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5. Answer the following questions:

  1. What is the difference between «wage» and «salary»?

  2. How can «wealth» be expressed?

  3. How can you use your wealth to get income? Give your examples.

  4. What is a budget?

  5. When is a budget said to have a deficit and when a surplus?

  6. What three steps are involved to prepare a budget?

  7. What makes up your personal budget?

  8. What is the rate of return?

  9. What is liquidity?

  10. What does credit allow you?

  11. What is the purpose of advertising?

6. Define the terms:

Wage, budget, liquidity, the rate of return, salary, wealth, surplus, compound interest.

7. Translate into English:

1. Велика кількість підприємств старанно працюють, щоб задовольнити ваші потреби. 2. Ми вирішили покласти гроші на рахунок у банку. 3. Фінансові витрати – це загальна сума, яку ви сплачуєте, щоб скористатися кредитом. 4. Страхування-вклад захищає страхувальника кілька років. 5. За свою роботу ви отримуєте заробітну плату. 6. Підсумувавши вартість вашої власності, банківських рахунків, заощаджень, ви отримуєте загальну суму вашого багатства. 7. Кількість і вартість речей, які ви спроможні купити, залежить від розміру вашого прибутку та від того, як розумно ви витратите його. 8. Банки та ощадні установи допоможуть захистити ваші гроші від пожежі, крадіжки та інших нещасних випадків.

8. Read and dramatize the following dialogue:

A.: Sorry, I will be very obliged to you if you will answer some of my questions.

B. : O.K. I'm at your disposal.

A.: I know that most of the nation's personal savings are held by the commercial banks, different types of savings institutions, and credit unions. The deposits held by these institutions are insured by agencies of the federal government. But I wonder what kinds of accounts can be offered by savings institutions?

B.: Well, savings institutions offer the following kinds of accounts: passbook and statement saving accounts, NOW (Negotiable Order of Withdrawal) accounts, money-market accounts, certificates of deposit, credit-union accounts. U.S. savings bonds and money-market bonds.

А.: O.K. It's very interesting. Can you tell me some more about passbook and statement accounts?

В.: Oh, yes, of course. I can. The safety of your money and high liquidity are the most important advantages of these accounts. Minimum balance requirements are usually quite low, and your savings can be withdrawn at any time.

А.: Is there any disadvantage to this kind of account?

В.: The disadvantage of them is that they pay relatively low interest rates.

А.: I see. And what about NOW and money-market accounts? Please, some words about them.

В.: Well, NOW accounts pay interest and allow the depositor to write checks. NOW accounts generally offer a slightly lower rate of return than savings accounts. Money-market accounts allow you to write a limited number of checks while participating in the «money-market» where banks and other businesses buy and sell short-term credit instruments and notes that come due in a year or less. The rate of return for money market accounts is usually higher than for passbook savings accounts. Would you like me to tell you about certificates of deposit and credit-union accounts?

А.: Oh, no, thank you very much. But it seems to me I know everything about them. Certificates of deposit, or CD's, pay the highest rates of interest offered by banks and savings institutions. They require the money to be left on deposit for a specified period of time that can run from a few weeks to five of more years. The money can be withdrawn early, if necessary, but not without a penalty.

Credit unions often serve people who have the same employer, work in the same industry, or belong to a particular church, labor union, or club. The rate of return offered by credit unions is higher than that of the other institutions. But what do you know about U.S. savings bonds and money-market funds?

В.: U.S. savings bonds can be purchased at most savings institutions. Guaranteed by the United States government, they are one of the safest investments one can make. After five years bonds earn a variable rate adjusted every six months. And money-market funds use the resources of their investors to buy money-market certificates. Money- market funds generally pay a higher rate of return than savings and NOW accounts. Unlike other accounts at savings institutions, money-market fund accounts are not insured nor do they provide check-writing privileges.

А.: I'm more than grateful to you for such important information. Thank you ever so much.

В.: Don't mention it.