new photocopier now my bank manager (go) crazy.
3. What (you say) if I offered you six months’ interest-free credit?
4. If you give) me a two-year guarantee and 15% off and six months’ interest-
free credit I (take) one.
4. Sales roles. A You to buy a car. Its price is $9000 but you only want to pay
$8000. B You are a secondhand car salesman. Look at these instructions, work out
what you will say and then have the conversation.
MAKE UP YOUR OWN SITUATION OF BUSINESS BARGAINING
READING
I
Functions of a Central Bank
Every country’s central bank watches economic data carefully and adjust the
money supply in an effort to keep the economy headed in the right direction. If a
central bank allows the economy to expand too rapidly by keeping too much money
in circulation, it may cause inflation. If it slows down the economy removing too
much money from circulation, an economic recession could result, bringing unemployment and reduced production.
Central banks usually print only enough currency to satisfy the everyday needs
of businesses and consumers. Instead of taking deposits and making loans as normal
banks do, a central bank controls the economy by increasing or decreasing the coun-
try’s money supply. Once customer deposits money in a bank, it becomes available
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for further lending, a bank’s supply of money for lending is limited by its deposits
and its reserve requirements, which are determined by the central bank.
Another way of controlling the money supply is to raise or lower interest rates.
When a central bank decides that the economy is growing too slowly, it can reduce
the interest rate it charges on the loans to the country’s banks. Alternately, if the
economy shows signs of growing too quickly, a central bank can increase the interest
rate on its loans to banks, putting the breaks on economic growth.
Probably the most dramatic way of increasing or decreasing the money supply
is through open market operations, where a central bank buys and sells large
amount of securities, such as government treasury bonds, in the open market.
1. Find the synonym to every expression.
Money supply – to borrow money
To expand – current account
To satisfy everyday needs – the amount of money
To make deposit – to develop
To make loans – to make smth. enough
To decrease money supply – deposit account
Saving deposit – to reduce the amount of money
Checking account – to cover
To become available – to invest money
2. Point out three ways of controlling the economy and money supply.
II
Other Bank Services
Trusts. A trust arrangement exists when a bank provides safekeeping and
management of funds for individuals, estates or institutions such as pension funds.
The bank’s job is to administer the money entrusted to it wisely and for the benefit
of the owner. The bank receives a fee for managing these funds.
Currency exchange. Banks can buy and sell foreign currencies for their own
benefit or for their clients. Importers, exporters and travelers are major users of
these services. Even domestic travelers may purchase travelers’ checks issued by
banks.
Safekeeping. Many banks rent safety deposit boxes in their vaults to persons
seeking a safe and secure place for their valuables.
Credit cards. Some banks derive significant revenues from operating
bankcard programs. There is usually an annual fee to use the credit card, and the
consumer pays interest on the unpaid balance. Merchants pay a fee to the bank as
well.
Letters of Credit. Banks may aid commerce by writing letters of credit. In
these documents, the bank guarantees one party (such as sellers) that payment will
be made if certain conditions are met (such as the delivery of merchandise). Letters
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of credit are common when goods are bought or sold abroad. There is a fee for
providing this letter of credit.
Investments. Banks are permitted to buy U.S. government bonds for their
own accounts. Banks may make money in trading such bonds and from the interests
paid by the government to the holders of such securities.
Consulting. A growing business for banks is to give advice to other businesses. Especially significant in recent years is the assistance provided to firms involved
in corporate mergers.
1. Explain the meaning of the following words connected with bank oper-
ation.
Safekeeping fee currency revenue credit card
interest letter of credit bonds merchandise securities
*2. What bank services would you use for your business and why?
III
Consumer credit
Consumer credit provides cash, goods or services now, while spreading repayment into the future. In this way credit enables you to enjoy your purchase even
before you have paid for it. But there are two important strings attached to every
credit purchase: credit costs something, and the principal, the original amount borrowed, must be paid back. If you are thinking of borrowing money or buying something on credit, you will want to know how much this credit will cost you and
weather or not you can afford it. Then you can shop for the best terms.
Credit costs vary from one lender to another, so it pays to shop before you
sign anything. Federal law requires that the lender tell you the total finance charges
and the annual percentage rate or APR.
The finance charge is the total amount you pay to use credit. It includes interest costs and any other fees (such as service charges and insurance) that the seller
or lender may be entitled to add to the loan.
The annual percentage rate or APR is the cost of credit calculated as a per-
cent on an annual basis.
Credit has its advantages and disadvantages. The principal advantages of
credit are:
Immediate possession. Credit enables us to enjoy goods and services immediately that we might otherwise have had to do without or postpone.
Flexibility. Credit allows us to time our purchases so as to take advantage of
sale items or other bargains even when our funds are low.
Safety. Credit cards provide a safe and convenient means of carrying our purchasing power with us while we are shopping or traveling.
Emergency funds. Credit gives us a cushion in an emergency (like an automobile breakdown when money is needed to get back on the road).
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Character reference. The regular payment of bills is recorded in a person’s
credit history, and this record can be used as a character reference.
Here are some of the disadvantages of buying on credit:
Overspending. Sometimes credit cards make it too easy to spend money.
Then, as the debts mounts, it is often difficult to make the necessary monthly payments.
Higher cost. It usually costs more to buy on credit than for cash. One reason
is that stores offering credit often charge more than those that sell only for cash.
Another is that interest or other charges are often added to the cost of goods sold on
credit.
Untimely shopping. Credit shoppers often ignore sales and special prices because they can buy what they want on credit whenever they want it.
1. Why do people take consumer credit?
2. What is the principal?
3. What is the finance charge?
4. What is the annual percentage rate or APR?
5. What are the advantages and disadvantages of buying on credit?
6. Have you ever bought anything on credit? What was it?
IV
What kinds of credit are available?
Credit for consumers falls into two categories: loan credit and sales credit.
Loan credit enables you to borrow money which can then be used to finance a pur-
chase. Sales credit enables you to buy goods and services now and pay for them
later. Here are some examples of each.
Home mortgages. Home mortgages are long-term loans (repayable in 10 to
30 years) used to finance the purchase of a home or apartment. Banks, savings and
loans and other thrift institutions are the most likely sources of mortgages money.
Home mortgages are repaid with interest, in equal monthly installments over the life
of the loan.
Auto and other consumer loans. Loans for financing the purchase of specific items like automobiles, or other goods and services, are available from a variety
of thrift institutions and lending agencies. Auto and other consumer loans are usually repaid in equal monthly installments over the life of the loan.
Charge accounts. Charge accounts enable consumers to make purchases up
to a specific limit without paying cash. There is usually no charge for the use of a
charge account if the balance is paid in full at the end of the month. However, interest is likely to be charged on balances that are not paid at the end of the month.
Credit cards. A credit card is a kind of charge account that entitles its holder
to shop at many different places. Master Charge, Visa, American Express and Din-
er’s Club are four of the most widely used credit cards. Credit cards purchases are
billed monthly. Like charge accounts, there is usually no charge for credit cards
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purchases that are paid in full when billed. However, there is an additional charge
levied on unpaid balances.
Explain the essence of each kind of credit.
V
Insurance
Accident, sickness and natural disaster are the daily risks of life. But we can
protect ourselves from their financial cost. We do this by sharing the risk of that
loss with others through insurance. Insurance companies calculate the odds of a
particular event occurring (like fire, accident, earthquake, etc.). this enables them to
compute how much will be needed to pay those who have losses. Then they add an
amount to cover administrative expenses or profits. The total cost is then divided
among the group in accordance with how much risk each faces. This charge, or
premium, is the price paid to be covered by the insurance.
Most common kinds of insurance are life, health, property, and liability insurance.
Life insurance. The principal purpose of life insurance is to provide money
for a family when a wage earner dies. There are three types of life insurance policies: term, whole life, and endowment.
Term insurance. Term insurance provides coverage for a specific period of
time (usually 1, 5, 10, or 20 years), and it is the least costly form of life insurance.
When the term ends, so does the insurance (though it can be renewed at a higher
rate).
Whole life. Whole life enables those insured to pay the same premium
throughout their lifetime. It also accumulates a “cash value”. This is a kind of sav-
ings account that increases in value over the years.
Endowment insurance. Endowment insurance protects the insured for a spe-
cific number of years. At the end of that time the full amount is paid to the policyholder. If the policyholder should die sometime before the maturity date, the
amount is paid to the beneficiary.
Health insurance. The purpose of health insurance is to provide protection
from the financial problems arising out of the accident or illness. Health insurance
provides two kinds of benefits. One covers the medical, hospital and surgical costs
arising from the accident or illness. The other protects against the loss of income
resulting from illness or injury.
Medical insurance. Basic coverage pays all or part of physical fees, hospital
services and surgical procedures up to a certain limit. Major medical protects
against the extraordinary expenses of long-term illness and serious injuries. It starts
where basic medical coverage leaves off. Catastrophic insurance pays the costs
resulting from the most serious kinds of illness and accidents. The limits of catastrophic insurance coverage can reach into the hundreds of thousand of dollars.
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Disability income insurance. Serious illness or injury can also cause loss of
income. Disability insurance is designed to offset this risk by providing cash payments while the wage earner is recovering.
Property and liability insurance. Property insurance protects policyholders
against the loss or damage of their own property. Anyone owning an automobile is
likely to have some form of property and liability insurance. The property insurance
reimburses them if their car is stolen or damaged as a result of fire or vandalism. In
addition, many car owners also buy collision insurance to pay for any damages to
their car caused by a collision.
Homeowners look to property insurance to protect them from the financial
loss that could be caused by things like fire, natural disasters, or theft. Renters, too,
may choose to insure their furniture and other personal belongings in their homes or
apartments.
Liability insurance protects us against the cost of injuries to others or damage
to their property for which we are responsible. As in the case of property insurance,
we will most likely to be buying liability insurance when you own your own automobile, or become a renter or homeowner.
* What kind of insurance policy do you think is necessary to have and
why?
VI
The Top Four
The UK’s Independent newspaper described the four men below as the
world’s most successful investors.
Perhaps the most outstanding investor of recent times is WAREN BUFFET of
Omaha, Nebraska. He started in 1956 with $100 and is today one of the world’s
richest men, with a personal fortune of more than $8.5 bn. He did it by careful,
long-term investment in simple, mass-market companies. It’s strategy that has outperformed the Dow Jones industrial average in every year since 1956.
SIR JOHN TEMPETON turned a £10000 investment in 1954 into more than
£300 m. he did this as the result of ‘investing at the time of maximum pessimism” –
in other words, moving against current investment fashions. He bought when stock
markets were lowest and sold when they rose.
SIR JAMES GOLDSMITH is worth around £1.15 bn. He made his money as
an asset stripper, but he kept it because of his sense of timing. He anticipated the
financial crash of 1974, the boom of the early 1980s and the great stock market
crash of 1987.
GEORGE SOROS’S Curacao-based Quantum Fund has produced a return of
almost 35% a year over 26 years, the greatest growth fund in history. A stake of
£1000 invested with Soros in 1969 would be worth £2.15 m today. Most famously,
Soros made £1 bn by selling sterling just before it was devalued (after leaving the
European exchange rate mechanism), and then buying it again.
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1. Look at the text and match underlined words to these definitions:
1. reduced in value
2. has done better than
3. thinking that whatever happens will be bad
4. money that is risked in a business
5. a sudden collapse
6. a person who buys an unsuccessful company, sells its most valuable parts
and then closes it down.
*2. What do you think makes a successful investor? Rank the things in
the box from 1 to 7. Which of the below qualities were important for each of
these four men?
A long-term strategy good luck courage caution
Quick thinking good timing good advice
You have £1000 to invest. Who would you give your money to. Explain
your choice.
79
5M of ECONOMICS
(Level II)
UNIT I
MONEY
Money is anything that is generally accepted in payment for goods and ser-
vices. Almost every country uses a different currency. Currency is paper money
and coins issued by federal government. The monetary value of all goods and services produced in one country may be compared with that of other country by using
currency exchange rate. Exchange rate is the relation in value between kinds of
money used in different countries. Currency appreciates when it can buy more units
of another currency. Currency depreciates when it can purchase fewer units of another currency. Management of the amount of money placed into economy by the
government and management of interest rates is known as the monetary policy of
the government. Interest is the money we pay for borrowing money from a bank or
the income from lending money. There are two kinds of interest: nominal interest
that is not adjusted for inflation and real interest adjusted for inflation. Inflation is
the rise of prices for goods and services over time.
Active Vocabulary
to accept – принимать
currency – валюта
coin – монета
value – ценность, стоимость
to compare – сравнивать
exchange rate – обменный курс
to appreciate – повышаться в цене
to depreciate – обесцениваться
amount – объем, количество
interest – процент
interest rate – процентная ставка
to lend – одалживать
to adjust – приспосабливать
Tasks
1. Translate the following combinations into Russian.
1. to accept in payment for goods and services
2. to use a different currency
3. paper money and coins
4. to issue by federal government
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