After you read

1. Getting the message

A. On each blank line, write the letter of the correct phrase to complete the sentence.

1. The American government _________.

a. is not allowed to regulate business

b. regulates business to some extent

2. People who buy stocks and bonds ________ .

1. hope to make a profit

b. usually become wealthy

3. Buying on credit __________ .

a. usually leads to bankruptcy

2. can lead to more debt than the consumer can handle

4. The U.S. is called a cashless society because __________ .

a. most people don't have enough cash

b. people use checks and credit cards instead of paper money to pay for many things

5. Buying a franchise is ________ .

1. one common way to become an entrepreneur in the U.S.

2. a form of business ownership used only in the fast-food industry

2. Building your vocabulary

A. These are the 15 key vocabulary words for this chapter. They are boldfaced in the reading. Pronounce these words after your teacher and discuss their meaning.

asset dept monopoly

bancruptcy economy profit

bond goods service

capitalism interest share

credit investor stock

B. Complete these sentences with some of the key vocabulary words. Make the nouns plural if necessary.

1. The American _________ is sometimes called a cashless society because most people pay for things with checks and _________ cards.

2. People lend money to a business by buying ________ , or they purchase a piece of a business by buying shares of ________ .

3. A person can buy part of a business by purchasing ________ of a stock sold on a stock exchange.

4. When you get your hair cut at the barber or beauty shop or your coat cleaned at the dry cleaner's, you are purchasing a/an ________ .

5. When you buy a jacket or some milk, you are purchasing ______ .

6. _________ depends on competition to keep prices down and quality high.

7. When American Telephone and Telegraph was providing nearly all the telephone service in the U.S., it had a(n) ________ .

8. A person who has a lot of _________ may decide to go into bankruptcy.

9. Valuable things that you own (such as a car, a house, or stock) are your __________ .

10. If you buy 100 shares of stock for $45 a share and sell those shares a year later for $60 a share, you have made a nice ________ on your investment.

C. Choose the correct word to complete each sentence. Then write it on the blank line in each sentence.

1. You bought a pair of gloves using your credit card. A few days later, you

returned the gloves to the store. The store your account.

(credited / charged)

2. Your mortgage application has been approved, so you can buy a condominium. The bank has agreed to _____ you the money for the purchase. (borrow / lend)

3. You purchased 100 shares of Delicious Candy Company stock. When the

company had a jump in sales, you received . (dividends /interest)

4. You have $1,000 in your savings account. The bank pays you 4% _______ annually on this money. (dividends / interest)

5. You just won a million dollars on a quiz show. You also own three homes, four cars, a big diamond ring, and a painting by Picasso. You have a lot of ______ . (assets / debts)

6. You own your own business, and two people work for you. They are your ______ . (employees / employers)

7. The price of your Delicious Candy Company stock went down below what you paid for it. If you sell this stock now, you'll take a ______. (profit /loss)

8. A person who goes into will have trouble getting credit for

several years. (debt / bankruptcy)