Task 1. Match the economic terms to their definitions.

1. interest rate	a. total value of goods and services produced in a country
2. exchange rate	b. general increase in prices
3. inflation rate	c. cost of borrowing money
4. labor force	d. price at which one currency can buy another
5. tax incentives	e. percentage of people without jobs
6. government bureaucracy	f. people working
7. GDP (gross domestic product)	g. low taxes to encourage business activity
8. unemployment rate	h. money from overseas
9. foreign investment	i. official rules/regulations/paperwork
10. balance of trade	j. difference in value between a country’s imports and exports

 

Task 2. Try to complete this economic profile without looking back at the terms in Task 1.

The economy is stable following the problems of the past two years. By following a tight monetary policy the government has reduced the 1 _______________ ___________ to 2%. After going up dramatically, the 2 __________ ________ is now down to 8%. The last six months has seen a slight improvement in the 3 ____________ __________ against the dollar. The 4 ______ has grown by 0.15%. Exports are increasing and the 5 __________ of _____________ is starting to look much healthier.

The 6 ____________ _________ continues to be a problem as it is still 16%. In order to stimulate the economy and attract 7 _____________ _______________ the government is offering new 8 ________ _____________ as well as making a renewed effort to reduce 9 _____________ ______________. Finally a large skilled 10 ___________ ___________ means there could be attractive investment opportunities over the next five years.

 

Task 3. Write sentences about the economic profile of Ukraine. Complete and then use the following chart.

economy GDP growth rate: ____ per year inflation rate: ____ per year unemployment rate: ____ at present	labor education system is excellent: a lot of skilled labor at every level – workers and mangers
transport and infrastructure heavy traffic on roads causes slow journeys and distribution problems, but fast rail services	comments some commentators talk about ‘laziness’ of young people

 

Task 4. Read the following text about starting a new business. Make up a list of things you need to start a successful new business.

When you are starting your own company, you have to be very confident. You have to be very determined. You have to know what it is you’re doing. You need to research the business – or the business arena that you’re intending to go into. You need to research your competitors and benchmark your service or your product against your competitors.

You need good family backup and good backup from your friends. And probably the most important thing is that you need a good mentor, and that needs to be a business mentor as well as a personal mentor.

You need a really good business plan. Again, you need to make sure that whatever you put on your business plan, you need to check it on a regular basis.

You need a very good relationship with your bank and your bank manger. But the most important thing is a good marketing campaign.

 

Task 5. Complete this text with the correct word.

force unemployment investment balance incentives  opportunities bureaucracy rate GDP exchange

 

The economy is very unstable. By letting monetary policy run out of control, the government caused inflation to rise at one point to 20%. The inflation 1 _____________ is now down to ‘only’ 8%. However, in the last six months there has been a severe worsening in the 2 ______________ rate against the dollar. Total output, or 3 _______________, has fallen by 5% over the past year. Exports are declining and the 4 _____________ of trade is disastrous: we are importing much more than we are exporting.

The 5 _________________ rate, with 30 percent of people out of work, is one of the highest in the industrialized world. In order to stimulate the economy and attract foreign 6 _______________ the government is offering new tax 7 _______________ as well as making a renewed effort to reduce government 8 ________________. But we need to improve education and improve the skills of our labor 9 ___________. In order to offer attractive investment 10 ________________ over the long term.

 

Task 6. Fill each gap in the text below with a word or phrase from the box. The item in bold are headings.

asserts discounts employment price    discretionary income loss leader credit availability economic growth purchasing power    outgoings

There are four major economic factors which affect consumer buying behavior.

General economic situation

When the national economy is doing well, when people feel that their 1 ___________________ is safe, they spend more. In times of a slow down in 2 _____________ ___________, if interest rates or taxation rates increase, then buyer confidence goes down.

2. 3 ____________________ _____________

People spend according to what is left after meeting their regular costs on rent, mortgage, bills, tax, borrowings and other 4 _______________. What is left is called 5 ______________________ _____________.

3. 6 _____________ __________________

Banks and other lenders are sometimes particularly happy to lend, for example to anyone in work, or with 7 ___________ such as property. Credit card spending goes up and many people borrow money to buy goods.

4. 8 _______________________

This is perhaps obvious. High prices may limit spending, but not always. Sometimes high prices indicate high quality and this increases the desirability of the product. Price may also be less important if the need is great. But, in contrast, low prices may increase buying, especially where 9 _____________ are on offer. Sometimes items are offered at a low price as a 10 _________ _____________. This means products are sold at below cost price. The shop thinks that consumers will buy these low priced goods, but also other high profit items. Supermarkets often sell some regularly purchased fast moving consumer goods at below cost price as part of a loss leader strategy.

Writing

Task 7. Read this email from a director of a financial services company to a colleague in an overseas subsidiary. Then fill each gap with a word or phrase from the box. Write a similar email.

domestic export external audit internal audit marketing audit SWOT analysis threat trend

Date 22 Jan 2008 15:48 From: JAW Financial services PLC JAWS@arena.com To: Isabelle Brock Isabrock@threecolors.com  Subject: Re. Update/news   Hello Isabelle, Just a short note to bring you up to date while you are away. Since there has been a decline in our 1 ____________ sales we have decided to carry out a 2 ___________ ____________ to identify areas where improvement can be made. This consists of a typical 3 __________ _____________ with an 4 ___________________ ___________ to look at factors within the company and an 5 ______________ ___________ examining factors outside our immediate control. We expect that the major 6 ____________ to improved performance in our domestic markets is the weakness of the national economy. The good news is that while home sales have fallen, our 7 _______________ performance has been good. The 8 __________ in our key international markets is positive.   Pleas call me when you return to the office to discuss this in more detail. Cheers, John