Text 3 The Limits on Economic Freedom Text a

A person is economically free, if he can do what he wishes with his own property, time and effort. In all communities, of course, limits are set upon this personal freedom. In some countries the limits are complex; in others they are relatively simple. All individual citizens are required to conform to the laws made by their governments.

Complete economic freedom of action can cause great difficulties, because the freedoms of various individuals will conflict. If citizens were completely free, some landowners might build factories in unsuitable places. If there was no system of control, factory-owners might make their employees work too long each day. If they were completely free, workers might stop working when they got their fist pay, and come back to do more work only when they needed more money. Such economic freedom could create a very unstable economy.

Laws related to economic conditions are sometimes concerned with workers’ health, wages and pensions. They are sometimes concerned with contracts between employers and employees. They are sometimes concerned with the location of places of work.

Text B

If a person can do what he wishes with his own property, time, and energy, then economists say that he is ‘economically free’. In all communities, of course, limits are imposed upon the personal freedom of their citizens and these limits are in some cases very complex but in others relatively simple. All individuals are required to conform to the laws made by their governments.

Complete economic freedom of action can create great difficulties, because the freedom exercised by various individuals often conflict. If citizens were completely free, some landowners might build factories in unsuitable places, while some factory-owners might make their employees work too long each day. If they were completely free, workers might stop working when they got their first play, and come back only when they needed more money. Such economic anarchy could cause instability (unemployment; loss of production etc.) in the whole economy of a country.

Laws related to economic conditions are sometimes concerned with contracts between employers and employees. Sometimes they are concerned with workers’ health, wages and pensions, and sometimes with the location of places of work. Sometimes they protect the interests principally of the workers, while at other times they may be beneficial towards the employers. The government policy towards both employees and employers will depend very much upon the political and economic ideology adopted by the government, and may be biassed towards employers and capital on the one hand, or workers and the problems of labour on the other hand.

Text 4 Banks

For most of us, the most important and best-known financial institution is our local bank. Probably our bank is a commercial bank, meaning that the bank is involved in trade, and what it trades in is money and other financial services. It carries out this trade for a profit, just as any business does.

Banks carry out a variety of functions. For its customers it operates savings and checking accounts; it offers loans; it changes money. With the familiar savings account, the customer can save money and earn interest. The customer deposits and withdraws money, and his deposits and withdrawals along with his interest earnings and the balance (the total of deposits minus withdrawals) are recorded in a passbook.

A checking account is a service that usually makes our lives a little easier. The bank holds our money and we pay our bills with our checks by drawing on our accounts. The checks come back to our bank through a clearinghouse and our accounts are charged for the checks we have written. At the end of each month we receive a statement which summarizes our transactions. Although checking accounts are very helpful, we can sometimes make problems for ourselves by bouncing a check. The check bounces back to us like a ball (a check that bounces is called a rubber check). It is marked insufficient funds, meaning we do not have enough money in our account to cover the check; we have overdrawn our account.

Banks usually have a service charge for maintaining our checking accounts, although some banks do not charge us if we keep a minimum balance in our account. So for example, if the minimum is $ 500 and our balance never goes below $ 500, we do not pay a service charge.

In addition to operating accounts, banks also loan money and charge interest on the loans. Although banks always try to keep a certain amount of money in reserve to cover withdrawals, they invest a large part of the money they are holding to earn more money. They also offer other services for a fee, such as storing valuables for people in safe deposit boxes inside the bank’s vault, changing currencies, and selling traveler’s checks.

In short, banks provide services and use our money to make money.