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126.Внеаудиторное чтение по английскому языку

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Министерство образования и науки Российской Федерации
Федеральное государственное бюджетное образовательное учреждение высшего
профессионального образования
«Оренбургский государственный университет»
Е.А. Антонюк, Т.В. Колосова
ВНЕАУДИТОРНОЕ ЧТЕНИЕ ПО АНГЛИЙСКОМУ ЯЗЫКУ
Рекомендовано Ученым советом федерального государственного бюджетного
образовательного учреждения высшего профессионального образования
«Оренбургский государственный университет» в качестве учебного пособия
для студентов, обучающихся по программам высшего профессионального
образования по экономическим направлениям подготовки
Оренбург
2013
Copyright ОАО «ЦКБ «БИБКОМ» & ООО «Aгентство Kнига-Cервис»
УДК 811.111`24:33(075.8)
ББК 81.432.1я73+65я73
А72
Рецензент - доцент, кандидат педагогических наук Г.В. Терехова.
А72
Антонюк, Е.А.
Внеаудиторное чтение по английскому языку : учебное
пособие / Е.А. Антонюк, Т.В. Колосова; Оренбургский гос.
ун-т. - Оренбург: ОГУ, 2013.- 134 c.
ISBN
Данное учебное пособие составлено на основе аутентичного
текстового материала.
Учебное пособие предназначено для студентов, обучающихся по
программам высшего профессионального образования по социальноэкономическим направлениям подготовки. Цель пособия - научить
студентов читать и понимать оригинальную литературу по специальности,
развивать навыки профессиональной речи, создать основу для развития
навыков говорения по изученной тематике.
УДК 811.111`24:33(075.8)
ББК 81.432.1я73+65я73
ISBNддддддддддддддддддддддлллллллллллььььь  Антонюк Е.А., Колосова Т.В.,
2013
 ОГУ, 2013
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Содержание
Введение………………………………………………………………………….........
4
1 Unit 1 The European summit………………………………………………………...
5
2 Unit 2 Lost economic time…………………………………………………………...
13
3 Unit 3 Global poverty………………………………………………………………..
20
4 Unit 4 Building competitiveness: insider aiding……………………………………..
26
5 Unit 5 China’s economy and the WTO…………………………………………........
33
6 Unit 6 US government poses next challenge for BP……………………………........
40
7 Unit 7 Celebrity endorsement in ads……………………………………………........
46
8 Unit 8 The first-mover advantage myth………………………...................................
52
9 Unit 9 Unemployment matters more than GDP or inflation…………………….......
59
10 Unit 10 Oil prices: 10 reasons to be fearful………………………………………...
66
11 Unit 11 The not-for-profit sector…………………………………………………...
72
12 Unit 12 The future of the European Union……………………………………........
79
13 Unit 13 Oil prices…………………………………………………………………...
87
Keys………………………………………………………………………………........
96
Glossary………………………………………………………………………………..
119
Список использованных источников……………………………………………...... 133
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Введение
Данное учебное пособие предназначено для проведения внеаудиторного
чтения по английскому языку у студентов факультета экономики и управления.
Цель пособия - познакомить студентов с терминологической лексикой, характерной
для экономической литературы, и развить навыки чтения, перевода и извлечения
информации.
Пособие создано на основе аутентичных текстов по экономике. Текстовый
материал пособия также знакомит студентов с актуальными событиями в области
экономики и является базовой основой для формирования навыков говорения по
изученной тематике.
Данное пособие состоит из 13 разделов. Тексты пособия имеют разную
учебную цель и предназначены для развития навыков различных видов чтения и
решения проблемных заданий. Предложенная система упражнений помогает снять
лексические и грамматические трудности. Частая повторяемость лексики всех
разделов пособия обеспечивает прочное усвоение специальной терминологии.
К пособию прилагается глоссарий, содержащий справочный материал, и
ключи к упражнениям для самоконтроля.
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1 Unit 1 The European summit
Praise heaven for a boring European summit. “This is my first summit without talk
of default, break-up or catastrophe,” said Enda Kenny, Ireland’s taoiseach (prime
minister). “We had a normal, constructive discussion.” The French president, Nicolas
Sarkozy, went even further: “We are not out of the economic crisis, but we are turning the
page on the financial crisis.”
A new treaty to impose greater fiscal discipline on euro-zone members and eight
others (but not Britain or the Czech Republic) was signed today after being negotiated in
record time. The fall in the spreads on bond yields of France and others showed the
situation was stabilising, said Mr Sarkozy: “It is a great relief.” The European Union is
now trying to turn its attention to promoting longer-term growth.
If Europe can breathe more easily it is thanks in large part to two Italians called
Mario. First, Italy’s technocratic prime minister, Mario Monti, has started to pull Italy
back from the brink through budget cuts and structural reforms.
More importantly, Mario Draghi, the president of the European Central Bank, has
administered a double shot of financial morphine—cheap three-year loans to any eurozone bank that asks for the money—that has eased the acute pain. But the euro zone is far
from cured: there are worrisome symptoms all over.
To begin with, Greece has more obstacles to overcome before securing the vital
second rescue package it has been promised. Whether it can implement all the budget cuts
and reforms it has promised is the subject of great doubt. But for now the mood is to push
the rescue through; talk of forcing Greece into an early default has died away.
So has the invective against Antonis Samaras, the leader of Greece’s New
Democracy party, who has often questioned the EU-IMF conditions imposed on his
country. Just before the summit, Mr Samaras had a long private meeting with Angela
Merkel, the German chancellor.
Both sides said it had gone well. Germany said it was reassured that Mr Samaras
would stick with the programme if elected in Greece's general election, expected in April.
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He said he had voted in favour of it and “paid with the blood of my party” after 21
members were expelled for opposing the EU/IMF demands.
The Greek issue neutralised, for a while at least, there is now a looming clash with
Spain. As the euro zone enters a double-dip recession, Spain may be coming closer to a
deflationary spiral. Its unemployment rate, at 23,3 % last month, is the highest in the EU.
And its budget deficit last year barely declined from 2010, standing at 8,5 % of GDP
instead of the planned 6 %.
Mariano Rajoy, the new Spanish prime minister, has been lobbying for his country’s
deficit target to be softened, but the summit was having none of it. The conclusions
declare: “Member States under market pressure should meet agreed budgetary targets and
stand ready to pursue further consolidation measures if needed.”
A novice in European summits, Mr Rajoy has been playing a strange game. He was
careful not to discuss specific figures with fellow leaders. But as soon as he emerged from
the summit he declared that Spain’s deficit this year would be 5,8 %, rather than the
agreed target ratio of 4,4 %. He insisted, though, that Spain would still fall below the 3 %
deficit limit in 2013, as planned.
The question now is how strictly the European Commission will interpret its new
powers to monitor national economies and demand reform, backed with the threat of semiautomatic fines. Senior figures in Brussels say they could in theory live with a Spanish
slippage this year.
But they are wary of undermining the new governance system, and of giving
recently becalmed markets a new reason to panic. After all, Belgium was recently forced
to make additional cuts to meet its target, and Italy has also made more cuts to balance the
budget by next year.
Germany, moreover, seems to be in an intolerant mood. There is irritation that the
Spanish government is delaying its budget pending regional elections in Andalusia that Mr
Rajoy's party hopes to win, and suspicion that it is inflating last year's deficit figures to
blame its Socialist predecessor. The commission says it wants to double-check the
numbers. But a senior source in Berlin puts it more bluntly: “Everybody knows the
Spanish are lying about the figures.”
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The recession has now reached the Netherlands, causing some Schadenfreude in
Brussels. The Dutch, after all, have been the most abrasively hawkish of the northern
creditor governments. The latest official forecasts show that, on its current course, the
Netherlands would post a deficit of 4,5 % of GDP this year, falling to 3,3 % in 2015. In
other words, it would miss its aim to come below the 3% target next year.
Mark Rutte, the Dutch prime minister, says he is determined to bring the deficit into
line, not because the EU is telling him to do so but because he believes in budget
discipline. But it is unclear how he can do this, and whether the anti-immigrant and antiEU Freedom Party of Geert Wilders will continue to prop up his minority government.
Political uncertainty comes from other directions, too. Ireland has called a
referendum to ratify the fiscal compact. Mr Kenny has expressed confidence that Irish
voters, who have twice rejected European treaties, will vote "yes" this time. Moreover,
François Hollande, the French Socialist presidential candidate, has said he would
renegotiate the treaty if elected in May.
A final unsettling factor is the unresolved question of whether to enhance the euro
zone’s rescue funds. The easiest way of doing this would be to allow the current temporary
European Financial Stability Facility to continue using its leftover funds when the
permanent European Stability Mechanism comes into force this summer.
Germany has argued that the current firewall is sufficient given the greater calm in
the markets, but has agreed to review the matter by the end of the month. It is under
pressure from key members of the IMF who insist that the euro zone must strengthen its
firewall before they agree to contribute more money.
For now, though, European leaders are glad to talk of promoting growth, though
they mean very different things by the term. The most obvious means of achieving this at a
time of austerity is to open up the EU’s single market, particularly in services.
Mario Monti, the Italian prime minister, says that as well as a “fiscal compact” the
EU needs an “economic compact”. Along with Britain, Sweden and others, he is pushing
for the performance of countries in market liberalisation be monitored more closely. The
summit communiqué calls for a “scoreboard” to compare the performance of member
states, and “regular monitoring” in future summits.
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This could set up a potential future clash between northern liberals, now backed by
Italy and Spain, against France and Germany, that for the most part prefer to protect the
services industry. Mr Sarkozy, for one, says he will not have a repeat of the hated
Bolkenstein directive that partly liberalised services and led to controversies about the
legendary “Polish plumber”. German officials like to mock Britain for placing too much
emphasis on financial services at the expense of industry.
The leaders have many reasons to engage in happy talk about the euro zone turning
the corner: Mr Sarkozy is campaigning for re-election, so wants to take the credit for
saving the euro; Mrs Merkel wants to get the world to stop asking for more money; Mr
Monti wants to break the Franco-German duumvirate by building alliances with northern
liberals on the issue of the single market; Ireland and Portugal want to distance themselves
from Greece; and many want to avoid structural reforms that may be even harder than
cutting budgets.
Above all, they all hope they can change perceptions. “This is a psychological
crisis,” says one senior source, “It is a matter of confidence. The consumer has abdicated.
When you keep hearing talk of Greek default and the end of the euro, you will save your
money rather than spend it.”
(The Economist)
1.1
Read the text thoroughly and be ready to arrange the following statements
into the logical order of the text:
1 The European Union is now trying to turn its attention to promoting longer-term
growth.
2 “This is a psychological crisis,” says one senior source, “It is a matter of
confidence”.
3 The question now is how strictly the European Commission will interpret its new
powers to monitor national economies and demand reform.
4 A new treaty to impose greater fiscal discipline on euro-zone members was signed
today after being negotiated in record time.
5 A final unsettling factor is the unresolved question of whether to enhance the euro
zone’s rescue funds.
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6 The recession has now reached the Netherlands, causing some Schadenfreude in
Brussels.
7 The Greek issue neutralised, for a while at least, there is now a looming clash with
Spain.
8 For now, though, European leaders are glad to talk of promoting growth, though
they mean very different things by the term.
1.2
Match the words with their definitions and make up the sentences with them:
1) summit
1) a thing that is borrowed, esp. a sum of money that
is expected to be paid back with interest
2) treaty
2) supporting the use of military force in order to
deal with political problems
3) loan
3) to make someone or something late
4) worrisome
4) a formally concluded and ratified agreement
between countries
5) deficit
5) failure to pay money that you owe at the right time
6) hawkish
6) the amount by which something, esp. a sum of
money, is too small
7) clash
7) a serious argument about something that involves
many people and continues for a long time
8) delay (v)
8) a meeting between heads of government
9) controversy
9) an argument between two people or groups
because they have very different beliefs or opinions
10) default
10) causing anxiety or concern
1.3 Insert the correct preposition.
1 Military spending imposes a huge strain ….. the economy.
2 That's all the news there is ….. now.
3 The planning application was pushed ….. as quickly as possible.
4 We must teach children to be wary ….. strangers.
5 He insisted ….. checking everything himself.
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6 The government introduced measures to prop ….. the stock market.
7 Safety standards in the industry have been a matter ….. concern.
1.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Mario Monti is the president of the European Central Bank.
2 Spain’s budget deficit last year barely declined from 2010, standing at 12 % of
GDP instead of the planned 3 %.
3 The latest official forecasts show that the Netherlands would post a deficit of
4,5
% of GDP this year.
4 The most obvious means of achieving the promoting growth is to open up the
EU’s single market, particularly in products.
5 German officials like to mock Britain for placing too much emphasis on financial
services at the expense of industry.
1.5 Answer the following questions.
1 What is Enda Kenny?
2 What treaty was signed after being negotiated in record time?
3 Who helped Europe breathe more easily?
4 What is the economic situation in Spain at the time of euro zone entering a
double-dip recession?
5 Why does the commission want to double-check the numbers?
6 What are the conclusions of the summit?
7 Has the recession touched the Netherlands?
8 What is the easiest way to enhance the euro zone’s rescue funds?
9 Why does the summit communiqué call for a “scoreboard”?
10 What will you do when you keep hearing talk of Greek default and the end of the
euro?
1.6 Match equivalents:
1) crisis
1) spending
2) budget
2) beginner
3) expense
3) statistics
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4) promote
4) catastrophe
5) election
5) danger
6) threat
6) slowdown
7) figures
7) foster
8) novice
8) vote
9) recession
9) credit
10) loan
10) fund
1.7 Finish the following sentences using the original text:
1 A new treaty to impose greater fiscal discipline on euro-zone members and eight
others… .
2 Germany said it was reassured that Mr Samaras would stick with the
programme… .
3 As the euro zone enters a double-dip recession… .
4 After all, Belgium was recently forced to make additional cuts to meet its target…
5 A final unsettling factor is the unresolved question of… .
6 The most obvious means of achieving the promoting growth at a time of austerity
is… .
1.8 Choose the correct variant.
1 The company will have to restructure its debts to avoid …. .
a) defeat;
b) default;
c) accident.
2 Oil companies were heavily criticized when they made large profits during the oil
….. of the 1970s.
a) crisis;
b) growth;
c) consumption.
3 Both sides have agreed to sign the …. .
a) threat;
b) treaty;
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c) treatment.
4 We need active policies to pull the country out of …. .
a) decision;
b) retention;
c) recession.
5 ….. for April show a slight improvement on previous months.
a) figures;
b) fractions;
c) funds.
6 Most analysts are forecasting a further downturn in the …. .
a) department store;
b) supermarket;
c) market.
7 ….. is the total value of all goods and services produced in a country, in one year,
except for income received from abroad.
a) G-20;
b) GDP;
c) GNP.
8 In the current …… climate (=conditions), we must keep costs down.
a) economic;
b) economical;
c) economy.
9 This employee's should be fired because of his poor …. .
a) performance;
b) show;
c) play.
10 Euro-.... officially called the euro area, is an economic and monetary union of 17
European Union (EU) member states that have adopted the euro
as their common
currency.
a) region;
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b) territory;
c) zone.
1.9 Write out key expressions. Make up a plan for retelling.
1.10 Be ready to retell the text in class.
2 Unit 2 Lost economic time
Now almost five years old, the economic crisis rumbles on. In order to assess how
much economic progress it has undone, The Economist has constructed a measure of lost
time for hard-hit countries. It shows that Greece’s economic clock has been turned back
furthest: it has been rewound by over 12 years. Elsewhere in the euro area, Ireland, Italy,
Portugal and Spain have lost seven years or more. Britain, the first country forced to
rescue a credit-crunched bank, has lost eight years. America, where the trouble started, has
lost ten (see left-hand chart).
Our clock uses seven indicators of economic health, which fall into three broad
categories. Household wealth and its main components, financial-asset prices and property
prices, are in the first group. Measures of annual output and private consumption are in the
second category. Real wages and unemployment make up the third. A simple average of
how much time has been lost in each of these categories produces our overall measure.
Stockmarkets give some of the starkest results. American equities lost a quarter of
their value in the month after the collapse of Lehman Brothers in September 2008. Shares
are an important component of households’ pension-fund wealth, and in that month alone
five years of gains were eradicated. The main indices have improved markedly since then:
the S&P 500 is back to around 90 % of its peak value. But they were at these levels back
in the late 1990s, too, so some investors will have made no capital gains in 13 years. Greek
stocks were higher in 1992 than today: 20 years have been wiped away.
Recent performance is actually quite good from a historical perspective: five years
on from both Wall Street’s 1929 crash and Japan’s 1989 asset bust, equities were at just
50 % of their peak values in real terms. But history also offers a warning: it took 25 years
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for American stocks to regain their 1929 highs and Japanese stocks have never made it
back to their peak.
House prices have gone backwards, too. The average American homeowner is living
in 2001, judging by inflation-adjusted property values. Britain has suffered less dramatic
drops in house prices, but has still lost seven years. The costs of this lost time are huge:
British households’ property wealth, in today’s prices, is around £500 billion ($785
billion) short of its peak; American households have lost a whopping $9,2 trillion.
How quickly economies make up lost time will depend on where they have ceded
ground. Some indicators may bounce back quickly: share prices are forward-looking
measures of expected returns that are constantly being reassessed. Just as they can crash
down they can jump back up, boosting wealth (see figure 1).
Figure 1
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Other indicators are more sluggish. Measures of output tend to crawl, not jump. One
such measure, nominal GDP, is a vital metric of governments’ debt sustainability. Since
debts are set at past values, growth and inflation tend to make the burden of borrowing
more manageable; a shrinking economy makes the problem worse. There are 14 countries
that have gone back in time, according to the nominal GDP indicator. This group includes
eight members of the European Union, all of which have to repay their debts from an
eroded tax base. Portugal and Spain have been sucked back to 2008 on this measure;
Ireland was richer in 2006 (see figure 2).
Figure 2
A different measure of GDP is needed to see how well consumers are doing.
Inflation needs to be stripped out since it is higher output, not higher prices, that make
people better off. Population growth also needs to be taken into account, since living
standards are best measured on a per-person basis. Measured by real GDP per person a
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third of the 184 countries the IMF collects data for are poorer than they were in 2007.
These 61 countries have each lost at least five years.
The type and location of the economies still underwater on this measure are striking
(see chart). The EU has done very badly: 22 of its 27 members have lost time. Of the G7
group of large economies, only Germany has not gone backwards. The Caribbean and
eastern Europe also have their fair share of submerged countries. Asia has performed
much more strongly.
Our labour-market indicators provide more estimates of lost time. The OECD, a
think-tank, publishes wage data for 25 rich countries. In ten of them real wages were lower
in 2010 than previously, with four years lost on average by those that went backwards.
Workers in Greece and Hungary had lost six years, with pay below its 2004 level.
Unlike income and GDP, there is no reason why unemployment statistics should
improve year on year. But many advanced countries had managed to reduce joblessness to
new lows in the years before 2007. The crisis blew all those gains away. In America the
unemployment rate stands at 8,3 % of the labour force, its 1983 level. In Britain it is at its
worst for 17 years. In the euro area job prospects diverge hugely: unemployment is falling
in Germany but Greece, Ireland and Portugal have joblessness rates not seen since the
early 1990s (see bottom chart).
These measures are the most worrying of all. Growth will reset the economic clock,
providing new jobs and the resources to pay down debts. The IMF predicts that in three
years Italy will be the only G7 country with real GDP lower than in 2007. Within this
group, America, which is already growing again, is in a better position than Britain, which
is not. But periods of unemployment scar workers even after economies have crawled back
to health. For some, the time lost to the crisis will never be recovered.
(The Economist)
2.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 How quickly economies make up lost time will depend on where they have ceded
ground.
2 Now almost five years old, the economic crisis rumbles on.
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3 The IMF predicts that in three years Italy will be the only G7 country with real
GDP lower than in 2007.
4 Recent performance is actually quite good from a historical perspective.
5 The OECD, a think-tank, publishes wage data for 25 rich countries.
6 Stockmarkets give some of the starkest results.
7 Inflation needs to be stripped out since it is higher output, not higher prices, that
make people better off.
8 The given clock uses seven indicators of economic health, which fall into three
broad categories.
2.2 Match the words with their definitions and make up sentences with them:
1) rumble on (v)
1) to gradually reduce something such as someone's
power or confidence
2) rewind (v)
2) shares in a company from which the owner of the
shares receives some of the company's profits rather
than a fixed regular payment
3) peak
3) ability to continue for a long time
4) erode (v)
4) to continue for a long time
5) equities
5) the number of people in a particular country or
area who cannot get a job
6) household
6) a sum of money that a person or organization owes
7) sustainability
7) to make a cassette tape or video go backwards in
order to see or hear it again
8) consumer
8) someone who buys and uses products and services
9) debt
9) the time when something or someone is best,
greatest, highest, most successful etc
10) unemployment
10) a house and its occupants regarded as a unit
2.3 Insert the correct preposition.
1 The row about pay is still rumbling …. .
2 These figures do not take ….. account changes in the rate of inflation.
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3 Many illnesses fall ….. the category of stress-related illnesses.
4 The company will be forced to pay $6 million to make ….. the difference.
5 The novel is written ….. a child's perspective.
6 It would cost $1 million ….. the very least.
7 The new bridge should reduce travelling time from 50 minutes ….. 15 minutes.
2.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 The Economist’s clock uses seven indicators of economic health, which fall into
three broad categories.
2 American equities lost a quarter of their value in the month after the collapse of
Soviet Union.
3 There are 7 countries that have gone back in time, according to the nominal GDP
indicator.
4 Many advanced countries had managed to reduce joblessness to new lows in the
years before 2007.
5 The IMF predicts that in three years Italy will be the only G7 country with real
GDP higher than in 2007.
2.5 Answer the following questions.
1 What has the Economist done to assess how much economic progress it has
undone?
2 How many indicators does the clock use? What are they?
3 When did American equities lose a quarter of their value?
4 Have American and Japanese equities reached their initial levels?
5 What does how quickly economies make up lost time depend on?
6 What is a vital metric of governments’ debt sustainability?
7 When is the average American homeowner living, judging by inflation-adjusted
property values?
8 What the OECD wage data for 25 rich countries show?
9 Had many advanced countries managed to reduce joblessness to new lows in the
years before 2007?
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10 What will happen to Italy in three years according to the IMF predictions?
2.6 Match equivalents:
1) progress
1) liability
2) rescue
2) decline
3) debt
3) save
4) unemployment
4) climax
5) standard
5) asset
6) output
6) advance
7) peak
7) quality
8) drop
8) value
9) assess
9) joblessness
10) property
10) production
2.7 Finish the following sentences using the original text:
1 In order to assess how much economic progress it has undone…
2
The main indices have improved markedly since then:…
3
How quickly economies make up lost time will depend on…
4
A different measure of GDP is needed to see…
5
Population growth also needs to be taken into account,…
6
The IMF predicts that in three years…
2.8 Choose the correct variant.
1 A consumer price ….. (CPI) measures changes in the price level of consumer
goods and services purchased by households.
a) inflation;
b) interest;
c) index.
2 Damage to the building was ….. at $40,000.
a) assessed;
b) accessed;
c) counted.
3 Manufacturing ….. has increased by 8%.
a) input;
b) output;
c) cut.
4 There are extra benefits for people on low …. .
a) wares;
b) wages;
c) weight.
5 For most companies there are two types of ….. : ordinary shares and preference
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shares.
a) equity;
b) equality;
c) etiquette.
6 The share price has continued to fall in ….. over the past week.
a) volume;
b) venue;
c) value.
7 She had run up credit card ….. of thousands of dollars.
a) debt;
b) debut;
c) money.
8 …… demand led to higher imports of manufactured goods.
a) client;
b) consumer;
c) customer.
9 Next year we hope to have a bigger ….. of the market.
a) percentage;
b) stock;
c) share.
10 There is a good ….. for growth in the retail sector.
a) problem;
2.9
b) product;
c) prospect.
Write out key expressions. Make up a plan for retelling.
2.10 Be ready to retell the text in class.
3 Unit 3 Global poverty
The past four years have seen the worst economic crisis since the 1930s and the
biggest food-price increases since the 1970s. That must surely have swollen the ranks of
the poor.
Wrong. The best estimates for global poverty come from the World Bank’s
Development Research Group, which has just updated from 2005 its figures for those
living in absolute poverty (not be confused with the relative measure commonly used in
rich countries). The new estimates show that in 2008, the first year of the finance-and-food
crisis, both the number and share of the population living on less than $1.25 a day (at 2005
prices, the most commonly accepted poverty line) was falling in every part of the world.
This was the first instance of declines across the board since the bank started collecting the
figures in 1981 (see chart).
The estimates for 2010 are partial but, says the bank, they show global poverty that
year was half its 1990 level. The world reached the UN’s “millennium development goal”
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of halving world poverty between 1990 and 2015 five years early. This implies that the
long-term rate of poverty reduction – slightly over one percentage point a year – continued
unabated in 2008-10, despite the dual crisis.
A lot of the credit goes to China. Half the long-term rate of decline is attributable to
that country alone, which has taken 660m people out of poverty since 1981. China also
accounts for most of the extraordinary progress in East Asia, which in the early 1980s had
the highest incidence of poverty in the world, with 77 % of the population below $1.25 a
day. In 2008 the share was just 14 %. If you exclude China, the numbers are less
impressive. Of the roughly 1.3 billion people living on less than $1.25 a day in 2008, 1.1
billion of them were outside China. That number barely budged between 1981 and 2008,
an outcome that Martin Ravallion, the director of the bank’s Development Research
Group, calls “sobering”.
If China accounts for the largest share of the long-term improvement, Africa has
seen the largest recent turnaround. Its poverty headcount rose at every three-year interval
between 1981 and 2005, the only continent where this happened. The number almost
doubled from 205 m in 1981 to 395 m in 2005. But in 2008 it fell by 12 m, or five
percentage points, to 47 % – the first time less than half of Africans have been below the
poverty line. The number of poor people had also been rising (from much lower levels) in
Latin America and in eastern Europe and Central Asia. These regions have reversed the
trend since 2000 (see figure 3).
Figure 3
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All this is good news. It reflects the long-run success of China, the impact of social
programmes in Latin America and recent economic growth in Africa. It is also a result of
the counter-cyclical fiscal expansions that many developing countries, notably China,
embarked on in response to the 2007-08 crisis. Many economists (including some at the
World Bank itself) were sceptical about these programmes, fearing they would prove
inflationary, inefficient and ill-timed. In fact, the programmes helped make poor and
middle-income countries more resilient.
The poverty data chime with other evidence. Estimates by the Food and Agriculture
Organisation that the number of hungry people soared from 875m in 2005 to 1 billion in
2009 turned out to be wrong, and were quietly dropped. Derek Headey of the International
Food Policy Research Institute has shown that despite the world food-price spike, people’s
assessment of their own food situation in most poor and middle-income countries was
better in 2008 than it had been in 2006.
Most of the progress has been concentrated among the poorest of the poor—those
who make less than $1.25 a day. The bank’s figures show only a small drop in the number
of those who make less than $2 a day, from 2.59 billion in 1981 to 2.44 billion in 2008
(though the fall from a peak of 2.92 billion in 1999 has been more impressive).
According to Mr Ravallion, poverty-reduction policies seem to help most at the very
bottom. In 1981, 645 m people lived on between $1.25 and $2 a day. By 2008 that number
had almost doubled to 1.16 billion. Even if many of these middling poor move up, their
places are often taken by those who have just escaped from absolute poverty; population
growth does the rest. The poorest of the poor seem to have escaped the worst of the post2007 downturn. But the growth in the middling poor shows there is much to be done.
(The Economist)
3.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 The world reached the UN’s “millennium development goal” of halving world
poverty between 1990 and 2015 five years early.
2 In 2006 most of the progress has been concentrated among the poorest of the
poor—those who make less than $1.25 a day.
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3 The poorest of the poor seem to have escaped the worst of the post-2007
downturn.
4 The new estimates show that in 2008 both the number and share of the population
living on less than $1.25 a day was falling in every part of the world.
5 Africa’s poverty headcount rose at every three-year interval between 1981 and
2005, the only continent where this happened.
6 The past four years have seen the worst economic crisis since the 1930s.
3.2 Match the words with their definitions:
1)
increase (v)
1)
the
number
of
times
something
happens,
especially crime, disease etc
2)
long-run
2)
able to become strong, happy, or successful again
after a difficult situation or event
3)
dual
3)
continuing for a long time
4)
incidence
4)
to move, or to make someone or something move
5)
move up (v)
5)
a process in which you make a judgment about a
person or situation, or the judgment you make
6)
budge (v)
6)
a period or process in which business activity,
production etc is reduced and conditions become
worse
7)
resilient
7)
having two of something or two parts
8)
assessment
8)
a decrease in the size, price, or amount of
something, or the act of decreasing something
9)
reduction
10) downturn
9)
to become bigger in amount, number, or degree
10) to get a better job in a company, or change to a
more advanced group, higher rank, or higher level
3.3 Insert the correct preposition.
1 They came across many instances ….. discrimination.
2 I found the keys - they were ….. the bottom of my handbag.
3 Australia's unemployment rate rose ….. 6.5 % in February.
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4 We have to make our choice ….. of these three books.
5 The phone rang ….. regular intervals all afternoon.
6 He embarked ….. a new career as a teacher.
7 The results showed a sharp drop ….. profits.
3.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 The best estimates for global poverty come from the World Bank’s Development
Research Group.
2
Of the roughly 1.3 billion people living on less than $1.25 a day in 2008, 1.1
billion of them were inside China.
3
Africa is the only continent where the poverty headcount rose at every three-
year interval between 1981 and 2005.
4
The Food and Agriculture Organisation states that the number of hungry people
decreased from 1 billion in 2005 to 875m in 2009.
5
The poorest of the poor seem to have escaped the worst of the post-2007
downturn.
3.5 Answer the following questions.
1 What have the past four years seen?
2 Where do the best estimates for global poverty come from?
3 How were the number and share of the population living on less than $1.25 a day
changing in 2008?
4 What is the UN’s “millennium development goal”?
5 What is Martin Ravallion?
6 How did Africa’s poverty headcount change between 1981 and 2005?
7 Has the number of poor people been rising only in Africa?
8 How did people in most poor and middle-income countries assess their own food
situation in 2008?
9 Whom do poverty-reduction policies seem to help most, cccording to Mr
Ravallion?
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10 Do the poorest of the poor seem to have escaped the worst of the post-2007
downturn?
3.6 Match equivalents:
1)
decline
1) worldwide
2)
share
2) evade
3)
global
3) result
4)
instance
4) extent
5)
outcome
5) fall
6)
interval
6) objective
7)
response
7) period
8)
level
8) percentage
9)
goal
9) feedback
10) escape
10) example
3.7 Finish the following sentences using the original text:
The past four years have seen the worst economic crisis since the 1930s and… .
1 The new estimates show that in 2008, the first year of the finance-and-food crisis,
both the number and share of the population living on less than $1.25 a day… .
2 The world reached the UN’s “millennium development goal” of… .
3 The number of poor people had also been rising in Latin America… .
4 Many economists (including some at the World Bank itself) were sceptical about
these programmes… .
5 Even if many of these middling poor move up, their places are often taken by
those… .
3.8 Choose the correct variant.
1 The island's population initially numbered 180, but there was a gradual …..
until only 40 people were left.
a) increase;
b) inclination;
c) decline.
2 Some ….. put the number of deaths at several hundred.
a) evaluates;
b) estimates;
c) rates.
3 They achieved their ….. of increasing sales by five percent.
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a) gown;
b) growl;
c) goal.
4 The company promised they would make no staff ……. for at least two years.
a) reduction;
b) production;
c) corruption.
b) account;
с) encounter.
5 Put it on my ….. please.
a) accountant;
6 Larger corporations are setting the ….. for better maternity benefits.
a) threat;
b) treaty;
c) trend.
7 The next chapter summarizes ….. developments in the field.
a)
decent;
b) recent;
c) resentful.
8 They are not allowed to hold ….. on people’s private finances.
a) date;
b) data;
c) facts.
9 Manufacturers report a big ….. in new orders.
a) drop;
b) drug;
c) prop.
10 In the long ….., alcohol causes high blood pressure.
a) turn;
b) time;
c) term.
3.9 Write out key expressions. Make up a plan for retelling.
3.10 Be ready to retell the text in class.
4 Unit 4 Building competitiveness: insider aiding
Europe’s labour markets have favoured older workers at the expense of younger
ones. The latest in an occasional series on structural reform
Of all the euro zone’s many problems, youth unemployment is perhaps the most
distressing. Joblessness among young workers is around 30 % in Portugal and nearly 50 %
in Spain. Above-average unemployment is the norm for young people, even in more
liberal markets like America’s. But Spain’s youth unemployment rate jumped by nearly 20
percentage points between 2007 and 2009, compared with a rise of seven points in
America. Labour-market regulations take much of the blame: while hard-to-fire older
workers luxuriate on permanent contracts, the young are typically hired temporarily and
are easier to sack.
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Such “dual” labour markets are themselves products of reform. Although American
unemployment quickly dropped following the troubles of the 1970s and early 1980s,
European joblessness remained stuck at high levels. Leaders recognised the need to inject
more flexibility into the labour market but powerful trade unions headed off a full-frontal
assault on workers’ rights. The answer was to create a less-protected class of employees.
The pain in Spain
Spain’s experience is instructive. As the unemployment rate approached 20 % in the
mid-1980s, the government introduced fixed-term contracts of between six months and
three years, which were subject to lower dismissal costs than those for workers on openended contracts. At the end of a three-year contract firms could either convert a worker to
permanent employment or send him packing. The reforms got results. Unemployment fell
from nearly 18 % when they began in 1984 to around 14 % six years later.
But the reforms had unintended consequences too. Temporary contracts surged,
soon accounting for close to a third of Spanish employment. Workers churned from job to
job: just 6 % of temporary contracts were converted to permanent employment during the
mid-2000s. When the economy turned down employees were shed in larger numbers and
the unemployment rate rose faster than before. Those more likely to be employed on
temporary contracts, such as the young, bore the brunt of the pain. The euro zone’s long
expansion from the mid-1990s until the crisis of 2008 disguised many of these problems.
A construction boom helped Spanish unemployment back below 10 %, even as
immigration soared. But the crisis has exposed old weaknesses again.
Volatility is but one cost of dual labour markets. Frequent job turnover makes
households’ finances less certain, making it harder, for example, to save regularly for old
age. More importantly, temporary employment discourages firms from investing in their
workers. The cost to an employer of converting an expiring temporary contract into a
permanent one is quite high because of a discontinuous jump in the cost of sacking the
worker. So there is an incentive to get rid of him when his contract ends and to invest little
in training him (see figure 4).
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Figure 4
This systematic underinvestment drags productivity inexorably downward. A 2011
study by Juan Dolado of Universidad Carlos III de Madrid, Salvador Ortigueira of the
European University Institute and Rodolfo Stucchi of the Inter-American Development
Bank pins 20 % of the productivity slowdown in Spanish manufacturing between 1992
and 2005 on temporary work. The young are especially harmed. Between 2005 and 2007
roughly 80 % of Spanish workers aged 16 to 19 were on temporary contracts, compared
with 32 % of 30-year-olds and 24 % of 40-year-olds. A lack of training may weigh on
them throughout their working lives.
A single, open-ended labour contract, in which severance pay rises continuously
with tenure, should increase the incentive for firms to retain more employees for longer
and to invest more in the human capital of new workers. Incremental protections should
also moderate swings in employment. A study of French and Spanish labour markets
found that the recent rise in Spain’s unemployment rate might have been cut by a third had
Spain followed the French example of a shallower gradient between labour-market tiers.
At this point, supporters of the model might well point to Germany, where the youth
unemployment rate is a mere 7,8 % and overall joblessness is at its lowest level for
decades. In many respect Germany’s labour market mirrors that of its peers. It, too,
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responded to eurosclerosis with flexible, second-tier contracts. Permanent positions
protected by strong employment rules still dominate its labour market.
But Germany also sought greater flexibility in other areas. Part-time work became
increasingly common: Germany’s Kurzarbeit programme, in which firms reacted to
recession by cutting hours rather than employees, is just the latest example of this
approach. Germany’s better performance also relied on ever-stingier unemployment
benefits, which increased labour supply and reduced upward wage pressure. Clauses in
collective-bargaining agreements allowed individual firms to stray from wage deals when
competitive pressures demanded it.
Dual purpose
Germany may have pursued wage restraint, but that is no easy route to prosperity.
Indeed, dual labour markets are more likely to have the opposite effect. Permanent
workers fearlessly seek higher wages, confident that job losses will fall first on temporary
workers. Soaring Spanish unemployment has produced little wage moderation. During
2009 the pay of permanent workers rose by 4 % in real terms.
And attractive as the German model is now, across decades American jobless rates
are tough to match. The Anglo-Saxon preference for little or no employment protection
may be the most effective at herding workers from declining industries to growing ones,
driving job creation and innovation. Dyspeptic bond markets are now pushing Spain and
others towards reforms that make it easier and cheaper to lay off workers again. Not before
time.
(The Economist)
4.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 Of all the euro zone’s many problems, youth unemployment is perhaps the most
distressing.
2 Germany may have pursued wage restraint, but that is no easy route to prosperity.
3 Unemployment in Spain fell from nearly 18% when they began in 1984 to around
14% six years later.
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4 A study of French and Spanish labour markets found that the recent rise in Spain’s
unemployment rate might have been cut by a third had Spain followed the French example
of a shallower gradient between labour-market tiers.
5 Such “dual” labour markets are themselves products of reform.
6 The Anglo-Saxon preference for little or no employment protection may be the
most effective at herding workers from declining industries to growing ones, driving job
creation and innovation.
7 Frequent job turnover makes households’ finances less certain, making it harder,
for example, to save regularly for old age.
8 This systematic underinvestment drags productivity inexorably downward.
4.2 Match the words with their definitions:
1)
expense
1) an organization, usually in a particular trade or
profession, that represents workers, especially in meetings
with employers
2)
churn (v)
2) one that cannot be stopped
3)
trade union
3) a difficult time when there is less trade, business
activity etc in a country than usual
4)
sack (v)
4) money you earn that is paid according to the number
of hours, days, or weeks that you work
5)
inexorable
5) the amount of money that you spend on something
6)
swing
6) an occasion when an employer ends a worker's
employment for a temporary period of time because there
is not enough work
7)
recession
7) the introduction of new ideas or methods
8)
wages
8) to feel sick because you are nervous or frightened
9)
innovation
9) a noticeable change in opinions or emotions
10) lay-off
10) to dismiss someone from their job
4.3 Insert the correct preposition.
1 Conference rooms were equipped ….. great expense.
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2
Much ….. the city was destroyed in the attack.
3
Williams invested a large sum of money ….. Swiss stocks.
4
Governments should be encouraged to get rid ….. all nuclear weapons.
5
The desire for peace will weigh heavily …… the negotiators.
6
Responding ….. the news, Mr Watt appealed for calm.
7
The company laid ….. 250 workers in December.
4.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1
Joblessness among young workers is around 50% in Portugal and nearly 30%
in Spain.
2
In Spain just 6% of temporary contracts were converted to permanent
employment during the mid-2000s.
3
Between 2005 and 2007 roughly 80% of Spanish workers aged 16 to 19 were
on temporary contracts.
4
In Germany the youth unemployment rate is a mere 7.8% and overall
joblessness is at its lowest level for decades.
5
Temporary workers fearlessly seek higher wages, confident that job losses will
fall first on permanent workers.
4.5 Answer the following questions.
1
What is the most distressing of all the euro zone’s many problems?
2
What is the rate of joblessness among young workers in Portugal and in Spain?
3
What do “dual labour-market regulations” mean?
4
How is it possible to inject more flexibility into the labour market?
5
How does frequent job turnover influence households’ finances?
6
Why is there an incentive to get rid of an employee when his contract ends and
to invest little in training him?
7
How many Spanish workers aged 16 to 19 were on temporary contracts
between 2005 and 2007?
8
What is the main benefit of a single, open-ended labour contract?
9
What dominates Germany’s labour market.
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10
What is the Anglo-Saxon preference for little or no employment protection the
most effective at?
4.6 Match equivalents:
1) reform
1) impetus
2) unemployment
2) speed
3) contract
3) joblessness
4) incentive
4) provide
5) employee
5) treaty
6) benefit
6) advantage
7) supply
7) development
8) wage
8) improve
9) rate
9) salary
10) innovation
10) worker
4.7 Finish the following sentences using the original text.:
1 Above-average unemployment is the norm for young people… .
2
As the unemployment rate approached 20% in the mid-1980s, the government
introduced fixed-term contracts of between six months and three years… .
3
Frequent job turnover makes households’ finances less certain, making it harder,
for example… .
4
A single, open-ended labour contract, in which severance pay rises continuously
with tenure, should increase the incentive for firms… .
5
Clauses in collective-bargaining agreements allowed individual firms to stray
from wage deals… .
6
Permanent workers fearlessly seek higher wages, confident that job losses… .
4.8 Choose the correct variant.
1 … shortages have forced the Japanese into making heavy use of industrial robots.
a)
labour;
b) water;
c) food.
2 Closure of the plant means 80 workers are facing ... .
a)
unanimity;
b)
unhappiness;
c)
unemployment.
3 There has been a marked increase in … between East and West.
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a)
grade;
b) trade;
c) treat.
4 My contract was for a … term of five years.
a)
fixed;
b) mixed;
c) long.
5 Awards provide an … for young people to improve their skills.
a)
inventive;
b) incentive;
c) intention.
6 This unfortunate experience will … heavily against further investment in the area.
a)
weighed;
b) weigh;
c) weighing.
7 The … rate of interest is 18% since you only have use of the funds for 120 days
instead of 360 days.
a)
infective;
b) affective;
c) effective.
8 There are no … in the clothes shops at the moment.
a)
bargains;
b) money;
c) demand.
9 The government has imposed … on corporate mergers.
a)
-
b) restaurants;
c) restraints.
10 This law provides … for threatened animals and plants.
a) perfection;
b) infection;
c) protection.
4.9 Write out key expressions. Make up a plan for retelling.
4.10 Be ready to retell the text in class.
5 Unit 5 China’s economy and the WTO
The World Trade Organisation (WTO), like many clubs, denies patrons the right of
automatic readmission. Having quit the organisation’s predecessor shortly after the
Communist revolution of 1949, China had to wait 15 long years to gain entry after
reapplying in the 1980s. The doors finally opened on December 11th 2001, ten years ago
this week.
The price of re-entry was as steep as the wait was long. China had to relax over
7,000 tariffs, quotas and other trade barriers. Some feared that foreign competition would
uproot farmers and upend rusty state-owned enterprises (SOEs), as to some extent it did.
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But China, overall, has enjoyed one of the best decades in global economic history. Its
dollar GDP has quadrupled, its exports almost quintupled.
Many foreigners also prospered. American foreign direct investment reaps returns of
13,5 % in China, compared with 9,7 % worldwide, according to K.C. Fung of the
University of California, Santa Cruz. China imposes lower tariffs on average than Brazil
or India. The gap between what it can charge, under WTO rules, and what it does charge is
also unusually small. So unlike its peers, China could not raise tariffs much even if it
wanted to (see chart).
Yet in America, China’s single biggest trading partner, sentiment towards the
country has turned starkly negative. In a recent poll, 61 % of Americans said that China’s
recent economic expansion had been bad for America; just 15 % thought it had been good.
This partly reflects China’s controversial currency regime. By keeping the exchange rate
down, China’s critics allege, it has gained a substitute for the mercantilist measures it gave
up to join the WTO.
Foreign frustration is partly a sign of China’s success. As its economy has grown
and matured, the stakes have risen. Foreign firms lament losing trade battles they might
not bother to wage in a less lucrative market. They also face competition from local
upstarts in markets where no such rivals previously existed (see figure 5).
Figure 5
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Electronic payments are one example. China’s first ever payment card was issued in
1986 by MasterCard. Foreign brands remained dominant at the time of China’s WTO
entry. But shortly afterwards, China’s central bank established a domestic competitor,
China UnionPay, and gave it a de facto monopoly over the handling of local-currency
payments between merchants and banks. This setback might have been easier to take for
foreign companies had the market not since grown tenfold, to $1.6 trillion, according to
The Nilson Report, an industry newsletter.
China’s economy has evolved faster than anyone hoped. But its economic
philosophy has not. Long Yongtu, who helped China win admission to the WTO, recently
said that China is now moving further away from the organisation’s principles. To
modernise its economy, it has remained wedded to industrial policies, state-owned
enterprises, and a “techno-nationalism” that protects and promotes home-grown
technologies.
Many foreign companies feel they must compete not with Chinese firms but with
the Chinese state. Between them, China’s central and local governments own over 100,000
companies and implicitly favour many more. Thanks to the WTO, foreign firms are no
longer required to hand over technology in exchange for entry to China’s market. But
many still feel an informal pressure to do so. China is also keen to promote its own firms
by enforcing its own technological standards, such as for 3G mobile phones.
Many of these interventions violate the spirit, if not always the letter of WTO rules.
In response, America often pushes back bilaterally rather than in Geneva, according to a
former American trade negotiator. This is partly because companies worry they will face
retribution from China’s government if they provide evidence against it in a trade case. It
is also because much of what China does falls into a grey area that is not easy for the
WTO to police.
China, on the other hand, is growing more comfortable with the WTO machinery. In
its early years as a member, it shied away from confrontation, points out Henry Gao of
Singapore Management University. In 2006, for example, America threatened to file a
complaint over China’s duties on kraft linerboard. China lifted the duties the next working
day. But now the Chinese have learned the ropes, they have also become more proactive.
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“Now they defend themselves,” says Nicholas Lardy of the Peterson Institute, a
Washington think-tank. “They initiate cases. And when they lose, they comply.”
In some cases the discrimination is no worse than before, it is simply more visible.
As part of its WTO agreement, China now circulates draft laws and regulations for 30 days
to collect comments. That has made it easier for foreigners to spot foul play. America
recently complained that China had failed to notify the WTO of nearly 200 subsidy
programmes, such as those supporting green-energy technology. It knew this in part
because China, following its newly transparent practice, had disclosed many such
programmes online, the former negotiator said: “Similar policy announcements were neibu
(for limited distribution) in the past.”
China’s trade policies may look a little uglier than WTO members had hoped when
they opened the club’s doors ten years ago. But that is partly because the lights have been
turned on.
(The Economist)
5.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 China’s economy has evolved faster than anyone hoped.
2 As part of its WTO agreement, China now circulates draft laws and regulations for
30 days to collect comments.
3 By keeping the exchange rate down, China’s critics allege, it has gained a
substitute for the mercantilist measures it gave up to join the WTO.
4 As China’s economy has grown and matured, the stakes have risen.
5 Thanks to the WTO, foreign firms are no longer required to hand over technology
in exchange for entry to China’s market.
6 So unlike its peers, China could not raise tariffs much even if it wanted to.
7 China’s trade policies may look a little uglier than WTO members had hoped
when they opened the club’s doors ten years ago.
8 The World Trade Organisation (WTO), like many clubs, denies patrons the right
of automatic readmission.
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5.2 Match the words with their definitions:
1)
quadruple (v)
1) a tax on goods coming into a country or going out of
a country
2)
tariff
2) to express feelings of great sadness about something
3)
currency
3) to make something publicly known, especially after it
has been kept secret
4)
lament (v)
4) facts or signs that show clearly that something exists
or is true
5)
payment
5) money that is paid by a government or organization
to make prices lower, reduce the cost of producing goods
etc
6)
lucrative
6) letting you earn a lot of money
7)
evidence
7) to increase and become four times as big or as high,
or to make something increase in this way
8)
subsidy
8) the activity of buying, selling, or exchanging goods
within a country or between countries
9)
disclose (v)
9) an amount of money that has been or must be paid
10)
trade
10) the system or type of money that a country uses
5.3 Insert the correct preposition.
1 Movie-making involves acting for 10 minutes and then waiting around ….. two
hours.
2
You will be notified ….. any changes in the system.
3
Microsoft Corporation filed EU complaint ….. Google Inc and Motorola
Mobility Holdings.
4
There was very little evidence ….. the two men.
5
Its success will depend ….. a large extent on local attitudes.
6
Military spending imposes a huge strain ….. the economy.
7
We spent half an hour looking for the keys, but eventually gave ….. and went
home.
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5.4 Say whether the statement is true or false. If the statement is false, give the
correct variant.
1 For re-entry the youth unemployment rate is a mere 7.8% and overall joblessness
is at its lowest level for decades.
2
China’s economy has evolved faster than anyone hoped.
3
American foreign direct investment reaps returns of 33.5% in China.
4
China had failed to notify the WTO of nearly 500 subsidy programmes.
5
As part of its WTO agreement, China now circulates draft laws and regulations
for 30 days to collect comments.
5.5 Answer the following questions
1 Does the World Trade Organisation support patrons the right of automatic
readmission?
2
What was the price of China’s re-entry to WTO?
3
What was one of the best China’s decades in global economic history
characterized by?
4
What do the Americans think of China’s recent economic expansion?
5
How has China gained a substitute for the mercantilist measures it gave up to
join the WTO?
6
What happens to foreign firms as China’s economy has grown and matured?
7
When was China’s first electronic payment card issued?
8
What has China done to modernise its economy?
9
What does China do now as part of its WTO agreement?
10 How do China’s trade policies look now?
5.6 Match equivalents:
1) deny
1) profitable
2) entry
2) obstacle
3) trade
3) inform
4) barrier
4) rivalry
5) impose
5) commerce
6) successful
6) access
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7) merchant
7) tariff
8) competition
8) apply
9) duty
9) retailer
10) notify
10) reject
5.7 Finish the following sentences using the original text:
1 Having quit the organisation’s predecessor shortly after the Communist
revolution of 1949, China had to wait 15 long years…
2
But China, overall, has enjoyed one of the best decades…
3
Foreign firms lament losing trade battles they might not bother…
4
Many foreign companies feel they must compete not with Chinese firms but…
5
China is also keen to promote its own firms by enforcing its own technological
standards…
6
China’s trade policies may look a little uglier than WTO members had hoped…
5.8 Choose the correct variant.
1 The government … the existence of poverty among 16- and 17-year-olds.
a) derives;
b) denies;
c) drive.
2 The Senator's … that he had lied to Congress shocked many Americans.
a)
remission;
b) admission;
c) decision.
3 The local … is the Swiss franc.
a)
currency;
b) current;
c) occurence.
4 They have to win the contract - thousands of jobs are at ...
a)
stick;
b) steak;
c) stake.
5 He finished 39 seconds ahead of his main ... .
a) rivalry;
b) rival;
c) competition.
6 A … is a businessperson who trades in commodities that were produced by others,
in order to earn a profit.
a) merchant;
b) buyer;
c) consumer.
7 We need to … against military aggression.
a) defend;
b) depend;
c) attend.
8 The way the system works will be … to the user.
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a) transport;
b) translate;
c) transparent.
9 We were shocked by the … that the mayor was resigning.
a) renouncement;
b) announce;
c) announcement.
10 The EU spends millions on … to farmers every year.
a) bargains;
b) subsidies;
c) discounts.
5.9 Write out key expressions. Make up a plan for retelling.
5.10 Be ready to retell the text in class.
6 Unit 6 US government poses next challenge for BP
BP may have resolved some of the claims it faced over the 2010 Gulf of Mexico oil
spill with a $7,8 bn deal to compensate people and businesses hurt by the spill, but the
bigger issue is still open: the damages and penalties sought by the US government.
The settlement with the private sector plaintiffs in the litigation over the spill is a
significant step for BP in putting an end to some of the financial uncertainty that has
surrounded it over the past two years, but the UK oil group still faces a challenging time as
it attempts to manage the cost of the disaster. Penalties under the Clean Water Act could
be more than $17,5 bn if the company is judged to have acted with gross negligence, a
charge that BP has always denied, but the US authorities are likely to assert.
There will be damages running into billions of dollars for harm done to the gulf
coastline, and potential criminal penalties. The US Department of Justice is investigating
possible criminal charges against BP, other companies involved in the spill, and their
employees, although none have been brought.
A settlement to resolve all the federal, state and local government claims is seen by
legal experts as the most likely outcome.
Comments from federal and state officials over the weekend suggested they would
take a tough line in extracting the maximum possible pay-out from BP. The trial over the
spill, which will hear claims from the government and the private sector has been
postponed indefinitely. Lawyers from all sides will meet the judge soon to try to set a new
date. For now, the pressure to do a deal quickly is off.
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The proposed settlement announced on Friday night – the parties have 45 days to
reach a definitive agreement – would cover damages claims for the estimated 116,000
people and businesses that were plaintiffs in the litigation over the spill, and anyone else
who comes forward before the April 2013 deadline. BP said it did not expect the deal,
which it valued at $7,8 bn, to add to the $37,2 bn total cost it expects to face as a result of
the spill.
The settlement will be paid out of the $20 bn trust fund BP set up to pay
compensation for damage from the accident, which is included in that total charge. The
company said on Friday that an estimated $3,4 bn remained unallocated within the fund as
a result of the settlement – which could cover claims from state governments and
environmental restoration.
Jason Kenney, an analyst at Banco Santander, expects a positive reaction to the deal
in BP’s share price. “The announcement of a settlement with the PSC (plaintiffs’ steering
committee) is a positive step forward, and within the rational range of claim amounts
already assumed by BP.
“With any worst-case claims scenario for BP looking increasingly unlikely the
current significant discount in BP’s share price can now begin to unwind.”
If BP is to pay the claims from the US federal and state governments, whether in a
settlement or at trial, it looks as though it will have to pay significantly more than $3,4 bn.
Executives at the group in London will have noted the robust statement issued by
the DoJ on Friday that while it was “open to a fair and just settlement” it was also “fully
prepared to try the case”. It added: “The United States is prepared to hold the responsible
parties accountable for the damage suffered in the Gulf region.”
People familiar with the situation point out that actions by the DoJ – with respect to
the banking and the pharmaceutical industries – point to a tough approach to business.
Other comments since the news have been similarly robust. Garret Graves, the chair
of Louisiana’s Coastal Protection and Restoration Authority, described settlement of the
private claims as “a good first step,” but added: “We have been preparing for trial for over
18 months and are very anxious to get into court as soon as possible on the remaining
matters before the court.
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“This would include confirming the obvious gross negligence determination, any
criminal issues resulting from the investigation, and tens of billions of dollars in natural
resources and Clean Water Act fines reinvested in our coast and the Gulf.”
Peter Hutton, analyst at RBC Capital Markets, said shareholders would likely be
supportive if BP took “incremental” further charges to settle all remaining claims, which
would both resolve uncertainty and send a signal to the US that the company was taking its
punishment.
“Investors will be supportive of incremental charges to the P&L, if this provides the
basis for settlement with major parties involved, and the prospect of returning to ‘business
as normal’,” he said. “Equally, we think it correct and expedient that BP should be seen to
increase charges as a result of the settlements.”
As the November elections approach, the Obama administration and state
leaderships would welcome a large settlement that showed BP was being forced to repair
the damage.
For Bob Dudley, BP chief executive, the beginning of the end may be in sight, but
the task at hand will be to steer the group through the remaining uncertainty. The
balancing act he has performed over the past two years between protecting shareholder
interests while finding a resolution in what was the group’s biggest growth market
remains.
(By Ed Crooks and Sylvia Pfeifer, The Times)
6.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 The trial over the spill, which will hear claims from the government and the
private sector has been postponed indefinitely.
2 Other comments since the news have been similarly robust.
3 As the November elections approach, the Obama administration and state
leaderships would welcome a large settlement that showed BP was being forced to repair
the damage.
4 A settlement to resolve all the federal, state and local government claims is seen
by legal experts as the most likely outcome.
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5 BP may have resolved some of the claims it faced over the 2010 Gulf of Mexico
oil spill with a $7.8bn deal to compensate people and businesses hurt by the spill
6 The United States is prepared to hold the responsible parties accountable for the
damage suffered in the Gulf region.
7 Investors will be supportive of incremental charges to the P&L, if this provides the
basis for settlement with major parties involved, and the prospect of returning to ‘business
as normal’.
8 With any worst-case claims scenario for BP looking increasingly unlikely the
current significant discount in BP’s share price can now begin to unwind.
6.2 Match the words with their definitions:
1) compensate (v)
1) increasing in amount or value gradually and by a
regular amount
2) litigation
2) the process of taking claims to a court of law
3) official
3) a reduction in the usual price of something
4) trust fund
4) someone who is in a position of authority in an
organization
5) discount
5) a situation which you are not sure about because
you do not know what will happen
6) chair
6) someone who owns shares in a company or
business
7) incremental
7) money belonging to someone that is controlled
for them by a trustee
8) uncertainty
8) to pay someone money because they have
suffered injury, loss, or damage
9) shareholder
9) an increase in the value of goods or services
produced and sold by a business or a country
10) growth
10) the position of being in charge of a meeting or
committee, or the person who is in charge of it
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6.3 Insert the correct preposition.
1 This is the first step ….. reforming the welfare system.
2
Recent economic performance suggests that a major crisis is ….. hand.
3
The company staff are extremely supportive ….. each other.
4
More than 30 software firms were involved ….. the project.
5
Paintings valued ….. over $200,000 were stolen from her home.
6
An emergency fund was set up in reaction ….. the famine.
7
Managers must be accountable ….. their decisions.
6.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Over the past two years BP had been suffering from the financial uncertainty.
2 The US Department of Commerce is investigating possible criminal charges
against BP.
3 The settlement will be paid out of the $20bn trust fund BP set up to pay
compensation for damage from the accident.
4 The company said on Friday that an estimated $3.4 thousand remained
unallocated within the fund as a result of the settlement
5 Roger Dudley is BP chief executive.
6.5 Answer the following questions.
1 What claims may BP have resolved?
2 What is a significant step for BP in putting an end to some of the financial
uncertainty that has surrounded it over the past two years?
3 What is the US Department of Justice investigating?
4 What did comments from federal and state officials over the weekend suggest?
5 What is Jason Kenney?
6 What is the United States prepared to?
7 What is Garret Graves?
8 What would send a signal to the US that the company was taking its
punishment?
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9 Under what circumstances will investors be supportive of incremental charges to
the P&L?
10 What will the task at hand be, according to Bob Dudley?
6.6 Match equivalents:
1) pay
1) probability
2) issue
2) manufacturing
3) damage
3) confusion
4) agreement
4) question
5) total
5) settlement
6) suffer
6) growth
7) industry
7) undergo
8) uncertainty
8) salary
9) increase
9) complete
10) prospect
10) harm
6.7 Finish the following sentences using the original text:
1 The settlement with the private sector plaintiffs in the litigation over the spill is a
significant step for BP in putting an end… .
2 Comments from federal and state officials over the weekend suggested they
would take a tough line in… .
3 The company said on Friday that an estimated $3.4bn remained unallocated
within the fund as a result of the settlement… .
4 The United States is prepared to hold the responsible parties accountable for… .
5 We have been preparing for trial for over 18 months and are very anxious to get
into court as soon as possible… .
6 As the November elections approach, the Obama administration and state
leaderships would welcome a large settlement that showed… .
6.8 Choose the correct variant.
1 If you're still not satisfied, you may be able to … compensation.
a) clam;
b) ask;
c) claim.
2 Unemployment is not the … - the real problem is the decline in public
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morality.
a) tissue;
b)
issue;
c)
issuance.
3 The changes in share values have … investor confidence.
a) damaged;
b)
managed;
c)
diverged.
4 Thank you, but I think I can … perfectly well on my own.
a) rampage;
b)
damage;
c)
manage.
5 Your order will be sent free of … .
a) charge;
b) chance;
c) change.
6 Prices rose steadily to … record levels.
a) rich;
b) reach;
c) reached.
7 Her case has attracted an enormous … of public sympathy.
a) doughnut;
b)
amount;
c)
mount.
8 London employers were … from a desperate shortage of school-leavers.
a) suffering;
b)
surfing;
c)
smurfing.
9 The security system will be reviewed after a three-month … period.
a) trying;
b)
trial;
c)
try.
10 We want to … the workforce at all stages of the decision-making process.
a) evolve;
b)
revolve;
c)
involve.
6.9 Write out key expressions. Make up a plan for retelling.
6.10 Be ready to retell the text in class.
Unit 7 Celebrity endorsement in ads
The story
In 1996 Oprah Winfrey, the US’s highest- rated syndicated talk-show host,
announced the launch of a book club designed to “get America reading again”. The plan
was simple: Ms Winfrey would use her celebrity influence to convince her viewers to turn
to literature, in one of the most highly publicised reading promotion programmes in
history.
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The structure was equally straightforward: Ms Winfrey would select a book and
announce the title during a show, and then discuss it during a televised segment a month or
so later.
The challenge
Oprah’s Book Club (the “Club”) faced immediate scepticism from literary
commentators, who associated syndicated daytime shows with lowbrow offerings such as
soap operas. Even members of Ms Winfrey’s staff questioned whether viewers would be
interested in essentially being assigned homework and sitting through the television
equivalent of a high-school English class. Their fears were supported by survey evidence
that showed the percentage of Americans reading literature had fallen from 57 per cent in
1982 to 47 per cent in 2002.
Results for the endorsed author
Ms Winfrey’s endorsement led to lasting sales increases for the chosen authors. For
instance, the first selection was The Deep End of the Ocean by Jacquelyn Mitchard,
describing the destructive events following the kidnap of a three-year-old child. The novel
had sold roughly 70,000 copies – impressive for a first novel, but hardly a blockbuster. In
the month after its endorsement, sales increased by 700,000 copies and the book became a
top bestseller.
The Club’s next two selections were older novels: Toni Morrison’s Beloved and
Jane Hamilton’s A Story of Ruth. Each sold nearly 1m copies following the endorsement.
The improvement in sales is not limited to the endorsed book. Immediately after
endorsement, sales of other titles by the same author also increase and the magnitude of
this spillover benefit grows in the three months after the announcement. The effect is
similar to a positive review in the New York Times.
Results for the book industry
The remaining strategic question is whether a set of celebrity endorsements can in
fact expand the market. Analysis of data from Nielsen Bookscan, the premier point-ofsale-tracking data set in the publishing sector, reveals that the Club led to no increase in
aggregate book sales.
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Among booksellers involved in the research, following a book’s endorsement total
sales in that book’s category actually fell. A plausible explanation is that endorsed titles
took longer to read because they were more challenging or longer than books that would
otherwise have been purchased.
The lessons
At the broadest level, the Club can be thought of as a series of exceptionally
prominent celebrity endorsements. The use of this marketing tool dates back at least as far
as Pope Leo XIII’s 1899 endorsement of the Vin Mariani alcoholic beverage.
In some countries, as much as 40 per cent of ads use some form of celebrity
endorsement. However, the manner in which they affect customer behaviour remains
unclear. Hence, companies often fail to develop either their advertising strategies or their
responses to those of competitors adequately.
Ms Winfrey believed her endorsements could expand the number of people reading.
However, it seems higher post-endorsement sales primarily serve a business-stealing role.
When a competitor’s ads steal sales rather than expand the overall market it represents an
immediate threat to profits that requires a response. An endorsement announcement from a
rival may require a company to increase its own marketing and promotions significantly.
The results are also informative for companies offering many products under one
umbrella brand. When endorsements by Ms Winfrey increased sales of books by the same
author, it showed how ads for one product can have a big impact on an entire suite.
(By Craig Garthwaite, an assistant professor of management and strategy at the
Kellogg School of Management at Northwestern University)
7.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 In 1996 Oprah Winfrey, the US’s highest- rated syndicated talk-show host,
announced the launch of a book club designed to “get America reading again”.
2 Ms Winfrey’s endorsement led to lasting sales increases for the chosen authors.
3 Among booksellers involved in the research, following a book’s endorsement total
sales in that book’s category actually fell.
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4 Ms Winfrey believed her endorsements could expand the number of people
reading.
5 The structure was equally straightforward.
6 Oprah’s Book Club (the “Club”) faced immediate scepticism from literary
commentators, who associated syndicated daytime shows with lowbrow offerings such as
soap operas.
7 The improvement in sales is not limited to the endorsed book.
7.2 Match the words with their definitions:
1)
talk-show
1)
the effect that one situation or problem has on
another situation
2)
launch
2)
reasonable and likely to be true or successful
3)
destructive
3)
an advertisement
4)
bestseller
4)
a television show in which famous people
answer questions about themselves
5)
spillover
5)
a situation when a famous person says in an
advertisement that they use and like a product or
service
6)
plausible
6)
a famous living person
7)
celebrity
7)
causing damage to people or things
8)
rival
8)
a popular product, especially a book, which
many people buy
9)
endorsement
9)
a person, group, or organization that you
compete with in sport, business, a fight etc
10)
ad
10)
when a new product, book etc is made
available or made known
7.3 Insert the correct preposition.
1 The 1970s were the most successful ….. the theater's long history.
2 Copies of the report are available to schools and members …… the public.
3 Our research led us …… the conclusion that the present system is unfair.
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4 They told me it would be cheap but ….. fact it cost me nearly $500.
5 The fighting is a major threat ….. stability in the region.
6 There's been a big improvement ….. the children's behaviour.
7 The speech was strikingly similar ….. one given by the American President
earlier this year.
7.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Oprah’s Book Club faced immediate scepticism from literary commentators.
2 The percentage of Americans reading literature had fallen from 57 per cent in
1982 to 47 per cent in 2002.
3 He first celebrity endorsement dates back to 1899.
4 Oprah Winfrey is the Africa’s highest- rated syndicated talk-show host.
5 Ads for one product can have a big impact on an entire suite.
7.5 Answer the following questions.
1 What is Oprah Winfrey?
2 When did Oprah Winfrey announce the launch of a book club designed to “get
America reading again”?
3 What was the plan?
4 What was the structure?
5 Whom did Oprah’s Book Club face immediate scepticism from?
6 What did Ms Winfrey’s endorsement lead to?
7 How many copies had the novel The Deep End of the Ocean by Jacquelyn
Mitchard sold?
8 Is the improvement in sales limited to the endorsed book?
9 How many ads use some form of celebrity endorsement in some countries?
10 What may an endorsement announcement from a rival require?
7.6 Match equivalents:
1) celebrity
1) damaging
2) endorsement
2) reference
3) select
3) testimony
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4) staff
4) buy
5) evidence
5) extent
6) destructive
6) opt
7) improve
7) rival
8) magnitude
8) enrich
9) purchase
9) public figure
10) competitor
10) personnel
7.7 Finish the following sentences using the original text:
1 In 1996 Oprah Winfrey, the US’s highest- rated syndicated talk-show host,
announced the launch of a book club… .
2 Ms Winfrey would select a book and announce the title during a show, and then
discuss it… .
3 Their fears were supported by survey evidence that showed the percentage of
Americans reading literature… .
4 The remaining strategic question is whether a set of celebrity endorsements can
in fact… .
5 The use of this marketing tool dates back at least as far as Pope Leo XIII’s 1899
endorsement… .
6 An endorsement announcement from a rival may require a company… .
7.8 Choose the correct variant.
1 Our … greeted us at the door.
a) host;
b) ghost;
c) post.
2 The officials were eager to … us of the safety of the nuclear reactors.
a) convince;
b) prevail;
c)
persuade.
c)
selected.
c)
multitude.
3 They … the winner from six finalists.
a) chosen;
b) are selected;
4 They didn't seem to appreciate the … of the problem.
a) majority;
b) magnitude;
5 The hotel wants to … its business by adding a swimming pool.
a) expand;
b) expense;
c)
spend.
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6 The curtain opened to … the grand prize.
a) rival;
b) veil;
c)
reveal.
7 Officials at the school say they received a bomb … at approximately 11:30 a.m.
today.
a) threat;
b) treat;
c)
treatment.
c)
protect.
c)
bread.
8 The property company made a huge … on the deal.
a) profit;
b) perfect;
9 What … of detergent do you use?
a) bride;
b) brand;
10 Higher mortgage rates have already had a major … on spending.
a) -
b) impact;
c)
-.
7.9 Write out key expressions. Make up a plan for retelling.
7.10 Be ready to retell the text in class.
8 Unit 8 The first-mover advantage myth
Whether it’s toothpaste or bleach, skin cream or detergent, the ways a gooey liquid
can be engineered, packaged, purchased and applied in the daily routine of the average
consumer are more varied than the average consumer has the time – or inclination – to
care about. Not so Procter & Gamble.
Its research and development staff spend $2 bn a year hypothesising, experimenting,
analysing and ruminating on each of those things in the name of “innovation” – a
corporate mantra that P&G staff repeat with a frequency that suggests heartfelt
commitment or rigorous brainwashing.
The latest offering from its laboratories resembles a jellyfish-like creature wearing a
hat of orange and purple bulges. Called the Tide Pod, the new product is a dissolvable
triple-chamber capsule of laundry detergent. It is concentrated, convenient, lightweight
and removes the bother of measuring out your detergent, says P&G. The company is also
trying hard to present it as revolutionary.
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It told journalists invited for a preview in Ohio that the squishy Tide Pods
represented the biggest “disruption” in US laundry since it introduced Tide liquid
detergent in 1984. “It’s been three decades since the lives of people in the laundry room
were changed in a meaningful way,” said Alex Keith, P&G’s general manager for fabric
care.
The truth, however, is rather different – and not simply because single-dose capsules
are already common in Europe. P&G has not even been a capsule pioneer in the US:
Henkel, Sun Products and Church & Dwight all released similar products before P&G’s
arrived on shelves last month.
With Tide Pods, therefore, P&G has neither broken new ground nor lived up to its
innovative mission. It will not enjoy the vaunted “first-mover advantage” of lodging its
brand in the minds of consumers, shaping their preferences, establishing a technological
edge and securing the best space on retail shelves before anyone else.
But does that matter? The answer is probably not. In spite of P&G’s compulsion to
innovate, being “first to market” is not the sure-fire path to dominance it is cracked up to
be.
In 2001 the idea of first-mover advantage was challenged by the academics Peter
Golder and Gerard Tellis, whose research into the history of 66 industries found that
companies get limited rewards from being pioneers. In fact, it is later entrants that tend to
succeed.
In Will and Vision: How Latecomers Grow to Dominate Markets, they showed that
many companies believed to be pioneers in categories that they led (at least for a time)
were in fact late arrivals: Kodak in cameras, Xerox in photocopiers, Apple in personal
computers. “Market pioneering is neither necessary nor sufficient for long-term success,”
they wrote.
Instead, so-called “fast followers” have the advantage of being able to use pioneers’
experiences to learn about consumer tastes, new designs and manufacturing techniques,
and the potential size of a market. They can also learn from their mistakes.
Eric Schwartz, general manager of laundry care at Henkel in the US, echoes this
view. “The first mover sometimes overcomplicates in the beginning,” he says. “At the end
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of the day it’s not about how intricate you make a new offering. It’s about how close to
what the consumer wants your offering is.”
But the myth of first-mover advantage remains firmly embedded in business. One
reason is that first movers that fall by the wayside get forgotten. Another is the law, which
gives first movers the right to register new patents and brands.
The belief that first is best is also buried deep in many people’s minds. “There’s
tremendous romance around the idea of pioneering, breakthrough innovation,” says
Patrick Barwise, emeritus professor at London Business School and co-author of Beyond
the Familiar: Long-term Growth Through Customer Focus and Innovation. “It’s an
extension of people’s exaggerated belief in the importance of differentiation.”
Given the high costs and high risks involved, he believes that being the first mover
is generally not a good thing if you are trying to create an entirely new product category. It
has more value for an “adjacent” innovation – such as Tide Pods, a premium product built
on the larger Tide brand, which accounts for about 43 per cent of detergent sales at US
retailers tracked by Symphony IRI, a market research group. (P&G is projecting pod sales
of $300 m over the next year.)
P&G remains keen to promote its pioneer narrative but another hole in its story is
that it has sold single-dose detergents twice before: Salvo in the 1960 s and 1970 s; and
Tide Rapid Action tablets from 2000 to 2002. Neither dissolved well, say rivals. This time
round, it unveiled Tide Pods in March 2011 and pledged to have them in shops three
months later.
But it subsequently had to delay shipments twice, thereby giving rivals time to
accelerate pre-existing capsule plans or to begin drawing some up. In the past two months,
Henkel of Germany has launched Purex UltraPacks in the US, Sun Products has unveiled
its All Mighty Pacs, and Arm & Hammer, owned by Church & Dwight, has released
Power Paks. A small Philadelphia company called Cot’n Wash has been selling its Dropps
capsules since 2006.
Asked if P&G was playing catch-up, Ms Keith answered with a firm “no”. All the
alternatives have single chambers, unlike the triple-barrelled Tide Pods, whose design
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separates chemicals that are not stable if blended but produce superior cleaning, stain
removal and brightening when mixed with water, says P&G.
Others, however, are unconvinced. Tide Pods are just “one of the crowd”, says Mary
Marlowe Leverette, About.com’s laundry expert. “Do I think it’s innovative? No.”
But there is little downside to P&G being late. For some brands, the arrival of
several similar products at the same time can even be helpful.
Michael Lyons, senior brand manager for Sun Products’ All line, says: “The number
one challenge we have is educating consumers about what these are, how to use them and
what they do. I’m in the mindset that the more people advertise, the quicker the uptake.”
Prof Barwise says that while it would have been better for P&G to launch Tide Pods
in a less crowded market, “it’s not a big deal. They still have all the other advantages of
being Procter: brand, distribution, great execution and the ability to keep improving the
product”. Its marketing budget also exceeded $13b n last year.
Consumers often assume that the brand which advertises loudest hit the market first.
And in the long term, victors shape the telling of history. Pampers, a P&G brand launched
in 1961, is often presumed to have been the disposable nappy pioneer because of its
dominant market position today. But it wasn’t, as the authors of Will and Vision recount:
Chux, a Johnson & Johnson brand, was first to market in 1949. But who remembers that?
(By Barney Jopson, Financial Times)
8.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 Market pioneering is neither necessary nor sufficient for long-term success.
2 P&G has not even been a capsule pioneer in the US.
3 For some brands, the arrival of several similar products at the same time can even
be helpful.
4 The belief that first is best is also buried deep in many people’s minds.
5 P&G remains keen to promote its pioneer narrative but another hole in its story is
that it has sold single-dose detergents twice before.
6 Its Procter & Gamble research and development staff spend $2bn a year
hypothesising, experimenting, analysing and ruminating on each of those things in the
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the name of “innovation”.
7 In spite of P&G’s compulsion to innovate, being “first to market” is not the surefire path to dominance it is cracked up to be.
8 Consumers often assume that the brand which advertises loudest hit the market
first.
8.2 Match the words with their definitions:
1)
purchase
1)
a call to take part in a contest or competition,
esp. a duel
2)
rigorous
2)
something you buy, or the act of buying it
3)
preference
3)
a special document that gives you the right to
make or sell a new invention or product that no one
else is allowed to copy
4)
compulsion
4)
when goods are supplied to shops and
companies for them to sell
5)
patent
5)
more powerful, important, or noticeable than
other people or things
6)
detergent
6)
a strong and unreasonable desire to do
something
7)
stain
7)
a liquid or powder used for washing clothes,
dishes etc
8)
challenge
8)
a mark that is difficult to remove, especially one
made by a liquid such as blood, coffee, or ink
9)
dominant
9)
careful, thorough, and exact
10)
distribution
10)
to like something more than another thing
8.3 Insert the correct preposition.
1 I've booked a table …… the name of Steinmann.
2 She's now assistant marketing manager ….. the south east area.
3 Even if you are the first ….. market you still have every other product the
consumer wants to compete against.
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4 There is some point in what you say; ….. the same time we adhere to our own
opinion.
5 Inflation is close ….. 7 percent.
6 The contract was drawn ….. last year.
7 ….. the long term, alcohol causes high blood pressure.
8.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 P&G research and development staff spend $30bn a year hypothesising,
experimenting, analysing and ruminating on innovation.
2 In 1991 the idea of first-mover advantage was challenged by the academics Peter
Golder and Gerard Tellis.
3 Eric Schwartz is the general manager of laundry care at Henkel in the US.
4 Asked if P&G was playing catch-up, Ms Keith answered with a firm “yes”.
5 Pampers, a P&G brand launched in 1981, is often presumed to have been the
disposable nappy pioneer.
8.5 Answer the following questions.
1 What do Procter&Gamble research and development staff spend $2bn a year for?
2 What is “innovation” for P&G?
3 How did P&G present the squishy Tide Pods to journalists?
4 Is it a good thing to be the first mover?
5 How was the idea of first-mover advantage challenged?
6 What is Eric Schwartz?
7 Why does the myth of first-mover advantage remain firmly embedded in
business?
8 Was P&G playing catch-up?
9 What is little downside to P&G being late?
10 Is Pampers, a P&G brand launched in 1961, the disposable nappy pioneer?
8.6 Match equivalents:
1)
advantage
1) benefit
2)
average
2) quicken
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3)
inclination
3) front runner
4)
convenient
4) large-scale
5)
pioneer
5) ordinary
6)
brand
6) savings
7)
extensive
7) expenses
8)
costs
8) practical
9)
accelerate
9) temptation
10) budget
10) label
8.7 Finish the following sentences using the original text:
1 It’s been three decades since the lives of people in the laundry room… .
2
In 2001 the idea of first-mover advantage was challenged by the academics
Peter Golder and Gerard Tellis, whose research into the history of 66 industries found… .
3
Instead, so-called “fast followers” have the advantage of being able to use
pioneers’ experiences to learn about… .
4
The belief that first is best is also buried deep… .
5
For some brands, the arrival of several similar products at the same time… .
6
Consumers often assume that the brand which advertises loudest… .
8.8 Choose the correct variant.
1 The … cost of making a movie has risen by 15%.
a) privilege;
b) beverage;
c)
average.
c)
staff.
2 The entire … has done an outstanding job this year.
a) stiff;
b) stuff;
3 Commercials … consumers into buying things they don't need.
a) handwash;
b) brainwash;
c)
headwash.
4 One of the largest applications of … is for cleaning clothing.
a) revenge;
b) detergents;
c)
divergent.
5 John Whitney was a … of computer animation.
a) pioneer;
b) freshman;
c) best man.
6 Feelings of guilt are deeply … in her personality.
a) embedded;
b) improved;
c)
embed.
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7 Afro-Americans … for 12% of the US population.
a) count;
b) account;
c)
accounts.
8 Younger workers tend to be at an … when applying for jobs.
a) advantage;
b) adventure;
c) advertise.
9 The capacity to think … humans from animals.
a) separate;
b) separates;
c)
selects.
10 The … of some vaccinations fell as the media stirred up fears of possible side
effects.
a) retake;
b) downtake;
c) uptake.
8.9 Write out key expressions. Make up a plan for retelling.
8.10 Be ready to retell the text in class.
Unit 9 Unemployment matters more than GDP or inflation
Jobless figures are the one major economic indicator that measures people. And they
demonstrate the toll in misery across Europe
There is a spectre haunting Europe – the spectre of mass unemployment. On
Thursday it was announced that the eurozone's unemployment rate had risen to a record
high of 10,7 % in January. That's 16,9 million people out of work across the 17-nation
euro area.
Across the 27-member European Union unemployment is also topping 10% for the
first time: a jaw-dropping 24,3 million jobless. The sheer size of the continent's growing
army of unemployed workers is difficult to comprehend.
Spain holds the EU record, with unemployment at 23,3 %, or 5,3 million people –
and rising. “This is the terrible cancer of our society,” said Rafael Zornoza Boy, the bishop
of Cadiz, last week. Yet prime minister Mariano Rajoy's new (and conservative)
government's pleas to give Madrid some leeway on spending cuts fell on deaf ears at
Friday's EU summit of fiscal self-flagellists in Brussels. Then there is poor Greece, where
EU-imposed cuts have left one in five unemployed and have driven up the suicide rate by
40 %. Austerity is, literally, killing Europeans.
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Poll after poll shows voters across the EU care much more about the jobs deficit
than they do about the budget deficit. Nonetheless, the proverbial Martian, landing in
Brussels last week, would have been stunned to witness the complacency and indifference
of the continent's political elites to the crisis of spiralling joblessness. EU leaders continue
to fiddle – over borrowing limits, fiscal compacts, treaty changes – as their economies
crash and burn. The austerity gamble hasn't paid off. Fiscal consolidation has failed to spur
growth or boost employment.
Fiscal stimulus, on the other hand, works. The US has had 23 consecutive months of
private-sector job growth, with 3,7 m new jobs created over the past two years thanks to
Barack Obama's American Recovery and Reinvestment Act. US unemployment benefit
claims are now at a four-year low.
But Europe's political and financial elites – led by austerity junkies such as
“Merkozy”, the European Central Bank's Mario Draghi and, of course, our very own
David Cameron – pretend not to notice. Here on the jobless side of the Atlantic, the only
solution to austerity-induced unemployment, it seems, is more austerity. In Brussels,
eurozone finance ministers threatened to impose swingeing fines on those member states,
such as Spain and the Netherlands, that may miss their budget deficit targets. If insanity, as
Albert Einstein is said to have once remarked, is doing the same thing over and over again
and expecting different results, then our leaders have gone mad.
The irony is that mass unemployment itself is the biggest barrier to deficit reduction.
Basic economics teaches us that the best way to cut borrowing levels is to get people back
to work and paying taxes. Or as John Maynard Keynes put it: “Look after unemployment
and the budget will look after itself.”
But Europe's crisis isn't just about economics. Unlike GDP or inflation,
unemployment is the only major economic indicator that measures real human beings,
rather than growth or prices.
Having a job isn't just about earning a living or paying taxes; it's about human
dignity and self-worth. The human and social costs of unemployment are welldocumented: financial hardship, emotional stress, depression, lethargy, loss of morale and
status, shame, sickness and premature death. Then there is the hopelessness that often
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leads to rising crime, disorder and social unrest. We can probably expect a new wave of
riots and violence in the continent's city centres.
The tragedy is that there is nothing unavoidable about Europe's unemployment
crisis. The US is proof that even the most modest of fiscal stimuli can create jobs. But
politicians in Germany, where mass unemployment in the 1930s helped the Nazis seize
power, refuse to countenance any loosening of the fiscal purse strings inside the EU,
arguing that such a move would increase borrowing costs and might panic the bond
markets. Yet, as the Nobel-prizewinning economist Christopher Pissarides has written, “a
small rise in gilt interest rates is a small price to pay for more jobs”.
Here in the UK, where unemployment stands at a 17-year high of 2,7 million (or a
staggering 6,3 million if the "underemployed" are included), our own do-nothing
chancellor, George Osborne, continues to proclaim that “the British government has run
out of money”. Really? Perhaps he should have a word with Mervyn King. Over the past
three years, the Bank of England governor has, with a mere tap on his keyboard,
authorised the creation of £325bn of new money, out of thin air, through a process of
"quantitative easing" (QE). This, however, has so far been used only to bail out the
bankers. Why not use it to bail out millions of jobless Britons?
If we assume it would cost £26,000 (the median salary for UK workers) to create
each new job, the cost to the government of putting a million people back to work would
be £26 bn – or around half of the latest £50 bn tranche of QE released by the Bank last
month.
How many more of Europe's jobs will be sacrificed at the altar of deficit reduction?
How many more lives ruined, families impoverished and communities destroyed in pursuit
of growth-choking, job-killing, self-defeating austerity? It is unacceptable for governments
to stand by as dole queues lengthen. Unemployment is not a price worth paying. Nor is it a
price that has to be paid.
(By Mehdi Hasan, The Guardian)
9.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
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1
Poll after poll shows voters across the EU care much more about the jobs
deficit than they do about the budget deficit.
2
Fiscal consolidation has failed to spur growth or boost employment.
3
Jobless figures are the one major economic indicator that measures people.
4
Unemployment is not a price worth paying. Nor is it a price that has to be
5
Basic economics teaches us that the best way to cut borrowing levels is to get
paid.
people back to work and paying taxes.
6
The tragedy is that there is nothing unavoidable about Europe's
unemployment crisis.
7
Spain holds the EU record, with unemployment at 23.3%, or 5.3 million
people – and rising.
8
Having a job isn't just about earning a living or paying taxes; it's about
human dignity and self-worth.
9.2 Match the words with their definitions:
1) figure
1) a line of people waiting to enter a building,
buy something etc, or a line of vehicles waiting to
move
2) cut
2) an
official
document
promising
that
a
government or company will pay back money that
it has borrowed, often with interest
3) benefit
3) a political situation in which people protest or
behave violently
4) barrier
4) bad economic conditions in which people do
not have much money to spend
5) tax
5) an amount of money that you must pay to the
government according to your income, property,
goods etc and that is used to pay for public
services
6) unrest
6) a number representing an amount, especially
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an official number
7) interest
7) extra money or other advantages that you get
as part of your job or from insurance that you
have
8) bond
8) a reduction in the size or amount of smth.,
especially the amount of money that is spent by a
government or company
9) austerity
9) a rule, problem etc that prevents people from
doing something, or limits what they can do
10)
queue
10)
the extra money that you must pay back
when you borrow money
9.3 Insert the correct preposition.
1 The appeal fell in practice ….. deaf ears.
2 Some local businesses have offered to bail ….. the museum.
3 We are expecting a sharp rise ….. interest rates.
4 The company made a loss ….. $250,000 last year.
5 They ran ….. of money and had to abandon the project.
6 Problems with childcare remain the biggest barrier ….. women succeeding at
work.
7 There are no simple solutions ….. the problem of overpopulation.
9.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Jobless figures are the one major psychological indicator that measures people.
2 Spain holds the EU record, with unemployment at 5.3 million people.
3 Adam Smith put it: “Look after unemployment and the budget will look after
itself.”
4 The tragedy is that there is nothing unavoidable about Europe's unemployment
crisis.
5 In the UK unemployment stands at a 17-year high of 2.7 million.
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9.5 Answer the following questions.
1 What is the one major economic indicator that measures people?
2 What is the eurozone's unemployment rate?
3 Who holds the EU record?
4 What do voters across the EU care about?
5 What is the only solution to austerity-induced unemployment on the jobless side
of the Atlantic?
6 What does basic economics teach us?
7 What does having a job mean?
8 What human and social costs of unemployment can you enumerate?
9 Where does unemployment stand at a 17-year high of 2.7 million?
10 How has the Bank of England governor authorized the creation of £325bn of new
money?
9.6 Match equivalents:
1) toll
1) successive
2) comprehend
2) understand
3) growing
3) gain
4) consecutive
4) rate
5) target
5) aim
6) indicator
6) disorder
7) earn
7) increasing
8) avoid
8) line
9) unrest
9) prevent
10)
10) sign
queue
9.7 Finish the following sentences using the original text:
1 Jobless figures are the one major economic indicator that… .
2 Poll after poll shows voters across the EU care much more about the jobs deficit
than… .
3 Basic economics teaches us that the best way to cut borrowing levels is… .
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4 The human and social costs of unemployment are well-documented: financial
hardship, emotional stress, depression, lethargy…. .
5 As the Nobel-prizewinning economist Christopher Pissarides has written, "a
small rise in gilt interest rates is… .
6 Unemployment is not… .
9.8 Choose the correct variant.
1 Government … underestimate the problem.
a) figures;
b) figure;
c) fingers.
2 The company seems to … him very highly.
a) right;
b)
rate;
c)
treat.
c)
society.
c)
is imposed.
c)
feeding.
3 The subject was rarely mentioned in polite ... .
a) sociable;
b)
sausage;
4 Military spending … a huge strain on the economy.
a) imposes;
b)
impose;
5 Bert had been … his income tax for years.
a) feeling;
b)
fiddling;
6 I think we can safely … that interest rates will go up again soon.
a) presume;
b) resume;
c) assume.
7 … is now running at over 16%.
a) inflation;
b) infection;
c) inspection.
8 All of my assets were …, including my home.
a) size;
b) seized;
c) seize.
9 Hopes of economic … are fading.
a) discovery;
b) recover;
c) recovery.
10 The company promised they would make no staff … for at least two years.
a) deduction;
b) reductions;
c) induction.
9.9 Write out key expressions. Make up a plan for retelling.
9.10 Be ready to retell the text in class.
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10 Unit 10 Oil prices: 10 reasons to be fearful
Already newspaper headlines are screaming out the news of record petrol prices in
the UK and there are growing concerns about the latest headwind for a sluggish UK
economy
Oil prices have surged by more than 12 % since the start of the year to hit $125 a
barrel and some analysts see them pushing even higher to $150.
Already newspaper headlines are screaming out the news of record petrol prices in
the UK and there are growing concerns about the latest headwind for a sluggish UK
economy.
Alan Clarke, UK and eurozone economist at Scotiabank in London, has sought to
lay out how a jump in the oil price impacts on the UK. Here he gives Britons 10 reasons
not to be cheerful about the oil price jump:
1. Higher petrol prices: Given the typical relationship between petrol prices on the
forecourt and the price of crude oil, if the latter did move up to $150 a barrel, we could
expect the price of petrol a litre to move up from around £1.34 to over £1.50 – a new
record high by a significant margin. That is bad news for both inflation and consumer
confidence.
2. Higher household energy bills: Gas and electricity prices typically take a steer
from the price of oil. If oil rises sharply, it is more likely than not that household energy
bills will rise at some point. Indeed, the price of gas traded in the wholesale market has
risen by at least 10 % over the period since oil has been surging.
Timing is key. In continental Europe, particularly France, when oil prices move,
household energy bills typically adjust very promptly. By contrast, in the UK, price hikes
are unusual at the end of winter. This is because utility providers will get lots of bad press,
but not much increase in profit margins as households switch off their central heating for
summer. If, however, elevated oil prices persist until the autumn, then utility bill hikes at
that point will become more likely.
3. Higher food prices: A fair proportion of the cost of food is distribution, fuel for
farm vehicles and petro-chemicals. Furthermore, the emergence of bio-fuels means that
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higher oil prices has tended to exert upward pressure on agricultural commodity prices,
since these can be used as a substitute for oil. Higher agricultural prices typically mean
higher food prices in household shopping baskets.
4. Risk of persistently high inflation: All in all, we calculate that in a scenario where
oil prices surge to $150 per barrel, CPI inflation in the UK would be at least 1 % higher at
the end of this year than we have assumed in our base case. That would mean inflation
ends the year a little above 3 % rather than the near 2 % that we and most other forecasters
assume.
5. The value of savings is eroded: If inflation out-paces interest rates, then it means
the “real” value of savings will fall. For example, with interest rates around 0.5 % but
inflation running at 4 %, the real return on savings is falling.
6. High inflation makes it hard for the Bank of England to support economic growth
through low interest rates: The Bank of England's target for CPI inflation is 2 % year-onyear with a tolerance threshold of 1 % either side of that. If inflation looks likely to persist
above that level, then it is less likely that the Bank of England will support economic
growth with further policy easing (i.e. quantitative easing) and might even have to raise
interest rates more quickly than were it not for elevated oil prices.
Having said that, the Bank does have some wiggle room. For example, inflation was
close to 5 % when the Bank engaged in the latest round of quantitative easing.
7. High street retailers suffer: Consumers don't have much choice about whether or
not to pay for food or energy. They need to eat and they need to heat their homes. Hence
increased expenditure on these as their prices rise leaves less spare cash to spend on 'fun
stuff' i.e. discretionary goods such as TVs and clothing.
8. Inflation hurts economic growth: The causality between growth and inflation has
run in reverse over the last year. High inflation has dampened growth. Conventional
wisdom might have argued that weak growth would have led to slow inflation. The great
hope for 2012 is that slowing inflation will help growth to resume an upward trajectory.
More specifically, if inflation falls sharply it will reverse the squeeze on household spare
cash, in turn helping to revive consumer spending. If oil rises to $150 a barrel we will
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probably still see a slowdown in inflation and a recovery in growth, though not quite as
impressive as would have been the case with lower energy prices.
9. The government's austerity programme suffers: There are a number of channels
through which higher oil prices will impact the public finances:
a) The government will face a higher interest burden on the portion of the national
debt that is linked to inflation;
b) Slower economic growth will reduce tax receipts and could raise government
outlays on unemployment benefits;
c) The government may choose to increase winter fuel subsidies to the elderly
against a backdrop of higher energy costs;
d) It is harder for the government to implement the planned increase in petrol duty
given the risk of public backlash;
10. Fuel protests and disruptions: Public anger at the rising cost of fuel could
provoke blockades and strikes. Panic buying and queues at petrol stations are not good for
sentiment and overall business activity.
(The Guardian)
10.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 Gas and electricity prices typically take a steer from the price of oil.
2 Oil prices have surged by more than 12% since the start of the year to hit $125 a
barrel.
3 Consumers don't have much choice about whether or not to pay for food or
energy.
4 Public anger at the rising cost of fuel could provoke blockades and strikes.
5 If inflation out-paces interest rates, then it means the 'real' value of savings will
fall.
6 Conventional wisdom might have argued that weak growth would have led to
slow inflation.
7 Higher agricultural prices typically mean higher food prices in household
shopping baskets.
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8 It is harder for the government to implement the planned increase in petrol duty
given the risk of public backlash.
10.2 Match the words with their definitions:
1)
sluggish
1) the effect or influence that an event, situation etc
has on someone or something
2) impact
2) a period of time when a group of workers
deliberately stop working because of a disagreement
about pay, working conditions etc
3) jump
3) a written list showing how much you have to pay
for services you have received, work that has been
done etc
4) bill
4) an additional amount of something such as time,
money, or space that you include in order to make
sure that you are successful in achieving something
5) margin
5) moving or reacting more slowly than normal
6) rate
6) a substance such as coal, gas, or oil that can be
burned to produce heat or energy
7) retailer
7) a person or business that sells goods to customers
in a shop
8) recovery
8) a sudden large increase in an amount or value
9) fuel
9) the process of returning to a normal condition
after a period of trouble or difficulty
10) strike
10) the number of times something happens, or the
number of examples of something within a certain
period
10.3 Insert the correct preposition.
1 The financial considerations are laid ….. in a booklet called “How to Borrow
Money”.
2 You will probably sell the car ….. some point in the future.
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3 Charles tends ….. obesity.
4 She had to pay a £35 fine ….. speeding.
5 Interest rates were cut and, ….. turn, share prices rose.
6 All these PCs are linked up ….. the network.
7 House buyers usually have a large initial outlay ….. carpets and furniture.
10.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Oil prices have surged by more than 12% since the start of the year.
2 In France, when oil prices move, household energy bills typically adjust very
promptly.
3 With interest rates around 0.5% but inflation running at 4%, the real return on
savings is falling.
4 If oil rises to $50 a barrel we will probably still see a slowdown in inflation.
5 Panic buying and queues at petrol stations are not bad for sentiment and overall
business activity.
10.5 Answer the following questions.
1 What are newspaper headlines screaming out?
2 How have oil prices surged since the start of the year?
3 How many reasons does Alan Clarke, UK and eurozone economist at Scotiabank
in London, give Britons not to be cheerful about the oil price jump?
4 What will happen if oil rises sharply?
5 Why are price hikes unusual at the end of winter in the UK?
6 What do higher agricultural prices typically mean?
7 How does high inflation influence the Bank of England?
8 What does increased expenditure on food and energy lead to?
9 What is the great hope for 2012?
10 What could public anger at the rising cost of fuel provoke?
10.6 Match equivalents:
1) overall
1) effect
2) concern
2) recruit
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3) impact
3) goods
4) adjust
4) issue
5) commodities
5) dividend
6) substitute
6) surplus
7) return
7) modify
8) engage
8) decrease
9) spare
9) replacement
10)
10) gross
reduce
10.7 Finish the following sentences using the original text:
1 Oil prices have surged by more than 12% since the start of the year to hit $125 a
barrel and some analysts… .
2 If oil rises sharply, it is more likely than not that household energy bills… .
3 The emergence of bio-fuels means that higher oil prices has tended to exert
upward pressure on agricultural commodity prices… .
4 High inflation makes it hard for the Bank of England to support economic
growth through… .
5 Consumers don't have much choice about whether or not… .
6 Slower economic growth will reduce tax receipts and could raise… .
10.8 Choose the correct variant.
1 The … tank is leaking.
a) patrol;
b) petrol;
c) patron.
2 The report … the drug traffic on the Mexican-US border.
a) concern;
b) consumes;
c) concerns.
3 They have cut the … of their products by almost 30 per cent.
a) rise;
b) price;
c) rice.
4 The president has proposed a … in the minimum wage.
a) hike;
b) hikes;
c) high.
5 Michael Owen had to be … after 20 minutes on the field.
a) substitutes;
b) substitute;
c) substituted.
6 All small companies will need to make … if they are to survive.
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a) saver;
b) savings;
c) save.
7 The results … our original theory.
a) suffer;
b) support;
c) supports.
8 She hopes to … work after the baby is born.
a) resumes;
b) assume;
c) resume.
9 Manufacturers report a big … in new orders.
a) drop;
b) drops;
c) drape.
10 The strike caused widespread ...
a) seduction;
b) eruption;
c) disruption.
10.9 Write out key expressions. Make up a plan for retelling.
10.10 Be ready to retell the text in class.
11 Unit 11 The not-for-profit sector
Are regulators striking the right balance between safety and profitability?
Nary a cucumber sandwich was thrown and the heckling was rather subdued. But
the genteel rebellion over executive pay at the Barclays shareholders’ meeting in London
last month, an echo of similar disquiet at annual meetings in America, shows how fed up
bank investors have become with their returns.
No wonder. Between 2007 and the end of last year shareholders in banks globally
have lost almost 10 % of their investment each year, according to the Boston Consulting
Group (see figure 6).
Figure 6
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Behind this international average lie some truly horrible losses. Investors who stuck
it out in Dutch banks saw the value of their holdings fall by almost 28 % a year. Holders
of French, German and Swiss banks suffered average annual losses of close to 20 %.
Those in American and British banks lost 14 % and 16 % a year respectively. “The little
secret to doing well…has been ‘just don’t hold banks’,” says Jacob de Tusch-Lec, a fund
manager at Artemis.
A fall in the price of an asset is usually a good signal to consider buying it. But
those investors who thought that they had timed the bottom of the market have been
proved wrong again and again. “I’ve been dipping in and out of Italian banks but am
keeping very quiet about it,” says one fund manager. “Last year when I told an investor [in
my fund] that I was holding some he got up and left the room.”
Such sharp falls in shareholder value are not just distressing for investors. They
should also worry the businesses and households that need a healthy banking system to
keep credit flowing. If the shares and debt issued by banks are uninvestible, then over time
the banking system will have to shrink or be nationalised.
There are three reasons why the banks have been such a bad bet. The first is
weakness in Western economies, which has led to elevated losses, subdued demand for
credit and deleveraging by the banks themselves. With returns on assets remaining largely
unchanged (this is a tough time to charge customers more), the industry’s total profits are
likely to keep falling.
A second reason is worries about sovereign defaults. In the second half of last year
European banks sold virtually none of the long-term bonds that they use, alongside
deposits, to finance loans. These markets have thawed slightly since the European Central
Bank (ECB) provided more than €1 trillion ($1.3 trillion) in three-year loans to European
banks. But they are still fragile, partly because banks have pledged collateral to the ECB,
leaving less to repay bondholders if a bank were to go bust. Simon Samuels, an analyst at
Barclays, points out that almost five years since the start of the financial crisis, European
banks are more dependent on state support than ever. “What we have, in effect, is
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nationalisation via the debt markets,” he says. “If you can’t get a private-sector debt model
to work then there is no real investible equity.”
The weak economy and worries over the euro area are, with some luck, transient
problems. Yet weighing on investors’ minds is a third concern: the impact that regulation
will have on banks’ long-term profitability and the safety of their debt. Returns on equity
have fallen precipitously, from about 15 % before the crisis to below 10 % now. British
banks’ returns have slipped from almost 20 % to about 5 % last year (see figure 7).
A big reason is that banks have to hold much more equity as a buffer against losses.
Simple arithmetics dictates that returns must fall. Other regulations to make banks safer
also have a cost. Banks will have to hold many more liquid assets, which can be quickly
sold. They are also being forced to stop profitable (if risky) activities such as proprietary
trading.
Figure 7
Rules aimed at ring-fencing retail banks, “bailing in” bondholders and making
banks easier to wind up if they fail are also pushing up banks’ funding costs and
depressing returns. They are doing little to encourage investors to buy bank bonds. “If
regulators told European banks to raise bail-in debt there would be a resounding clatter of
pennies at the bottom of the tin but no folding money at all,” says the chairman of a large
bank.
For all the gloom, most big banks are still forecasting (or at least aiming for) returns
on equity of 12-15 %, which would handily cover the cost of their capital. That would also
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be respectable by historical standards: Autonomous Research reckons that over the long
term banks’ returns have averaged 10 % in Britain and 9 % in America. But it invites two
questions.
The first is whether banks can attract investors with a combination of utility-like
returns and bank-like volatility. Regulators hope better-capitalised banks will be less
volatile and more attractive. More pragmatically, index-tracking investors may have little
choice but to hold them.
The second is whether banks can juice their returns by managing costs better. There
is plenty of room to do so, particularly in wholesale banking. The Boston Consulting
Group reckons that investment banks can quickly cut 10-15 % of fat in areas such as
market data and exchange fees. Deeper savings can be made by reducing layers of
management and title creep: it found that almost half of the staff in second-tier investment
banks had the title of director or managing director compared with 20-30% among the
better firms.
But banks do not have a great record as beancounters. European lenders have
managed to reduce their overall cost-to-income ratio only to about 62 % from 69 % since
the mid-1990s, an average improvement of 0,3 % a year. Their current targets assume an
average improvement of 2,7 % a year over the next three years, a figure Mr. Samuels
thinks looks “far too ambitious”. To keep shareholders and creditors interested, they may
have little choice.
(The Economist)
11.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 Banks will have to hold many more liquid assets, which can be quickly sold.
2 Between 2007 and the end of last year shareholders in banks globally have lost
almost 10% of their investment each year.
3 Banks do not have a great record as beancounters.
4 The weak economy and worries over the euro area are, with some luck, transient
problems.
5 A fall in the price of an asset is usually a good signal to consider buying it.
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6 There are three reasons why the banks have been such a bad bet.
7 Deeper savings can be made by reducing layers of management and title creep.
8 Regulators hope better-capitalised banks will be less volatile and more attractive.
Match the words with their definitions:
1) rebellion
a) something which a person owns, especially land or
shares in a company
2) holding
b) the amount of profit that you get from something
3) annual
c) when someone opposes or fights against people in
authority or ideas which they do not agree with
4) leverage
d) happening or existing now
5) sovereign
e) when a business or an activity makes a profit, or
the amount of profit it makes
6) creditor
f) an amount of money that you pay to do something
or that you pay to a professional person for their work
7) profitability
g) happening once a year
8) return
h) having the highest power in a country
9) fee
i) to make money available to someone in order to
invest or to buy something such as a company:
10)
current
j) a person, bank, or company that you owe money to
11.3 Insert the correct preposition.
1 Investors who stuck it … in Dutch banks saw the value of their holdings fall …
almost 28 % a year.
2 “I’ve been dipping … and … of Italian banks but am keeping very quiet about
it,” says one fund manager.
3 With returns … assets remaining largely unchanged, the industry’s total profits
are likely to keep falling.
4 The weak economy and worries … the euro area are, … some luck, transient
problems.
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5 If regulators told European banks to raise bail-in debt there would be a
resounding clatter … pennies … the bottom of the tin but no folding money … all.
6 Autonomous Research reckons that … the long term banks’ returns have
averaged 10 % in Britain and 9 % in America.
7 The Boston Consulting Group reckons that investment banks can quickly cut 1015 % … fat … areas such as market data and exchange fees.
11.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Holders of French, German and Swiss banks suffered average annual losses of
close to 20 %.
2 If the shares and debt issued by banks are uninvestible, then over time the
banking system will have to shrink or be privatised.
3 These markets have thawed slightly since the European Central Bank (ECB)
provided more than €3 trillion in four-year loans to European banks.
4 For all the gloom, most big banks are still forecasting returns on equity of
12-15 %.
5 European lenders assume an average improvement of 2.7% a year over the next
three years.
11.5 Answer the following questions.
1 When did Barclays shareholders’ meet in London?
2 How much of their investment have shareholders in banks lost each year
between 2007 and the end of last year?
3 What has the little secret to doing well been, according to Jacob de Tusch-Lec?
4 Whom should sharp falls in shareholder value worry?
5 How many reasons are there for the banks having been such a bad bet?
6 What has weakness in Western economies led to?
7 How have returns on equity fallen?
8 What do regulators hope for?
9 How can deeper savings be made?
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10 How have European lenders managed to reduce their overall cost-to-income ratio
since the mid-1990s?
11.6 Match equivalents:
1)
pay
1) delicate
2)
loss
2) independent
3)
healthy
3) gross
4)
fragile
4) salary
5)
autonomous
5) uncertainty
6)
concern
6) defense
7)
buffer
7) effect
8)
volatility
8) strong
9)
impact
9) worry
10) overall
10) debt
11.7 Finish the following sentences using the original text:
1 Investors who stuck it out in Dutch banks saw the value of their holdings… .
2 A fall in the price of an asset is usually a good signal… .
3 If the shares and debt issued by banks are uninvestible, then over time… .
4 Rules aimed at ring-fencing retail banks, “bailing in” bondholders and making
banks easier to wind up if they fail are also pushing up banks’… .
5 Autonomous Research reckons that over the long term banks’ returns have
averaged… .
6 European lenders have managed to reduce their overall cost-to-income ratio only
to about… .
11.8 Choose the correct variant.
1 Between … and the end of last year shareholders in banks globally have lost
almost 10% of their investment each year.
a) 2008;
b) 2007;
c) 2009.
2 Holders of French, German and Swiss banks suffered average annual losses of
close to… .
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a) 15 %;
b) 10 %;
c) 20 %.
3 The little secret to doing well has been “just don’t hold …”.
a) banks;
b) clients;
c) customers.
4 A … in the price of an asset is usually a good signal to consider buying it.
a) fall;
b) rise;
c) uprise.
5 There are … reasons why the banks have been such a bad bet.
a) two;
b) three;
c) four.
6 The … economy and worries over the euro area are, with some luck, transient
problems.
a) healthy;
b) strong;
c) weak.
7 … banks’ returns have slipped from almost 20% to about 5% last year.
a) German;
b) Australian;
c) British.
8 Most big banks are still forecasting returns on equity of …, which would
handily cover the cost of their capital.
a) 12-15 %;
b) 13-16 %;
c) 14-17 %.
9 … lenders have managed to reduce their overall cost-to-income ratio to about
62% from 69% since the mid-1990s.
a) Asian;
b) European;
c) African.
10 Banks will have to hold many more liquid assets, which can be quickly… .
a) used;
b) frozen;
c) sold.
11.9 Write out key expressions. Make up a plan for retelling.
11.10 Be ready to retell the text in class.
12 Unit 12 The future of the European Union
The choice
What will become of the European Union? One road leads to the full break-up of the
euro, with all its economic and political repercussions. The other involves an
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unprecedented transfer of wealth across Europe’s borders and, in return, a corresponding
surrender of sovereignty. Separate or superstate: those seem to be the alternatives now.
For two crisis-plagued years Europe’s leaders have run away from this choice. They
say that they want to keep the euro intact — except, perhaps, for Greece. But northern
European creditors, led by Germany, will not pay out enough to assure the euro’s survival,
and southern European debtors increasingly resent foreigners telling them how to run their
lives.
This has become a test of over 60 years of European integration. Only if Europeans
share a sense of common purpose will a grand deal to save the single currency be seen as
legitimate. Only if it is legitimate can it last. Most of all, it is a test of Germany.
Chancellor Angela Merkel maintains that the threat of the euro’s failure is needed to keep
wayward governments on the path of reform. But German brinkmanship is corroding the
belief that the euro has a future, which raises the cost of a rescue and hastens the very
collapse she says she wants to avoid. Ultimately, Europe’s choice will be made in Berlin.
Last summer this newspaper argued that to break the euro zone’s downward spiral
required banks to be recapitalised, the European Central Bank (ECB) to stand behind
solvent countries with unlimited support, and the curbing of the Teutonic obsession with
austerity. Unfortunately, successive European rescue plans fell short and, though the ECB
bought temporary relief by supplying banks with cheap, long-term cash in December and
February, the crisis has festered and deepened.
In recent months we have concluded that, whether or not Greece stays in the euro, a
rescue demands more. If it is to banish the spectre of a full break-up, the euro zone must
draw on its joint resources by collectively standing behind its big banks and by issuing
Eurobonds to share the burden of its debt. We set out the scheme’s nuts and bolts below. It
is unashamedly technocratic and limited, designed not to create the full superstate that
critics (and we) fear. But it is plainly a move towards federalism — something that
troubles many Europeans. It is a gamble, but time is running short. Rumours of bank runs
around Europe’s periphery have put savers and investors on alert. The euro zone needs a
plan.
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Goodbye to all that
Is the euro really worth saving? Even the single currency’s diehard backers now
acknowledge that it was put together badly and run worse. Greece should never have been
let in. France and Germany rode a coach and horses through the rules designed to prevent
government borrowing getting out of hand. The high priests of euro-orthodoxy failed to
grasp that, though Ireland and Spain kept to the euro’s fiscal rules, they were vulnerable to
a property bust or that Portugal and Italy were trapped by slow growth and declining
competitiveness.
A break-up, many argue, would allow individual countries to restore control over
monetary policy. A cheaper currency would help match wages with workers’ productivity,
for a while at least. Advocates of a break-up imagine an amicable split. Each government
would decree that all domestic contracts — deposits and loans, prices and pay — should
switch into a new currency. To prevent runs, banks, especially in weak economies, would
shut over a weekend or limit withdrawals. To stop capital flight, governments would
impose controls.
All good, except that the people who believe that countries would be better off
without the euro gloss over the huge cost of getting there. Even if this break-up were
somehow executed flawlessly, banks and firms across the continent would topple because
their domestic and foreign assets and liabilities would no longer match. A cascade of
defaults and lawsuits would follow. Governments that run deficits would be forced to cut
spending brutally or print cash.
And that is the optimistic scenario. More likely, a break-up would take place amid
plunging global share prices, a flight to quality, runs on banks, and a collapse in output.
Devaluation in weak economies and currency appreciation in strong ones would devastate
rich-country producers. Capital controls are illegal in the EU and the break-up of the euro
is outside the law, so the whole union would be cast into legal limbo. Some rich countries
might take advantage of that to protect their producers by suspending the single market;
they might try to deter economic migrants by restricting freedom of movement. Practically
speaking, without the movement of goods, people or capital, little of the EU would remain.
The heirs of Schuman and Monnet would struggle to restore the Europe of 27 when
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it had been the cause of such mayhem — even if a euro-rump of strong countries emerged.
Collapse would be a gift to anti-EU, anti-globalisation populists, like France’s Marine Le
Pen. There would be so many people to blame: Eurocrats, financiers, intransigent
Germans, feckless Mediterraneans, foreigners of all kinds. As national politics turned
ugly, European co-operation would break down. That is why this newspaper thinks
willingly abandoning the euro is reckless. A rescue is preferable to a break-up.
A problem shared
But not just any rescue. Too much of the debate over how to save the euro puts the
emphasis merely on a plan for growth. That would help, because growth makes debt more
manageable and banks healthier. Mrs. Merkel should have been more accommodating on
this. But any realistic stimulus would be too modest to stem the crisis. The ECB could and
should cut rates and begin quantitative easing, but official funds for investment are
limited. More ambitious ways of boosting growth, such as the completion of a single
European market for services, are sadly not even on the table.
In any case, the euro zone’s troubles run too deep. Banks and their governments are
propping each other up like Friday-night drunks. The ECB’s support for the banks cannot
prevent the weak economies of Spain, Portugal, Italy and Ireland from enfeebling their
banks and governments. For as long as bond yields are high and growth is poor,
sovereigns will face doubt about their capacity to service their debt and banks will see
loans go bad. Yet that same uncertainty pushes up sovereign yields and stops bank
lending, further inhibiting growth. Fear that the state might have to deal with a banking
collapse makes government bonds riskier. Fear that the state could not cope makes a
banking collapse more likely.
That is why we have reluctantly concluded that the nations in the euro zone must
share their burdens. The logic is straightforward. The euro zone’s problem is not the debt’s
size, but its fragmented structure. Taken as a whole, the stock of euro-zone public debt is
87 % of GDP, compared with over 100 % in America. Similarly, the banks are not too big
for the continent as a whole, just for individual governments. To survive, Europe has to
become more federal: the debate is how much more.
(The Economist)
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12.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 The euro zone needs a plan.
2 The ECB could and should cut rates and begin quantitative easing, but official
funds for investment are limited.
3 Chancellor Angela Merkel maintains that the threat of the euro’s failure is
needed to keep wayward governments on the path of reform.
4 Separate or superstate: those seem to be the alternatives now.
5 To survive, Europe has to become more federal: the debate is how much more.
6 Devaluation in weak economies and currency appreciation in strong ones would
devastate rich-country producers.
7 Practically speaking, without the movement of goods, people or capital, little of
the EU would remain.
8 Each government would decree that all domestic contracts—deposits and loans,
prices and pay—should switch into a new currency.
12.2 Match the words with their definitions:
1) repercussion
1) a feeling of comfort when something frightening,
worrying, or painful has ended or has not happened
2) capitalise
2) damage something very badly or completely
3) relief
3) the act of finishing something
4) liabilities
4) a sudden failure in the way something works, so that it
cannot continue
5) devastate
5) the effects of an action or event, especially bad effects that
continue for some time
6) break-up
6) easy to control or deal with
7) completion
7) to calculate the value of a business based on the value of
its shares or on the amount of money it makes
8) manageable
8) simple and easy to understand
9) collapse
9) the separation of a group, organization, or country into
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smaller parts
10) straightforward
10)
the amount of debt that must be paid
12.3 Insert the correct preposition.
1 One road leads … the full break-up of the euro, … all its economic and political
repercussions.
2 … two crisis-plagued years Europe’s leaders have run away … this choice.
3 A cheaper currency would help match wages … workers’ productivity, for a
while … least.
4 To prevent runs, banks, especially … weak economies, would shut … a weekend
or limit withdrawals.
5 Practically speaking, … the movement … goods, people or capital, little … the
EU would remain.
6 Too much … the debate … how to save the euro puts the emphasis merely … a
plan for growth.
7 Similarly, the banks are not too big … the continent as a whole, just …
individual governments.
12.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Northern American creditors, led by Germany, will not pay out enough to assure
the euro’s survival.
2 Though Ireland and Spain kept to the euro’s fiscal rules, they were vulnerable to
a property bust.
3 A break-up, many argue, would allow individual countries to restore control over
foreign policy.
4 The ECB’s support for the banks cannot prevent Spain, Portugal, Italy and
Ireland from enfeebling their banks and governments.
5 The stock of America’s public debt is 100% of GDP.
12.5 Answer the following questions.
1 What will become of the European Union?
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2 Under what conditions will a grand deal to save the single currency be seen as
legitimate?
3 Where will Europe’s choice be made?
4 What troubles many Europeans?
5 What would a break-up allow individual countries?
6 What would a cheaper currency help do?
7 Where are capital controls illegal?
8 What would happen without the movement of goods, people or capital?
9 What cannot the ECB’s support for the banks prevent the weak economies of
Spain, Portugal, Italy and Ireland from?
10 What is the stock of euro-zone public debt, taken as a whole?
12.6 Match equivalents:
1)
collapse
1) warning
2)
purpose
2) shortage
3)
legitimate
3) lawful
4)
cash
4) responsibility
5)
alert
5) cease
6)
domestic
6) break-down
7)
abandon
7) loan
8)
deficit
8) aim
9)
lend
9) money
10) burden
10)
national
12.7 Finish the following sentences using the original text:
1 Chancellor Angela Merkel maintains that the threat of the euro’s failure is
needed to… .
2 Whether or not Greece stays in the euro,… .
3 Advocates of a break-up imagine an amicable split. Each government would
decree that all domestic contracts—deposits and loans, prices and pay—should… .
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4 Capital controls are illegal in the EU and the break-up of the euro is outside the
law, so… .
5 Banks and their governments are propping each other up like… .
6 Taken as a whole, the stock of euro-zone public debt is 87% of GDP,… .
12.8 Choose the correct variant.
1 For … crisis-plagued years Europe’s leaders have run away from this choice.
a) two;
b) three;
c)
four.
2 This has become a test of over … years of European integration.
a) 50;
b) 60;
c)
40.
3 In recent months we have concluded that, whether or not … stays in the euro, a
rescue demands more.
a) Denmark;
b) Poland;
c)
Greece.
4 To prevent runs, …, especially in weak economies, would shut over a weekend
or limit withdrawals.
a) banks;
b) shops;
c)
clubs.
5 Capital controls are illegal in the … and the break-up of the euro is outside the
law.
a) EU;
b) USA;
c)
NATO.
6 Too much of the debate over how to save the … puts the emphasis merely on a
plan for growth.
a) ruble;
b) dollar;
c)
euro.
7 The … could and should cut rates and begin quantitative easing, but official
funds for investment are limited.
a) WWF;
b) IMF;
c)
ECB.
8 Banks and their governments are propping each other up like …-night drunks.
a) Monday;
b) Friday;
c)
Wednesday.
9 Taken as a whole, the stock of euro-zone public debt is 87% of GDP, compared
with over 100% in ... .
a) America;
b) Africa;
c)
Australia.
10 To survive, Europe has to become more …: the debate is how much more.
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a) democratic;
b) federal;
c)
liberal.
12.9 Write out key expressions. Make up a plan for retelling.
12.10 Be ready to retell the text in class.
13 Unit 13 Oil prices
Everyone knows why oil prices, at around $125 for a barrel of Brent crude, are so
high. The long-term trends are meagre supply growth and soaring demand from China and
other emerging economies. And in the short term, the market is tight, supplies have been
disrupted and Iran is making everyone nervous.
Saudi Arabia, the only OPEC member with enough spare capacity to make up
supply shortfalls, is the best hope of keeping the market stable. The Saudis recently
reiterated their pledge to keep the market well supplied as American and European Union
sanctions hit Iran. Over time, other producers in the Persian Gulf may be able to pump
more. Iraq—and Iran itself—have vast oilfields that could eventually provide markets with
millions more barrels a day (b/d). All this is conventional wisdom.
Yet these calculations do not take account of the region’s growing thirst for its own
oil. Between 2000 and 2010 China increased its consumption of oil more than any other
country, by 4,3 m b/d, a 90 % jump. It now gets through more than 10 % of the world’s
oil. More surprising is the country that increased its consumption by the second-largest
increment: Saudi Arabia, which upped its oil-guzzling by 1,2 m b/d. At some 2,8 m b/d, it
is now the world’s sixth-largest consumer, getting through more than a quarter of its 10 m
b/d output.
Saudi Arabia is not the only oil-producer that chugs its own wares. The Middle East,
home to six OPEC members, saw consumption grow by 56 % in the first decade of the
century, four times the global growth rate and nearly double the rate in Asia (see map).
Energy use per head is also rising. According to BP, in 1970 in the Middle East it
was half what it was in other emerging markets. By 2010 it was three times higher. Global
oil consumption stayed at roughly 4,6 barrels a head annually between 2000 and 2010, but
the average Iranian and Saudi was getting through roughly 30 % more by the end of the
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decade. The Saudis consume 35,1 barrels each. Overall energy consumption per head, at
7,3 tonnes of oil equivalent, is roughly the same as in America (see chart), which is much
richer.
There are three explanations for this growing taste for oil. The first is demography.
Populations in the Persian Gulf, and in OPEC as a whole, are growing fast. Tiny Qatar’s
population trebled between 2000 and 2010. Saudi Arabia’s grew from around 20 m to 27,4
m, a 37 % increase. Demand for power, water and petrol has risen accordingly. Saudi
power-generating capacity has doubled in the past decade. Partly this is to mitigate the
fearful heat: according to a report from Chatham House, a think-tank, air-conditioning
units soak up half of all power generated at peak consumption periods.
The second relates to economic structure. It takes energy to produce energy: pumps
must be powered and vast quantities of seawater desalinated. Aramco, the Saudi state oil
company, sucks up nearly 10 % of the country’s energy output. Attempts to diversify the
Saudi economy beyond oil, gas and petrochemicals have not gone far (see figure 8).
Figure 8
The third reason for rising Gulf consumption is the inefficiency of domestic energy
markets. Some 65 % of Saudi electricity is generated using black gold, even as successive
price shocks and the relative inefficiency of oil generation have seen it all but phased out
in rich countries. Oil is used with such profligacy because domestic consumption is
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massively subsidised. According to the International Energy Agency, global oil subsidies
added up to $192 billion in 2010. OPEC countries accounted for $121 billion of the total.
Saudi Arabia has the cheapest fuel in the Gulf and dirt-cheap electricity, too. This
has alleviated poverty but it has also encouraged an American-style driving culture (for
men) and limited public transport. Only a third as many Saudis own cars as Americans; as
they get richer many more will take to the desert highways.
Many oil-producing countries (including Saudi Arabia) have pledged to cut
subsidies. But this is hard to do when regimes are terrified of unrest (and often unelected).
Violent protests greeted Nigeria’s attempts in January to raise the price of imported petrol.
Only Iran, which had the most generous subsidy regime, has managed a big price hike—
and it had a handy scapegoat in the form of sanctions.
It is costing Saudi Arabia dear to burn through so much oil. With “lifting” costs of
$3 to $5 a barrel the fuel is cheap but the opportunity cost, given a global price of $125, is
huge. And like many Gulf oil producers Saudi Arabia has failed to use its abundant
natural-gas supplies properly (see figure 9).
Figure 9
Gas does now contribute 35 % to power generation, but rock-bottom prices and a
sniffiness about gas as oil’s poor relation mean that exploiting its bounty (Saudi Arabia
apparently has the world’s fifth-largest gas reserves) has proven hard. Initiatives to attract
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Western oil companies to get at the gas foundered as low prices and stingy terms failed to
attract bidders. Much of the “unassociated” gas that doesn’t spew out alongside oil is
tough to extract, and would require prices four or five times higher than now to make it
worthwhile. According to BP, oil makes up 74 % of the region’s energy production. By
2030 it will have dropped only to 67 %.
Saudi Arabia is trying to develop nuclear and solar energy. But its fleet of oil-fired
power stations will keep going for years. And as Mark Lewis of Deutsche Bank points out,
two more big ones are now being built. On current trends the kingdom would become a
net importer of oil by 2038 (unlikely though that is).
This puts big strains on oil markets. In the short term Saudi spare capacity is an
important factor in oil prices. As the year progresses seasonal Saudi demand is likely to
jump. Last year the upswing between March and July was some 750,000 barrels of fuel a
day, according to Barclays Capital. Much of that will be driven by air conditioners
working overtime. This will put pressure on the country’s ability to maintain exports and
keep oil prices stable.
The longer-term picture is equally worrying. Global demand for oil is projected to
rise to over 100 m b/d by 2030. The Gulf states of Saudi Arabia, Iran and Iraq, which have
vast and easily accessible reserves, are regarded as the obvious sources of new supply. But
Iranian oil production will decline as sanctions bite and the country loses access to
equipment and expertise. Iraq, currently producing 3 m b/d, has the reserves to increase
production significantly. But fragile politics, dodgy security and a battered oil
infrastructure are deterring the investment required to boost supplies. And Saudi Arabia’s
thirst for its own oil shows little sign of abating. The Gulf is usually seen as the answer to
the world’s oil problems, but it looks ever more like a question-mark instead.
(The Economist)
13.1 Read the text thoroughly and be ready to arrange the following statements into
the logical order of the text:
1 Saudi Arabia is trying to develop nuclear and solar energy.
2 There are three explanations for this growing taste for oil.
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3 Saudi Arabia, the only OPEC member with enough spare capacity to make up
supply shortfalls, is the best hope of keeping the market stable.
4 Between 2000 and 2010 China increased its consumption of oil more than any
other country, by 4.3m b/d, a 90% jump.
5 Yet these calculations do not take account of the region’s growing thirst for its
own oil.
6 Saudi Arabia has the cheapest fuel in the Gulf and dirt-cheap electricity.
7 Global oil consumption stayed at roughly 4.6 barrels a head annually between
2000 and 2010, but the average Iranian and Saudi was getting through roughly 30% more
by the end of the decade.
8 Oil is used with such profligacy because domestic consumption is massively
subsidised.
9 This puts big strains on oil markets.
10 The Gulf is usually seen as the answer to the world’s oil problems, but it looks
ever more like a question-mark instead.
13.2 Match the words with their definitions:
1) Conventional
1) The amount of something produced by a
person, machine, or industry.
2) Shortfall
2) Increase rapidly above the usual level.
3) Output
3) Say something again or a number of times,
typically for emphasis or clarity.
4) Boost
4) An increase or addition, esp. one of a series on
a fixed scale; a regular increase in salary on such a
scale.
5) Strain
5) Consisting of three parts; threefold.
6) Reiterate
6) Based on or in accordance with what is
generally done or believed.
7) Soar
7) A deficit of something required or expected.
8) Increment
8) A force tending to pull or stretch something to
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an extreme or damaging degree.
9) Meagre
9) To increase or improve something and make it
more successful; to help someone reach a higher
place by lifting or pushing them.
10)
Treble
10)
(Of something provided or available)
lacking in quantity or quality.
13.3 Insert the correct preposition.
1 Everyone knows why oil prices, … …$125 … a barrel … Brent crude, are so
high.
2 … some 2.8m b/d, it is now the world’s sixth-largest consumer, getting ….. more
… a quarter of its 10m b/d output.
3 Energy use …. head is also rising. ….. to BP, in 1970 … the Middle East it was
half what it was in other emerging markets.
4 Saudi Arabia’s grew …. …. 20 m … 27.4 m, a 37% increase.
5 … its fleet …. oil-fired power stations will keep going …. years.
6 …. current trends the kingdom would become a net importer … oil … 2038
(unlikely though that is).
7 Global demand … oil is projected to rise … …. 100 m b/d …. 2030.
13.4 Say whether the statement is true or false. If the statement is false, give the
correct variant:
1 Saudi Arabia, the only OPEC member, is the best hope of keeping the market
stable.
2 Between 2000 and 2010 China increased its consumption of oil more than any
other country, by 4.3m b/d, a 90% jump.
3 The Far East, home to six OPEC members, saw consumption grow by 56% in
the first decade of the century, four times the global growth rate and nearly double the rate
in Asia (see map).
4 Saudi power-generating capacity has trebled in the past decade.
5 Only Iran, which had the most generous subsidy regime, has managed a big price
hike—and it had a handy scapegoat in the form of sanctions.
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13.5 Answer the following questions.
1 What are the oil prices and why are they so?
2 What do Iraq and Iran have?
3 What has happened in China between 2000 and 2010?
4 What can you say about oil consumption in Saudi Arabia?
5 What are the explanations for the growing taste of oil?
6 What are the calculations made by International Energy Agency?
7 What can you say about fuel and its usage in Saudi Arabia?
8 What can you say about “unassociated” gas prices?
9 What is Saudi Arabia trying to develop and what has it already done?
10 What is the long-term picture according to general project?
13.5 Match equivalents:
1)
capacity
1) lack
2)
oil
2) tension
3)
conventional
3) wastefullness
4)
shortfall
4) provide
5)
strain
5) shatter
6)
pledge
6) usual
7)
supply
7) increase
8)
increment
8) petroleum
9)
profligacy
9) security
10) disrupt
10) faculty
13.7 Finish the following sentences using the original text:
1 Iraq—and Iran itself—have vast oilfields…. .
2 The Middle East, home to six OPEC members, saw consumption grow by…. .
3 Global oil consumption stayed at roughly 4.6 barrels a head annually between
2000 and 2010, but…. .
4 Some 65% of Saudi electricity is generated using black gold, even as successive
price shocks and …. .
5 Much of the “unassociated” gas that doesn’t spew out alongside … .
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6 Gas does now contribute 35% to power generation, but rock-bottom prices… .
13.8 Choose the correct variant.
1 Saudi Arabia, the only …. member with enough spare capacity to make up
supply shortfalls, is the best hope of keeping the market stable.
a) NATO;
b) OPEC;
c)
WTO.
2 Between 2000 and 2010 China increased its consumption of …. more than any
other country, by 4.3m b/d, a 90% jump.
a) oil;
b) gas;
c)
energy.
3 The Middle East, home to …. OPEC members, saw consumption grow by 56%
in the first decade of the century, four times the global growth rate and nearly double
the rate in Asia (see map).
a) four;
b) five;
c)
six.
4 Overall …. consumption per head, at 7.3 tonnes of oil equivalent, is roughly the
same as in America (see chart), which is much richer.
a) oil;
b) gas;
c)
energy.
5 Saudi power-generating capacity has….. in the past decade.
a) doubled;
b) trebled;
c)
fourbled.
6 Aramco, the Saudi state oil company, sucks up nearly 10% of the …. output.
a) world’s oil;
b) region’s gas;
c)
country’s energy.
7 Some 65% of Saudi electricity is generated using …., even as successive price
shocks and the relative inefficiency of oil generation have seen it all but phased out in
rich countries.
a) iron ore;
b) black gold;
c)
wood.
8 According to …., oil makes up 74% of the region’s energy production.
a) Chatham house;
b) Barclays capital;
c)
BP.
9 Last year the upswing between March and July was some 750,000 barrels of
fuel a …, according to Barclays Capital.
a) month;
b) week;
c)
day.
10 The Gulf is usually seen as the answer to the ….. problems, but it looks ever
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more like a question-mark instead.
a) world’s oil;
b) region’s gas;
c)
country’s energy.
13.9 Write out key expressions. Make up a plan for retelling.
13.10 Be ready to retell the text in class.
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Keys
1.1
d, a, g, c, f, e, h, b.
1.2
1) 8
3) 1
5) 6
7) 9
9) 7
2) 4
4) 10
6) 2
8) 3
10) 5
1.3
1 on
5 on/upon
2 for
6 up
3 through
7 of
4 of
1.4
1 F
2
F
3
T
4
F
5
T
1.5
1
Enda Kenny is an Ireland’s prime minister.
2
A new treaty to impose greater fiscal discipline on euro-zone members and
eight others (but not Britain or the Czech Republic) was signed after being negotiated in
record time.
3
Italy’s technocratic prime minister, Mario Monti, and Mario Draghi, the
president of the European Central Bank helped Europe breathe more easily.
4
Its unemployment rate, at 23,3 % last month, is the highest in the EU. And its
budget deficit last year barely declined from 2010, standing at 8,5 % of GDP instead of the
planned 6%.
5
Senior source in Berlin says that the Spanish are lying about the figures.
6
Member States under market pressure should meet agreed budgetary targets
and stand ready to pursue further consolidation measures if needed.
7
The recession has now reached the Netherlands. The latest official forecasts
show that the Netherlands would post a deficit of 4.5% of GDP this year, falling to 3,3 %
in 2015.
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8
The easiest way of doing this would be to allow the current temporary
European Financial Stability Facility to continue using its leftover funds.
9
The summit communiqué calls for a “scoreboard” to compare the performance
of member states, and “regular monitoring” in future summits.
10 When you keep hearing talk of Greek default and the end of the euro, you will
save your money rather than spend it.
1.6
1)
4
3) 1
5) 8
7) 3
9) 6
2)
10
4) 7
6) 5
8) 2
10) 9
1.7
1 … was signed today after being negotiated in record time.
2 … if elected in Greece's general election, expected in April.
3 … Spain may be coming closer to a deflationary spiral.
4 … and Italy has also made more cuts to balance the budget by next year.
5 … whether to enhance the euro zone’s rescue funds.
6 … to open up the EU’s single market, particularly in services.
1.8
1 b) default
6 c) market
2 a) crisis
7 b) GDP
3 b) treaty
8 a) economic
4 c) recession
9 a) performance
5 a) figures
10 c) zone
2.1
b, h, f, d, a, g, e, c.
2.2
1-4
3-9
5-2
7-3
9-6
2-7
4-1
6-10
8-8
10-5
2.3
1
on
5
from
2
into
6
at
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3
into
4
up
7
to
2.4
1 T
2 F
3 F
4 T
5 F
2.5
1 In order to assess how much economic progress it has undone, The Economist
has constructed a measure of lost time for hard-hit countries.
2 The clock uses seven indicators of economic health: household wealth, financialasset prices, property prices, annual output, private consumption, real wages and
unemployment.
3 American equities lost a quarter of their value in the month after the collapse of
Lehman Brothers in September 2008.
4 It took 25 years for American stocks to regain their 1929 highs and Japanese
stocks have never made it back to their peak.
5 How quickly economies make up lost time will depend on where they have
ceded ground.
6 Nominal GDP is a vital metric of governments’ debt sustainability.
7 The average American homeowner is living in 2001, judging by inflationadjusted property values.
8 In ten of them real wages were lower in 2010 than previously, with four years
lost on average by those that went backwards. Workers in Greece and Hungary had lost six
years, with pay below its 2004 level.
9 Yes, they had.
10 The IMF predicts that in three years Italy will be the only G7 country with real
GDP lower than in 2007.
2.6
1) 6
3) 1
5) 7
7) 4
9) 8
2) 3
4) 9
6) 10
8) 2
10) 5
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2.7
1 … The Economist has constructed a measure of lost time for hard-hit countries.
2 … the S&P 500 is back to around 90 % of its peak value.
3 … where they have ceded ground.
4 … how well consumers are doing.
5 … since living standards are best measured on a per-person basis.
6 … Italy will be the only G7 country with real GDP lower than in 2007.
2.8
1 c) index
6 c) value
2 a) assessed
7 a) debt
3 b) output
8 b) consumer
4 b) wages
9 c) share
5 a) equity
10 c) prospect
3.1
f, d, a, e, b, c.
3.2
1) 9
3) 7
5) 10
7) 2
9) 8
2) 3
4) 1
6) 4
8) 5
10) 6
3.3
1
of
5 at
2
at
6 on
3
to
7 in
4
out
3.4
1 T
2
F
3
T
4
F
5
T
3.5
1 The past four years have seen the worst economic crisis since the 1930s and the
biggest food-price increases since the 1970s.
2 The best estimates for global poverty come from the World Bank’s Development
Research Group.
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3 The new estimates show that in 2008, the first year of the finance-and-food
crisis, both the number and share of the population living on less than $1,25 a day was
falling in every part of the world.
4 The UN’s “millennium development goal” is halving world poverty between
1990 and 2015 five years early.
5 Martin Ravallion is the director of the bank’s Development Research Group.
6 Its poverty headcount rose at every three-year interval between 1981 and 2005.
7 No, the number of poor people had also been rising (from much lower levels) in
Latin America and in eastern Europe and Central Asia.
8 Derek Headey of the International Food Policy Research Institute has shown that
despite the world food-price spike, people’s assessment of their own food situation in most
poor and middle-income countries was better in 2008 than it had been in 2006.
9 According to Mr. Ravallion, poverty-reduction policies seem to help most at the
very bottom.
10 Yes, the poorest of the poor seem to have escaped the worst of the post-2007
downturn.
3.6
1) 5
3) 1
5) 3
7) 9
9) 6
2) 8
4) 10
6) 7
8) 4
10) 2
3.7
1 … the biggest food-price increases since the 1970s.
2 … was falling in every part of the world.
3 … halving world poverty between 1990 and 2015 five years early.
4 … and in eastern Europe and Central Asia.
5 … fearing they would prove inflationary, inefficient and ill-timed.
6
… who have just escaped from absolute poverty; population growth does the
rest.
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3.8
1 c) decline
6 c) trend
2 b) estimates
7 b) recent
3 c) goal
8 b) data
4 a) reduction
9 a) drop
5 b) account
10 c) term
4.1
a, e, c, g, h, d, b, f.
4.2
1) 5
3) 1
5) 2
7) 3
9) 7
2) 8
4) 10
6) 9
8) 4
10) 6
4.3
1 at
5 on
2 of
6 to
3 in
7 off
4 of
4.4
1F
2 T
3 T
4 T
5 F
4.5
1 Of all the euro zone’s many problems, youth unemployment is perhaps the most
distressing.
2 Joblessness among young workers is around 30 % in Portugal and nearly
50 %
in Spain.
3 While hard-to-fire older workers luxuriate on permanent contracts, the young are
typically hired temporarily and are easier to sack.
4 In order to inject more flexibility into the labour market it is necessary to create a
less-protected class of employees.
5 Frequent job turnover makes households’ finances less certain, making it harder,
for example, to save regularly for old age.
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6 The cost to an employer of converting an expiring temporary contract into a
permanent one is quite high because of a discontinuous jump in the cost of sacking the
worker.
7 Between 2005 and 2007 roughly 80 % of Spanish workers aged 16 to 19 were on
temporary contracts.
8 A single, open-ended labour contract should increase the incentive for firms to
retain more employees for longer and to invest more in the human capital of new workers.
9 Permanent positions protected by strong employment rules still dominate its
labour market.
10 The Anglo-Saxon preference for little or no employment protection may be the
most effective at herding workers from declining industries to growing ones, driving job
creation and innovation.
4.6
1) 8
3) 5
5) 10
7) 4
9) 2
2) 3
4) 1
6) 6
8) 9
10) 7
4.7
1 …even in more liberal markets like America’s.
2 … which were subject to lower dismissal costs than those for workers on openended contracts.
3 … to save regularly for old age.
4 … to retain more employees for longer and to invest more in the human capital
of new workers.
5 … when competitive pressures demanded it.
6 … will fall first on temporary workers.
4.8
1
a) labour
6
b) weigh
2
c) unemployment
7
c) effective
3
b) trade
8
a) bargain
4
a) gradient
9
c) restraint
5
b) incentive
10 c) protection
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5.1
h, f, c, d, a, e, b, g.
5.2
1) 7
3) 10
5) 9
7) 4
9) 3
2) 1
4) 2
6) 6
8) 5
10) 8
4 F
5 T
5.3
1 for
5 to
2 of
6 on
3 over
7 up
4 against
5.4
1 T
2 T
3 F
5.5
1
The World Trade Organisation denies patrons the right of automatic
readmission.
2
China had to relax over 7,000 tariffs, quotas and other trade barriers.
3
Its dollar GDP has quadrupled, its exports almost quintupled.
4
In a recent poll, 61 % of Americans said that China’s recent economic
expansion had been bad for America; just 15 % thought it had been good.
5
By keeping the exchange rate down, China has gained a substitute for the
mercantilist measures it gave up to join the WTO.
6
Foreign firms lament losing trade battles they might not bother to wage in a
less lucrative market. They also face competition from local upstarts in markets where no
such rivals previously existed.
7
China’s first electronic payment card was issued in 1986 by MasterCard.
8
To modernise its economy, it has remained wedded to industrial policies, state-
owned enterprises, and a “techno-nationalism” that protects and promotes home-grown
technologies.
9
As part of its WTO agreement, China now circulates draft laws and regulations
for 30 days to collect comments.
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10 China’s trade policies may look a little uglier than WTO members had hoped
when they opened the club’s doors ten years ago.
5.6
1) 10
3) 5
5) 8
7) 9
9) 7
2) 6
4) 2
6) 1
8) 4
10) 3
5.7
1 … to gain entry after reapplying in the 1980s.
2 … in global economic history.
3 … to wage in a less lucrative market.
4 … with the Chinese state.
5 … such as for 3G mobile phones.
6 … when they opened the club’s doors ten years ago.
5.8
1 b) denies
6 a) merchant
2 b) admission
7 a) defend
3 a) currency
8 c) transparent
4 c) stake
9 c) announcement
5 b) rival
10 b) subsidy
6.1
e, d, a, h, f, b, g, c.
6.2
1) 8
3) 4
5) 3
7) 1
9) 6
2) 2
4) 7
6) 10
8) 5
10) 9
6.3
1 in
5 at
2 at
6 to
3 of
7 for
4 in
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6.4
1T
2 F
3 T
4 F
5 F
6.5
1 BP may have resolved some of the claims it faced over the 2010 Gulf of Mexico
oil spill with a $7.8bn deal to compensate people and businesses hurt by the spill.
2 The settlement with the private sector plaintiffs in the litigation over the spill is a
significant step for BP in putting an end to some of the financial uncertainty that has
surrounded it over the past two years.
3 The US Department of Justice is investigating possible criminal charges against
BP, other companies involved in the spill, and their employees.
4 Comments from federal and state officials over the weekend suggested they
would take a tough line in extracting the maximum possible pay-out from BP.
5 Jason Kenney is an analyst at Banco Santander.
6 The United States is prepared to hold the responsible parties accountable for the
damage suffered in the Gulf region.
7 Garret Graves is the chair of Louisiana’s Coastal Protection and Restoration
Authority.
8 If BP took “incremental” further charges to settle all remaining claims, it would
send a signal to the US that the company was taking its punishment.
9 Investors will be supportive of incremental charges to the P&L, if this provides
the basis for settlement with major parties involved, and the prospect of returning to
‘business as normal’.
10 For Bob Dudley, the task at hand will be to steer the group through the
remaining uncertainty.
6.6
1) 8
3) 10
5) 9
7) 2
9) 6
2) 4
4) 5
6) 7
8) 3
10)
1
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6.7
1 … to some of the financial uncertainty that has surrounded it over the past two
years.
2 … extracting the maximum possible pay-out from BP.
3 … which could cover claims from state governments and environmental
restoration.
4 … the damage suffered in the Gulf region.
5 … on the remaining matters before the court.
6 … BP was being forced to repair the damage.
6.8
1 c) claim
6 b) reach
2 b) issue
7 b) amounts
3 a) damage
8 a) suffer
4 c) manage
9 b) trial
5 a) charge
10 c) involve
7.1
a, e, f, b, g, c, d.
7.2
1) 4
3) 7
5) 1
7) 6
9) 5
2) 10
4) 8
6) 2
8) 9
10) 3
7.3
1 in
5 to
2 of
6 in
3 to
7 to
4 in
7.4
1T
2 T
3 T
4 F
5 T
7.5
1 Oprah Winfrey is the US’s highest- rated syndicated talk-show host.
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2 In 1996 Oprah Winfrey announced the launch of a book club designed to “get
America reading again”.
3 Ms Winfrey would use her celebrity influence to convince her viewers to turn to
literature, in one of the most highly publicised reading promotion programmes in history.
4 Ms Winfrey would select a book and announce the title during a show, and then
discuss it during a televised segment a month or so later.
5 Oprah’s Book Club faced immediate scepticism from literary commentators,
who associated syndicated daytime shows with lowbrow offerings such as soap operas.
6 Ms Winfrey’s endorsement led to lasting sales increases for the chosen authors.
7 The novel The Deep End of the Ocean by Jacquelyn Mitchard had sold 70,000
copies and in the month after its endorsement, sales increased by 700,000 copies.
8 No, sales of other titles by the same author also increase and the magnitude of
this spillover benefit grows in the three months after the announcement.
9 In some countries, as much as 40 per cent of ads use some form of celebrity
endorsement.
10 An endorsement announcement from a rival may require a company to increase
its own marketing and promotions significantly.
7.6
a)
9
c) 6
e) 3
g) 8
i) 4
b)
2
d)
f)
h)
j) 7
10
1
5
7.7
1 … designed to “get America reading again”.
2 … during a televised segment a month or so later.
3 … had fallen from 57 per cent in 1982 to 47 per cent in 2002.
4 … expand the market.
5 … of the Vin Mariani alcoholic beverage.
6 … to increase its own marketing and promotions significantly.
7.8
1 a) host
6 c) reveal
2 c) convince
7 a) threat
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3 c) select
8 a) profit
4 b) magnitude
9 b) brand
5 a) expand
10 b) impact
8.1
f, b, g, a, d, e, c, h.
8.2
1) 2
3) 10
5) 3
7-8
9-5
2) 9
4) 6
6) 7
8-1
10-4
8.3
1 in
5 to
2 for
6 up
3 to
7 in
4 at
8.4
1 F
2 F
3 T
4 F
5 F
8.5
1 Its research and development staff spend $2bn a year hypothesising,
experimenting, analysing and ruminating on each of those things in the name of
“innovation”.
2 “Innovation” is a corporate mantra that P&G staff repeat with a frequency that
suggests heartfelt commitment or rigorous brainwashing.
3 It told journalists that the squishy Tide Pods represented the biggest “disruption”
in US laundry since it introduced Tide liquid detergent in 1984.
4 Given the high costs and high risks involved, being the first mover is generally
not a good thing if you are trying to create an entirely new product category.
5 The idea of first-mover advantage was challenged by the academics Peter Golder
and Gerard Tellis, whose research into the history of 66 industries found that companies
get limited rewards from being pioneers.
6 Eric Schwartz is general manager of laundry care at Henkel in the US.
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7 One reason is that first movers that fall by the wayside get forgotten. Another is
the law, which gives first movers the right to register new patents and brands.
8 Asked if P&G was playing catch-up, Ms Keith answered with a firm “no”.
9 For some brands, the arrival of several similar products at the same time can
even be helpful.
10 No, Chux, a Johnson & Johnson brand, was first to market in 1949.
8.6
1) 1
3) 9
5) 3
7) 4
9) 2
2) 5
4) 8
6) 10
8) 7
10)
6
8.7
1 … were changed in a meaningful way.
2 … that companies get limited rewards from being pioneers.
3 … consumer tastes, new designs and manufacturing techniques, and the potential
size of a market.
4 … in many people’s minds.
5 … can even be helpful.
6 … hit the market first.
8.8
1 c) average
6 a) embedded
2 c) staff
7 b) accounts
3 b) brainwashing
8 a) advantage
4 b) triple-
9 b) separate
5 a) pioneer
10 c) uptake
9.1
c, g, a, b, e, h, f, d.
9.2
1) 6
3) 7
5) 5
7) 10
9) 4
2) 8
4) 9
6) 3
8) 2
10) 1
9.3
1 on
5 out
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2 out
6 to
3 in
7 to
4 of
9.4
6
F
7
T
8
F
9
T
10
T
9.5
1 Jobless figures are the one major economic indicator that measures people.
2 The eurozone's unemployment rate had risen to a record high of 10,7 %, hat's
16,9 million people out of work across the 17-nation euro area.
3 Spain holds the EU record, with unemployment at 23,3 %, or 5,3 million people
– and rising.
4 Voters across the EU care much more about the jobs deficit than they do about
the budget deficit.
5 On the jobless side of the Atlantic, the only solution to austerity-induced
unemployment is more austerity.
6 Basic economics teaches us that the best way to cut borrowing levels is to get
people back to work and paying taxes.
7 Having a job isn't just about earning a living or paying taxes; it's about human
dignity and self-worth.
8 The human and social costs of unemployment are: financial hardship, emotional
stress, depression, lethargy, loss of morale and status, shame, sickness and premature
death.
9 In the UK, unemployment stands at a 17-year high of 2,7 million.
10 Over the past three years, the Bank of England governor has authorized the
creation of £325 bn of new money through a process of “quantitative easing”.
9.6
1) 4
3) 7
5) 5
7)
3
9)
6
2) 2
4) 1
6) 10
8)
9
10) 8
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9.7
1 … measures people.
2 … they do about the budget deficit.
3 … to get people back to work and paying taxes.
4 … loss of morale and status, shame, sickness and premature death.
5 … a small price to pay for more jobs".
6 … a price worth paying.
9.8
1 a) figures
6 c) assume
2 b) rate
7 a) inflation
3 c) society
8 b) seize
4 a) impose
9 c) recovery
5 b) fiddle
10 b) reduction
10.1
b, a, g, e, c, f, h, d.
10.2
1) 5
3) 8
5) 4
7) 7
9) 6
2) 1
4) 3
6) 10
8) 9
10) 2
10.3
1 out
5 in
2 at
6 to
3 towards
7 on
4 for
10.4
1 T
2
T
3
T
4
F
5
F
10.5
1 Newspaper headlines are screaming out the news of record petrol prices in the
UK.
2 Oil prices have surged by more than 12 % since the start of the year to hit $125 a
barrel and some analysts see them pushing even higher to $150.
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3 Alan Clarke, UK and eurozone economist at Scotiabank in London, gives
Britons 10 reasons not to be cheerful about the oil price jump.
4 If oil rises sharply, it is more likely than not that household energy bills will rise
at some point.
5 This is because utility providers will get lots of bad press, but not much increase
in profit margins as households switch off their central heating for summer.
6 Higher agricultural prices typically mean higher food prices in household
shopping baskets.
7 High inflation makes it hard for the Bank of England to support economic
growth through low interest rates.
8 Increased expenditure on food and energy as their prices rise leaves less spare
cash to spend on 'fun stuff' i.e. discretionary goods such as TVs and clothing.
9 The great hope for 2012 is that slowing inflation will help growth to resume an
upward trajectory.
10 Public anger at the rising cost of fuel could provoke blockades and strikes.
10.6
1)
10
3) 1
5) 3
7) 5
9) 6
2)
4
4) 7
6) 9
8) 2
10) 8
10.7
1 … see them pushing even higher to $150.
2 … will rise at some point.
3 … since these can be used as a substitute for oil.
4 … low interest rates.
5 … to pay for food or energy.
6 … government outlays on unemployment benefits.
10.8
1 b) petrol
6 b) savings
2 c) concern
7 b) support
3 b) price
8 c) resume
4 a) hikes
9 a) drop
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5 c) substitute
10 c) disruption
11.1
b, e, f, d, a, h, g, c.
11.2
1) 3
3) 7
5) 8
7) 5
9) 6
2) 1
4) 9
6) 10
8) 2
10) 4
11.3
1 out, by
5 of, at, at
2 in, out
6 over
3 on
7 of, in
4 over, with
11.4
1 T
2
F
3
F
4
T
5
T
11.5
1
Barclays shareholders’ met in London last month.
2
Between 2007 and the end of last year shareholders in banks globally have lost
almost 10% of their investment each year.
3
“The little secret to doing well…has been ‘just don’t hold banks’,” says Jacob
de Tusch-Lec.
4
Sharp falls in shareholder value should worry investors, businesses and
households that need a healthy banking system to keep credit flowing.
5
There are three reasons why the banks have been such a bad bet.
6
Weakness in Western economies has led to elevated losses.
7
Returns on equity have fallen precipitously, from about 15 % before the crisis
to below 10 % now.
8
Regulators hope better-capitalised banks will be less volatile and more
attractive.
9
Deeper savings can be made by reducing layers of management and title creep.
10 European lenders have managed to reduce their overall cost-to-income ratio
only to about 62 % from 69 % since the mid-1990s.
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11.6
1) 4
3) 8
5) 2
7) 6
9) 7
2) 10
4) 1
6) 9
8) 5
10) 3
11.7
1 … fall by almost 28 % a year.
2 … to consider buying it.
3 … the banking system will have to shrink or be nationalised.
4 … funding costs and depressing returns.
5 …10 % in Britain and 9 % in America.
6 …62 % from 69 % since the mid-1990s, an average improvement of 0,3 % a
year.
11.8
1 b) 2007
6 c) weak
2 c) 20 %
7 c) British
3 a) banks
8 a) 12-15%
4 a) fall
9 b) European
5 b) three
10 c) sold
12.1
d, c, a, h, f, g, b, e.
12.2
1) 5
3) 1
5) 2
7) 3
9) 4
2) 7
4) 10
6) 9
8) 6
10) 8
12.3
1 to, with
5 without, of, of
2 For, from
6 of, over, on
3 with, at
7 For, for
4 in, over
12.4
1 F
2
T
3
F
4
T
5
T
12.5
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1
One road leads to the full break-up of the euro, with all its economic and
political repercussions. The other involves an unprecedented transfer of wealth across
Europe’s borders and, in return, a corresponding surrender of sovereignty.
2
Only if Europeans share a sense of common purpose a grand deal to save the
single currency will be seen as legitimate.
3
Europe’s choice will be made in Berlin.
4
A move towards federalism troubles many Europeans.
5
A break-up, many argue, would allow individual countries to restore control
over monetary policy.
6
A cheaper currency would help match wages with workers’ productivity, for a
while at least.
7
Capital controls are illegal in the EU.
8
Without the movement of goods, people or capital, little of the EU would
remain.
9
The ECB’s support for the banks cannot prevent the weak economies of Spain,
Portugal, Italy and Ireland from enfeebling their banks and governments.
10 Taken as a whole, the stock of euro-zone public debt is 87 % of GDP
12.6
1) 6
3) 3
5) 1
7) 5
9) 7
2) 8
4) 9
6) 10
8) 2
10) 4
12.7
1 … keep wayward governments on the path of reform.
2 … a rescue demands more.
3 … switch into a new currency.
4 … the whole union would be cast into legal limbo.
5 … Friday-night drunks.
6 … compared with over 100% in America.
12.8
1 a) two
6 c) euro
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2 b) 60
7 c) ECB
3 c) Greece
8 b) Friday
4 a) banks
9 a) America
5 a) EU
10 b) federal
13.1
8,5,1,3,2,7,4,6,9,10.
13.2
1) 6
3) 1
5) 8
7) 2
9) 10
2) 7
4) 9
6) 3
8) 4
10) 5
13.3
1 at, for, of
5
but, of, for
2 at, through, than
6
on, of, by
3 per, according, in
7
for, to, over, by
4 from, around, to
13.4
1 F
2
T
3
F
4
F
5
T
13.5
1 Oil prices, at around $125 for a barrel of Brent crude, are so high.
2 Iraq—and Iran itself—have vast oilfields that could eventually provide markets
with millions more barrels a day (b/d).
3 Between 2000 and 2010 China increased its consumption of oil more than any
other country, by 4.3 m b/d, a 90 % jump.
4 The Saudis consume 35,1 barrels each.
5 There are three explanations for this growing taste for oil. The first is
demography. Populations in the Persian Gulf, and in OPEC as a whole, are growing fast.
The second relates to economic structure. It takes energy to produce energy: pumps must
be powered and vast quantities of seawater desalinated.
The third reason for rising Gulf consumption is the inefficiency of domestic energy
markets. Some 65 % of Saudi electricity is generated using black gold, even as successive
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price shocks and the relative inefficiency of oil generation have seen it all but phased out
in rich countries.
6 According to the International Energy Agency, global oil subsidies added up to
$192 billion in 2010. OPEC countries accounted for $121 billion of the total.
7 Saudi Arabia has the cheapest fuel in the Gulf and dirt-cheap electricity, too. This
has alleviated poverty but it has also encouraged an American-style driving culture (for
men) and limited public transport. Only a third as many Saudis own cars as Americans; as
they get richer many more will take to the desert highways.
8 Much of the “unassociated” gas that doesn’t spew out alongside oil is tough to
extract, and would require prices four or five times higher than now to make it worthwhile.
9 Saudi Arabia is trying to develop nuclear and solar energy. But its fleet of oil-fired
power stations will keep going for years.
10 The longer-term picture is equally worrying. Global demand for oil is projected
to rise to over 100 m b/d by 2030.
13.6
1) 10
3) 6
5) 2
7) 4
9) 3
2) 8
4) 1
6) 9
8) 7
10) 5
13.7
1 … oilfields that could eventually provide markets with millions more barrels a
day (b/d).
2 … by 56 % in the first decade of the century, four times the global growth rate
and nearly double the rate in Asia.
3 … the average Iranian and Saudi was getting through roughly 30 % more by the
end of the decade.
4 … the relative inefficiency of oil generation have seen it all but phased out in
rich countries.
5 … oil is tough to extract, and would require prices four or five times higher than
now to make it worthwhile.
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6 … and a sniffiness about gas as oil’s poor relation mean that exploiting its
bounty (Saudi Arabia apparently has the world’s fifth-largest gas reserves) has proven
hard.
13.8
1 b) OPEC
6 c) country’s energy
2
a) oil
7
b) black gold
3
b) six
8
a) BP
4
c) energy
9
a) a day
5
a) doubled
10 c) world’s oil
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Glossary
Unit 1
1
Becalm - make (someone) tranquil and quiet; soothe.
2
Bluntly - (of a person or remark) uncompromisingly forthright.
3
Brink - a point at which something, typically an unwelcome or disastrous
event, is about to happen.
4
Chancellor - a senior state or legal official; the head of the government in some
European countries, such as Germany.
5
Enhance - intensify, increase, or further improve the quality, value, or extent
6
Expel - deprive (someone) of membership of or involvement in a school or
of.
other organization; force (someone) to leave a place, esp. a country.
7
Favour - an attitude of approval or liking; support or advancement given as a
sign of approval.
8
Firewall - any barrier that is intended to thwart the spread of a destructive
9
Fiscal - of or relating to government revenue, esp. taxes and relating to
agent.
financial matters.
10
Hawkish – military intended.
11
Implement - put (a decision, plan, agreement, etc.) into effect.
12
Invective - insulting, abusive, or highly critical language.
13 Leftover -something, esp. food, remaining after the rest has been used or
consumed.
14 Lobby - a room, providing a space out of which one or more other rooms or
corridors lead, typically one near the entrance of a public building; a group of people
seeking to influence politicians or public officials on a particular issue.
15 Mock - tease or laugh at in a scornful or contemptuous; make (something)
seem laughably unreal or impossible.
16 Novice - a person new to or inexperienced in a field or situation.
17 Obstacle - a thing that blocks one's way or prevents or hinders progress.
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18 Pending - awaiting decision or settlement; about to happen; imminent.
19 Praise - express one's respect and gratitude toward (a deity).
20 Predecessor - a person who held a job or office before the current holder.
21 Prop up - position something underneath (someone or something) for support.
22 Slippage - failure to meet a standard or deadline: the extent of this.
23 Summit - a meeting between heads of government.
24 Treaty - a formally concluded and ratified agreement between countries.
25 Wary - feeling or showing caution about possible dangers or problems.
26 Worrisome - causing anxiety or concern.
27 Yield - produce or provide (a natural, agricultural, or industrial product).
Unit 2
1
Backward - in reverse of the usual direction or order.
2
Boost - help or encourage (something) to increase or improve.
3
Burden - a duty or misfortune that causes hardship, anxiety, or grief; the main
responsibility for achieving a specified aim or task.
4
Cede - give up (power or territory); cease making an effort; resign oneself to
failure.
5
Collapse - a sudden failure of an institution or undertaking.
6
Crawl - move slowly along a surface; move at an unusually slow pace.
7
Crunch - crush (a hard or brittle foodstuff) with the teeth, making a loud but
muffled grinding sound.
8
Eradicate - destroy completely; put an end to.
9
Rewind – wind back to the beginning.
10 Rumble - move in the specified direction with a resonant sound.
11 Scar - a lasting effect of grief, fear, or other emotion left on a person's character
by a traumatic experience; a mark left on something following damage of some kind.
12 Sluggish - slow-moving or inactive a sluggish stream; lacking energy or
alertness; slow to respond or make progress.
13 Wipe away - If you wipe away or wipe off dirt or liquid from something, you
remove it, for example by using a cloth or your hand.
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Unit 3
1 Attributable - If something is attributable to an event, situation, or person, it is
likely that it was caused by that event, situation or person.
2 Cheer - praise or encourage with shouts; give comfort or support to.
3 Dual - consisting of two parts, elements, or aspects.
4 Embark - begin (a course of action, esp. one that is important or demanding).
5 Headcount - an instance of counting the number of people present; a total
number of people, especially the number of people employed in a particular organization.
6 Ill-timed - If you describe something as ill-timed, you mean that it happens or is
done at the wrong time, so that it is damaging or rude.
7 Imply - strongly suggest the truth or existence of (something not expressly
stated); (of a fact or occurrence) suggest (something) as a logical consequence.
8 Poverty - the state of being extremely poor; the state of being inferior in quality
or insufficient in amount.
9 Resilient - able to recoil or spring back into shape after bending, stretching, or
being compressed; able to withstand or recover quickly from difficult conditions.
10 Sobering - You say that something is a sobering thought or has a sobering effect
when a situation seems serious and makes you become serious and thoughtful.
11 Spike - a sharp increase in the magnitude or concentration of something, e.g. in
price.
12 Unabated - without any reduction in intensity or strength.
Unit 4
1
Brunt - the worst part or chief impact of a specified thing.
2
Churn – move about vigorously.
3
Dual - consisting of two parts, elements, or aspects.
4
Favour - an attitude of approval or liking; support or advancement given as a
sign of approval.
5
Incentive - a thing that motivates or encourages one to do something.
6
Incremental – increasing gradually; growing step by step.
7
Inexorably - the state of being inflexible and unbending.
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8
Instructive - useful and informative.
9
Luxuriate - enjoy oneself in a luxurious way; take self-indulgent delight.
10 Moderate - not radical or excessively right- or left-wing.
11 Open-ended - having no determined limit or boundary.
12 Sack - dismiss from employment.
13 Soar - increase rapidly above the usual level.
14 Surge - increase suddenly and powerfully, typically during an otherwise stable
or quiescent period.
15 Swing - a smooth flowing rhythm or action; a discernible change in something.
16 Tenure - the conditions under which land or buildings are held or occupied; the
holding of an office.
17 Volatility – the state of being unstable and not constant.
Unit 5
1
Draft - a preliminary version of a piece of writing; plan, sketch, or rough
drawing.
2
Enforce - cause (something) to happen by necessity or force.
3
Evolve - develop gradually, esp. from a simple to a more complex form.
4
Foul - unfairly; contrary to the rules.
5
Frustration - the feeling of being upset or annoyed, esp. because of inability to
change or achieve something.
6
Lament - express regret or disappointment over something considered
unsatisfactory, unreasonable, or unfair.
7
Lucrative - producing a great deal of profit.
8
Patron - a person who gives financial or other support to a person, organization,
cause, or activity; a customer, esp. a regular one, of a store, restaurant, or theater.
9
Poll - a record of the number of votes cast in an election.
10 Predecessor - a person who held a job or office before the current holder.
11 Quit - leave (a place), usually permanently; resign from (a job).
12 Reap - receive (a reward or benefit) as a consequence of one's own or other
people's actions.
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13 Rival - a person or thing competing with another for the same objective or for
superiority in the same field of activity.
14 Rusty - (of a metal object) affected by rust.
15 Spirit - the nonphysical part of a person that is the seat of emotions and
character; the soul; a supernatural being.
16 Spot - see, notice, or recognize (someone or something) that is difficult to
detect or that one is searching for.
17 Uproot - move (someone) from their home or a familiar location; eradicate;
destroy.
18 Violate - break or fail to comply with (a rule or formal agreement); fail to
respect (someone's peace, privacy, or rights).
19 Wage - carry on (a war or campaign).
20 Wedded - of or relating to marriage or married people.
Unit 6
1
Anxious - experiencing worry, unease, or nervousness, typically about an
imminent event or something with an uncertain outcome.
2
Assert - state a fact or belief confidently and forcefully; behave or speak in a
confident and forceful manner.
3
Challenge - a task or situation that tests someone's abilities.
4
Claim - an application for compensation under the terms of an insurance
policy.
5
Extract - obtain (something such as money or an admission) from someone in
the face of initial unwillingness.
6
Face - be positioned with the face or front toward (someone or something);
confront and deal with or accept.
7
Incremental - increasing gradually; growing step by step.
8
Litigation – legal process.
9
Negligence - failure to take proper care in doing something.
10 Penalty - a punishment imposed for breaking a law, rule, or contract
11 Plaintiff - a person who brings a case against another in a court of law.
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12 Postpone - cause or arrange for (something) to take place at a time later than
that first scheduled.
13 Restoration - the action of returning something to a former owner, place, or
condition.
14 Robust - strong and healthy, vigorous; (of a process or system, esp. an
economic one) able to withstand or overcome adverse conditions.
15 Spill - reveal (confidential information) to someone.
16 Tough - (of a substance or object) strong enough to withstand adverse
conditions or rough or careless handling; able to protect one's own interests or maintain
one's own opinions without being intimidated by opposition; confident and determined.
17 Trial - a formal examination of evidence by a judge, typically before a jury, in
order to decide guilt in a case of criminal or civil proceedings.
18 Unallocate - set something free; release.
Unit 7
1
Aggregate – a whole formed by combining several (typically disparate)
elements.
2
Beverage – a drink, esp. one other than water.
3
Endorsement – an act of giving one's public approval or support to someone or
something; a recommendation of a product in an advertisement.
4
Host – a person who receives or entertains other people as guests; a person,
place, or organization that holds and organizes an event to which others are invited.
5
Kidnap – take (someone) away illegally by force, typically to obtain a ransom.
6
Launch – start or set in motion (an activity or enterprise).
7
Lowbrow – not highly intellectual or cultured.
8
Magnitude – the great size or extent of something; great importance.
9
Prominent – important; famous.
10 Response – a verbal or written answer; a reaction to something.
11 Roughly – n a manner lacking gentleness; harshly or violently; in a manner
lacking refinement and precision.
12 Straightforward - uncomplicated and easy to do or understand.
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Unit 8
1
Adjacent - расположенный рядом, смежный, соседний (с кем-л./чем-л.).
2
Bleach - whiten by exposure to sunlight or by a chemical process; clean and
sterilize.
3
Brainwashing – the process of making (someone) adopt radically different
beliefs by using systematic and often forcible pressure.
4
Bulge - swell or protrude to an unnatural or incongruous extent.
5
Commitment - an act of pledging or setting aside something; an engagement or
obligation that restricts freedom of action.
6
Crack up - express warm approval or admiration of ; express one's respect and
gratitude toward (a deity).
7
Detergent - a water-soluble cleansing agent that combines with impurities and
dirt to make them more soluble and differs from soap in not forming a scum with the salts
in hard water.
8
Disruption - the action or process of causing so much damage to something that
it no longer exists or cannot be repaired.
9
Dissolvable - (of a substance) able to be dissolved, esp. in water; (of a problem)
able to be solved.
10 Echo - often be echoed repeat (someone's words or opinions), typically to
express agreement.
11 Embedded - if ideas, attitudes, or feelings etc. are embedded, you believe or
feel them very strongly; to put something firmly and deeply into something else, or to be
put into something in this way.
12 Gooey - soft and sticky; mawkishly sentimental.
13 Heartfelt - (of a feeling or its expression) sincere; deeply and strongly felt.
14 Inclination - a person's natural tendency or urge to act or feel in a particular
way; a disposition or propensity.
15 Jellyfish - a free-swimming marine coelenterate with a jellylike bell- or saucershaped body that is typically transparent and has stinging tentacles around the edge.
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16 Laundry - clothes and linens that need to be washed or that have been newly
washed.
17 Lodge - make or become firmly fixed or embedded in a particular place.
18 Pioneer - a person who is among the first to explore or settle a new country or
area.
19 Pledged - a thing that is given as security for the fulfillment of a contract or the
payment of a debt and is liable to forfeiture in the event of failure.
20 Rigorous - extremely thorough, exhaustive, or accurate.
21 Rival - a person or thing competing with another for the same objective or for
superiority in the same field of activity.
22 Ruminate - think deeply about something.
23 Shipment - the action of shipping goods; a quantity of goods shipped; a
consignment.
Unit 9
1
Austerity - when a government has a deliberate policy of trying to reduce the
amount of money it spends.
2
Bishop - a priest with a high rank in some Christian religions, who is the head
of all the churches and priests in a large area.
3
Boost - to increase or improve something and make it more successful; to help
someone reach a higher place by lifting or pushing them.
4
Cancer - a very serious disease in which cells in one part of the body start to
grow in a way that is not normal.
5
Complacency - a feeling of satisfaction with a situation or with what you have
achieved, so that you stop trying to improve or change things - used to show disapproval.
6
Comprehend - to understand something that is complicated or difficult.
7
Consolidate - to strengthen the position of power or success that you have, so
that it becomes more effective or continues for longer; to combine things in order to make
them more effective or easier to deal with.
8
Countenance - to accept, support, or approve of something.
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9
Dignity - the ability to behave in a calm controlled way even in a difficult
situation; the fact of being respected or deserving respect; a calm and serious quality.
10 Dole - the number of people who are unemployed and claiming money from
the government, or a line of people waiting to claim this money each week.
11 Fiddle - to give false information about something, in order to avoid paying
money or to get extra money.
12 Hardship - something that makes your life difficult or unpleasant, especially a
lack of money, or the condition of having a difficult life.
13 Haunt - to cause problems for someone over a long period of time.
14 Junky - someone who likes something so much that they seem to be dependent
on it - used humorously; someone who takes dangerous drugs and is dependent on them.
15 Land - to make a plane move safely down onto the ground at the end of a
journey.
16 Leeway - freedom to do things in the way you want to.
17 Loosen - to make laws, rules etc less strict; to reduce the control or power you
have over someone or something.
18 Mere - used to emphasize how small or unimportant something or someone is;
used to emphasize that something which is small or not extreme has a big effect or is
important.
19 Proclaim - to say publicly or officially that something important is true or
exists.
20 Riot - a situation in which a large crowd of people are behaving in a violent and
uncontrolled way, especially when they are protesting about something.
21 Spur - to encourage someone or make them want to do something; to make an
improvement or change happen faster.
22 Stun - to surprise or upset someone so much that they do not react immediately.
23 Tap - a piece of equipment for controlling the flow of water, gas etc from a
pipe or container.
24 Toll - the number of people killed or injured in a particular accident, by a
particular illness etc.
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25 Witness - to see something happen, especially a crime or accident.
Unit 10
1 Burden - a duty or misfortune that causes hardship, anxiety, or grief; a nuisance.
2 Cheerful - noticeably happy and optimistic.
3 Confidence - the feeling or belief that one can rely on someone or something;
firm trust.
4 Conventional - based on or in accordance with what is generally done or
believed.
5 Crude - in a natural or raw state; not yet processed or refined; (of an action)
showing little finesse or subtlety and as a result unlikely to succeed.
6 Discretionary - available for use at the discretion of the user; denoting or relating
to investment funds placed with a broker or manager who has discretion to invest them on
the client's behalf.
7 Disruption - a situation in which something is prevented from continuing in its
usual way.
8 Elevate- raise or lift (something) up to a higher position; raise to a more
important or impressive level.
9 Erode - gradually destroy or be gradually destroyed.
10 Fair - in accordance with the rules or standards; legitimate; a periodic gathering
for the sale of goods.
11 Forecourt - an open area in front of a large building.
12 Headwind - a wind blowing from directly in front, opposing forward motion.
13 Hike - a sharp increase, esp. in price; a long walk, esp. in the country or
wilderness.
14 Impact - have a strong effect.
15 Margin - a sum deposited with a broker to cover the risk of loss on a transaction
or account.
16 Petrol - refined petroleum used as fuel for internal combustion engines.
17 Revive - give new strength or energy to; restore interest in or the popularity of;
improve the position or condition of.
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18 Scream - give a long, loud, piercing cry or cries expressing excitement, great
emotion, or pain.
19 Sluggish - slow-moving or inactive; lacking energy or alertness; slow to respond
or make progress.
20 Steer - follow (a course) in a specified direction; guide the movement or course
of (someone or something).
21 Surged - a sudden powerful forward or upward movement, esp. by a crowd or by
a natural force such as the waves or tide; increase suddenly and powerfully, typically
during an otherwise stable or quiescent period.
22 Threshold - the magnitude or intensity that must be exceeded for a certain
reaction, phenomenon, result, or condition to occur or be manifested.
23 Wholesale - the selling of goods in large quantities to be retailed by others; sell
(goods) in large quantities at low prices to be retailed by others.
24 Wiggle - move or cause to move up and down or from side to side with small
rapid movements.
25 Wisdom - the quality of having experience, knowledge, and good judgment; the
quality of being wise; the soundness of an action or decision with regard to the application
of such experience, knowledge, and good judgment.
Unit 11
1 Buffer - a person or thing that prevents incompatible or antagonistic people or
things from coming into contact with or harming each other.
2 Bust - a period of economic difficulty or depression; bankrupt.
3 Collateral - something pledged as security for repayment of a loan, to be
forfeited in the event of a default; descended from the same stock but by a different line.
4 Dip - spend from or make use of (one's financial resources).
5 Elevate - raise or lift (something) up to a higher position; raise to a more
important or impressive level.
6 Fragile - easily broken or damaged; (of a person) not strong or sturdy; delicate
and vulnerable.
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7 Feed up - encourage the growth of; cause to move gradually and steadily,
typically through a confined space.
8
Genteel - polite, refined, or respectable, often in an affected or ostentatious way.
9
Heckle - interrupt (a public speaker) with derisive or aggressive comments or
abuse; dress (flax or hemp) to split and straighten the fibers for spinning.
10 Leverage - to make money available to someone in order to invest or to buy
something such as a company; to spread or use resources (=money, skills, buildings etc
that an organization has available), ideas etc again in several different ways or in different
parts of a company, system etc.
11 Pledge - a thing that is given as security for the fulfillment of a contract or the
payment of a debt and is liable to forfeiture in the event of failure.
12 Rebellion - an act of violent or open resistance to an established government or
ruler.
13 Reckon - establish by counting or calculation; calculate.
14 Shrink - become or make smaller in size or amount; contract or cause to
contract.
15 Staff - all the people employed by a particular organization.
16 Subdue - overcome, quieten, or bring under control (a feeling or person) she
managed to subdue an instinct to applaud; bring (a country or people) under control by
force.
17 Transient - lasting only for a short time; impermanent.
18 Wind up - arrive or end up in a specified state, situation, or place.
Unit 12
1
Abandon - give up (leave) completely (a course of action, a practice, or a way
of thinking).
2
Amicable - (of relations between people) having a spirit of friendliness;
without serious disagreement or rancor.
3
Amid - surrounded by; in the middle of.
4
Austerity – when a government has a deliberate policy of trying to reduce the
amount of money it spends.
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5
Banish - send (someone) away from a country or place as an official
punishment.
6
Boost - to increase or improve something and make it more successful; to help
someone reach a higher place by lifting or pushing them.
7
Brinkmanship - the art or practice of pursuing a dangerous policy to the limits
of safety before stopping, typically in politics.
8
Brutal - savagely violent; punishingly hard or uncomfortable; without any
attempt to disguise unpleasantness.
9
Burden - a duty or misfortune that causes hardship, anxiety, or grief; a
nuisance.
10 Corrode - destroy or weaken (something) gradually.
11 Devastate – destroy or ruin (something); cause (someone) severe and
overwhelming shock or grief.
12 Enfeeble - make weak.
13 Fester – (of a negative feeling or a problem) become worse or more intense,
esp. through long-term neglect or indifference; (of a person) undergo physical and mental
deterioration in isolated inactivity.
14 Gloss – shine or luster on a smooth surface; a superficially attractive
appearance or impression.
15 Grasp - seize and hold firmly; act decisively to the advantage of (something).
16 Heir - a person legally entitled to the property or rank of another on that
person's death; a person inheriting and continuing the legacy of a predecessor.
17 Inhibit - hinder, restrain, or prevent (an action or process); prevent or prohibit
someone from doing something.
18 Intact - [often as complement] not damaged or impaired in any way; complete.
19 Limbo - an uncertain period of awaiting a decision or resolution; an
intermediate state or condition.
20 Plagued – affected with a contagious bacterial disease characterized by fever
and delirium, typically with the formation of buboes (see bubonic plague) and sometimes
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infection of the lungs (pneumonic plague); a contagious disease that spreads rapidly and
kills many people.
21 Plunge - jump or dive quickly and energetically; fall suddenly and
uncontrollably; embark impetuously on a speech or course of action; suffer a rapid
decrease in value.
22 Reckless - (of a person or their actions) without thinking or caring about the
consequences of an action.
23 Repercussion - an unintended consequence occurring sometime after an event
or action, esp. an unwelcome one.
24 Surrender - cease resistance to an enemy or opponent and submit to their
authority.
25 Topple - overbalance or become unsteady and fall slowly.
26 Wayward - difficult to control or predict because of unusual or perverse
behavior.
27 Yield - produce or provide (a natural, agricultural, or industrial product); (of an
action or process) produce or deliver (a result or gain).
Unit 13
1
Boost - to increase or improve something and make it more successful; to help
someone reach a higher place by lifting or pushing them.
2
Chug - emit a series of regular muffled explosive sounds, as of an engine
running slowly.
3
Conventional - based on or in accordance with what is generally done or
believed.
4
Crude - in a natural or raw state; not yet processed or refined.
5
Desalinate – remove salt from (seawater).
6
Disrupt – interrupt (an event, activity, or process) by causing a disturbance or
problem; drastically alter or destroy the structure of (something).
7
Emerge – move out of or away from something and come into view.
8
Hike – a long walk, esp. in the country or wilderness; walk for a long distance,
esp. across country or in the woods.
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9
Increment – an increase or addition, esp. one of a series on a fixed scale; a
regular increase in salary on such a scale.
10 Meager/ meagre - (of something provided or available) lacking in quantity or
quality.
11 Output – the amount of something produced by a person, machine, or industry.
12 Pledge – a thing that is given as security for the fulfillment of a contract or the
payment of a debt and is liable to forfeiture in the event of failure.
13 Reiterate – say something again or a number of times, typically for emphasis or
clarity.
14 Scapegoat - (in the Bible) a goat sent into the wilderness after the Jewish chief
priest had symbolically laid the sins of the people upon it (Lev. 16).
15 Shortfall - a deficit of something required or expected.
16 Soar - increase rapidly above the usual level.
17 Spew out - expel large quantities of (something) rapidly and forcibly; be
poured or forced out in large quantities; informal vomit.
18 Strain - a force tending to pull or stretch something to an extreme or damaging
degree.
19 Treble - consisting of three parts; threefold.
20 Wisdom - the quality of having experience, knowledge, and good judgment;
the quality of being wise; the soundness of an action or decision with regard to the
application of such experience, knowledge, and good judgment.
Список использованных источников
1 The Economist – world news, politics, economics, business and finance : [сайт]. –
Режим доступа: http://www.economist.com
2 The Times – UK news, world news and opinion : [сайт]. – Режим доступа:
http://www.thetimes.co.uk/tto/news/
3 World business, finance and political news from the Financial Times : [сайт]. –
Режим доступа: http://www.ft.com/home/
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4 Latest news, sport and comment from the Guardian : [сайт]. – Режим доступа:
http://www.guardian.co.uk/
5 Дюканова, Н.М. Английский язык для экономистов: учеб. пособие / Н.М.
Дюканова. – М.: ИНФРА-М, 2008. – 320с.
6 Ардо, Жужанна. English For Practical Management / Жужанна Ардо. – М.:
Дело. 1992. - 162 с.
7 Kral, Thomas. Economic Considerations. English Through Content: Applied
Economics / Thomas Kral. – Washington D.C., 1996. – 135 p.
8 Bannock, Graham. The Penguin Dictionary of Economics / Graham Bannock,
R.E. Baxter, Evan Davis. – Penguin English, 1997. – 439 p.
9 Miller, Roger Le Roy. Economics Today. The Macro View: institute for
University Studies / Roger Le Roy Miller. - Arlington, Texas: Pearson Education Inc.,
2004. – 819 p.
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