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19.11.2009
Unit IV
Fiscal Policy and Taxes
Grammar: Modal Verbs.
Word building: -ly.
Text: Fiscal Policy and Taxation System.
Business practice: Presenting a report.
Interesting facts: Oxbridge.
Ex. 1 Translate the sentences into Russian:
1. In the absence of some form of money, exchange can take the form of barter.
2. The company was able to get a credit last week.
3. Will the plant be able to buy new equipment next year?
4. May I read this letter? – No, you may not. It is for the manager.
5. I won’t be allowed to transfer the money.
6. They must introduce new machinery as soon as possible.
7. We had to cope with a lot of difficulties last year.
8. He didn’t have to pay any tax last year
9. The economists were to give recommendations to the government.
10. The engineers should follow the instructions how to use the equipment.
11. The secretary should have typed the report.
12. Not all partners in a firm must take an active part in management.
13. All companies must pay taxes on their profits.
14. The prices may go up.
15. They will be able to increase production.
16. They could have earned much more.
Ex. 2 Complete the sentences using can, may or must in proper forms.
… developing countries enter the European Union?
Our firm … rent their building to start new business.
We … expect a return of 40 %.
Our plant … purchase some new equipment.
The businessmen … meet a few more times.
If there are a few firms in an industry, the change in the behavior of one firm … influence
other firms.
7. You … have a special license to import or export some goods.
8. The new government policy … provide more jobs for population.
9. Some international events … influence the stability of prices in world markets.
10. The building firm … finish the construction of the new plant this year.
11. The workers … produce the first 100 cars by the end of the year.
12. Companies trading in the world market … ensure (гарантировать) high standards.
13. By means of computer programmes economists … make more complex economic models
in future.
1.
2.
3.
4.
5.
6.
1
14. The firm was closed as it … (not) pay its debts.
15. Developing countries … (not) become economically independent until they import less
than they export.
Ex. 3 Translate the sentences into English, using modal verbs:
1. Работа должна быть выполнена немедленно.
2. Им не следовало бы заключать этот договор.
3. Должен ли я начать эту работу сейчас же?
4. Мне предстоит завтра делать доклад.
5. Вы должны нанять лучшего менеджера.
6. Думаю, Том должен получить эту работу. У него есть все данные для этого.
7. Вы получите ваш заказ завтра.
8. Каждый потребитель должен решить проблему выбора.
9. Ему, наверное, не сказали, когда начнется собрание.
10. Питер был не в состоянии сделать эту работу за две недели, поэтому Майкл должен
был помочь ему.
11. Эту систему можно легко применить к другому банку.
12. Не следует ничего откладывать на потом.
13. Не следует недооценивать имеющиеся проблемы.
14. Правительство должно принять этот закон, чтобы снизить уровень безработицы.
15. Нужно повысить цену на 1 процент для сохранения прибыли на том же уровне.
16. Мы должны были закончить эту работу в прошлом месяце.
Ex. 4 Write these sentences in Present, Past and Future Simple Tenses, using modal
verbs and their equivalents:
1. He can do this work himself.
2. You may ask the manager to help you.
3. We must sign this contract as soon as possible.
Ex. 5 Translate the sentences into Russian paying attention to Modals:
1. Any crisis in the economy of the USA can seriously influence the economies of other
nations.
2. Any country must follow some rules in international trade.
3. As the demand for this good is low, the producer has to decrease the price for it.
4. Members of the OPEC are to sell oil at the same price.
5. Prices can be increased by the government next year.
6. The French businessmen are to be met at the airport tomorrow.
7. Nearly 1,000 workers are to loose their jobs in our factory.
8. All the new teachers coming out of universities should know something about
computers.
9. People will have to be prepared to work in the world of rapid evolution.
10. People in the company have to be able to find information easily.
Ex. 6 Read Text A. Find international words in the text and give their translation.
Words to the Text A:
fiscal policy, n
финансовая политика
2
e.g. Tax increases cannot remain the only instrument of fiscal policy.
иметь отношение,
относиться
refer to, v
e.g. The figures in the left-hand column refer to our sales abroad.
жесткий ( о политике)
contractionary, a
e.g. a contractionary fiscal policy
доход
revenue, n
e.g. The government usually receive revenue from taxes.
излишек, остаток
surplus, n
e.g. an enormous surplus of crude oil
budget surplus, n
бюджетный избыток
(превышение доходов над расходами)
e.g. The government, which is running a budget surplus must spend billions of dollars to build
roads and other infrastructure to improve the quality of life.
дефицит бюджета
(превышение расходов над доходами)
e.g. Any savings on military spending should be used to reduce the budget deficit.
budget deficit, n
balanced budget, n
сбалансированный бюджет
e.g. New York state has failed to achieve a balanced budget in six of the past eight years.
occur, v
случаться, происходить,
иметь место
e.g. Climatic changes have occurred at intervals throughout the millennium.
adjust, v
регулировать
e.g. Their monthly repayments are adjusted once a year
VAT ( value added tax), n
налог на добавленную
стоимость (НДС)
e.g. Final customers pay VAT on goods in shops and on services.
tax, n
налог, пошлина
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e.g. The government claimed it would lower taxes.
бремя налога
tax burden, n
e.g. People can’t bear so hard tax burden.
налоговая ставка
tax rate, v
e.g. In countries with very high tax rates many people prefer to stay unemployed.
to collect taxes, v syn. to raise taxes
взимать (собирать) налоги
e.g. It should be noted that at the national level government collect (raise) such taxes as
income tax and VAT (value added tax).
tax revenues, n
налоговые поступления
e.g. Tax revenues were not as big as the government had expected.
bond, n
облигация
e.g. My father put all his money into Canadian Northern Railway bonds.
to issue bonds, v
выпускать облигации
e.g. The company decided to issue bonds in order to receive additional capital.
interest rate, v
процентная ставка
e.g. The interest rate on the loan is 16,5% per year.
cause, v
быть причиной,
вызывать
e.g. Heavy traffic is causing long delays on the freeway.
unemployment benefit, n
пособие по безработице
e.g. High unemployment rate in Europe is the result of high unemployment benefits.
welfare, n
благотворительность
e.g. The company’s welfare officer deals with employees’ personal problems.
валовый внутренний
продукт (ВВП)
e.g. Canada’s annual growth in GDP will decline to about 1% next year.
GDP (Gross Domestic Product), n
expenditure(s), n
затраты, расход(ы)
e.g. The total expenditure on defense has dropped since 1989.
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Text A
Fiscal Policy and Taxation System
Fiscal policy refers to government attempts to influence the direction of the economy through
changes in government taxes, or through some spending.
The goal of fiscal policy is to keep price level stability, full employment, and the achievement of
the natural level of GDP.
The two main instruments of fiscal policy are government expenditures and taxes. The
government collects taxes in order to finance expenditures on a number of public goods and
services – for example, highways and education.
The three possible cases of fiscal policy are neutral, expansionary and contractionary:
- A neutral fiscal policy exists when government expenditures are exactly equal to tax revenues
in a given year, the government is running a balanced budget for that year.
- When government expenditures exceed government tax revenues in a given year, the
government is running a budget deficit for that year. The budget deficit, which is the difference
between government expenditures and tax revenues, is financed by government borrowing ( the
government issues of bonds and shares). Then expansionary fiscal policy exists.
- A contractionary fiscal policy occurs when government expenditures are less than tan tax
revenues in a given year, the government is running a budget surplus for that year. The budget
surplus is the difference between tax revenues and government expenditures.
A tax is a financial charge imposed on an individual or a legal entity by a state.Taxes consist
of direct tax or indirect tax, and may be paid in money or as its labour equivalent.
In modern taxation systems, taxes are levied in money. The method of taxation and the
government expenditure of taxes raised is often highly debated in politics and economics.
Funds provided by taxation have been used by states to carry out many functions. Some of
these include expenditures on war, economic infrastructure (roads), public works, and the
operation of government itself. Most modern governments also use taxes to fund welfare and
public services. These services can include education systems, health care systems, pensions for
the elderly, unemployment benefits, and public transportation.
Governments use different kinds of taxes and vary the tax rates. This is done to distribute the
tax burden among individuals or classes of the population involved in taxable activities, such as
business, or to redistribute resources between individuals or classes in the population.
A nation's tax system is often a reflection of its communal values. To create a system of
taxation, a nation must make choices regarding the distribution of the tax burden - who will pay
taxes and how much they will pay - and how the taxes collected will be spent. In democratic
nations where the public elects those in charge of establishing the tax system, these choices
reflect the type of community which the public wishes to create. In countries where the public
does not have a significant amount of influence over the system of taxation, that system may be
more of a reflection on the values of those in power.
Ex. 7 Arrange the following words in pairs of synonyms:
Effort, effect, country, recession, encourage, essential, attempt, outcome, state, fall, stimulate,
important, implement (v), displacement, exist, release, reason, perform (v), removal, live, issue,
cause.
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Ex. 8 Arrange the following words in pairs of antonyms:
Destroy, abundance, reduce, high, effect (n), impossible, spending, exclude, deficit, lack, create,
increase, low, cause (n), possible, revenue, involve, surplus.
Ex. 9 Say instead of what words the pronouns that/those are used. Translate these
sentences into Russian.
1.
2.
3.
4.
5.
6.
The prices are much lower than those quoted previously.
The result of the calculation is a little bit different from that presented yesterday.
The output has increased 2% as compared with that last year.
Credit risks are bigger than those under the previous loan agreement.
The goods sold in the market are of lower quality than those of our company.
Students studying economics can expect higher earnings than those of studying
philosophy.
7. In a country like Japan the output of private goods is large and that of social
services small.
Ex. 10 Form adverbs by adding the suffix –ly and give their Russian equivalents:
Easy, real, full, deep, probable, natural, recent, relative, personal, annual, free, narrow, bad,
quick, slow, part, week, first, late, continuous, technical, scientific, regular, exact, dramatic.
Ex. 11 Make word combinations from the given verbs and adverbs from Ex. 10. Write
them down and translate.
to provide services
to collect taxes
to have meetings
to run a business
to influence
to visit friends
to exceed revenues
to be equal to
to meet expectations
to carry out functions
to vary tax rates
to fund welfare
to redistribute resources
to make choice
Ex. 12 Find English equivalents in Text A.
1.
2.
3.
4.
5.
6.
7.
правительственные расходы
жесткая налоговая политика
связанный с дефицитом бюджета
влиять на уровень совокупного спроса
ценовая стабильность
регулирование правительственных расходов
в периоды высокого экономического роста
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8. периоды спада
9. увеличение процентной ставки
10. высокий спрос на кредиты
11. привести к инфляции
12. полная занятость
13. нормальный уровень ВВП
14. возможные случаи
15. управление сбалансированным бюджетом
16. управление дефицитным бюджетом
17. управление бюджетным излишком
18. финансовые расходы
19. общественные работы
20. отражение общественных ценностей
21. ответственный за создание налоговой системы
Ex. 13 Say if it is true or false. Correct false statements, using the following phrases: I’m
afraid it’s not correct, as far as I know, I don’t really agree etc.
1. Neutral fiscal policy exists when government spending is fully funded by tax revenue.
2. Expansionary fiscal policy leads to a lower budget deficit .
3. During periods of high economic growth taxes can be used to decrease activity in the
economy.
4. Governments usually fund a budget deficit with the release of government bonds.
5. There is no any lag (отставание) between the implementation of the policy and
detectable effects in the economy.
Ex. 14 Fill in the gaps with prepositions.
1. Fiscal policy refers … the overall effect … the budget outcome … economic activity.
2. Expansionary fiscal policy is usually associated … a budget deficit.
3. Fiscal policy is used … governments to influence the level … aggregate demand … the
economy.
4. The removal … funds … the economy will reduce levels … aggregate demand … the
economy and contract it.
5. When governments fund a deficit … the release … government bonds, an increase …
interest rates … the market can occur.
6. An unchecked spiral … aggregate demand will lead … inflation.
Ex. 15 Match parts A and B.
A
1. A rise in the general level of prices.
2. The money that is received by a business usually
from selling goods or services.
3. The amount of money that is spent by a person,
a government or an organization.
4. The way in which a government charges taxes or
spends money in order to manage the economy.
5. The amount by which money that a government
or business spends is greater than money received
in a particular period of time.
6. The cost of borrowing money, usually expressed
as a percentage of the amount borrowed.
B
1. spending
2. fiscal policy
3. inflation
4. interest rate
5. revenue
6. budget deficit
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Ex. 16 Give answers to the following questions according to Text A.
1. How many types of fiscal policy do you know?
2. What does an expansionary fiscal policy result in?
3. What does a contractionary fiscal policy result in?
Ex. 17 Read Text B and fill in the gaps with the given words in the correct form.
( expenditure, unemployment benefit, taxes (3), property, tax rate, resource, fiscal
policy, business, law, economy, tax system, welfare, distribution of the tax burden)
Text B
Purposes and Effects of Taxes
Funds provided by taxes have been used by states and their functional equivalents throughout
history to carry out many functions. Some of these include _____________ on war, the
enforcement (осуществление) of ___ and public order, protection of ________ , economic
infrastructure (roads, legal tender, enforcement of contracts, etc.), public works, social
engineering, and the operation of government itself. Most modern governments also use _____
to fund ______and public services. These services can include education systems, health care
systems, pensions for the elderly, _____________________ , and public transportation. Energy,
water and waste management systems are also common public utilities.
Governments use different kinds of taxes and vary the _________ . This is done to distribute
the tax among individuals or classes of the population involved in taxable activities, such
as________ , or to redistribute _________ between individuals or classes in the population.
Historically, the nobility were supported by taxes on the poor; modern social security systems
are intended to support the poor, the disabled, or the retired by _____ on those who are still
working. In addition, _____ are applied to fund foreign and military aid, to influence the
macroeconomic performance of the economy (the government's strategy for doing this is called
its _____________ ), or to modify patterns of consumption or employment within an _______ ,
by making some transaction more or less attractive.
A nation's tax system is often a reflection of its communal values or the values of those in
power. To create a system of taxation, a nation must make choices regarding the
______________________________ — who will pay taxes and how much they will pay and
how the taxes collected will be spent. In democratic nations where the public elects those in
charge of establishing the __________ , these choices reflect the type of community which the
public wishes to create. In countries where the public does not have a significant amount of
influence over the system of taxation, that system is more of a reflection on the values of those in
power.
Ex. 18 Read Text C and make a summary.
Notes to text:
transfer payments – передаточные платежи
“revenue neutral” – нейтральные доходы
construe - истолковывать
incentive – стимул, побуждение
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disposable income – чистый доход
Text C
Fiscal policy
Fiscal policy is the use of government spending and taxation to influence the economy. When
the government decides on the goods and services it purchases, the transfer payments it
distributes, or the taxes it collects, it is engaging in fiscal policy. The primary economic impact
of any change in the government budget is felt by particular groups - a tax cut for families with
children, for example, raises their income. Discussions of fiscal policy, however, generally
focus on the effect of changes in the government budget on the overall economy. Although
changes in taxes or spending that are “revenue neutral” may be construed as fiscal policy - and
may affect the aggregate level of output by changing the incentives that firms or individuals face
- the term “fiscal policy” is usually used to describe the effect on the aggregate economy of the
overall levels of spending and taxation, and more particularly, the gap between them.
Fiscal policy is said to be contractionary when revenue is higher than spending (i.e., the
government budget is in surplus) and expansionary when spending is higher than revenue (i.e.,
the budget is in deficit). Often, the focus is not on the level of the deficit, but on the change in
the deficit. Thus, a reduction of the deficit from $200 billion to $100 billion is said to be
contractionary fiscal policy, even though the budget is still in deficit.
The most immediate effect of fiscal policy is to change the aggregate demand for goods and
services. A fiscal expansion, for example, raises aggregate demand through one of two channels.
First, if the government increases its purchases but keeps taxes constant, it increases demand
directly. Second, if the government cuts taxes or increases transfer payments, households’
disposable income rises, and they will spend more on consumption. This rise in consumption
will in turn raise aggregate demand.
Ex. 19 Render Text D into English.
Text D
Налоги: сущность и функции
На
протяжении всей
истории
человечества
складывалась
система
налогообложения. Если сначала налоги взимались в виде различных натуральных податей
и служили дополнением к трудовым повинностям или формой дани с покоренных народов,
то по мере развития товарно-денежных отношений налоги приобрели денежную форму.
Государство может воздействовать на ход экономической жизни, лишь располагая
определенными денежными средствами. Их должны предоставить все заинтересованные в
выполнении функций государства стороны - граждане и юридические лица. Для этого и
существует система налогов, т.е. обязательных платежей государству.
Ни одно государство не может существовать без налогов. За счет налоговых
взносов, сборов, пошлин и других платежей, формируются финансовые ресурсы
государства. Налоги обеспечивают реализацию социальной, экономической, оборонной и
других функций государства. Они идут на содержание государственного аппарата, армии,
правоохранительных органов, финансирование образования, здравоохранения, науки. Из
собранных в виде налогов средств государство строит школы, высшие учебные заведения,
больницы, детские дома, государственные предприятия; платит зарплату преподавателям,
врачам, государственным служащим, стипендии и пенсии. Часть средств идет на
социальные пособия пожилым и больным людям, защиту здоровья матери и ребенка,
окружающей среды и т.д.…
9
Хотя налоги чаще вызывают возмущение, чем одобрение общества, без них ни одно
государство существовать не сможет.
Ex. 20 Study this information carefully and make your own presentation on any topic
according to the studied Units (I, II, III, IV).
A presentation proves that you are able to communicate on a topic of your choice with just a
few key words as reminders.
What should you begin with? Prepare the structure of the talk carefully and logically. The
following plan will help you.
Structure and Content

Introduction: General information on the topic
Give your listeners an introduction to the topic (some general information) and explain what
exactly you are going to talk about in your presentation.

Actual Presentation
Subdivide your presentation into several sub-topics, e.g.:
o
Presentation on an event: history, present, special customs
o
Presentation on a sport: history, rules, important events
o
Presentation on a stay in an English speaking country: chronologically

Conclusion
Find a good conclusion (otherwise it would look as if you simply stopped in the middle of
your presentation). A good conclusion could be for example:
o
How does the event influence our daily lives?
o
How important is the event for you personally? What's your opinion about it?
o
What might the future bring?
o
a quotation that summarises your presentation
Do you know?
1. Say what you know about Oxford and Cambridge.
2. Now read the text and say what new information you have learned.
Oxbridge
Oxford and Cambridge are the oldest and more prestigious universities in Great Britain. They
are often called collectively Oxbridge. Both universities are independent. Only the education
elite go to Oxford and Cambridge.
The normal length of the degree course is three years, after which the students take the Degree
of bachelor of Arts (B.A.) . Some courses, such as languages or medicine, may be one or two
years longer. The degrees are awarded at public degree ceremonies. Oxford and Cambridge cling
to their traditions, such as the use of Latin at degree ceremonies. Full academic dress is worn at
examinations.
Oxford and Cambridge universities consist of a number of colleges. Each college is different,
but in many ways they are alike. Each college has its name, its coat of arms. Each college is
governed by a Master.
Oxford is one of the oldest universities in Europe. It is the second largest in Britain, after
London. The town of Oxford is first mentioned in the Anglo-Saxon Chronicle in 911 A.D. and it
was popular with the early English kings. The university’s earliest charter is dated to 1213.
Among the oldest colleges are University College, All Souls and Christ Church.
10
Cambridge University started during the 13th century and grew until today. The oldest college
is Peterhouse, which was founded in 1284, and the most recent is Robinson College, which was
opened in 1977. The most famous is probably King’s College because of its magnificent chapel,
the largest and the most beautiful building in Cambridge and the most perfect example left of
English fifteen-century architecture. Its choir of boys and undergraduates is also very well
known.
Many great men studied at Cambridge, among them Desiderius Erasmus, the great Dutch
scholar, Roger Bacon, the philosopher, Milton, the poet, Oliver Cromwell, the soldier, Newton,
the scientist, and Kapitza, the famous Russian physicist.
Unit V
Stock Exchange
Grammar: Sequence of Tenses.
Word building: –ful, -al, -ive, -less.
Text: Stock Exchange Evolution.
Busines practice: Negotiations.
Interesting facts: The States of the USA.
Ex. 1 Revise the Rules of the Sequence of Tenses and complete the sentences:
что он студент.
he was a student.
He said
he had entered the institute.
Он сказал
he would be an economist.
1.
2.
3.
4.
5.
что поступил в институт.
что будет экономистом.
The newspaper said the rate of unemployment …
We knew that the stock market …
The graph showed that sales had …
Media experts believed that electronic shopping …
One of the students explained that …
Ex. 2 Use the verbs in the brackets in the proper Tense form. Translate the sentences.
1.
2.
3.
4.
The manager asked if the work (can) be compressed into 6 days.
He considered that this problem (to solve) in the near future.
I asked how long it (to take) him to make that plan.
He (to indicate) that in many instances automation arrangements had
been introduced by his company.
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5. The chairman (to say) the recession had started to hit the company in
the second half of last year.
6. We were sure we (overcome) these difficulties.
7. The conference was told that the Government (to be failing) to prepare
the British people for the changes.
8. The President (to want) to convince (убеждать) people that the energy
crisis was real.
Ex. 3 Change these sentences according to the model:
Model:
A: Nick has passed his exam.
B: I knew Nick had passed his exam.
1. Steve is a good economist.
2. Our company lost all its money in this deal.
3. The manager studied economic theory very carefully.
4. The company is gaining more customers.
5. Cable-TV operators are entering the market.
6. The profits are going down.
7. The number of giant companies has decreased.
Ex. 4 Make sentences following the example:
Germany / to sign the agreement
He said Germany had signed the agreement.
1. they / to cover the deficit
2. the government / to levy new taxes
3. the bank / to underwrite the loan
4. the steel industry / to achieve the large figures
5. the samples / to pack into the boxes
6. our company / to sign all the necessary documents.
Ex. 5 Translate these sentences into English:
1. Он сказал, что они столкнулись с большими трудностями.
2. Он подтвердил, что они добились больших успехов.
3. Она утверждала, что жилищная реформа продвинулась далеко вперед.
4. Газеты писали, что несколько стран присоединились к Сообществу.
5. В статье говорилось, что эта страна также подписала Договор.
6. Специалисты подчеркивали, что экспорт увеличился.
7. Газеты утверждали, что безработица сократилась.
Ex. 6 Read Text A. Find international words in the text and give their translation.
Words to the Text A:
Stock Exchange,
syn. securities market
фондовая биржа,
рынок ценных бумаг
e.g. She made a fortune on the Stock exchange.
stock, n
акция
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e.g. stocks issue
lead to, v
приводить (к ч.-л.)
e.g. an investment program that will lead to the creation of hundreds of new jobs
fair, n
ярмарка
e.g. a trade fair, the Frankfurt Book fair
wholesale, a ant. retail
оптовый
e.g. a wholesale price
deliver, v
доставлять
e.g. Could you deliver this letter to the accounts department?
delay, v
задерживать,
откладывать
e.g. Ralph decided to delay his trip until April.
delayed, p.p. from delay
отсроченный
e.g. delayed payment
execution date, n
дата исполнения
e.g. execution date of contract
price fluctuations, n
колебания цен
e.g. bonds price fluctuation
create, v
создавать
e.g. Government promises to create more public sector jobs.
securities, pl
ценные бумаги
e.g. government securities
undertake, v
брать на себя,
предпринимать
e.g. He undertook to pay the money back in six months.
intermediary, n
посредник
e.g. Jackson acted as an intermediate between the two parties.
chart, n
диаграмма,
график
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e.g. a weather chart
извлекать прибыль
derive a profit, v
e.g. Our company must derive a profit from this deal.
партия (товара)
batch, n
e.g. This batch of new devices arrived to our laboratory last month.
сохранение капитала
preservation of capital, n
e.g. Preservation of capital is the main task of each company.
paper liabilities, n
«бумажные»
обязательства
e.g. Traders on stock exchange buy not real goods but only paper liabilities.
жесткая
конкуренция
tough competition, n
e.g. This price reduction is due to tough competition among suppliers.
котировка, оценка
quotation, n
e.g. quotation of bonds
Text A
Stock Exchange Evolution
Exchange has existed from the beginning of the human society. Development of this process
led to appearance of money and trading. Then fairs, caravan routes, active international trade
appeared, and a new social class was formed - traders. To exchange news and conclude
transactions, traders had to meet at taverns, city squares or even in churches. Thus, first exchange
assemblies appeared.
Appearance of the very term "stock exchange" is related to the Dutch city Brugge, where a
rich family of traders, Van der Burgsters, lived. The family had a hotel, which became a favorite
accommodation of Venice traders. Thus, the expression "come to Burgser" gradually
transformed to the modern word "bourse" (биржа).
A special building for transactions was first constructed in 1531, in Flemish Antwerp. It was a
prototype of the Lion Exchange (1545), London Royal Exchange (1566) and other exchanges of
commodity type mainly. Their difference from wholesale trading was not only an opportunity to
buy or sell goods without delivering the entire batch to the place of transaction, but that it was
possible to conclude a transaction for commodities, which had not been yet produced.
Appearance of transactions with delayed execution date provided an opportunity to derive
profit from price fluctuations, which made the exchange an attractive place for speculators.
From this moment on, anyone, who understood that preservation of capital is its increasing, took
interest in the exchange, and the only enrichment instrument was own intellect and piercing wit.
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But participation in such exchanges was affordable only for owners of big capitals. Not
everyone could find resources to buy 10,000 bags of grain or a caravan with oriental spices. To
solve this problem, stock exchanges were created. Stock exchanges needed numerous
participants, although they were not always accessible to the public.
Even large wealth was not stable, because its owner wished to invest all money in business to
gain the biggest profit, and the lack of reserve made him a victim of changing conditions (price
increase, non-fulfillment of obligations before the partner, shipwrecks, etc.). This is when it
became necessary to involve small savers, whose small capitals formed a considerable
contribution to the 'central' capital. Then stocks were issued, giving the right to their owners to
participate in the company's activities and receive a share of profits, depending on the share size.
The securities market appeared where anyone could buy stocks of the company he trusted or
stocks, which rose in price. Thus stock exchanges emerged, where they sold not commodities,
but paper liabilities.
With increasing trading, the exchange could not physically accommodate all, who wanted to
sell or buy securities. Those who undertake the function of exchange business became
intermediaries (посредники). In a separate transaction three parties participated: the seller, the
buyer and the intermediary. At the initial stage, the model was simple - one intermediary brought
together the buyer and the seller. With increased exchange operations the model became more
complex:
there
were
two
intermediaries.
Tough competition and development of the Internet technologies simplified technical and legal
aspects of transaction. After the computer revolution, the revolution of exchange business
happened. The central information link is also decentralized here. Participants enter into
transactions with a high degree of independence, crossing borders of countries, economic unions
and previously portable exchanges.
Approximately in the 1950-60's, first enthusiasts and then other progressive part of exchange
community paid attention to the fact that price on this or that financial asset does not change
chaotically, but follows certain regularities. Virtually everywhere traders started placing prices
on the coordinate axis, trying to analyze the received charts. Thus, the New Epoch of exchange
trade has come - the Epoch of Technical Analysis.
Technical analysis assumes that all information on the market and its further fluctuations is
already contained in the price. Any factor influencing the price - economic, political or
psychological - has been already considered by the market and included in the price. Background
data for technical analysis are prices - highest and lowest, opening and closing price for a
specified period and volume of operations. The instrument of technical analysis is a chart, the
language - statistics. It is possible to say, that technical analysis is statistical-mathematical
analysis of previous quotations with forecasting of consequent prices.
Such an approach to exchange business was new and attractive. Just for several years, technical
analysis has changed from an exotic instrument to a scientific method. Today it is hard to
imagine the Stock Exchange without price change charts. Profession of the financial manager or
the trader has become something more than just an occupation. Trading results much depend on
ability to correctly interpret events, not just on financial potential of the participant of exchange
trading. Such personal qualities as individuality, analytical mind, quick reaction, etc. started
playing a significant role.
Ex. 7 Arrange the following words in pairs of synonyms:
Form, finish, transaction, stock, mainly, opportunity, bring, enrich, assistance, solve, question,
condition, liability, contribution, try, function, study, activity, analyze, undertake, addition,
obligation, state, problem, settle, participation, develop, deliver, chance, generally, commodity,
deal, conclude, construct.
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Ex. 8 Arrange the following words in pairs of antonyms:
Rich, special, construct, difference, partial, accelerate, poverty, public, stable, right, emerge,
initial, stage, poor, ordinary, destroy, uniformity, wholesale, delay, wealth, private, unstable,
incorrect, disappear, final, phase.
Ex. 9 Word building:
1) form adjectives by adding the suffix –ful and translate them into Russian:
Care, truth, beauty, doubt, fruit, peace, use, skill, wonder, meaning.
2) form adjectives by adding the suffix –al and translate them into Russian:
Centre, culture, form, intellect.
3) form adjectives by adding the suffix –ive and translate them into Russian:
Act, compare, progress, restrict, compete, construct, create.
4) form adjectives by adding the suffix –less and translate them into Russian:
Aim, fruit, help, home, hope, shame use, price.
5) form adjectives by adding the suffix –able / -ible and translate them into Russian:
Afford, trade, quote, exchange, profit, consider, understand, deliver, access, change,
deliver, compete.
Ex. 10 Find English equivalents in Text A.
1. заключать сделки
2. оптовая торговля
3. отсроченная дата поставки
4. средство обогащения
5. получать огромные прибыли
6. рынок ценных бумаг
7. посредник сводит покупателя и продавца
8. технические и юридические стороны сделки
9. высокая степень независимости
10. следовать определенной системе
11. эпоха технического анализа
12. фактор, влияющий на цену
13. способность правильно толковать события
14. цена на момент открытия биржи
15. практически повсюду
16. исходные данные
17. жесткая конкуренция
18. проницательный ум
Ex. 11 Match parts A and B.
A
1. A product or a raw material, such as grain, coffee,
cotton or metals, that can be bought and sold in large quantities.
B
1. Medium of exchange
2. Commodity
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2. Money or other ways of paying for things.
3. The activity of buying and selling or of exchanging goods
or services between people or countries.
4. A large amount of money, property, etc., that a person or
a country owns.
5. The buying and selling of goods in large quantities, so that
they can be sold again to make a profit.
3. Trade
4. Wholesale trade
5. Wealth
Ex. 12 Say if it is true or false. Correct false statements, using the following phrases: I’m
afraid it’s not correct, as far as I know, I don’t really agree etc.
1. The process of exchange led to appearance of money and trading.
2. The first places for exchange were schools.
3. At the first stock exchange it wasn’t possible to conclude a transaction for commodities,
which had not been yet produced.
4. Participation in exchanges was affordable for everyone.
5. In a separate transaction two parties participated: the seller and the buyer.
6. Trading results much depend on ability to correctly interpret events.
Ex. 13 Fill in the gaps with prepositions.
1. Exchange has existed … the beginning of the human society.
2. A special building … transactions was first constructed … 1531.
3. Appearance … transactions … delayed execution date provided an opportunity to derive
profit … price fluctuations.
4. The securities market appeared where anyone could buy stocks … the company he
trusted or stocks, which rose … price.
5. Tough competition and development … the Internet technologies simplified technical
and legal aspects … transaction.
6. Technical analysis assumes that all information … the market and its further fluctuations
is already contained … the price.
7. Such an approach … exchange business was new and attractive.
8. Just … several years, technical analysis has changed … an exotic instrument … a
scientific method.
9. Development of this process led … appearance … money and trading.
Ex. 14 Give answers to the following questions according to Text A:
1.
2.
3.
4.
5.
6.
Why did the first exchange assemblies and then stock exchange appear?
What transactions were possible to conclude at the first stock exchange?
Could everyone become a participant at the stock exchange?
Why did intermediaries appear? What was their function?
What were the reasons for the Epoch of Technical Analysis coming?
What is the main instrument of Technical analysis?
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Ex. 15 Read Text B and fill in the gaps with the given words in the correct form.
( securities (2), corporation, bond, supply and demand, price, stock exchange (2),
investor, share, trader)
Text B
A stock exchange, securities exchange or (in Europe) bourse is a ____________ or
mutual organization which provides "trading" facilities for stock brokers and _______ , to trade
stocks and other __________ . Stock exchanges also provide facilities for the issue and
redemption (выкуп) of securities as well as other financial instruments and capital events
including the payment of income and dividends. The securities traded on a stock exchange
include: ______ issued by companies, unit trusts and other pooled investment products
(объединенные инвестиции) and ______ . To be able to trade a security on a certain
______________ , it has to be listed there. Usually there is a central location at least for
recordkeeping, but trade is less and less linked to such a physical place, as modern markets are
electronic networks, which gives them advantages of speed and cost of transactions. Trade on an
exchange is by members only. The initial offering of stocks and bonds to ________ is by
definition done in the primary market and subsequent trading is done in the secondary market. A
______________ is often the most important component of a stock market. _________________
in stock markets is driven by various factors which, as in all free markets, affect the _____ of
stocks.
There is usually no compulsion (принуждение) to issue stock via the stock exchange
itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off
exchange or over-the-counter.
This is the usual way that bonds are traded. Increasingly, stock exchanges are part of a
global market for __________ .
Ex. 16 Read Text C and answer the questions below.
1. What are the functions of the London Stock Exchange?
2. Why is the LSE the most international of all exchanges?
3. What systems are different shares traded on the LSE?
Text C
London Stock Exchange (LSE)
The London Stock Exchange is one of the world’s oldest stock exchanges and can trace
its history back more than 300 years. Starting life in the coffee houses of 17th century London,
the Exchange quickly grew to become the City’s most important financial institution. Over the
centuries following, the Exchange has consistently led the way in developing a strong, wellregulated stock market and today lies at the heart of the global financial community.
For over 300 years, London Stock Exchange has produced detailed market information
for companies and investors. Technological innovations have transformed this service from a
twice-weekly paper publication for the London business community to a continuous flow of
electronic information to all the financial markets across the globe.
The London Stock Exchange is the most important exchange in Europe and one of the
largest in the world. It lists over 3,000 companies and with 350 of the companies coming from
50 different countries, the LSE is the most international of all exchanges.
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The London Stock Exchange is comprised of two different stock markets: the Main
Market and the Alternative Investment Market (AIM). The Main Market is solely for established
companies with high performance, and the listing requirements are strict. Approximately 1,800
of the LSE's company listings trade on the Main Market, and the total market capitalization is
over 3,500 billion. The Alternative Investment Market on the other hand trades small-caps
(мелко - капитализированный), or new enterprises with high growth potential. Over 1,060
companies list on this market, with a total capitalization of 37 billion.
The LSE is completely electronic, but different shares are traded on different systems.
Highly liquid shares are traded using the SEATS (Stock Exchange Automated Trading System)
on an order driven basis. This means that when a buy and sell price match, an order is
automatically executed. For securities that trade less regularly, the London Stock Exchange
implements the SEAQ (Stock Exchange Automated Quotation) system, where market makers
keep the shares liquid. These market makers are required to hold shares of a specific company
and set the bid and ask prices, ensuring that there is always a market for the stock.
Ex. 17 Underline the topical sentences in each paragraph of Text C. Make up a short
summary of Text C.
Ex. 18 Render Text D into English.
Text D
Что такое биржа?
Финансовый рынок - своего рода “нервный центр” современной экономики,
обеспечивающий ее жизнедеятельность. А рынок ценных бумаг - важнейшая составная
часть финансового рынка, здесь сбережения превращаются в инвестиции для
использования в производительном секторе экономики. Цель рынка ценных бумаг обеспечивать контакт между теми, кто нуждается в средствах, и теми, кто хотел бы
инвестировать избыточный доход.
Фондовая биржа представляет собой торговую площадку, где продавец акций и
покупатель встречаются. Товар здесь особый – ценные бумаги, и рынок для него имеет
особое устройство и особые правила. Правила биржи устанавливаются государственным
законодательством и Уставом биржи.
Торговлю на бирже ведут профессиональные участники рынка ценных бумаг,
имеющие соответствующую лицензию, прошедшие процедуру биржевой аккредитации.
Они предоставляют всем желающим юридическим и физическим лицам, которые стали их
клиентами, возможность принять участие в биржевых торгах, то есть оказывают им
брокерские услуги, взимая за это комиссию.
Ценные бумаги допускаются к торгам на бирже только после процедуры листинга
(буквально "включение в список"), пройдя надежную юридическую проверку. Листинг
позволяет выявить наиболее надежные и качественные ценные бумаги и способствует
повышению их ликвидности.
Жесткие требования к ценным бумагам, выставляемым на торги, и к участникам
биржевых торгов гарантирует честность и надежность заключаемых нa торгах сделок,
предохраняет от мошенничества и злоупотреблений.
Ex. 19 Study the information.
The usual purpose of negotiations is to strike a deal. That’s why diplomacy, friendliness and
cooperation are important in negotiating. All types of business negotiations have something in
common. One can find four main phases in negotiations:
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1) The preparation phase: this is where you work out what you want.
2) The debating phase: this is when you try to find out what the other side wants,
without informing them about your final conditions.
3) The proposal phase: when you are suggesting something.
4) The bargaining phase: where in turn your conditionally exchange individual
points.
Normally both parties are interested in reaching an agreement in which both sides take away
something positive from the deal. This is called a “win – win” situation.
Negotiations can occur spontaneously (when you are visiting a trade fair) or may be planned in
advance. When people meet each other for the first time they usually exchange business cards.
For example:
International Express Ltd
Martin Ross
Economist
Commercial Director
30 White street
8023 London
Great Britain
Telephone 41 263 381
Fax 41 275 339
Imagine that you are working as an office manager for Brooks & Co Ltd.
Make a business card for yourself:
Do you know?
How many States do the USA comprise?
The States of the USA
The United States began as nation of 13 states. These were the colonies which had broken
away from Great Britain in 1776 and fought six-year War for Independence. The original 13
colonies were then located in the area today occupied by 16 states, and 34 other states were ad
mitted to the union one by one.
The newest states are Alaska and Hawaii, admitted in 1959. Washington, in the District of
Columbia, is the national capital. It was named in honour of George Washington, the first US
president. The District of Columbia, which was named for Christopher Columbus, discoverer of
America, is 60 square miles in area; and is not part of any state.
Many of the state lines look like they had been laid out according to a regular, squared
pattern. Indeed, the whole country west of the original 13 states was surveyed in regular blocks,
a mile square. This way of dividing the land is reflected in the borders of the states.
The United States is a young country. Its written history is only a few hundred years old.
It is sometimes, in fact, called the “New World.” Over the last four hundred years millions of
people have come to start a new life in this “New World.”
20
Americans are not afraid of new ideas. They built the first skyscrapers and they put the
first man on the moon. They like to be modern. They like exciting, modern cities, new houses,
and new cars.
At the same time, Americans love old things. They like to visit historic houses and
museums. They build old pioneer towns and remember the days of the “Wild West.” Americans
are interested in old traditions, but they are good at making new traditions too.
The people of the United States are a mixture of many different nationalities. In one city
you can find people whose parents, grandparents or great-grandparents came from China, Africa,
South America, Southeast Asia, and every European country.
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