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ФГБОУ ВО «Адыгейский государственный университет»

Кафедра иностранных языков

Читао И.А., Хатхе А.А., Хабекирова З.С. и др.

BASIC OF ECONOMICS AND BUSINESS


ENGLISH FOR ECONOMISTS

ОСНОВЫ ЭКОНОМИКИ И БИЗНЕСА


АНГЛИЙСКИЙ ЯЗЫК ДЛЯ ЭКОНОМИСТОВ

учебно-методическое пособие
для студентов магистратуры

Майкоп
ЭлИТ
2019
УДК 811.111(075.8)
ББК 81.432.1-9
Ч 69

Публикуется по решению редакционно-издательского совета Aдыгейского


государственного университета

Рецензент: А.П. Тихонова, кандидат филологических наук,


доцент кафедры английской филологии
Адыгейского государственного университета

Авторы-составители:
И.А. Читао, А.А. Хатхе, З.С. Хабекирова,
Ф.А Аутлева, М.А. Асланова, З.К. Хачецукова

Читао, И.А.
Ч 69 ОСНОВЫ ЭКОНОМИКИ И БИЗНЕСА. АНГЛИЙСКИЙ ЯЗЫК ДЛЯ ЭКОНОМИСТОВ =
BASIC OF ECONOMICS AND BUSINESS. ENGLISH FOR ECONOMISTS [Электронный
ресурс] : учебно-методическое пособие для студентов магистратуры / Авт.-сост.:
Читао И.А., Хатхе А.А., Хабекирова З.С., Аутлева Ф.А., Асланова М.А., Хачецукова З.К.
– Электор. Дан. (1 файл pdf – 1.82 Мб) – Майкоп : ЭлИТ, 2019. – 1 электрон. опт. диск
(CD-Rom). – Сист. Треб: Adobe Reader; экран 10’.

Цель пособия – помочь студентам усвоить экономическую лексику,


расширить словарный запас, вести деловую беседу, обсуждать
проблемные ситуации на английском языке.
Учебное пособие может быть использовано в качестве базового
учебного материала по специальности для студентов магистратуры
экономических факультетов вузов.
Пособие представляет интерес для широкого круга лиц, желающих
совершенствовать деловой английский язык и рекомендован т ем, кто
стремится расширить знания английского языка по экономической
тематике.
УДК 811.111(075.8)
ББК 81.432.1-9

© ФГБОУ ВО «АГУ», 2019


© Читао И.А., Хатхе А.А., Хабекирова З.С.,
Аутлева Ф.А., Асланова М.А., Хачецукова З.К., 2019
© Оформление электронного издания ООО «ЭлИТ», 2019
СОДЕРЖАНИЕ
ПРЕДИСЛОВИЕ ................................................................................................................................ 6
PART I. ................................................................................................................................................. 7
Texts on Economics.......................................................................................................................... 7
Banks and money ........................................................................................................................... 7
How does a swiss bank account work? ............................................................................................ 9
English banks ............................................................................................................................... 11
Federal reserve system of the USA ................................................................................................ 13
The economic environment ........................................................................................................... 15
What caused the international debt crisis? .................................................................................... 17
What is hyperinflation?................................................................................................................. 20
The impact of inflation on business............................................................................................... 22
Can inflation be beneficial ............................................................................................................ 25
Wealth and income ....................................................................................................................... 27
Income.......................................................................................................................................... 29
How is wealth determined around the world? ............................................................................... 32
Profit and loss statement Gilligan’s Coconut. Juice ltd. (samoan island branch) .......................... 34
Basic terms in foreign trade .......................................................................................................... 36
Foreign trade of the UK ................................................................................................................ 37
The European Union .................................................................................................................... 38
How is foreign trade encouraged?................................................................................................. 40
What are trade surpluses and deficits? .......................................................................................... 42
How are bonds traded? ................................................................................................................. 44
Skills of negotiating....................................................................................................................... 45
Marketing ..................................................................................................................................... 47
Marketing today ............................................................................................................................ 48
The four P’s .................................................................................................................................. 49
Computers as tools for marketing.................................................................................................. 50
Application of computers .............................................................................................................. 51
The internet .................................................................................................................................. 53
PART II. ............................................................................................................................................. 58
Dialogues on business activity ....................................................................................................... 58
Dialogue 1.................................................................................................................................... 58
Dialogue 2.................................................................................................................................... 60
Dialogue 3..................................................................................................................................... 62
Dialogue 4..................................................................................................................................... 66

4
Dialogue 5..................................................................................................................................... 67
Dialogue 6..................................................................................................................................... 69
Dialogue 7..................................................................................................................................... 72
Dialogue 8..................................................................................................................................... 74
PART III. ............................................................................................................................................ 77
Role Plays. Thought – Provoking Exercises ................................................................................ 77
Role play and Games 1. Poor sales ............................................................................................... 77
Role play 2. Excess noise............................................................................................................... 78
Role play 3. A market research problem ........................................................................................ 82
Role play 4. Damage to delivered equipment ................................................................................. 86
Role play 5. The advertising campaign .......................................................................................... 87
Role play 6. A problem of modernization....................................................................................... 90
Role play 7. Employment problem ................................................................................................. 93
Role play 8. The fire ...................................................................................................................... 96
Game 1. Terminology knowledge contest ...................................................................................... 99
Game 2. Marketing game.............................................................................................................. 99
Game 3. Play “Auction” ............................................................................................................. 100
Game 4. Advertise your line of product ....................................................................................... 100
Game 5. Just a minute ................................................................................................................ 101
ЛИТЕРАТУРА ................................................................................................................................ 102

5
ПРЕДИСЛОВИЕ

Предлагаемые методические указания по английскому языку


предназначены для студентов экономических факультетов.
Учебное пособие может быть использовано в качестве базового учебного
материала по специальности для студентов магистратуры экономических
факультетов вузов.
Цель пособия – помочь студентам усвоить экономическую лексику,
расширить словарный запас, вести деловую беседу, обсуждать проблемные
ситуации на английском языке.
Пособие включает три части.
В первой части указаний представлены тексты информативного
характера, ориентированные на формирование навыка полного извлечения
информации из прочитанного. В процессе чтения обучаемые смогут освоить
необходимую лексику, представленную после каждого текста, а также ответить
на вопросы, построенные на их материале.
Во второй части подобраны тематические диалоги, а также разработан
ряд упражнений и заданий, направленных на развитие устной речи и отработку
артикуляции.
Последний раздел состоит из деловых игр и проблемных заданий на
принятие решений в условиях конкуренции и коммерческого риска. Ролевой
тренинг позволяет изучить мотивации и психологические аспекты
предпринимательсвой деятельности.
Поскольку в данных указаниях представлены темы, построенные на
реальных ситуациях, такие как банки, деньги, инфляция, маркетинг,
бухгалтерский учет и т.д., они могут быть использованы специалистами,
работающими в области бизнеса и коммерции, в финансовых компаниях и
биржах. Материал указаний представляет интерес для широкого круга лиц,
желающих совершенствовать деловой английский язык и рекомендован тем,
кто стремится расширить свои знания английского языка по экономической
тематике.

6
PART I.

TEXTS ON ECONOMICS.

BANKS AND MONEY


For a full view of bank and money the city to visit is Amsterdam. It is
associated with not one but two of the great developments in their history.
In 1609, money – hard, coined money – was, as money goes, abundant in
Amsterdam. Everywhere in Europe men were taking th e coins and sweating and
clipping them, thereby getting metal to make more of them. It was to the problem of
quality that the merchants of Amsterdam now addressed themselves. They created a
bank owned by the city; the bank solved the problem of the quality of the coins by
going back to the system that antedated the invention of coinage. That was weighing.
A merchant brought his good and wretched coins to the bank, the bank weighed them,
and the weight of the pure metal was then credited to his account. This deposit was
a highly reliable form of money.
A merchant could transfer in to the account of another merchant. The recipient
knew that he was getting honest weight. Payments through the bank commanded a
premium.
Then came the second Amsterdam discovery. The deposits so created did not
need to be left idle in the bank. They could be lent. The bank then got interest. The
borrower then had a deposit that he could spend. But the original deposit still stood
to the credit of the original depositor. That too could be spent money. Spendable
money had been created.
The important thing, obviously, is that the original depositor and the borrower
must never come at the same time for their deposits – their money.
As will now be evident – very monetary innovation or reform carries the seeds
some new abuse. So it was here. One of the important borrowers from the Bank was
the Dutch East India Company. The members of the Company were often the same
men who ran the Bank. In the eighteenth century the India Company fell on har d
times; there was war with England, ships did not come back. It was slow pay at first,
and then its loans went into default. Early in the last century suspicion spread, the
weakness was affirmed, the depositors started coming, and they couldn't be paid.

7
PART I. TEXTS ON ECONOMICS.

VOCABULARY NOTES
money деньги
hard money металлические деньги; твердая валюта
coined money деньги в форме монеты
to be abundant иметься в изобилии
to take coins обрабатывать монеты
to sweat coins стирать золото с монет
to clip coins обрезать края у монет
to antedate предшествовать
1. металлические деньги;
coinage
2. чеканка монет
weighing взвешивание
merchant купец, торговец
good coin полноценная монета
wretched coin неполноценная монета
to credit to one's account заносить на чей-либо счет
deposit
депозит, вклад, взнос
to transfer money to the
account of... перевести деньги на чей-либо счет
recipient получатель
payment(s) платеж (и)
premium премия, оплата за услуги
to command a premium давать премию, оплачивать услуги
idle money бездействующие, неиспользуемые деньги
to lend ссужать, давать взаймы
borrower заемщик, получатель ссуды
to stand to the credit of the быть записанным на первоначального
original depositor вкладчика
to create money создавать деньги
денежный, кредитно-денежный; валютный
monetary
(фонд)
abuse злоупотребление
loan заем, ссуда
default неуплата, прекращение платежей
to go into default прекращать платежи

as money goes исходя из того, как деньги обращаются


nothing funny здесь никакого обмана, без обмана
It was slow pay at first, and
Сначала уменьшились вклады, а затем
then its loans went into
прекратились банковские займы.
default

8
PART I. TEXTS ON ECONOMICS.

Answer the questions


1. What role did Amsterdam play in the economic life of European at the beginning
of the 17th century? Was it the greatest merchant city then? Why did its role
decline?
2. What was typical of coined money circulation in European countries at the
beginning of the 17 lh century? What did men do to get more metal to make
money?
3. Why did coins lose weight and purity and become deficient? How was the
problem of quality of coins solved by the Bank of Amsterdam?
4. How were deposits created? What did the bank do with idle money? What do
you think was necessary for a normal money circulation when banki ng was just
developing? Why couldn't the original depositor and the borrower do their
transaction simultaneously?

HOW DOES A SWISS BANK ACCOUNT WORK?


Switzerland is one of the few countries in the world that guarantees, by law, the
secrecy of its bank accounts. As long as the client of a Swiss bank has not done
anything that is considered illegal in Switzejland, the bank will not reveal the client's
identity to anyone.
During World War II, for example, many families from war -torn Germany,
Italy, and France were able to keep their savings secure by putting them in Swiss
banks. Many Europeans still consider having a bank account in Zurich, Basel,
Lugano, or Geneva to be a sign of financial security.
Opening a legal, numbered Swiss bank account is still relativ ely easy to do,
usually involving nothing more than going to Switzerland, filling out a few forms,
and making a deposit. Swiss bankers are known to be dependable, trustworthy, and,
above all, discreet. These qualities have made Switzerland one of the world 's
banking centers. But they have also made Switzerland a center for money
laundering.
Swiss bank accounts are useful for money-laundering schemes because once
passes through a respectable Swiss bank, it is accepted anywhere in the world. When
several Swiss banks were found to be facilitating the activities of international drug
traffickers in the 1980s, the Swiss authorities finally decided to break open several
secret accounts that were linked to illegal activities abroad.

9
PART I. TEXTS ON ECONOMICS.

Most people holding Swiss bank accounts, however, do not use them to launder
illegally earned money. They merely want their legally earned funds to be safe and
free from government control and taxes at home. Swiss bankers do not reveal the
accounts of clients accused of avoiding taxes in their home country, since tax
evasion is not considered to be “illegal” in Switzerland: it is only a civil, not a
criminal offense.
Foreigners – as long as they break no Swiss laws – can keep their money in
Swiss bank accounts without fear. This guarantee of secrecy can be used by many
unscrupulous people for a wide variety of shady international activities. In the case
of the Iran-contra scandals during the 1980s, for example, the secret deals between
America's CIA and the Iranian arms merchants were paid for in part with money
deposited by CIA agents at banks in Switzerland.
Philippine dictator Ferdinand Marcos had also deposited large sums of illegally
acquired funds in Swiss banks during the 1970s and 1980s. When he was deposed,
the Philippine government called for the return of these funds, which was agreed to
by the Swiss authorities. After several abuses of Swiss banking secrecy, the Swiss
authorities announced that they would be ready to open any accounts revealed to be
linked to illegal international activity. (From «А beginner's guide to the world
economy» by Randy Charles Epping).

VOCABULARY NOTES
guarantee гарантировать
illegal незнакомый, нелегальный
account счет, отсчет
saving сберегательная
security надёжный, гарантировать
legal юридический, законный
form формальность, бланк, составлять
deposit вклад, задаток, наложить
activity деятельность, активность
fund запас, фонд
safe невредимый, безопасный, сейф
tax налог, облагать налогом
accuse обвинять
avoid избегать, уклоняться
civil гражданский, штатский

10
PART I. TEXTS ON ECONOMICS.

shady сомнительный, темный


case случай, дело (судебное)
deal сделка, дело

Answer the questions


1. Does Switzerland guarantee the secrecy of its bank accounts? When does it
reveal the client's identity to anyone?
2. What do Europeans consider to be a sign of financial security?
3. What has made Switzerland a center for money laundering?
4. When did Swiss authorities finally decide to break open several secret accounts
that were linked to illegal activities abroad?
5. What is the purpose of the most people in holding Swiss bank accounts?
6. How long can the foreigners keep their money in Swiss bank?
7. What can you tell of illegal activity of Philippine dictator Ferdinand Marcos.

ENGLISH BANKS
Today the British banking is a complicated tripartite system like a three-
layer cake. The system is headed by the Bank of England.
This bank was established under a royal charter in 1694. The head of the
Bank is Governor of the Bank appointed by the Queen on the recommendation of
the Prime Minister. The Queen also appoints Deputy Governor and the Court of
Directors, which consists of 16 directors.
The Bank of England is a central bank or a national bank. It controls the
British banking system, issues banknotes and mints coins. It lends and borrows
money for the government, manages the national debt and is in the control of the
nation's gold reserve. The other two layers are:
– the commercial or joint stock clearing banks
– specialized banking institutions such as the discount houses and merchant
banks.
The commercial or joint-stock banks deal with the general public. The four
large English commercial banks are known as the Big Four. They are Barclays,
Lloyds, the Midland, and the National Westminster. Together they have upwards
of 10,000 branches. Commercial banks render various service t o companies and
individuals. Some of the services are:
– to receive or accept from their customers the deposit of money
– to collect and transfer money both at home and abroad against deposit and
current accounts
– to provide overdrafts to both personal and business customers
– to lend loans to their customers

11
PART I. TEXTS ON ECONOMICS.

– to exchange money
– to supply economic information and to prepare economic reviews to be
published
– to make foreign exchange transactions, including spot transactions, forward
transactions and swap transactions
– to issue various banker's cards
Merchant banks and discount houses deal only with special customers
providing funds for special purposes. They accept commercial bills of exchange and
offer quite a lot of financial services. They provide adv isory services about new
issues of securities, mergers, take-overs and reorganizations. They also arrange
financing for their customers and provide fund-management services.
Besides there is a big group of banks in the United Kingdom made up of
foreign banks. All the major foreign banks are represented in the UK by subsidiary,
branch, representative offices or consortium. They provide finance both in sterling
and in other currencies and offer a wide range of financial services.
Lombard Street is the symbol of British banking. This is the place where the
first bankers coming from Italy settled.

VOCABULARY NOTES
to complicate усложнять, запутывать
complicated сложный, запутанный
tripartite тройственный, трехсторонний
layer слой, пласт
royal королевский
governor управляющий
prime minister премьер-министр
court of directors совет директоров (в Банке Англии)
(SYN. board of directors) (в других банках, на фирмах)
to lend (lent, lent) давать взаймы, ссужать
to borrow занимать, брать взаймы
national debt государственный долг
gold reserve золотой резерв
clearing клиринг, безналичные расчеты между
банками
clearing bank клиринговый банк
discount дисконт, скидка
discount house учетный дом
merchant торговый, коммерческий
merchant bank торговый банк
upwards вверх, больше, выше
upwards of свыше

12
PART I. TEXTS ON ECONOMICS.

to render оказывать, предоставлять


spot спот, немедленный
spot transaction сделка спот
spot price цена спот
forward будущий, срочный
forward transaction форвардная сделка
swap своп, обмен
swap transaction сделка своп
issue эмиссия, выпуск
securities ценные бумаги
subsidiary дочерняя компания
consortium консорциум
to settle поселять (ся)

Answer the questions


1. What is British banking?
2. What banks does tripartite system consist of? Describe them.
3. What services do commercial banks to companies and individuals?
4. What services do merchant banks and discount houses provide?
5. What is Lombard Street?

FEDERAL RESERVE SYSTEM OF THE USA


The Federal Reserve System is the central banking system of the United States
of America, set up by the Federal Government in 1913. On account of the vast area of
the country, and the greater difficulties of travelling at that time, the country was divided
into twelve Federal Reserve Districts (FRD), each with its own Federal Reserve Bank
(FRB).
Here is the map showing FRDs and the cities where FRBs are:
Federal Reserve Banks

1. Boston 5. Philadelphia 9. Richmond


2. Chicago 6. Minneapolis 10. Dallas
3. New York 7. Cleveland 11. Atlanta
4. St. Louis 8. Kansas City 12. San Francisco

13
PART I. TEXTS ON ECONOMICS.

There are also twenty five branches of the Federal Reserve Banks to serve
particular areas within each district. The activities of the Federal Reserve Banks are
coordinated through tho Federal Reserve Board of Governors in Washington. The
Board exercises general supervision over the Federal Reserve Banks.
The Federal Reserve Banks hold the reserves of the member banks, i.e. the
commercial banks which are members of the Federal Reserve System. The FR Banks
supply the member banks with currency if necessary and act to them as lenders by
rediscounting bills. The Board determines the reserve requirements of the
commercial banks. The Board really determines discount rates too. The Board
discount rate corresponds in nature to the English Bank rate, though the Federal
Reserve Banks do not always have the same discount rate.
The Federal Reserve System, in collaboration with the Government of the
USA, determines monetary policy and, aided by the Federal Reserve Banks, carries
it out.
All national banks must be members of the Federal Reserve System.
Incorporated state banks including commercial banks, mutual savings banks, trust
companies, and industrial banks, may also join the System.
Incorporated state banks are those which have a charter from the state to act
as an individual.
Mutual savings banks are savings banks owned by their depositors. Industrial
banks make loans for the purchase or manufacture of industrial products.

VOCABULARY NOTES
the Federal Reserve System (FRS) Федеральная резервная система США
vast обширный, громадный
to coordinate координировать
to exercise осуществлять; упражняться, тренировать
supervision наблюдение, надзор
to rediscount переучитывать (векселя)
discount rate учетная ставка
collaboration сотрудничество
monetary денежный, валютный, монетарный
monetary policy денежно-кредитная политика
to aid помогать, способствовать
mutual взаимный
mutual savings bank взаимно-сберегательный банк

14
PART I. TEXTS ON ECONOMICS.

Answer the questions


1. What is the Federal Reserve System?
2. How many branches has the Federal Reserve System?
3. What reserves do the Federal Reserve Banks hold?
4. What banks may also join the Federal Reserve System?
5. What are mutual savings banks and industrial banks?

THE ECONOMIC ENVIRONMENT


The economy comprises millions of people and thousands of firms as well as
the government and local authorities, all taking decisions about prices and wages,
what to buy, sell, produce, export, import and many other matters. All these
organizations and the decisions they take play a prominent part in shaping the
business environment in which firms exist and operate.
The economy is complicated and difficult to control and predict, but it is
certainly important to all businesses. You should be aware that there are tinies when
businesses and individuals have plenty of funds to spend and there are times when
they have to cut back on their spending. This can have enormous implications for
business as a whole.
When the economy is enjoying a boom, firms experience high sales and
general prosperity. At such times, unemployment is low and many firms will be
investing funds to enable them to produce more. They do this because consumers
have plenty of money to spend and firms expect high sales. It naturally follows
that/the state of the economy is a major factor in the success of firms.
However, during periods when people have less to spend many firms face hard
times as their sales fall. Thus, the economic environment alters as the economy
moves into a recession. At that time, total spending declines as income falls and
unemployment rises. Consumers will purchase cheaper items and cut expenditure on
luxury items such as televisions and cars.
Changes in the state of the economy affect all types of business, though the
extent to which they are affected varies. In the recession of the early 1990s the high
street banks suffered badly. Profits declined and, in some cases, losses were incurred.
This was because fewer people borrowed money from banks, thus denying them the
opportunity to earn interest on loans, and a rising proportion of those who did borrow
defaulted on repayment These so-called “bad debts” cut profit margins substantially.

15
PART I. TEXTS ON ECONOMICS.

Various forecasters reckoned that the National Westminster Bank's losses in the case
of Robert Maxwell's collapsing business empire amounted to over 100 million.
No individual firm has the ability to control this aspect of its environment.
Rather, it is the outcome of the actions of all the groups who make up society as well
as being influenced by the actions of foreigners with whom the nation has dealings.

VOCABULARY NOTES
to comprise включать в себя, составлять
local authorities местные органы власти
to take (syn. to make)
принимать решения
decisions
to play a prominent part играть заметную (значительную) роль
to shape the environment формировать обстановку, среду, окружение
to predict (syn. to
предсказывать
forecast)
to cut back on spending сокращать расходы
enormous Implications большое значение, смысл, влияние
general prosperity всеобщее процветание
делать возможным для кого-то, позволять
to enable smb to do smth
кому-либо что-либо делать
consumers потребители
to alter изменяться
a recession упадок
total spending общие, суммарные расходы
to decline снижаться
income доход
unemployment безработица
to purchase (SYN. to buy) покупать
to cut expenditure сокращать расходы
luxury items предметы роскоши
to affect (SYN. to
влиять
influence smb, smth)
the extent степень
to some extent в некоторой степени
the high street banks центральные банки

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PART I. TEXTS ON ECONOMICS.

to suffer badly сильно пострадать


profits прибыль
to incur (SYN. to bear, to
нести убытки, потери
suffer) losses
to borrow from занимать, брать взаймы
to deny the opportunity лишать возможности
to deny отрицать
to earn interest получать процентный доход
loans ссуды, займы
не выполнять обязательств
to default on repayment
по выплате (долгов, процентов и т. п.)
a debt долг
profit margins размеры прибыли
the outcome of the actions результат действий
to make up society составлять общество
to have dealings иметь торговые (деловые) связи

Answer the questions


1. What does the economy comprise?
2. What's a boom in the economy? What characterises the state of the
economy at that time?
3. What happens when the economy moves into a recession?
4. What are "bad debts"?
5. What happened to some banks in the early 1990s and why?

WHAT CAUSED THE INTERNATIONAL DEBT CRISIS?


If you owe the bank a small amount of money and you can't pay it, then you are
in trouble. However, if you owe the bank an enormous amount of money and you can't
pay it, then the bank is in trouble.
By the end of the 1980s, European and American banks that had made large loans
to the Third World were in big trouble. Countries such as Argentina, Brazil, and Mexico
just could not pay the money back. In many cases, the debtor countries could not even
afford to pay the interested on their interest on their outstanding loans. And some of the
American creditor banks did not have enough capital and reserves to cover these
nonperforming loans.

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PART I. TEXTS ON ECONOMICS.

The developing countries had gambled in the 1970s and borrowed billions of
dollars from Japanese and Western banks, hoping to grow their way out of poverty.
But the gamble failed. By the 1980s, the debtor countries of the Third World found
themselves confronted with the scissors effect of soaring interest rates and an economic
slump in the developed countries, reducing worldwide demand and lowering
inflation. The prices of commodities such as coffee and sugar fell sharply, reducing
many developing countries export earnings. Debtor countries were forced to borrow
even more money to pay for the increased cost of oil and debt payments.
Although some of the original loans had been used to line the pockets of
government officials and businessmen, much of the money was actually spent on
valuable infrastructure projects like electricity system and roads. But the tragedy of
the debt crisis is that the majority of the Third World's debt was generated on the
back of the debt itself. The high interest payments of the 1980s, largely caused by
the U.S. Federal Reserve’s battle against inflation, had to be paid for with increased
borrowing as the debtor countries of Third World refused to admit that their gamble
was failing.
Brazil, for example, had managed to keep its economy alive during the 1980s
despite the huge interest payments it had to make to service its debt. I t exported a
wide range of goods, ranging from coffee and airplanes to tanks and shoes, racking
up annual trade surpluses of ten to twenty billion U.S. dollars, the third highest trade
surplus in the world after Japan and West Germany. But most of these ea rnings were
sent abroad just to pay the interest on more than $100 billion of debt, the highest in
the developing world. Funds were being transferred abroad instead of invested into
the weakening Brazilian economy.
Faced with the impossibility of more foreign loans, the Brazilian government
was forced to start looking for funds within the country. This was done by issuing
domestic debt, usually in the form of government bonds. In order to attract buyers
for its bonds within Brazil, the government had to pay high interest rates, sometimes
several percent-age points higher than the inflation rate. For example, with local
inflation at 20 percent per year, the government would pay 25 percent interest on its
bonds, for a “real” interest rate of 5 percent.
Eventually, the Brazilian government was forced to issue even more debt to
pay for its increased interest payments. Internal debt soared, because not enough
taxes were being collected to pay for the increased government spending.
By borrowing more money on the back of the original loans, the debt problem
was only getting worse. But neither the banks nor the Third World debtor countries

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PART I. TEXTS ON ECONOMICS.

wanted to admit that there was just no money available. Not only were the debtor
countries unable to pay back the principal – the original amount borrowed – in many
cases they were not even able to keep up with the interest payments. The principal
and interest payments on the loans had built up like a snow-ball rolling downhill,
and the borrowers and the banks of the world found themselves in trouble. (from “А
beginner’s guide to the world есоnomy” by Randy Charles Epping).

VOCABULARY NOTES
amount сумма
available наличный
borrow занимать
bond облигации
debt долг
domestic debt внутренний долг
enormous громадный
creditor кредитор
inflation инфляция
loans займы
owe быть должным
pay платить
payment платёж
poverty бедность
unable to pay неспособность платить

Answer the questions


1. What is the reason of bank’s and client's troubles?
2. Why were European and American banks in big trouble by the end of the
1980s.?
3. What did the developing countries do in the 1970s in order to grow
their way out of poverty?
4. What was the tragedy of the debts crisis?
5. How had Brazil managed to keep its economy during the 1980s.?

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PART I. TEXTS ON ECONOMICS.

WHAT IS HYPERINFLATION?
During a period of hyperinflation in Argentina, when the currency was losing
its value at an alarming rate, it was joked that it was paid for at the beginning, when
the currency was still worth something, while the taxi ride was paid for at the end after
the currency had already lost its value.
Hyperinflation – an explosions in the prices of goods and services – is a symptom of an
economy out of control. Hyperinflation has occurred all over the world: in Germany
between the two world wars, and later in Israel and parts of Eastern Europe. But it has
been most widespread in the debtor countries of Latin America, where it resulted
primarily from government policies that attempt to satisfy political demands without
increasing taxes.
When a profligate government finances spending by increased borrowing or by
simply printing new currency, prices will increase as the new money enters the
economy. The expectation of runaway inflation fuels the fires of hyperinflation.
Eventually this wage and price spiral takes on a life of its own: price rise, leading to a
demand for increased wager, which results in higher prices. Imagine buying goods for
a home or factory, or playing The Price is Right, when prices are increasing 200 percent
a month. Even winning the lottery may not help when a million or a billion pesos does
not even pay for next month's rent.
The rising prices of hyperinflation end up hurting the poor people most, because their
day – today expenses consume a significantly higher percentage of their total income.
Some countries try to index salaries and social service payments to keep up with
inflation, but salaries and social payments rarely keep pace with the increase in prices,
and purchasing power declines. Even though a salary is increased in nominal terms,
what the salary will actually buy – its real value – can decline. Hyperinflation especially
hurts those on fixed incomes such as old-age pensions: when there are no cost-of-living
increases, stipends can become virtually worthless.
Governments often refuse to take tough economic action against hyperinflation
because they fear the political consequences of austerity plans or increased taxes. In
order to keep large state work forces satisfied, for example, governments borrow money
to keep from closing inefficient state industries or reduce bloated bureaucracies.
Overburdened governments usually keep the economy going by increasing the money
supply even further, issuing more government debt or printing ever more money. As the
government loses control of the economy, the vicious circle of wage and price increases
spins out of control.

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PART I. TEXTS ON ECONOMICS.

VOCABULARY NOTES
hyperinflation гиперинфляция
eventually в конце концов
currency валюта
wage заработная плата
value стоимость
spiral ускоряющееся повышение или падение
alarmingrate тревожный темп
песо (латиноамериканская денежная
pesos
единица)
cheap дешевый
rent арендная плата
explosion взрыв
expenses расходы
occur случаться, иметь место
consume потреблять
widespread широко распространяться
significantly существенно
debtor должник
процент, процентное отношение,
percentage
содержание, часть, доля
primarily первично, первоначально
total income полный доход
attempt попытка
to index salaries показать оклад
satisfy удовлетворять, утолять

demands спрос
declines отклонять
increasing taxes увеличенные налоги
tough жесткий
profligate расточительный
consequences последствие
borrowing заимствование
vicious порочный, злобный
expectation ожидание

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PART I. TEXTS ON ECONOMICS.

inefficient неспособный, неэффективный


fuels топливо
bureaucracies бюрократия, бюрократизм

Answer the questions


1. What is hyperinflation? Where has it occurred?
2. Does the printing of new currency help to prevent hyperinflation?
3. Whom does hyperinflation hurt especially?
4. What do the governments do in order to keep large state work forces
satisfied?

THE IMPACT OF INFLATION ON BUSINESS


Inflation can adversely affect business in а number of ways:
1. Accounting and financial problems.
Significant rates of inflation can cause accounting and financial problems for
businesses. They may experience difficulty in valuing assets and stocks, for example.
Such problems can waste valuable management time and make forecasting,
comparisons and financial control more onerous.
2. Falling sales.
Many businesses may experience falling sales during inflationary periods for
two broad reasons. Firstly, it may be that saving rises in a time of inflat ion. We
would expect people to spend more of their money when prices are rising to avoid
holding an asset (cash), which is falling in value. However, during the mid-1970s,
when industrialized nations were experiencing high inflation rates, savings as a
proportion of income rose! It is not easy to identify the reason for this, but some
economists suggest that people like to hold a relatively high proportion of their assets
in a form which can be quickly converted into cash when the future is uncertain .
Whatever the reason, if people save more they spend less and businesses suffer
falling sales. The economic model predicts that if savings rose the level of activity
in the economy would fall. Clearly, if this happened we .would expect businesses to
experience difficulty in maintaining their levels of sales.
Businesses may be hit by a reduction in sales during a time of inflation for a
second reason. As inflation progresses, it is likely that workers’ money wages (that
is, wages unadjusted for inflation) will be increased broadly in line with inflation.
This may well take a worker into a higher tax bracket and result in a higher

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PART I. TEXTS ON ECONOMICS.

percentage of his or her wages being taken as tax. This process, known as fiscal drag,
will cause workers to have less money available to spend; on firms’ goods and
services. The poverty trap has a similar impact. As money wages rise, the poor may
find that they no longer qualify for state benefits to supplement their incomes and at
the same time they begin to pay income tax on their earnin gs. Again, this leaves less
disposable income to spend on the output of firms. Finally, it may be that the wages
of many groups are not index-linked and so they rise less qufckly than the rate of
inflation, causing a reduction in spending power and demand for goods and services.
Once again, the economic model can be used to predict that increases in the
level of taxation will increase withdrawals, lowering the level of economic activity
and depressing firms' sales.
Not all businesses will suffer equally from declining demand in an inflationary
period. Not all businesses will suffer equally from declining demand in an
inflationary period. Those selling essential items, such as food, may be little affected
whilst others supplying less essential goods and services, such as foreign holidays,
may be hard hit.
3. High interest rates.
Inflation is often accompanied by high interest rates. High interest rates tend
to discourage investment by businesses as they increase the cost of borrowing finds.
Thus, investment may fall. Businesses may also be dissuaded from undertaking
investment programmes because of a lack of confidence in the future stability and
prosperity of the economy. This fall in investment may be worsened by foreign
investment being reduced as they also lose some confidence in the economy’s future.
Such a decline in the level of investment can lead to businesses having to retain
obsolete, inefficient and expensive means of production and cause a loss of
international competitiveness. Finally, a fall in investment can lower the level of
economic activity, causing lower sales, output and so on. Thus, to some extent,
businesses can influence the economic environment in which they operate.
4. Higher costs.
During a bout cf inflation firms will face higher costs for the resources they
need to carry on their business. They will have to pay higher wages to their
employees to compensate them for rising prices. Supplies of raw materials and fuel
will become more expensive as will rents and rates. The inevitable re action to this
is that the firm has to raise its own prices. This will lead to further demands for
higher wages as is called the wage-price spiral. Such cost-push inflation may make
the goods and services produced by that enterprise internationally less competitive

23
PART I. TEXTS ON ECONOMICS.

in terms of price. An economy whose relative or comparative rate of inflation is high


may find that it is unable to compete in home or foreign markets because its products
are expensive. The economic model tells us that a situation of declining e xports and
increasing imports will lower the level of activity in the economy with all the
consequent side-effects.

VOCABULARY NOTES
impact удар, влияние, воздействие
может уходить много драгоценного
waste valuable management time
времени
make more onerous сделать более затруднительным
to avoid holding an asset чтобы избавиться от наличности
whatever the reason какова бы ни была причина
фирмы (предприятия) могут пострадать
businesses may be hit by
от...
заработная плата без учета уровня
wages unadjusted for inflation
инфляции
следующая группа, категория {напр. при
A HIGHER TAX BRACKET группировке налогоплательщиков по
доходу)
финансовый тормоз экономического роста
fiscal drag
с помощью налоговых изъятий
they no longer qualify for они больше не подпадают под...
to supplement their incomes что является дополнением к их доходу
this leaves less disposable income из-за этого остается меньше средств
index-linked индексированный
a reduction in spending (syn.
снижение покупательной способности
buying, purchasing) power
declining demand падение спроса
tend to discourage investment не способствуют инвестирование
may also be dissuaded from могут также отказаться от…
a lack of confidence недостаток (отсутствие) уверенности
this fall in investment may be это падение уровня инвестирования может
.worsened by foreign investment стать еще сильнее, если сократятся
being reduced иностранные инвестиции

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PART I. TEXTS ON ECONOMICS.

can lead to businesses having to может привести к тому, что фирмам


retain (предприятиям) придется сохранить
a bout (syn. period, spelt) of
период инфляции
inflation
менее конкурентоспособный в смысле
less competitive in terms of price
цены

Answer the questions


1. What ways can inflation affect business.
2. What problems can significant rate of inflation cause for businesses?
3. For what reasons may many businesses experience falling sales during
inflationary periods. Tell a few words about them.
4. Inflation is often accompanied by high interest rates. What does it mean?
5. What is higher cost?

CAN INFLATION BE BENEFICIAL


We would be simplifying the impact of inflation on business if we suggested
that all effects were unfavourable. There is a school of thougfit, which argues that a
low and stable rate of increase in the price level can be beneficial. It believes that a
steady rise in money profits produces favourable expectations and induces
investment as firms seek to expand. This action expands the economy as a whole.
Paradoxically, inflation can also reduce the costs of businesses in the short run. Many
enterprises incur costs, which are fixed for some period of time – for example, the
rent of a factory may be fixed at a particular figure for a few years. At a time when
the selling price of the firm's product, and hence its sales income, is rising this cost
will be falling in real terms and thus stimulating the business.
There is a further argument that firms may be persuaded to borrow heavily in
a period of inflation since the burden of repaying loans is reduced by inflation. If
inflation is running annually at 10 per cent, for example, then the real value of the
repayments of the loan will fall by approximately that amount each year. This may
serve to encourage investment which, since it is an injection into the circular flow,
will promote the level of activity. However, in these circumstances interest rates are
likely to be high.

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PART I. TEXTS ON ECONOMICS.

Government will accept that low rates of inflation are likely to exist in many
economies. Inflation rates of 5 per cent or below are not considered to be too great a
problem, especially if competitor nations are suffering similar rates.
In spite of the above, the conclusion must be drawn that inflation is, in general,
harmful to business and its environment. Indeed, many economists would contend
that inflation is the fundamental evil as its presence leads to lack of competitiveness
and therefore relatively high unemployment and low rates of growth. This viewpoint
has gained in credence in government circles over the last few years. It is for this
reason that its control has been a major objective of government economic policy
throughout the 1980s and early 1990s.

VOCABULARY NOTES
beneficial выгодный, приносящий доход
unfavourable (ant. favourable) НЕБЛАГОПРИЯТНЫЙ
there is a school of thought, which
СУЩЕСТВУЕТ МНЕНИЕ, ЧТО...
argues that
и способствует росту
and induces investment as firms seek
капиталовложений, так как фирмы
to expand
(предприятия) расширяются
in the short run очень быстро
несут расходы, которые в течение
incur costs, which are fixed for some
какого-то периода являются
period of time
неизменными
a further argument еще один аргумент
to borrow heavily брать взаймы большие суммы
repaying loans выплата займов
to contend настаивать, утверждать
эта точка зрения получила большое
this viewpoint has gained in credence
распространение
a major objective главная цель

Answer the questions


1. Give the definition of inflation. What can you add to it?
2. The extent and severity of inflation.
3. Types of inflation (short characteristics). Are there any others?
4. Demand-pull inflation. Name countries with this type of inflation.

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PART I. TEXTS ON ECONOMICS.

5. Cost-push inflation. Name countries with this type of inflation.


6. The impact of inflation on business (in brief):
♦ accounting and financial problems;
♦ falling sales;
♦ high interest rates.
How can businesses influence the economic environment?
7. Do you believe in the advice to borrow heavily in a period of inflation? Give
your reasons.
8. Can inflation be beneficial?
9. What other factors not mentioned in this unit can cause inflation?
10. What "cures" for inflation do you know and can suggest?

WEALTH AND INCOME


Wealth consists of a stock of goods which have a money value. It includes such
assets as land, houses, factories, shops, machines, and many kinds of personal
possessions.
Private wealth means the possessions of individuals. It will obviously include
land, houses, works of art, jewellery, motor cars and so on. Private wealth also
includes financial assets such as notes and coins, bank deposits, building society
deposits and company shares.
Social wealth consists of those assets owned by the community as a whole (i.
e. by central and local government). It includes such things as roads, hospitals,
schools, parks and libraries.
National wealth is the sum of all the wealth possessed by the citizens of a
country, whether it is privately owned or publicly owned.
Whereas wealth is a stock of assets which have a money value, income is a
flow of money. Income refers to the amount of money earned or received during a
given period of time - usually one year.
An individual may receive income in various forms, such as wages, salaries,
interest on savings, rent from the ownership of property, profits on shares, or social
security payments.

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PART I. TEXTS ON ECONOMICS.

VOCABULARY NOTES
wealth богатство, изобилие
запас, ассортимент; ценные бумаги, реально
stock
переходящие из рук в руки
value цена, стоимость
asset имущество, актив(ы)
to possess обладать, владеть
possession обладание, владение
works of art произведение/я искусства
jewellery ювелирные украшения, драгоценности
jewel драгоценный камень; ювелирное изделие
private частный, личный
note (syn. banknote) банкнота
coin монета
building society строительное общество
deposit депозит
share доля, часть; акция
to share делить, разделять
to own владеть, иметь, обладать
ownership собственность, право собственности
citizen гражданин
whereas тогда как
flow поток
to refer to отсылать к, ссылаться на
interest выгода, польза, прибыль; проценты
to save экономить; спасать
savings сбережения
rent квартплата, рента, арендная плата
property собственность
profit прибыль, доход
to profit получать прибыль/доход/выгоду
social security социальное обеспечение
to hold (held, held) держать, проводить
holdings вклады
percentage процент
per cent процентов

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PART I. TEXTS ON ECONOMICS.

dwellings жилище
net of за вычетом
mortgage заклад, ипотека
debt долг
cash наличные
etc. (et cetera lat.) и так далее
life assurance funds фонды страхования жизни

Answer the questions


1. What does wealth consist of?
2. What assets does wealth include?
3. What does private wealth mean?
4. What does private wealth include?
5. National wealth is the sum of all the wealth, isn’t it?

INCOME
The second of the three economic issues is the question of income, that is,
income distribution, the way in which income – that's what people earn – is
distributed or shared around.
You, and your family, have an income. You have an annual income, that is what
you earn in a year. This income allows you to enjoy various goods and services. It
means you have a certain standard of living. Your standard of living, of course,
includes what you think of as necessary to your life, things like food, water,
somewhere to live, health and education. But your income doesn’t just cover the
necessities of life. It also includes recreation, whether that’s sport or TV or a holiday.
Your income will be less than some of your neighbours ’, but it will be more than
some of your other neighbours’. Your neighbours mean not just people living in your
own country, but also people living in other countries.
Just as you and your family have an income, so nations, different countries,
also have an income – the national income, it’s often called. A national income is not
the money the government gets. The national income is the sum total of the incomes
of all the people living in that country, in other words, everyone's income added
together. In the same way one can think of world income as the total of all the
incomes earned by all the people in the world.

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PART I. TEXTS ON ECONOMICS.

Concerning the distribution of national and world income, some questions are
to be asked: who, in the world, gets what share of these incomes? The distribution of
income, either in the world or in a country, tells us how income is divided between
different groups or individuals. Table 1 shows the distribution of world income.
There are three headings down the left-hand side of the table: income per head,
percentage of world population and percentage of world income. In poor countries,
like India, China and the Sudan, the income per head is o nly one hundred and fifty-
five pounds per year. But at the same time, they have fifty point seven per cent of
the world's population. These poor countries only have five per cent of the world's
income.
In middle-income countries the income per head is eight hundred and forty
pounds, that’s in countries like Thailand and Brazil. In the major oil countries, l ike
Kuwait and Saudi Arabia, it’s seven thousand, six hundred and seventy. In industrial
countries it's six thousand, two hundred and seventy.
Turning to middle-income countries again, they have twenty-five point one per
cent of world population, with fourteen point two per cent of world income. The
major oil countries have point four per cent of population, the industrial countries
fifteen point six. The oil countries have one point five per cent of world income, the
industrial countries sixty-four point eight.
The first economic question is for whom does the world economy produce? As
the table shows, it produces essentially for the people living in the rich industrial
countries. They get sixty per cent of the world's income, although they only have
sixteen per cent of its population. This suggests an answer to the second question,
that is of what is produced. The answer is that most of world production will be
directed towards the goods and services that these same rich industrialised countries
want.
The third question is how goods are produced. In poor countries, with little
machinery, not very much technical training and so on, workers produce much less
than workers in rich countries. And poverty is very difficult to escape. It continues
on and on. And this goes some way towards accounting for the differences in national
incomes. It accounts for an unequal distribution of income, not just between countries
but also between members of the same country, although there individual
governments can help through taxation. In other words, governments can act to help
distribute income throughout their population.

30
PART I. TEXTS ON ECONOMICS.

VOCABULARY NOTES

income distribution распределение дохода


an annual income годовой доход
a certain standard of living определенный уровень жизни
охватывать основные жизненные
to cover the necessities of life
потребности
recreation отдых, досуг
national income национальный доход
share of income доля, часть дохода
income per head доход на душу населения
percentage of world
процент мирового населения
population
percentage of world income процент мирового дохода
essentially в основном, большей частью
world production мировое производство
rich industrialised countries богатые промышленные страны
not very much technical training недостаточное техническое обучение
to escape зд. избежать
to account for (SYN. to explain) объяснять
the differences in national
различия в национальных доходах
incomes
unequal distribution of income неравное распределение дохода
throughout population среди населения

Task. Fill n the table with the data from the text
Table 1. The distribution of world income
Middle-
Poor Major oil Industrial
income
countries countries countries
countries
Income per
head % of
world
population %
of world
income

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PART I. TEXTS ON ECONOMICS.

Answer the questions


1. What is income distribution?
2. You have a certain standard of living. What does it mean?
3. What is national income? How can you determine it?
4. What are three economic questions?
5. What countries are called poor?
6. For whom and what does economy produce?
7. What is the role of government in distributing incomes?

HOW IS WEALTH DETERMINED AROUND THE WORLD?


A nation's wealth can best be determined by looking at its people. But it is
difficult to rely on any one statistic. Are the Kuwaitis better off because they earn
more money per capita then the Brazilians? Are the French better off if they have
more telephones per household then the Japanese? Are Italians b etter off because
they save more money then the Canadians?
There are many different ways to determine wealth. Economists define wealth
as what a person owns, such as stocks and real estate, but many people look first to
their level of income to see if they are well off. Comparing salaries in different
countries, however, is like comparing apples and oranges, because the salaries in
each country are paid in different currencies. We need to somehow translate what
each person earns into a common unit of measure.
One way of translating salaries is to first compare the value of the currencies
of the countries in question. This is usually done by using exchange rates that tell us
the value of one currency calculated in terms of another.
Exchange rates, determined by the foreign exchange markets around the world
reflect the markets view of each country's economic and political situation. By using
exchange rates, a salary in yen in Tokyo can be converted into U.S. dollars to make
it comparable to a salary in Los Angeles. Or it can be converted into French francs
to make it comparable to a salary in Paris.
Because the cost of living varies widely from one country to another, however,
it is difficult to translate salaries by simply using currency exchange rates. If a Bi g
Mac or an apartment costs three times as much in Tokyo as in Los Angeles or Paris,
a higher salary in Japan does not necessarily mean a Japanese worker is better off
than an American or French worker.

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PART I. TEXTS ON ECONOMICS.

It is sometimes more valuable to look at what salaries will actually buy in


each country. A salary’s “purchasing power” tell us how many goods and services
it can actually buy. Comparing the cost of group of goods and services from country
to country, therefore, gives us a more reliable exchange rate, called purchasing
power parity (PPP). The PPP exchange rate is calculated by looking at the cost of
groceries and other items such as vacation trips, automobiles, insurance, and rent
in different countries.
By choosing this basket of goods and services and calcu lating their cost in
different countries around the world, we can compare the purchasing power of
“real” value of salaries from country of country. Although one country may be
richer in terms of amount of money each citizen owns or earns, what counts in th e
long run is what each person can do with this wealth. (From “А beginner’s guide
to the world economy” by Randy Charles Epping).

VOCABULARY NOTES
define определять, устраивать
income доход
salaries зарплата, оклад
currency деньги
measure мера, размер
value стоимость, ценность
rate норма, расценка
valuable ценный
groceries бакалейный
insure страхование

Answer the questions


1. What can be determined nation wealth by?
2. There are different ways to determine wealth, aren’t they? What are they?
3. What is the first way of translating salaries?
4. What for can a salary in jen in Tokyo be converted in?
5. Does a higher salary means that a Japanese worker is better than an American
or French ones?
6. What does a salary’s “purchasing power” tell us about?
7. Can we compare the purchasing power or “real” value of salaries from
country to country?

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PART I. TEXTS ON ECONOMICS.

PROFIT AND LOSS STATEMENT GILLIGAN’S COCONUT.


JUICE LTD. (SAMOAN ISLAND BRANCH)
Period : one year
Revenues (from sale of coconut juice): $ 50
Cost of Goods Sold (paid to coconut pickers): $ 10
Other Expenses ( advertising on beach): $ 10
Gross Profit: $ 30
Taxes (33 %rate): $ 10
Net Profit: $20

Any enterprise from a major multinational corporation to a coconut juice stand


in the South Pacific need a summary of everything the company has earned and spent
over a given period of time. This overview of company’s day-to-day activities is
called an income statement or a profit and loss statement (P&L).
A company making and selling coconut juice on a South Pacific beach would
start its P&L with a summary of all revenues from selling its product. To determine
its profit, the company needs to subtract its expenses from its revenues. First, it
would subtract the costs incurred in producing the juice, called “cost of goods sold”.
Expenses such as salaries or maintenance of assets would also have to be accounted
for. Other expenses, such as interest on loans, would then have to be deducted.
Finally, depreciation, the decline in value of fixed assets, such as machinery
and tools, would have to be deducted from earnings. Deprecation causes numerous
accounting nightmares because there is no way to determine how much a fixed asset
really declines in value over time. Many companies take advantage of th is
uncertainty to show as much “loss” as possible as soon as possible, reducing earnings
in order to pay less tax in the early years of the asset’s life. By delaying tax payments,
companies can earn valuable interest on their retained earnings.
Once all expenses have been deducted from the revenues, a company can see
its total profit or loss. This is the proverbial bottom line. It tells us how much the
company's assets and liabilities changed over the course of the year.
Another tool for understating a company’s activity is to look at its cash flow.
This measures the actual flow of funds – real money – flowing into and out of a
company during a given period of time. A company’s cash flow, or “cash summary”,
factors out all of the accounting tricks and looks at what a company really earned.
Even though it does not tell us the compan’s “profit”, cash flow sometimes gives a

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PART I. TEXTS ON ECONOMICS.

clearer picture of a company's true earnings, because it excludes accounting tools


such as depreciation.
Cash flows and profit and loss statements are essential for understanding t he
revenues, expenses and profits of any organisation, including nonprofit organisations
such as the World Wildlife Fund or the United Nations. Even if profits are not
distributed to shareholders, any organisation need a P&L to account for its activities
to see whether it is being efficiently and honestly run. (From “А beginner's guide to
the world economy” by Randy Charles Epping).

VOCABULARY NOTES
multinational corporatic многонациональное объединение
depreciation обесценивание
pro fit and loss снижение стоимости
statement официальный отчет о прибылях и убытках
proverbial bottom line общеизвестный оптимальный прием
cash flow кассовый поток
liability ответственность
deduct вычитать, удерживать
revenue годовой доход
statement официальный отчет
cost цена
expenses расходы

Answer the questions


1. What is called a profit and loss statement?
2. What must the company do in order to determine its profit?
3. Why do the companies try to reduce earnings in the early years of the asset’s
life?
4. What gives a clearer picture of a company’s true earnings?
5. Are cash flows and profit and loss statements essential for understanding the
revenues expenses and profits of any organisation?

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PART I. TEXTS ON ECONOMICS.

BASIC TERMS IN FOREIGN TRADE


Countries buy and sell various goods as well as various services. Goods bought from
abroad, such as food, cars, marines, medicines, books and many others, are called visible
imports. Goods sold abroad are called visible exports.
Services, such as insurance, freight, tourism, technical expertise and others, are called
invisible imports and invisible exports.
The total amount of money a country makes including moneу from visible and invisible
exports, for a certain period of time, usually for a year, is Gross National Product, or ICNP.
The difference between a country's total earnings or GNP, and its total expenditure is
called its balance of payments.
The difference between what a country receives for its visible exports and what it pays
for its visible imports is its balance of trade. If a country sells more goods than it buys, it will
have a surplus. If a country buys more than it sells, it will have a deficit.

VOCABULARY NOTES
foreign внешний
medicine лекарство; медицина
visible видимый
ant. invisible невидимый
imports импорт
ant. exports экспорт
abroad за границу
freight фрахтование, фрахт
expertise экспертиза, знания
to balance балансировать, уравновешивать
balance баланс, остаток
balance of payments платежный баланс
balance of trade syn. trade
торговый баланс
balance
surplus излишек, активное сальдо

Answer the questions


1. What is visible imports?
2. What are called invisible imports and invisible exports?
3. What is Gross National Product or ICNP?

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PART I. TEXTS ON ECONOMICS.

4. How is called the difference between a country’s total earnings and its total
expenditure?
5. What are balance of trade and deficit?

FOREIGN TRADE OF THE UK


In the 19th century Britain dominated international trade, accounting for abou t
one-third of the world’s exports. Early in the 20th century its position changed. The
volume of world's exports increased but the percentage of British exports in world
trade declined significantly.
But still foreign trade is vital to Britain's livelihood . With a large population,
small land area, and few natural resources, the country must depend on foreign trade
to supply the raw materials for English factories and to provide a market for the sale
of the thousands of types of manufactured goods produced by English industries.
The United Kingdom's principal exports are vehicles, machinery,
manufactured goods and textiles. Her main imports are foodstaffs and most of the
raw materials for industry.
There is usually an unfavourable balance of trade, that is, imports exceed
exports, but this is compensated for in part by the so called INVISIBLE TRADE.
The earnings from invisible trade come in the way of shippi ng charges, interest
payments from foreign investments, interest payments from British enterprises
abroad, and tourist expenditure. The earnings from foreign tourist trade make this
one of British important industries.
Britain has got very sound economic ties with various countries of the world,
especially the Commonwealth countries. The Commonwealth, offic ially called The
Commonwealth of Nations, has grown out of the old British Empire which came to
an end with the Second World War. The Commonwealth countries are Canada,
Australia, New Zealand and a few small countries and territories. The UK enjoys
special rights to import various agricultural products such as fruits and vegetables
from the Commonwealth at very good prices all year round.

VOCABULARY NOTES
to dominate господствовать
volume объем
vital жизненно важный, существенный
livelihood жизнеспособность, жизнедеятельность

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PART I. TEXTS ON ECONOMICS.

manufactured goods промышленные товары


vehicle транспортное средство
foodstaffs пищевые продукты
favourable благоприятный
favourable balance of trade благоприятный торговый баланс
favourable balance of
благоприятный платежный баланс
payments
неблагоприятный
unfavourable

to exceed превышать
shipping charges расходы по отгрузке
enterprise предприятие
sound прочный, глубокий
tie связь
the Commonwealth (Британское) Содружество Наций

Answer the questions


1. What goods does the United Kingdom export and import?
2. What services does the country export?
3. Does the country earn a lot of money thanks to a big number of tourists coming
to Britain?
4. What is the Commonwealth?

THE EUROPEAN UNION


The European Union (the EU) was announced by fifteen European countries,
mostly former Common Market countries, in 1992 when they signed the Treaty oh
European Union. These member countries were Belgium, France, Germany, Italy,
Austria, Luxembourg, Denmark, the Netherlands, Finland, Sweden, Greece, Spain,
Portugal, Ireland, and the United Kingdom.
The treaty set, as its objective, the establishment of economic and monetary
union. In January 1999 a single currency (the euro) was introduced, though Great
Britain did not join the euro and it is still keeping the pound sterling. Joining the
euro is being highly debated and a recent poll showed that most Bretons supported
this perspective.

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PART I. TEXTS ON ECONOMICS.

At present Europe’s citizens approve of the enlargement of the European


Union and the entry of ten new member states scheduled for 2004. In addition to
Poland, Hungary and the Czech Republic, the accession countries comprised Latvia,
Lithuania, Estonia, Slovakia, Slovenia, Cyprus, arid Malta.
In June 2002 the Council of Ministers of the European Union approved a
regulation requiring all listed (publicly-traded) companies in all member states to
prepare their consolidated financial statements using International Acco unting
Standards (IAS) by no later than 2005. The other companies must comply by 2007.
All that requires extensive system changes.
The transition to IAS is now an urgent issue for 7,000 companies in the
European Union that currently report under national GAAP, and for other countries
and companies that are planning to adopt IAS.

VOCABULARY NOTES
to set устанавливать, определять
though хотя
to join присоединяться к
to debate обсуждать
public opinion poll опрос общественного мнения
to support поддерживать
support поддержка
to improve улучшать (ся)
improvement улучшение
to enlarge увеличивать (ся)
enlargement увеличение
entry вступление
to schedule намечать, планировать
schedule расписание, график
access доступ, вступление
to approve одобрять
approval одобрение
regulation правило
regulations устав
LISTED котирующийся на фондовой бирже
consolidated financial statement сводный баланс
extensive обширный

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PART I. TEXTS ON ECONOMICS.

transition переход
urgent срочный
issue вопрос, проблема
to report отчитываться, представлять отчет
IAS = International Accounting Международные стандарты
Standards бухгалтерского учета
GAAP = Generally Accepted Общепринятые принципы
Accounting Principles бухгалтерского учета

Answer the questions


1. What fifteen countries formed the European Union?
2. Has the Union enlarged since then?
3. What are the new member states?
4. Have they all joined the euro?
5. What else do you know about the latest developments in respect of the EU?

HOW IS FOREIGN TRADE ENCOURAGED?


When every country is allowed to do what it does best – letting the French
excel is fashion, on the Japanese in electronics, and the American in aircraft, for
example – the world economy prospers. With free trade, whoever produces the best
product at the best price can sell these products aroun d the world, benefiting
consumers everywhere.
By encouraging foreign trade, countries expose their own producers to foreign
competition, which can be disastrous for many poorly managed companies. This can
lead to short – term layoffs and idle factories. In the long run, however, foreign
competition usually forces companies to be more efficient and more competitive,
helping the country to become a successful and profitable member of the global
economy.
Free trade is based on the notion of open markets. With a level playing field,
companies is one country can compete openly with companies of other countries to
sell their goods in foreign markets.
When a government wants to encourage a new trading partner, it removes
restrictions and barriers to its internal market. This courtesy, called most favoured
nation status in the United States, in provided to countries whose political and
economic policies are seen to merit favoured status. Countries may also encourage

40
PART I. TEXTS ON ECONOMICS.

trade by allowing importers and exporters to barter goods. For example, in order to
overcome a temporary scarcity of hard currencies in the Soviet Union, Pepsi -Cola
traded soft drinks for vodka, which was then sold for dollars, yen, or marks in the
West.
When a country wants to encourage its own exports, it can provide incentives
to make the products more competitive on the world market. Some countries provide
loans or grants to foreign buyers of a country's goods and services through state-
supported export-import banks. These “ехim” banks provide low-cost loans-called
export credits – that help stimulate exports. These loans are sometimes criticised for
going too far, encouraging exports at the expense of producers in other countries.
At times, countries might want to encourage imports of foreign goods and
services to decrease international tensions resulting from trade imbalances. When
Germany and Japan were criticised for running large trade surpluses in the 1980s,
for example, they undertook measures called “external adjustment” to increase their
imports. One way to encourage imports is to increase the value of a country’s
currency, making foreign goods and services less expensive then locally -made
product.
Another way to encourage imports is to give the economy a shot in the a rm by
lowering interest rates, stimulating purchases at home and abroad. This cheaper
money usually means more sales of goods such as televisions and automobiles. In
countries such as Germany, where money consumer goods are imported, lowering
the interest rates can encourage imports of everything from Vietnamese rice to
Canadian sporting goods.
Another way to encourage imports would be to reduce cultural barriers that
may limit purchases of foreign products. For example, the Japanese government
undertook a program in the 1980s to convince Japanese consumers to buy more
foreign products (such as U.S. beef) in an effort to ease the threat of retaliatory trade
sanctions from its unhappy trading partners.

VOCABULARY NOTES
foreign trade иностранная торговля
free trade свободная торговля
o expose выставлять
idle factories бесполезные фабрики
to be disastrous быть гибельным
foreign competition иностранная конкуренция

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PART I. TEXTS ON ECONOMICS.

remove restrictions удалять препятствия


internal market внутренний рынок
temporary scarcity временный недостаток
hard currency обесцененная валюта
external adjustment внешние поправки
purchase покупка
cheaper money обесцененные деньги
trading partners торговые партнеры

Answer the questions


1. When does world economy prosper?
2. What helps the country to become a successful and profitable member of
global economy?
3. What are open markets?
4. What does a government do in order to encourage a new trading partner?
5. How does the country encourage its own experts?
6. What can you say about imports of foreign goods and services encourage?

WHAT ARE TRADE SURPLUSES AND DEFICITS?


Just like any business, a country has to keep track of its inflow and outflow of
goods, services, and payments. At the end of any given period, e ach country has to
look at its “bottom line” and add up its international trade and investments in one
way or another.
The narrowest measure of a country’s trade, the merchandise trade balance,
looks only at “visible” goods such as videocassette recorders, wine, and motorcycles.
Trade in visible goods is commonly referred to as the trade balance even though it
includes only those tangible goods that can actually be loaded on a ship, airplane, or
whatever other means of transports to move goods from one country to another.
The current account is a better measure of trade, because it includes a country’s
exports of services,in addition to its visible trade. It may not be obvious, but many
countries make a lot of money exporting “invisibles” such as banking, accounting,
and tourism. A tourist abroad, for example, “buys” hotel and restaurant services in
the same way as a consumer at home would buy an imported appliance. Movies and
banking services have to be paid for just like bags of rice.

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PART I. TEXTS ON ECONOMICS.

The current account tells us which countries have been profitab le traders,
running a current account surplus with money in the bank at the end of the year, and
which countries have been unprofitable traders, having imported more than they ’ve
exported, running a current account deficit, or spending more than they've ea rned.
Trade deficits and surpluses are balanced by payments that make up the
difference. A country with a current account surplus, for example, can use t he extra
money to invest abroad. A country running a current account deficit has to look
abroad for loans or investments, or be forced to dip into its own reserves to pay for
its excessive imports. All of these payments and transfers of funds are added up in a
country's capital account.
The widest measure of a country’s trade is called its balance of payments. It
includes not only payments abroad, but the goods, services, and all transfers of funds
that cross international borders. The balance of payments adds up everything in a
country’s current account and capital account. Since all the trade in goods and
services is “balanced” by the international transfers of funds, the balance of
payments should add up to zero at the end of accounting period. Every banana, every
automobile, every investment and payment that crosses a country’s borders gets
included in this final of international trade and investment – the balance of payments.

VOCABULARY NOTES
trade surpluses торговые излишки
inflow and outflow приток и утечка
merchandise trade balance коммерческий баланс
visible видимый
current account текущий счет
appliance приспособление, прибор
profitable прибыльный

Answer the questions


1. What track of goods, services and payments has a country to keep?
2. What tangible goods does the trade balance include?
3. Why is the current account a better measure of trade?
4. What does the current account tell us?
5. What payments and transfers of funds are added up in a country's capital
account?
6. What is the widest measure of a country's trade?

43
PART I. TEXTS ON ECONOMICS.

HOW ARE BONDS TRADED?


Bonds are traded around the world twenty-fours a day, usually in trading rooms
of banks and securities houses that are connected by an elaborate system of electronic
communications foment. The largest international capital markets are based in
London, New York, and Tokyo, but bonds are traded in almost every official center
in the world, from Paris to Bangkok, from Abu Dhabi to Vancouver.
Since it is difficult for bond investors to find individual buyers and sellers,
they usually go to professional “market-makers” who buy and sell their bonds for
them. Although some bond trading takes place on public trading floors like stock
exchanges, most of the world's fixed-income securities, or bonds, are traded by banks
and securities houses acting as market-makers of behalf of their clients.
Bond markets are just like any other competitive market in that traders make
money by buying for less and selling for more. To buy or set a bond, an i nvestor
goes to a trader who makes a “market” with two prices: a “bid” prices and an “offer”
price. A trader makes money by buying bonds at the lower bid price and by selling
them at the higher office. The difference between the two prices is called the spread.
Bond traders are forced by the market to keep their prices and spreads
competitive. Some markets are so competitive that the bid and offer prices are quoted
in fractions of a percent, sometimes given as 1/32 nds.
Bonds are usually traded with priced on a percentage of their original face
value. When the price of a thousand-dollar bond rises by 16/32, or one half of one
percent, its value rises by five dollars. Since the original value of the bond and its
interest rates do not change, adjusting the bond’s price it is a new yield. Bond yield
calculations are so complex that most traders use calculators to determine which
prices bring a bond's interest rate in line with changing market.
In the international capital markets, some bonds, such as U.S. Treasu ry bonds,
serve as bellwether indicators of the market as a whole. Because of the enormous
amount of U.S. Treasury debt issued, international investors prefer to use this market
for a large part of their trading and investing. U.S. government securities ar e said to
be the most liquid bonds in the world because they can be traded internationally in
large quantities at almost any given time.

44
PART I. TEXTS ON ECONOMICS.

VOCABULARY NOTES
bond облигации
security безопасность, гарантия
elaborate тщательно разработанный, подробный
base база, основание
invest вкладывать, помещать
seller продавец
acting временно исполняющий обязанности
behalf для, ради, в пользу
spread распространяться
quote цитировать, ссылаться
fraction частица
value ценность, стоимость, величина
rice поднимаются, увеличиваются
original первоначальный, подлинный
rate норма, расценка, темп, скорость
adjust улаживать
yield уступать, сдаваться, производство
calculate вычислять
determine определять, решаться
indicate указывать, требовать
amount сумма, итог, количество
quantity количество

Answer the questions


1. Where are bonds traded in?
2. What is called «the spread»?
3. Why do most traders use calculators?
4. Why are U.S. government securities the most liquid bonds in the world?

SKILLS OF NEGOTIATING
Most negotiations are conducted with a view to reaching a compromise
agreement. Both parties together move towards an outcome which is to mutual
benefit.
This is a range of tactics which can help conduct negotiations.

45
PART I. TEXTS ON ECONOMICS.

It’s no use immediately discussing business matters. The topic at the outset of
negotiations should be neutral, non-business. It could be immediate experiences, the
sort of journey the visitor has had, football, ice-hockey, the morning’s newspaper
headlines, common interests, etc.
Five per cent of the negotiating time is devoted to breaking the ice. The two
parties adjust their thinking and behavior to one another.
If you want to follow the reaction of your visitor introduce in your speech the
question – “Agree?”
At the very beginning of the talks get agreement covering the purpose, plan,
agenda of a meeting.
Here is some advice to a negotiator.
1. First discuss major items, then minor items.
2. Follow the headlines of the plan one by one.
3. Come over to the next point after you have resolved the previous one.
There are always differences of view between the parties.
Here is some advice on problem – solving tactics.
1. Present a problem in general and obtain the other party's view on it.
2. Look together at the possibilities of joint advantage.
3. Suggest practical actions to resolve a problem.
If negotiations are difficult and you are in a deadlock, take time -out. It'll help
you build bridges between yourself and your partner when resume negotiations.

VOCABULARY NOTES
to mutual benefit к взаимной выгоде
agenda повестка дня
adjust приспосабливать
deadlock тупик, безвыходное положение
expertise опыт

Answer the questions


1. What is the purpose of business negotiations?
2. What should be the topic at the outset of negotiations?
3. Why is it important to break the ice?
4. What are the tactics of conducting negotiations?
5. How should parties come out of a deadlock situation?
6. What would you say to your partner at the very first moment of the talks?

46
PART I. TEXTS ON ECONOMICS.

7. How would you break the ice if


a) you see your visitor for the first time?
b) your visitor is your long-standing partner and you know his family and his
hobby?
8. What would you say at the close of the talks if
a) you've come to a compromise?
b) you've failed to reach a compromise?

MARKETING
MARKETING is often confused with sales or with advertising, but it is these and
much more. Marketing is a complete process within the business which includes:
– finding out what the customer wants – this is called market research and
involves finding out what types of products are wanted (product policy) and what
prices consumers are prepared to pay
– helping to produce the right product at the right price
– persuading customers to buy the product – by means of advertising and
packaging
– transporting the product to the customer in the most convenient and efficient
way which means distribution.
The easiest way to remember what marketing is all about is to remember what the
marketing people call the marketing mix, i.e. the four Ps:
– product
– price
– promotion
– place
Product involves decisions about the product's quality, its style and design,
the branding policy (what to call it and how to ensure that customers recognise
the brand name), how to package it and what guarantees to offer.
Price means the need to set not only the price itself but also any discounts
which might be given and any allowances permitted, e.g. $50 for your old cooker
when you buy a new one.
Marketing involves the choice of how the product is promoted – the
advertising and the publicity it is given.
Place refers to how the product is distributed and through what types of
shop or other organisations.

47
PART I. TEXTS ON ECONOMICS.

VOCABULARY NOTES
маркетинг, создание рынков сбыта или
marketing
спроса
salesmanship навязывание, проталкивание товара
basic needs основные потребности
consumer потребитель
product development разработка изделия
challenge бросать вызов

Answer the questions


1.What is the fundamental difference between salesmanship and marketing?
2.What are the key elements of marketing?
3.What is the driving force of marketing?
4.What is the best way to win long-term loyalty to a product?

MARKETING TODAY
Marketing is a new science. What has been around previously is the art of
salesmanship. Salesmanship is the art of manufacturing something and making
another person want it. Marketing is the art of finding out what the other person
wants, then manufacturing it for him.
In a market of multiple choice, it is no longer sufficient to produce a product
and show your customers that it satisfies one of their basic needs. You must show
them it provides benefits other products fail to provide, that it can be supplied at a
competitive price and above all, supplied reliably. But in this fastchanging world,
competitors catch up more quickly than ever.
Preferences that consumers have for this or that product work for shorter and
sorter periods. Choice makes marketing work.
Companies need to be constantly engaged in product development, if they wish
to grow and make profits. Coca Cola was successful for many years with one product
in one size until Pepsi Cola challenged them with a bottle double the size at the same
changes. Today Coca Cola has many different soft drinks , cheeses, wines, movie
companies, television production companies, to name only a few of its holdings.
Multiple choices for the consumer is the motor that drives the marketing
vehicle.

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PART I. TEXTS ON ECONOMICS.

VOCABULARY
to confuse смешивать, перепутывать
to confuse smth with smth
перепутать что-либо с чем-то другим
different
marketing mix комплекс маркетинга, маркетинг-микс

to persuade убеждать
convenient удобный
promotion продвижение, содействие
allowance скидка
to permit/to give allowance давать скидку

Answer the questions


1. What is market research?
2. With what notions is marketing sometimes confused?
3. What are the four Ps?
4. What does the term branding policy mean?
5. What allowances can sometimes be permitted to attract con sumers?
6. What is the marketing mix?

THE FOUR P’S


There are four principal controllable factors that provide the most effective
choice for the consumer – the Four P’s: product, price, place and promotion. The
owner of factory manufacturing transportation equipment could produce an economy
car, a luxury car, truck, van, tractor, motorcycles and apply different marketing
techniques.
Place includes location of production and distribution. The place to see your
product could be dealer's showrooms or directly fro m the factory or from catalogs,
direct-mail coupons, even telemarketing with telephone sales people or through
computer shopping services.
Promotion includes all forms of marketing communication (advertising, direct
mail, customer service, image, special events, sales and the product or service itself).
Promotion is the most complex thing-how to select and divide your market according
to be type of product, its price and where it will be available. Each group of the
population has its own values to which you want to make your product appeal.

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PART I. TEXTS ON ECONOMICS.

The most controllable of these factors is the first “р”. – Product (service).
All products and services have what have been traditionally called “product
life cycles”.
The stages of the product life cycle are: introduction, growth, maturity and
decline.
The length of a product life cycle depends upon the
– intensity of the competition;
– extent to which the new product is an innovation, a modification of an
existing product;
– introductory timing of technologically superior products;
– marketing techniques.

VOCABULARY NOTES
controllable factors управляемые факторы
promotion продвижения товара
distribution распространение распределение
marketing communications маркетинговые коммуникации
product life cycle жизненный цикл продукции
decline спад деловой активности

Answer the questions


1.What are the controllable factors in marketing?
2. What does the pricing policy of a firm depend on?
3.What is the product life cycle?
4.What can prolong the product life cycle?

COMPUTERS AS TOOLS FOR MARKETING


Since 1975 the personal computer (PC) has changed the world of business.
In the past, the slide ruler, adding machine, the telegraph, the telephone, the hand
calculator and the airplane each greatly affected the way business is done. Today
the computer has begun to greatly affect the marketing field.
Computer programs are now available for collecting, assessing and analyzing
data and even projecting or predicting the future based upon current trends. Some
programs have been developed that can simulate potential market conditions so
that marketers can pretest strategies.

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PART I. TEXTS ON ECONOMICS.

With the use of telephone modems, connected to PC's and computer printers
and data base marketers today can assess information about any market, segment
of market, even a specific buyer anywhere in the world right from their own office.
Computer software is now available to write data collecting questionnaires,
job interview forms, analyze advertising media effectiveness, sales and market
trends.
Some US companies in specific marketing areas of consumer goods, forest
products, mining products and capital equipment plan for the future up to 50 years
by forecasting trends in possible and probable long-term marketing conditions.

VOCABULARY NOTES
slide ruler логарифмическая линейка
modem модем
software математическое обеспечение
questionnaire вопросник, анкета, опросный лист
char схема, таблица, чертёж

Answer the questions


1.What inventions had a revolutionary effect on business management?
2.Why is PC the most effective tool for marketing now?
3.What computer programmes are now available to assist a manager?
4.Why is it very important for a marketing manager to stimulate potential
market conditions?
5.What is the practical application for computer programmes ?

APPLICATION OF COMPUTERS
Computers are getting deeper and deeper into our life. They are indispensable
in space research, communication, medicine, metallurgy, light industry, information
technology and many other branches of industry.
Many countries have introduced computers into agriculture, education,
transport and many other spheres. Computers provide security and safety of various
processes, diagnose numerous cases and do a lot in monitoring different
developments. In short, they help to carry out increasingly complex tasks and their
application sometimes helps to prevent disasters, tragedies and accidents.

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PART I. TEXTS ON ECONOMICS.

Many people have a high degree of computer literacy. Computer games are
also now very popular with children, young men and grown -ups.
Here is a short curious newspaper item about rather unexpected application of
computers:
Telltale computers
The managements of some American schools have found an original application for
computers.
Now teachers simply feed into the memory of the machine names of the absentees and it
begins to phone their parents and warn that their children have missed lessons.
The teachers and parents like the new system and only pupils fall out of favour with it.

VOCABULARY NOTES
indispensable необходимый, обязательный
to monitor отслеживать, контролировать
disaster катастрофа
accident несчастный случай
computer literacy компьютерная грамотность
game игра
computer game компьютерная игра
curious любопытный
telltale ябедник, болтун
to feed (fed, fed) питать, снабжать (материалом)
to feed into the memory заносить в память
to be absent from a lesson отсутствовать на уроке
absentee отсутствующий
to warn предупреждать
to fall in love/favour with полюбить
to fall out of love/favour with разлюбить

Answer the questions


1. Did you find the information of the newspaper rather curious?
2. Whose idea was it to use computers in that way?
3. Who liked and who disliked that idea?
4. And what is your attitude to that idea?
5. Could you offer a better idea?

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PART I. TEXTS ON ECONOMICS.

THE INTERNET
Text 1.
The Internet is a network of networks. A computer network is a group of
computers that have been connected so they can communicate with each other. They
can send messages to each other and can share information in the form of computer
files. The Internet connects more than 18,000 of these net works, and more are being
added all the time. On those net works are millions of computers, computer terminals
and users – about two million computers and as many as 30 million users, according
to some estimates. And it's growing by around 1,000 computers a day. It's no wonder
that the president of ISOC (the Internet Society) recently suggested that the Internet
could reach 1 billion people in the not-too-distant future.
There's nothing astounding about computer networks, Many small companies
have networks that connect anywhere from two or three computers to thousands of
them.
But the Internet isn't just a network. It's a network of networks. Lots of
different networks have been joined to produce the wor ld's largest group of
connected computers. Some of the networks are run by government bodies, some by
universities, some by businesses, some by local community library systems, and
some are even run by schools. Most are in the United States, but many are o verseas,
in countries ranging from Australia to Zimbabwe. The Internet might make it
possible for you to communicate with all these people on all these computer
networks through electronic 'mail'.
When you connect to the Internet, you have the opportunity to connect to
thousands of different systems. Those computers contain government arch ives,
university databases, local-community computing resources, library catalogs,
messages about any subject you can imagine, and millions of computer files (over
two million at last count) containing photographs, documents, sound clips, video,
and whatever else you can put into digital form.

Text 2.
The best way to think of the Internet, or Net as it is often called, is a vast global
network of networks connecting computers across the world. At present, more than
billion people use Internet worldwide. They use the Net for transferring data, playing
games, socializing with other computer users, and sending e -mail.

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PART I. TEXTS ON ECONOMICS.

The Net was dreamt up in the late 1960s by the US Defence Department's
Advanced Research Projects Agency which decided that it needed a means by which
messages could be sent and received even if phone lines were inoperative. In 1969,
there was a network of just four computers. By 1972 the number had risen to 40.
About this time the idea of electronic mailbox was born. By 1984 the Internet began
to develop into the form we know it today.
The Internet can be divided into five broad areas.
Electronic mail, which is much faster than traditional mail. Anything that can
be digitized (converted into digital form) – pictures, sound, video – can be sent,
retrieved, and printed at the other end.
Information sites. This is perhaps the fastest growing area of the Internet as more
and more people put their own information pages on line. Computers process vast
amounts of information very fast, by specifying a key word or phrase. The computer
can then search around the Net until it finds some matches. These information sites
are usually stored on big computers that exist all over the world. The beauty of the
Net is that you can access all of them from your home, using your own PC.
THE WORLD WIDE WEB, usually referred to as WWW or 3W, is a vast network
of information databases that feature text, sound, and even video clips. On the W WW
you can go on a tour of a museum or exhibition, see the latest images from outer
space, go shopping, and get travel information on hotels and holidays.
USENET is a collection of newsgroups covering any topic. Each newsgroup
consists of messages and information posted by other users. There are more than
10,000 newsgroups and they are popular with universities and businesses.
TELNET programs allow you to use your personal computer to access a
powerful mainframe computer.

Text 3.
The Internet, a global computer network which embraces millions of users all
over the world, began in the United States in 1969 as a military experiment. It was
designed to survive a nuclear war. Information sent over the Internet takes the shortest
path available from one computer to another. Because of this, any two computers on the
Internet will be able to stay in touch with each other as long as there is a single route
between them. This technology is called packet switching. Owing to this technology, if
some computers on the network are knocked out (by a nuclear explosion, for example),
information will just route around them. One such packet-switching network which has

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PART I. TEXTS ON ECONOMICS.

already survived a war is the Iraqi computer network which was not knocked out during
the Gulf War.
Most of the Internet host computers (more than 50%) are in the United States,
while the rest are located in more than 100 other countries. Although the number of
host computers can be counted fairly accurately, nobody knows exactly how many
people use the Internet, there are millions worldwide, and their number is growing
by thousands each month.
The most popular Internet service is e-mail. Most of the people, who have
access to the Internet, use the network only for sending and receiving e -mail
messages. However, other popular services are available on the Internet: reading
USENET News, using the World-Wide Web, telnet, FTP, and Gopher.
In many developing countries the Internet may provide businessmen with a
reliable alternative to the expensive and unreliable telecommunications systems of
these countries. Commercial users can communicate cheaply over the Internet with
the rest of the world. When they send e-mail messages, they only have to pay for
phone calls to their local service providers, not for calls across th eir countries or
around the world. But who accually pays for sending e -mail messages over the
Internet long distances, around the world? The answer is very simple: users pay their
service provider a monthly or hourly fee. Part of this fee goes towards its costs to
connect to a larger service provider, and part of the fee received by the larger
provider goes to cover its cost of running a worldwide network of wires and wireless
stations.
But saving money is only the first step. If people see that they can ma ke money
from the Internet, commercial use of this network will drastically increase. For
example, some western architecture companies and garment centers already trans mit
their basic designs and concepts over the Internet into China, where they are
reworked and refined by skilled – but inexpensive – Chinese computer-aided-design
specialists.
However, some problems remain. The most important is security. When you
send an e-mail message to somebody, this message can travel through many different
networks and computers. The data is constantly being directed towards its
destination by special computers called routers. However, because of this, it is
possible to get into any of the computers along the route, intercept and even change
the data being sent over the Internet. In spite of the fact that there are many good
encoding programs available, nearly all the information being sent over the Internet
is transmitted without any form of encoding, i.e. “in the clear”. But when it becomes

55
PART I. TEXTS ON ECONOMICS.

necessary to send important information over the network, these encoding programs
may be useful. Some American banks and companies even conduct transactions over
the Internet. However, there are still both commercial and technical problems which
will take time to be resolved.

VOCABULARY NOTES
network сеть
терминал, конечное устройство, электронное
terminal устройство для ввода/вывода данных в
компьютер
estimates оценка, приблизительная цифра
according to some
по некоторым оценкам
estimates
it's no wonder that... неудивительно, что ...
astounding поразительный
archives архив
database база данных
digit цифра
digital adj цифровой
to log on подсоединиться (к компь ютеру)
to log in входить в, систему
to entail вызывать, влечь за собой
password пароль
user пользователь
digital form цифровая форма
retrieve извлекать
vast amount огромное количество
access доступ
swith переключить
survive выживать
route маршрут

Answer the questions


1. What is the Internet?
2. What was the Internet originally designed for?
3. What country are most of the Internet host computers in?

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PART I. TEXTS ON ECONOMICS.

4. What is the most popular Internet service?


5. Whom do you have to pay for sending e-mail messages?
6. When was the idea of electronic mailbox born?
7. What areas can the Internet be devided into?
8. What are Usenet and Telnet?
9. What is a computer network?
10. The Internet is a network of networks. What does it mean?
11. What opportunity do you have when you connect to the Internet?
12. How can you describe a log-on (or log-in) procedure?

57
PART II.

Dialogues on business activity

DIALOGUE 1.
Mr. J. – Manager of American company, who frequently travels to Russia on
project development, discusses day-to-day business contacts with Russian
managers. He is interviewed by the Trade Journal reporter.
Reporter: What changes have come about now that there is a direct
contact with Russian organizations?
Mr. J. More flexibility in what we can propose, especially financing
terms. And greater speed of response.
Reporter: Are you talking to different people now?
Mr. J. Sure. We are talking directly to plants.
Reporter: What level of official do you meet?
Mr. J. I speak with General Managers from the plants. We discuss in
openness, how we can get things done.
Reporter: Do you have contact on a continuing basis?
Mr. J. Cartainly. We always have a regular contact with people who
use our technology.
Reporter: Would you say the changes under way in Russian foreign trade
are dramatic?
Mr. J. Yes. The change is quite noticeable.
Reporter: Primarily is it the direct contact?
Mr. J. The direct contact and their willingness to do business. But
still there are some problems.
Reporter: What is it in particular?
Mr. J. Communications are still a big problem. Some plants don't
have a fax machine or a teleprinter.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

Reporter: When you weigh the advantages of direct contact against the
difficulties in communication, does the new system still come
out to everyone's advantage?
Mr. J. Oh, absolutely. Compared to the benefits, communications is a
minor frustration.
Reporter: What is the most fundamental change in attitudes to business?
Mr. J. Our Russian partners are ready to use new and innovative ways
of doing business.
Reporter: Can you explain that?
Mr. J. They are inclined now to experiment, to adjust to different ways
of doing business, and to say yes.

VOCABULARY NOTES
project development научно-техническая разработка
weigh взвешивать, весить
frustration неудовлетворенность
innovative инновационный
to be inclined быть склонным или расположенным

EXERCISES
1. Say what words in the text mean:
1. Contract without intermediaries
2. Facsimile
2. Answer the following questions
1. Due to what factors has the communication with Russian partners
become easier?
2. Why is it very important for foreign suppliers to have regular
contact with Russian plant and factory managers?
3. Why has the role of Plant Management increased?
4. Why is it very important for factory managers to experiment?
5. What are the advantages of direct sale in foreign trade?
3. Conduct the talks.
You are a plant manager. During the talks with your partner suggest an
innovative approach to business which could be of interest to both parties. You are
ready to experiment but at the same time you are rather cautious.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

DIALOGUE 2.
In the course of making enquiries and offers, the parties very often meet to
agree upon one or another question. Here is specimen business talk:
Seller: Well, let's get started. You know, with this delivery problem I'm
sure there's room for negotiation.
Buyer: Oh yes, we stressed in our enquiry that we needed the machine
urgently. A speedy delivery is of vital importance for us.
Seller: Well, this is how we see it. We can deliver the machine in ten
weeks and install it four weeks after that.
Buyer: Oh, I am afraid these periods are too long. We cannot agree with
you.
Seller: These are in fact the usual periods. It's pretty normal in this
kind of operation.
Buyer: When we mentioned speedy delivery we expected you to
deliver the machine in six weeks at the latest and to install it
three weeks after that.
Seller: I see what you mean. But that would be difficult. You see we
have a lot of orders to handle at present, and moving just one
machine is a major problem. Look, if I can promise you
delivery in seven weeks, does that help?
Buyer: I am afraid I cannot agree to that.
Seller: Well, you are really asking us for something that is very
difficult. I've already offered you seven weeks. I'll have to
consult with my colleagues and let you know our reply this
week.
Buyer: I've got a proposal. If you deliver the machine in 6 weeks we
shall place another order for the second half of the year as well.
Seller: Good, on that basis I suppose we might be able to look at some
kind of arrangement. In fact, if you can promise another order
I think we could accept your terms.
Buyer: Very good. Let's consider it settled. I'll confirm our next order for
the second part of the year in writing tomorrow.
Seller: I'm very glad we have come to an agreement.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

VOCABULARY NOTES
course ход, течение
in the course of smth в ходе чего-либо
party сторона, участник
a party to the contract сторона контракта
to agree соглашаться
to agree with smb соглашаться с кем-либо
to agree to smth соглашаться на что-либо
I agreed to his plan. Я согласился с его планом.
договориться о чем-либо,
to agree (on/upon) smth
согласовать что-либо
We agreed the plan. Мы согласовали план.
speedy быстрый, срочный
speedy delivery срочная поставка
of vital importance первостепенной важности
устанавливать, монтировать,
to install
инсталлировать
installation установка, инсталляция
pretty довольно
to consult советоваться
to consult with smb советоваться с кем-либо
consultation консультация
to give a consultation to smb дать консультацию кому- либо
colleague коллега
acceptance принятие, прием; акцепт

EXERCISES
1. Complete the sentences, as in the text:
1. In the course of making enquiries and offers, the parties very often...
2. You know, with this delivery problem I'm sure there's room ...
3. When we mentioned speedy delivery we expected you...
4. Look, if I can promise you delivery...
5. I'll have to consult...
6. If you deliver the machine in six weeks...
7. In fact, if you can promise another order...

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PART II. DIALOGUES ON BUSINESS ACTIVITY

2. Translate into Russian:


1. Well, let's get started.
2. Oh, I am afraid these periods are too long.
3. These are in fact the usual periods.
4. It's pretty normal in this kind of operation.
5. I am afraid I cannot agree to that.
6. Well, you are really asking us for something that is very difficult.
7. Well, on that basis I suppose we might be able to look at sorme kind of
arrangement.
8. I'm glad we have come to an agreement.
3. Sum up:
what the buyer's position was
what the seller's position was
to what agreement the parties came
4. Reproduce the dialogue making it shorter.
5. Act out another similar dialogue, changing the goods and time of delivery.

DIALOGUE 3.
Andrey Ivanov is a well-know manager of a restaurant in Moscow. He is very
active in the co-op movement. Now he is Secretary for International Relations of the
Association of Cooperatives. During his visit to the United States he was interviewed
by the Trade Journal Reporter.
Journal: Could you tell us how you started?
Ivanov: We opened our restaurant two years ago at some risk.
Journal: Did you invest money?
Ivanov: Any business started in the US or Russia need investment of
money.
Journal: How did you select the restaurant?
Ivanov: It is located in the old center of Moscow and attracts lot of people.
Journal: Did you have to redecorate the restaurant?
Ivanov: Yes, it was an apartment. So we had to rebuild it completely
to provide it with additional electric power.
Journal: Did you have any problem?

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PART II. DIALOGUES ON BUSINESS ACTIVITY

Ivanov: There were problems, but not so many.


Journal: How many people can you serve at the restaurant at one sitting?
Ivanov: Up to 100-150, but we are expanding.
Journal: You accept only rubles?
Ivanov: Not only. Hard currency as well.
Journal: And the last question. Why are you here in the US?
Ivanov: I want Russian undertakers to negotiate deals with
American businessman.
Journal: We wish you good luck.

Dialogue 3.1.
This is a conversation A. Ivanov had with a TV correspondent when he was
on a business tour to a West European country.
Journalist: What are you immediate plant?
Ivanov: I'm here to form a partnership with a local company.
Journalist: What sort of partnership will it be?
Ivanov: The idea is to build a leisure center for visiting quests.
Journalist: What kind of leisure complex is it going to be?
Ivanov: It'll have a hotel, a picture gallery, a concert hall, a swimming
pool and other facilities for people to relax. There'll be a
restaurant where people will enjoy delicious food.
Journalist: What kind of food?
Ivanov: It'll be the Russian and Georgian food to meet the most exquisite
tastes.
Journalist: What about the commercial side of the joint enterprise?
Ivanov: It'll be an equal holding. Each partner will have 50 per cent of
shares.
Journalist: And who will be your counterpart?
Ivanov: I'm sorry, but I wouldn't like to disclose it as yet.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

Dialogue 3.2.
This is another talk A. Ivanov had with the Trade Journal Reporter.
You’ve just said that you are Secretary of the Association of
Journal:
Cooperatives. Why is it necessary to have an Association?
To assist cooperatives to stand on their own, help them enter the
Ivanov:
international market, create currency funds.
Journal: What is an example of a workable cooperative program in Russia?
We have coop plants in Moscow with a huge annual turnover. The
Ivanov:
number of employees in some of them is 2000-2500 people.
Journal: What is coop plant?
It is an unprofitable state-run enterprise that has be transferred to a
Ivanov:
coop.
Journal: How is it made profitable?
The first thing done is to cut back on employees, leaving only 10 per
Ivanov: cent of the administrative staff, and all of sudden they start to make
profit.
Give us a model of some cooperation between an American
Journal:
business company and a Russian cooperative.
We could provide US businessmen with two or three buildings to
Ivanov: assemble computers in Moscow. It could be IBM or any other
company. It is no secret that there is a cheap labour market in
Russia.
Journal: Would this be joint venture?
Ivanov: It could be.
In such a venture, the very first basic question that a US company
would ask is: How do we maintain quality control so that the
Journal:
product I'm providing will be of high quality?

Ivanov: You have to check it. Your own managers will be there.
Yes. But since quality control has been widely discussed in Russia
Journal: as a problem, how do you overcome doubtful feelings among
Westerners?
Our West European partners are not so doubtful. Firms from Italy,
Belgium, Holland, Finland have entered into partnership with
Ivanov:
Russian coops. My understanding, and I am an economist, is that
you have an oversupply of goods and need new markets. Your small

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PART II. DIALOGUES ON BUSINESS ACTIVITY

companies are experiencing enormous competition here. If they


enter our market, both sides will gain from it.
I fully agree. I think, we could work together to improve
Journal: cooperation possibilities, as well as environment for improved
business.
I quite agree with you. We can introduce you to very interesting
Ivanov:
people who are in the co-op movement. They are outstanding
businessmen in the country.

VOCABULARY NOTES
leisure досуг
holding владение акциями
employee служащий, рабочий
oversupply избыточное предложение товара
shares акции
enter into partnership with a person вступить в товарищество с кем-то
turnover товарооборот

EXERCISES
1. Answer the following questions
1. What is the financial standing of the cooperative?
2. Is it a prestigious restaurant?
3. What is the share of Russian cooperative enterprise in American business?
4. Why is the European business community active in the Russian market?
5. What is the financial standing of the cooperative?
6. What leisure center is the cooperative going to build?
7. What is the financial arrangement of the partnership?
8. Why didn't Ivanov like to disclose the name of his counterpart at this stage?
9. For. what purpose was the Association of Russian cooperatives set up?
10. What is an example of workable cooperative programme in Russia?
11. What could be a model of cooperation between an American company and a
Russian cooperative?
12. How could quality control be maintained?
13. What are the difficulties experienced by small business companies in the USA?
2. Round-table discussion
Hold a round-table discussion with American businessmen who are from small
and medium companies. Discuss the prospects of cooperation.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

3. Conduct the talks.


You are to assume that you want to form a joint venture with an American
company. During the negotiations try to convince your future partner that you are a
solid trustworthy partner.
The areas of discussion: investment project, quality requirements, production
capabilities.

DIALOGUE 4.
PepsiCo, with interests in soft drinks, snack foods and restaurants, has been active
in the Russian market since the early 1970.
Mr. Kendal, chairman of the Executive Committee of the Company, speaks with
the Trade Journal Reporter about business relations with his Russian counterparts
and the marketing techniques employed by the company.
Reporter: There has been a lot of talk about the PepsiCo / Pizza Hut
deal. Is that a joint venture?
Mr. Kendall: Yes. Pizza Hut is a joint venture.
Reporter: There'll be American and Russian participation on the
board?
Mr. Kendall: Oh, yes. The board is going to be mixed.
Reporter: You are reasonably sure the venture will be successful?
Mr. Kendall: We are starting out with two units – one for hard
currency and one for local currency. We are going to
find out first how it works. If it's successful, we'll
expand it.
Reporter: Have you noticed any change in dealing in Russia?
Mr. Kendall: Our relationship with Russia has been good for a very
long time. The principal change is the speed with which
things now happen.
Reporter: Are you optimistic about the future?
Mr. Kendall: Yes, although I think one always has to be cautious. I
have been optimistic about the future of Russian relations
for a long time. I think now the prospects are better than
I've ever seen them.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

EXERCISES
1. Answer the following questions
1. Is PepsiCo a long-standing partner of Russian foreign trade organizations?
2. What are the main features off the Pizza Hut deal?
3. On what condition will the venture expand business?
4. What changes have taken place in Russian foreign trade management and
marketing?
2. Conduct the talks.
Discuss with your potential partner the percentage of shares contributed by
every party to the common stock.
Discuss the currency of payment for the services you are going to offer in the
domestic market.

DIALOGUE 5.
Mr W., an American expert on marketing management, conducted a question
and answer session with Russian managers, who were taking a course at a business
school in the United States.
Expert: What is the role of market research if you want to enter a
foreign market?
Manager:
If you want to begin selling abroad, you must do a lot of
market research. Market research will help you study the
buying mood of consumers, their preferences and dislikes.
You can get this information from embassies, consulates,
chambers of commerce and trade associations, banks and
agents, trade magazines, and customs import and export lists.
If you want professional market research done for you, apply
to specialized consultative bodies furnished with the data base
to study the market situation and forecast the market trends.
Expert: What information is most essential for market research?
Manager: When you assess the market you most get the answer to such
questions as:
Is there a demand for your articles?
What is the law in a country on export-import?

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PART II. DIALOGUES ON BUSINESS ACTIVITY

What soft of competition you'll face?


What are the local marketing conditions?
If the answers are favourable you must then decide exactly
how you will market your product. Should you open your own
office, or employ an agent? If you employ an agent, should he
be a stockiest? (This is particularly important when spare parts
have to be supplied). There is also the question of promotion
of the new line. The media chosen for advertising will vary
according to the product, and according to local preferences
and habits.
Expert: How soon can you expect a return on your investment into the
marketing program?
Manager: As a rule, it doesn't produce an immediate effect. In the initial
period you may even suffer losses. But a thoughtful manager
always acts with an eye to the future. He must see if the
marketing effort will be rewarded.

VOCABULARY NOTES
data base база данных
trend тенденция
assess оценивать
article товар, изделие
stockist фирма, имеющая запасы готовой продукции
return on investment прибыль на инвестированный капитал

EXERCISES
1. Answer the following questions
1. What organizations collect the information about the market situation?
2. What questions must an exporter answer if he wants to enter a new market?
3. How can an exporter promote a new product line?
4. Why is it important for a manager to be a good strategist?
2. Conduct the talks
Act out a negotiation with a selling agent who undertakes to distribute your product
the market of his country. The points of interest for you are:

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PART II. DIALOGUES ON BUSINESS ACTIVITY

1. warehousing capacity of the agent;


2. his ideas on promotion;
3. facilities for maintenance of your machines;
4. split of responsibility between the parties.

DIALOGUE 6.
Here is a specimen telephone conversation between two businessmen with a secretary
answering the call first:
Secretary: Good morning. Consolidated Industries. Can I help you?
Mr Weston: Good morning. I'd like to speak to Mr James Marsh, please.
Secretary: Who's calling, please?
Mr Weston: My name is Weston. I'm from Plant Installations Limited,
Manchester.
Secretary: Will you hold the line a moment, Mr Weston? I'll see if Mr
March is available.
Mr Weston: Yes, thank you.
Mr Marsh: Hello, Marsh is speaking.
Secretary: Oh, hello, Mr Marsh. I've got Mr Weston from Plant
Installations Limited on the line. Can you speak to him now?
Mr Marsh: Oh, yes. Thank you. Put him through, please.
Secretary: You are through now, Mr Weston.
Mr Marsh: Hello, Mr Weston. What can I do for you?
Mr Weston: Good morning, Mr Marsh. I'm phoning to say we have
problems with the spare parts you sent us last week
Mr Marsh: Do you mean those sent under Contract 106?
Mr Weston:: You are quite right.
Mr Marsh: And what are the problems? What's wrong with the spares?
Mr Weston: Well, you see the first problem is that the spares arrived with
a two weeks' delay.
Mr Marsh: Yes, you remember we wrote to you about the delay. It
wasn't our fault. You should take that into account.
Mr Weston: Still the contract stipulated the damages for delays.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

Mr Marsh: Mr Weston, I've got an idea. Next week I'm coming to


London and I'll contact you. I hope we shall come to an
agreement.
Mr Weston: Very good. Then we shall discuss both problems. By the
way when exactly are you coming?
Mr Marsh: Oh Tuesday and I'll ring you up as soon as I come to the
hotel.
Mr Weston: Good. I'm looking forward to seeing you. Good-bye.
Mr Marsh: Good-bye. See you on Tuesday.

VOCABULARY NOTES
to make a telephone call позвонить
syn. to call smb, to telephone smb,
звонить
to ring smb up
line телефонная линия
to hold the line не вешать трубку
На линии мистер Маш.
I've got Mr Marsh on the line
(Звонит мистер Маш.)
имеющийся в наличии,
available
зд. свободный
to put smb through соединить кого-либо по телефону
spare запасной
spare parts запчасти
delay задержка
fault вина
to take into account принять во внимание
damages неустойка

EXERCISES
1. Find the English equivalents in the conversations
1. Доброе утро. Чем могу быть полезна?
2. Я хотел бы поговорить с г-ном Машем.
3. Кто его просит?
4. Не вешайте трубку.
5. Я узнаю, свободен ли он.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

6. Говорит Маш.
7. Вам звонит Вестон.
8. Вы можете поговорить с ним сейчас?
9. Соедините меня с ним.
10.Г-н Вестон, я вас соединяю.
11.Здравствуйте, г-н Вестон. Чем могу быть полезен?
2. Complete the sentences, as in the conversations
1. ... to say we have problems with the spare parts you sent us last week,
2. Well, you see, the first problem is that the spares arrived with...
3. It wasn't our...
4. You should take that into...
5. Still the contract stipulated...
6. Next week I am coming to London and...
7. I hope we shall come to an...
8. By the way when exactly...
9. On Tuesday and I'll ring...
10.I’m looking forward to...
3. Write down answers to the following questions
1. What problems made Mr Weston make the telephone call?
2. Did Mr Marsh admit it was their fault that the goods were not shipped on time?
3. Did Mr Weston mention that damages should be paid to him?
4. Did they settle the problems during the conversation?
5. Where and when did they decide to discuss the problems?
6. Whose initiative was it?
4. Reproduce the conversations
between Mr Weston and the secretary
between Mr Marsh and the secretary
between Mr Weston and Mr Marsh
5. Act out similar conversations
You speak with the secretary of Brown and Co.
You speak with Mr Smith of Brown and Co. about a one week delay of
shipment.
6. a) Translate the following telephone conversations into English and act them
out:
♦ Добрый день.
♦ Добрый день.

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PART II. DIALOGUES ON BUSINESS ACTIVITY

♦ Можно попросить г-на Эрна?


♦ Вы, очевидно, набрали не тот номер.
♦ Это Лондон, 44-0281-375?
♦ Нет. Вы ошиблись.
♦ Извините.
♦ Это фирма «Слим»?
♦ Нет, эта фирма переехала на прошлой неделе. У нее теперь другой
номер телефона.
♦ Извините, а как бы я мог узнать их телефон?
♦ Вы можете позвонить в городское бюро информации и они я
думаю, вам помогут.
♦ Вы не подскажете телефон бюро информации?
♦ Наберите после кода города 0785.
♦ Большое спасибо.
♦ Пожалуйста.
b) Act out a few similar conversations.

DIALOGUE 7.
Business conversation
Mr Weston: Oh, Mr Marsh, I’m so very glad to see you. Did you have a
nice trip?
Mr Marsh: I’m glad to see you too. The trip was quite smooth. And I hope
our talk will be very smooth too.
Mr Weston: Well, then let’s get down to business. I propose to discuss the
second problem and then we shall speak about the delay.
Maybe we shall settle both at a time.
Mr Marsh: Agreed. And what is the second problem?
Mr Weston: Mr Marsh, you see, when the spares arrived we found that the
packaging was all wrong. You packed them in plastic boxes
instead of the metal containers we specified in the contract.
Mr Marsh: I’m awfully sorry about it. May I have a paper testifying to the
damage? It is important for our packers. But as to the damage
we’ll certainly rectify the situation.
Mr Marsh: But did they come safe?

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PART II. DIALOGUES ON BUSINESS ACTIVITY

Mr Weston: Unfortunately 50 pieces were damaged severely and 30


pieces were slightly damaged.
Mr Marsh: We'll do our best to rectify the situation.
Mr Weston: I hope so and what do you suggest?
Mr Marsh: I offer to ship the replacement by air this week.
Mr Weston: And at whose expense will it be done?
Mr Marsh: We’ll certainly cover all the transportation expenses and
insurance.
Mr Weston: Then if you send the replacement by air this week and they
safely reach us we shall forget about the delay or the first
problem.
Mr Marsh: Thank you. I think it's kind of you to make this suggestion.
Mr Weston: And one more thing. Please, send me a fax to confirm the
shipment.
Mr Marsh: Good. I’ll see to it. The fax will be sent the same day the
spares will be shipped from the airport.
Mr Weston: Thank you for cooperation and I hope in future we'll have no
problems at all.
Mr Marsh: I hope so. Thank you again and good-bye.
Mr Weston: Good-bye and happy journey back home.

VOCABULARY NOTES
packaging упаковка, расфасовка
to package упаковывать, расфасовывать
safe целый, невредимый
severely сильно
They were severely
Они были сильно повреждены.
damaged
to rectify исправлять, устранять ошибку
at our expense за наш счет
to suggest предлагать
suggestion предложение
to make a suggestion делать предложение

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PART II. DIALOGUES ON BUSINESS ACTIVITY

EXERCISES
1. Complete as in the talk
1 Oh, Mr Marsh, I'm so very glad...
2 The trip was...
3 Well, then let's get...
4 I propose to discuss the second... and then we shall speak ...
5 When the spares arrived we found...
6 You packed them...
7 Unfortunately 50 pieces were... and 30 pieces were ...
8 I offer to ship...
9 We'll certainly cover...
Reproduce the beginning of the talk before the businessmen get down to business.
Write down the words of Mr Weston proposing to discuss the second problem first:
Well, then
2. Write down answers to the following questions
1. Do you like the way Mr Weston handles the situation?
2. What is your opinion of Mr Marsh?
3. How would you change the settlement of the problem?

DIALOGUE 8.
Opening an account
Here is a specimen talk in a Swiss bank:
Cashier: Good afternoon, sir.
Man: I’d like to open an account, please.
Cashier: Certainly, sir. Do you live in Geneva?
Man: Yes. I’m at the Interpreters' School.
Cashier: Are you a student?
Man: Yes.
Cashier: What sort of account would you like?
Man: A current account, I think.
Cashier: Have you got any large sums to deposit?
Man: No, only a hundred euros or so a month.
Cashier: Well, we can open a current account with a cheque book for you
as long as the initial sum is at least three hundred euros. But I'd
advise you in your case to take an account that gives you more

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PART II. DIALOGUES ON BUSINESS ACTIVITY

interest, and which is more practical. We normally advise students


to open deposit accounts.
Man: Can I take out money whenever I like?
Cashier: Yes. There are two or three types of account. They permit you to
withdraw up to a hundred and fifty euros a month.
Man: Can I receive money directly from abroad?
Cashier: Certainly.
Man: And can I withdraw at a branch office?
Cashier: Certainly, though it may be more convenient to open your
account in our branch near the University.
Man: No, I live quite near here. Do you need a passport?
Cashier: Yes.
Man: I’m afraid I haven't got it on me. Will my student card do?
Cashier: No, I'm afraid not.
Man: I’ll come back later, then.
Cashier: Very good, sir.

Note: The initial sum necessary in order to have a cheque book varies from
country to country and from bank to bank.

VOCABULARY NOTES
interpreter переводчик (устный)
interpretation толкование, объяснение
sort вид, класс
to permit позволять, разрешать
permition разрешение

EXERCISES
1. Answer the following questions:
1. Where did the talk take place?
2. Who were the participants?
3. Why did the young man come to the bank?
4. What did he learn?
5. Was he happy to be served in the bank, to your mind?
2. Use the following phrases in the dialogue:
1.I'd like to open...

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PART II. DIALOGUES ON BUSINESS ACTIVITY

2.Have you got any large sums...


3.We can open a current account...
4.I'd advise you in your case to take an account...
5.We normally advise students to...
6.Can I take out money...
7.They permit you to withdraw...
8.Can I withdraw at...

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PART III.

ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

ROLE PLAY AND GAMES 1. POOR SALES


Problem
An American Agency company signed an agreement with Russian trading
association for distributing Russian goods in the American market. In their
correspondence the American Party criticized the Principal for the poor performance.
The points of criticism are as follows:
1. delays in delivery of the goods,
2. poor supply of spare parts,
3. late arrival of documentation necessary for customs clearance,
4. poor packing.
The American side held a meeting to discuss the situation with their Russian
counterparts; at the meeting the Russian delegation submitted their counter-
argumentation.

Words
principal принципал; лицо, уполномочивающее
другое лицо действовать в качестве агента
performance выполнение, исполнение/договора/

Analyse the case.


Questions
1. What were the points of criticism made by the Agent?
2. Do you find the criticism well-grounded?
3. What could be the counter argumentation of the principal?

Roles
Agent
You are an agent selling Russian goods in the US market.
Your major problem is:

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

– irregular supplies of goods and spare parts.


Ask the Principal to put the deliveries in small lots.
Customs Clearance is also a chronic problem with you as the shipping documents
arrive much later than the goods.

Principal
You act on behalf of the Principal. In your counter-argumen:ation say that sales
are poor because of high prices quoted by he agent.
Once again ask the firm to rent a warehouse of a bigger space. Then you will
have an opportunity to deliver the goods in bigger lots.

Useful language
We are selling at a loss (profit).
We are likely (unlikely) to reach the sales targets.
You'll be charged with a penalty.
I'm always open to offers (ideas).
I’d be obliged if...
Would you please...
I'd be glad to h&ve...
Would you be so good as to...

Further Subjects for Discussion


At present Russian-made goods are only a small part of the American imports.
What should be done to increase the inflow of Russian goods into the American
market?

Written follow-up
In your letter let the Agent know what has been done to rove the delivery
situation in concrete terms.

ROLE PLAY 2. EXCESS NOISE


Problem
During the guarantee period an excess noise level was found in the device.
At a face-to-face meeting with the Buyer the manufacturer promised to deliver
special equipment to cut down the noise.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

A project of sound-proof cover was designed but unfortunately not


commissioned to service.
Since the Seller didn't maintain his pledge the Buyer claimed a penalty for
delay in delivery.
Nonetheless the Surveyor's Report stated that' despite the defect the equipment
was in its running order and unstoppable.

Words and word combinations


excess превышение нормы
device устройство
sound-proof cover звукопоглощающее покрытие
commission вводить в эксплуатацию
maintain one's
выполнять обещание, обязательство
pledge

Encl. Clause of the Contract on guarantee

GUARANTEE
1. The Sellers guarantee:
(а) that the equipment supplied corresponds to the highest achievements of the
world technics for the given type of equipment;
(b) high quality of the materials being used for the manufacture of the equipment
(spare parts), first rate workmanship and high quality of the technical performance and
assembly.
(c) that the equipment supplied (spare parts) is manufactured in full conformity
with the conditions of the present Contract.
(d) completeness of the delivered equipment in accordance with the conditions
of the Contract.
2. The guarantee period of the normal operation of the equipment is to be
_______ months from the date of putting the equipment into operation, but not more
than _____ months from the time of its delivery.
3. If during the guarantee period the equipment proves to be defective or not in
conformity with the terms and conditions of the Contract, the Sellers undertake
immediately, at the Buyers' request, to eliminate free of charge the detected defects by
means of repairing or replacing the defective parts of the equipment with the new ones.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

In this case the Sellers should pay the agreed and liquidated damages in
accordance with the Contracts' terms at the rates stipulated in Clause 3 of the contract
starting from the date of the claim and up to the date when the defects have been
eliminated or the new equipment has been supplied.
However the amount of the penalty should not exceed 10% of the contractual
price of the equipment.
4. The defective equipment will be sent back to the Sellers at their request and
for their account within the dates agreed by the parties.
5. All transport expenses, insurance and other expenses, connected with return or
replacement of the defective goods on the territory of the Buyers' country and of a transit
country as well as on the Sellers' territory are to be borne by the Sellers.
6. The above-said guarantee period in regard to the repaired equipment or newly
supplied equipment will start again from the moment of putting it into operation.
7. If the Sellers fail to eliminate the claimed defects at the Buyers' request
immediately or within 30 days after the date of the claim, the Buyers will have the
right to eliminate the defect on their own account, the Sellers being charged with the
normal actual expenses.
Small defects, the elimination of which is urgent and does not require the
presence of the Sellers, will be repaired by the Buyers charging the Sellers with the
normal actual expenses.
8. If, while considering the claim or eliminating the defect, il will be stated tha t
the defect cannot be eliminated or the replacement of the goods cannot be done within
the dates acceptable to the Buyers but the goods may be used by the Buyers without
the elimination of the defect, the claim may be settled at the request of either part y
by means of downward revision of the price of the equipment within the rates agreed
by the parties.
In case of impossibility for the Buyers to use the supplied equipment the
Buyers will have the right to cancel the Contract in part of the said equipment or in
whole.

Words and word combinations


correspond (with, to) соответствовать
workmanship отделка
performance работа, производительность /о машине/
assembly сборка, монтаж

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

exceed превышать
contractual договорный
for one's (own) account за собственный счет
detect defects обнаруживать дефекты
at someone's request по просьбе, то требованию

Analyse the case


Questions
1. What defect emerged during the Guarantee Period?
2. What was undertaken by the Seller to cut down the noise?
3. Why did the Buyer claim a penalty from the Seller? Was it legitimate?
4. What measures could be taken to put things right?

Roles
Seller
Select the facts proving that the claim is unfounded. Explain why the sound -
proof cover has not been installed. Make arrangements about removing the defect
found.
Buyer
In your opinion the Seller failed to abide by contract obligations. An excess
noise level may be a signal to some malfunction in the equipment. You also believe
that the sound-proof cover should be necessarily installed in order to impr ove the
conditions for the service personnel.
You are free to invent any argument you think fit for the si tuation.

Useful language
date of check дата проверки
отказ, обусловленный погрешностью
design error failure
устройства
fit for service годный к эксплуатации
in working order на полном ходу
minor repairs мелкий ремонт
recondition приводить в исправное положение
repair schedule график ремонта
running test испытание на ходу
safety regulations техника безопасности

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

service manual инструкции по эксплуатации


technical condition техническое состояние
перечень часто возникающих
trouble chart
неисправностей
up-date обновлять, модернизировать

Written follow-up
In your letter to the Seller remind him of his obligation to deliver a sound-proof
device. The installation of a sound-proof device is necessary for normal operating
condition.

ROLE PLAY 3. A MARKET RESEARCH PROBLEM


Problem
Alexander Petrov is Manager of a workshop in St. Petersburg which builds
hand-made furniture in reproduction of the 19th century styles. His work collective
has taken it on lease with a view to buy it out in future. Alexander is faced with a
number of pressing problems. He is increasingly worried by a slight decrease in the
orders coming in. Another problem is that the number of skilled craftsmen is
dwindling. It is evident that a new development programme should be worked out.
The factory management is sure that a thorough study of marketing possibilities will
allow them to avoid making a leap in the dark. Before reaching a final decision the
Market Research group is to collect the following information:
What proportion of the customers was no longer satisfied with the present
styles of furniture offered them?
What kind of furniture would they like to buy?
Would they be prepared to buy modern furniture from the factory?
Were the qualities of good workmanship and durability as important in the
market for modern styles as they were for the present product?
What method of advertising could persuade people to buy moder n furniture
from the factory?
The research findings are as follows:
Elderly people are completely satisfied with the present style of the furniture
offered. Young customers want furniture of modern design. They want furniture that
is adaptable, light and easy to move.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

All groups of customers think, that good workmanship is absolutely desirable


in modern furniture...
From the research data collected it is clear that time has come to make the
changeover to modern furniture. Alexander plans to set up a new pro duction line
which could be supplied from Finland. A few Finnish experts have been enrolled on
the staff of Alexander’s firm recently.
Play the meeting between the General Manager, the Production Manager, the
furniture Designer, the Chief Accountant. Those present at the meeting work out
plans for putting the new idea into practice.
The questions on the agenda are:
1. the market situation,
2. the timing of the changeover to modern furniture,
3. the characteristics of the new furniture.

Words and word combinations


workshop мастерская, цех
take on lease брать в аренду
buy out выкупать
dwindle уменьшаться, сокращаться
craftsman искусный мастер
a leap in the dark прыжок в неизвестность, рискованный шаг
findings полученные данные, добытые сведения
data данные
changeover переход, переключение

Analyse the case.


1. What were the findings of the market research study?
2. Why is the number of skilled craftsmen dwindling?
3. Why do many work collectives take production facilities on lease?
4. What strategy would you suggest to the factory management for further
progress?

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Roles
Alexander
Your aim in the meeting is to reach a decision about the futu re of the factory.
You know that your Production Manager is skeptical of your plans. Try to convince
him that it is the only way to put things right.
You are also afraid that the ideas of the furniture designers may be too avant -
garde. You intend therefore to make sure that they decide to adopt designs which
will be saleable.
As to the reproduction furniture you think that the factory should go on as before.
Old-style furniture is in demand both in the home market and abroad. You want to
make an attempt to sell it in Western Europe.
Furniture Designer, a conservative
You have spent all your working life with the factory. You are a fine craftsman
and it is your insistence on high standards that has allowed the factory to maintain
its good reputation. You have little sympathy for new styles and do not think that a
change of style will solve the problems faced by the factory. Your only argu ment is
“people will soon get tired of this modern rubbish”. In the meeting you will do your
best to persuade your boss not to revolutionize the factory overnight.
Furniture Designer, an avant-garde artist
You are oriented only on new fashionable designs. You have just returned from
an exhibition which was held in Italy and are now full of avant -garde ideas. You
think the factory must be mostly oriented on people of the younger generation. You
are convinced that modern life styles mean that the old fixed he avy furniture is
outmoded and that lighter, more flexible solutions are necessary.
Finnish Experts
You are glad at the possibility of working with factory management which wants
to put new ideas to life.
Your strong belief is that reproduction furniture mu st not be out of production.
There is a great demand for exclusive, wellbuilt furniture in Western Europe,
particularly in Scandinavian countries.
You also believe that the changeover to modern furniture should be urgent. It is
clear that in a year or two there will be an increasing demand for office furniture in
St. Petersburg and other big cities.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Useful language
The purpose of to-day’s meeting is to make up our minds on...
On the agenda to-day is...
The subject for to-day’s meeting is...
I don’t accept that there's any need to...
You haven’t convinced me that...
There’s nothing in the market survey that will persuade me to...
There’s no evidence that...
I’m convinced
I’m sure
It’s my conviction that...
I’m absolutely certain that...
I advise you most strongly to...
If you follow my advice you won’t hesitate to...
Without any doubt, the best thing to do is...
First of all I’d like to present...
I’m going to concentrate on... first..., then... and finally...
What I suggest is to...
The most important features of my proposals are...
To sum up then...
In conclusion I’ll summarize the results of the survey.

Further Subjects for Discussion


Say what you know about market research and the techniques it uses.
Do market research findings benefit consumers?
Describe how you would furnish your ideal home. Describe the kind of house
you would most like to live in.

Written follow-up
Describe in writing the market situation in the area you live in.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

ROLE PLAY 4. DAMAGE TO DELIVERED EQUIPMENT


PROBLEM
The Seller shipped to the Buyer six sets of equipment for a project under
construction.
Assembly and commissioning was done by the Buyer’s personnel under the
guidance of the Seller’s Chief engineer. During the trial run one set of equipment
suffered damage. The Buyer asked the Seller to remove the damage and cover all
repair expenses.
To this, the Seller said no. In his opinion, the Buyer’s personnel had infringed
the maintenance and operation instructions.
However, the Seller could not produce convincing evidence that they had done
all possible to remove the fault and its harmful consequences.
That was one of the major conditions to the technical side of the Contract
which ran:
"During the starting period the parties to the contract are to ensure the faultless
operation and adjusting of the delivered sets".
Encl. extract from the Contract on Warranty

WARRANTY
1. The Seller warrants all equipment manufactured to be free from defects in
material and workmanship under normal use and service.
2. This warranty is for a period of 12 months from the date of putting the
equipment into operation and is applicable only when the equipment is installed or
operated in accordance with factory recommendations.
3. The warranty does not extend to damage or wear caused by misuse, corrosion,
negligence, accident, faulty installation.
4. This warranty will be extended if, through the Seller's fault, the plant operation
has been stopped for a certain period of time.
5. All the transport, insurance or other expenses for transportation of def ective
parts back to the Seller’s country and bringing replacement there from to the Buyer's
country are to be borne by the Seller.
Analyse the case.
Questions
1. How was assembly and commissioning done?
2. What happened during the trial run?

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

3. What was on the plus (minus) side of the parties in conflict?


4. What compromise could be arrived at?

Roles
Buyer
At a meeting you represent the Buyer. Make use of the arguments which are in
your favour. Try to convince the Seller that the damage should be repaired at their
expense.
Seller
At a meeting you represent the Seller. Defend your viewpoint on the matter.
But if the Buyer sounds convincing in his counterarguments be cooperative.

Useful language
I must admit …
It is largely because ...
And what's more …
Things are going wrong because ...
One thing worries me …
What's the extent of damage?
Is there good evidence to prove it?
We're bound to get paid.
Arbitration is a last resort and it's not worth while.
Let's come to a compromise.
Written follow-up
Write minutes of the meeting.

ROLE PLAY 5. THE ADVERTISING CAMPAIGN


Problem
A firm from South-East Asia has formed a joint venture with a Russian trading
company.
By arrangement the firm is to supply consumer electronics to Russian. At the
moment there is an enormous increase in the sales of consume r electronics and there
is an opportunity to expand the market. In the face of the increasing competition
from European and American electronics companies the firm plans an advertising
campaign to launch their production on the markets deep in the province .

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

In order to prepare the campaign the firm's advertising department has done
some desk research.
Here are some of the most significant findings:
Elderly people in the province are rather resistant to consumer electronics as
they regard them as luxury goods.
Young people, on the contrary, are excited at the idea of purchasing audio -
visual equipment.
Because supply to the provincial towns is rather limited, the venture expects a
very high demand for their goods. Now the agency must decide on the best methods
to run the campaign. They have to make up their minds about:
Who the potential buyers are.
What media would best allow them to reach the potential buyers.
What visual effects would be most effective.
Act the meeting at which experts of the advertising dep artment present their
plan for the campaign to the General Manager. The purpose of the meeting is to come
to a decision about the kind of advertising to be done. Ad experts should come with
sample suggestions of ads and slogans.

Words and word combinations


expand расширять, увеличивать
launch выпускать, (бросать, выбрасывать (товары на рынок)
resistant (to) сопротивляющийся ч-л
run a campaign проводить кампанию
ads объявления
slogan рекламная формула (броская, запоминающаяся фраза,
рекламирующая товар)

Analyse the case.


Questions
1. What measures have been taken by the firm to withstand the competition?
2. What are the findings of the advertising department?
3. What advertising media is most effective?
4. What methods do advertising agencies use to appeal to the public?

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Roles
Market Researcher
Your job in the meeting is to present the results of the study into the market
for your brand. You can invent data.
Ad. agent
You are in charge of media planning for the firm and should give an account
of the possible alternatives for the choice of media for the campaign. Present the
advantages and disadvantages of magazines, newspapers, television, radio. You
should choose one medium and recommend it firmly.

Accountant
You will be responsible for the co-ordination of the campaign. You have
brought the sample advertisements for the general manager to choose. You think that
the brand has enormous possibilities if it is well advertised. You therefore propose
an expensive campaign the cost of which comes as a shock to the gene ral manager,
who challenges you to prove to him that the spending will be profitable to the firm.
You should be ready with a less expensive proposal as well.

Useful language
Could you be more specific about...?
Could you give me all the facts and figures to back that up, please?
I’m worried about all the expense involved in... Can you prove that...
I can assure you that...
There is no need to worry about...
Our research shows that...
It’s been proved time and again that...
There is a lot of truth in that argument.
I’d go along with that point of view.
I’m sure we can rely on the research results.
I find that a very convincing argument
To sum up then, we're all agreed to...

Further Subjects for Discussion


Describe advertisements which amuse you, which irritate you, which
influence you, which put you off buying things. In what way, and to what degree
are you influenced by advertising?

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Written follow-up
Answer the question in writing
Do you find TV commercial channel amusing?

ROLE PLAY 6. A PROBLEM OF MODERNIZATION


Problem
Irene M. is a newly appointed manager of a textile factory in Moscow.
The factory was built at the end of the last century. The machinery is obsolete.
Irene is young, enthusiastic and has a good educational background. She has
just returned from the UK where she attended courses at the school of Business
Studies.
When she took over her first step was to study the situation closely. Her
ambitious plan is to get the factory back on its feet.
Here is the information she has collected.

The assets
The factory is located on a good site. There is a small warehouse not far from
it. The machinery in the factory is usable, but old and not so efficient as the machines
used by more modern cotton manufacturing firms. In the warehouse there is a certain
amount of stock.

The Financial Situation


Although the factory has not made much profit in the last ten years the financial
situation is not as bad as might be imagined. There are no loans or rent to be repaid.
So there is a chance to get a loan from a bank if modernization is envisaged.
The market
There is a shortage of cotton fabric in the internal market . So production of the
factory can have a ready sale.
There is a chance now for direct access to markets abroad, but the situation in
the world market is very tough. Small firms are absorbed by the giant manufacturers.
The few firms which have survived specialize in high -quality cotton for the fashion
trade and rely on the originality of their designs to retain the market. The secret of
their success lies in their flexibility and their ability to adapt very rapidly to market
conditions.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Human resources
Most of the production workers are women as is usual in the cotton industry.
The technical personnel has a lot of experience in the problems o f cotton
manufacture. The sales and accounts departments seem terribly old -fashioned to
Irene. Her plan is to invite foreign managers to run some of the departments.

Words and word combinations


obsolete устарелый
take over принимать (должность) от другого
assets (недвижимое) имущество
stock запас товара на складе
envisage предусматривать, намечать
have a ready sale находить хороший «сбыт, быстро продаваться
absorb поглощать
accounts department бухгалтерия

Analyse the case.


Questions
1. What is the financial situation of the cotton factory?
2. Should obsolete factories be demolished or modernized?
3. What is the current market situation in the cotton industry?
4. Is it necessary to change the personnel structure in the textile industry?

Roles
Manager
You have a plan of action for modernizing the factory. It is based on the
analysis and calculations. The development programme defines:
1. the product which must be manufactured
2. the market in which it will be sold
3. the investments which are needed to expand business
4. recruitment and retraining of the present personnel
5. your line of action if there are redundancies.
You know that you will meet considerable opposition from the more
conservative managers. You must therefore explain your plan very clearly and deal
patiently with any questions and objections. Try to get all the managers on your side
even if they are skeptical of your plan.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Chief Accountant
You have worked for the factory for twenty years, and, as chief accountant
have jealously guarded the factory's finances. You are shocked at the amount of
investment and borrowing involved in the project and consider it highly risky.

Sales Manager
You are afraid that the appointment of a foreign marketing manager will
diminish your status and influence in the factory. You have been with the factory for
many years and have worked up a good and comfortable relationship with its present
customers and are reluctant to give it up.

Production Manager
You are eager to cooperate in the new plans for. the factory as you have been
bored by the routine work of the last few years. You are thrilled at the idea of getting
new machines fur a new production line.
Marketing Manager
You have just been appointed to the post of marketing ma nager. You are an
expert from a foreign country where you have been with a textile company. You will
be responsible for market surveys, defining and planning new products and the
company's advertising.
Personnel Manager
You know that you will have to deal with any staff unrest or trade union
opposition to the plans. So you want to be absolutely clear about the effect
modernization will have on personnel relations – whether it will involve
redundancies, change of work rates. You want to know if pay rises are envisaged to
encourage worker adaptation to innovation.

Useful language
I want to explain exactly why I am proposing to...
I consider it inevitable...
I consider it absolutely essential…
If we want to grow we must...
The thinking behind my proposal is...
The consequences of... should allow us to...
I understand you may feel hesitant about... but I can assure you that...
Of course, radical changes are always difficult to accept at first, but I’m sure that...
Your objection is understandable but on the other hand...

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

While I realize you must have some doubts about the venture...
Does this mean that...?
Will this involve...?
Could you explain what this will mean in terms of...?
I don’t quite catch the full implications of...
I’m rather worried about what you said about...
Wouldn't it be rather rash to...?
I can see some difficulties ahead of us, if we...
Don’t you think it would be better to.:.
I’m sure it's feasible to...
I’m completely behind the proposal to...
I could not agree more with your idea...

Further Subjects for Discussion


What are the areas of investment in Russia? What is more rational to build new
enterprises or modernize the old ones?

ROLE PLAY 7. EMPLOYMENT PROBLEM


Problem
Ltd is a medium-sized company with its factories and offices in England. It
manufactures electronic components for computers. The company is in financial
difficulties at the moment. In recent years it has been concentrating on the research
and development of new products rather than on marketing them. As a result, the
sales have decreased and the company is having heavy losses.
In this crisis situation the Managing Director has resigned. There have been
also a number of resignations from men occupying key positions within the
Company. The posts that are vacant are those of Personnel Manager, Deputy Head
of Research and Development, Sales Director.
The company have advertised these posts in the mass media and received a
great many applications. On the basis of the curriculum vitae submitted, a short list
of candidates has beera drawn up for each post, and those selec ted are to attend the
interview.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Words and word combinations


personnel кадры
curriculum vitae биография
resign отказаться от должности, уходить в отставку
resignation отказ от должности, отставка
occupy a key position занимать ведущий пост

Analyse the case


Questions
1. Why is the Company in financial difficulties now?
2. What changes have taken place in the personnel structure ?
3. How was the selection of candidates made?
4. What kind of people stand better chances to take the posts ?

Roles
Chairman of the selection board
You are responsible for leading each interview. You may allot particular areas
of interview to other members of the selection on board. Remember you will have to
decide which candidate to appoint.
Among the candidates there is a manager from Moscow. You’ve selected him
because he managed to turn a loss-making factory in his home town into a profit-
making enterprise. On his minus side is that Russia has just developed the concept
of the market economy and Russin managers haven’t accumulated much experience
in free market operations. Your final word about him will depend on the results of
the interview.
Head of Research and Development
You should approach each interview with the needs of your department firmly
in mind. You are free to invent your requirements.
Marketing Manager
You should approach each interview with your marketing requirements firmly
in mind. You are free to invent your requirements.
Each member of the selection board
Before you interview a candidate you should work out your .attit ude to the
following points:
The salary you will offer.
The qualifications you require for the job.
The value you put on the .candidate's previous experience.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Useful contacts abroad.


Each candidate
Before being interviewed you should think out an imaginary .curriculum vitae.
You should also work out your attitude towards such questions as:
1. Responsibilities and rights
2. Salary - Holidays
3. Prospects you have with the company
You should think up other points which you may wish to raise .at the interview.

Russian manager
After you’ve read the ad offering employment you’ve decided to apply for the
post. Last year you took a full-time course at the London Business School and have
sufficient knowledge of accounting, economics and financial matters. You’ve
decided to try a hand as you want to gain the first-hand experience in free market
operations. You intend to work at the firm on a time basis.

Useful language
family status семейный статус
health condition состояние здоровья
life insurance страхование жизни
allowances надбавки к зарплате
education background уровень образования
command of foreign languages знание иностранных языков
practical working experience in... практический опыт работы в
fulfil functions исполнять функции
level of competence уровень компетентности

Further Subjects for Discussion


Arrange the following things about a job in order of importance. Choose
five and discuss your preferences.
well-paid foreign travel
interesting work variation in work
long holidays meeting people
security clean working conditions
short working hours lots of responsibility

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

good pension easy work


friendly colleagues promotion and advancement

ROLE PLAY 8. THE FIRE


Problem
Below is the case study which is usually given to a student of a business school
to test the ability to take action and make firm recommendations.
You are to assume that you will be appointed to a position of executive
responsibility within the firm if your performance in the role-play shows that you
can plan, organize, direct and control business operations. You are to take decisions
on major issues concerned with the case study.

Case-study
Statement of facts
Brown and Co. are in difficulty now. A month ago there was fire on its factory.
The fire started in an old building. The fire brigade tried to prevent the fire from
spreading. To do this they had to soak the research and development area and the
water did a lot of damage.
The Managing Director was up all night. As soon as he heard about the fire he
telephoned the key people in management and they all hurried immediately to the
factory.
The next morning the Managing director called a meeting to tie on reports from
managers and heads of departments on the damage caused by the fire and to discuss
what action should be taken to minimize the ill effects of the fire.

Words and word combinations


prevent (from) предотвращать от чего-л.
soak пропитать, намочить
research and development (научные) исследования и опытные разработки
ill effects пагубные последствия

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Ground plan of the factory premises

– Destroyed by the fire

– Soaked in water by the fire brigade

A – Headquarters (Administrative/Personnel/Sales/Finance Departments)


В – Research and Development Area
С – Warehouse
D – Factory
Analyse the case.
Questions
1. Why is Brown and Co in difficulty now?
2. What damage was caused by the fire?
3. Why did the Managing Director call a meeting the next day?
4. What could be your plan of action in the circumstances?

Roles
Managing Director
You want accurate reports from your subordinates with concrete and realistic
proposals as to how problems can be overcome. You should prepare an agenda for
yourself listing the points that you wish to raise and the order in which you wish to
raise them.
Marketing Manager
You should prepare a short report on how the fire will affect deliveries to the
local customers. Remember that most of your finished goods have been destroyed.
You want your local customers to have priority over overseas customers on available
stocks and on the goods as they are manufactured. You want to abandon overseas
customers for the time being.

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Production Manager
You have the most difficult problem. Your warehouse has been destroyed and
there is no factory space available for storage-purposes. Part of your factory has been
burnt out, part soaked in water. You should prepare a short report on the extent of
the damage. You should also be ready to state what problems in production you will
have to face over the next few weeks.
Head of Research and Development
You are in despair. Your area has been soaked in water, which has destroyed
a lot of your equipment, and nearly all your documents.
Finance Director
In your report you analyse the financial consequences of the fire. The firm is
bound to have a short-term liquidity problem. The reasons for it are:
1. The insurance claim won't be met for some time
2. The firm won't invoice customers for several weeks
3. There will be extra wage bills
4. There will be the added cost of renting new storage space.

Note: liquidity – ликвидность превращаемость в наличные деньги

Useful language
We were completely exhausted
panic-stricken
demoralized

The worst thing was...


The thing that worried me most...
In the circumstances the only chance seemed to be...
We knew it was risky but everybody felt we had to try.
My plan of action is based on exact calculations.
I've calculated that...
I advise you most strongly to...
I'm convinced...
I consider it inevitable.
The only thing to be done is...
There's only one way of dealing with the problem.
I'm dead sure of it.

98
PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Written follow-up
Put down in writing the main points of your plan of action ito normalize the
operation of the factory.

GAMES

GAME 1. TERMINOLOGY KNOWLEDGE CONTEST


Rules of the Game
The group of the students is divided into 2 groups. A person who names the
term faster than the others gets a score. The team which has the greater number of
scores wins the game.
I. Name the term
1. The geographical area in which sales are made
2. Someone who distributes goods in a particular area
3. A planned programme of advertising
4. A firm owned by another firm
5. An agent who holds stocks of goods
6. Shops selling direct to consumers
7. Money which has to be paid when goods enter a country
8. Statement of price
9. A reward to an agent in terms of percentage
10. A place where building work is in progress
11. The process of releasing goods from the customs
Key: market, distributor, an advertising campaign, subsidiary, stockist, retail
outlets, customs duties, quotation, commission, construction site,
customs clearance

GAME 2. MARKETING GAME


Rules of the game
The teacher splits the class into groups and gives each group the name of a
consumer product.
The task - Design the product for a particular market.
This includes:
1. defining the market (potential buyers, region)

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PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

2. defining the qualities of a product (materials used, colour, .utility)


3. setting a price (possible discounts, credits)
These details are then reported back to the class as a sales pitch and other
students can ask questions about the product. Each group deals with th e same type
of product and at the end the whole class decide which version of the product they
would buy. This group is then the winner.
Consumer goods: colour television, skis, fur coat, camera, car, guitar, yacht, etc.
Words
define определять, характеризовать
pitch партия товара, выброшенного на рынок

GAME 3. PLAY “AUCTION”


Rules of the game
This is a group game.
The roles distributed: an auctioneer, bidders.
A person who is allotted the role of an auctioneer must create in class the
atmosphere of tension and suspense. When announcing the starting price for an item
allegedly sold he doesn't name the item direct. He only gives a hint at what it could
be.
Then bidding starts. Being intrigued, the people involved in the game try to
outbid each other. When the time for bidding is up and the final price is arrived at,
the participants in the game begin to guess the name of the goods. Probing questions
to the auctioneer are welcome. A person who guessed right is a win ner.

The list of the goods could be: furs, tea, coffee, jewelry, articles of
furniture, sculpture, paintings, personal belongings of famous people.
The time factor: the time for bidding is 30 seconds.
Expressions to be used by the auctioneer.
The first bid... The next bid... Your word. Sold.

GAME 4. ADVERTISE YOUR LINE OF PRODUCT


People involved in the game:
salesmen, advertising agents, consumers of goods.

100
PART III. ROLE PLAYS. THOUGHT – PROVOKING EXERCISES

Advertising plays a key role in trade. If you want to launch a product in a


market you must advertise it. TV and radio ads are best for some lines, magazines
and trade papers for others. But a human contact is the best way to win a customer.
Suppose, you are a sales manager or an advertising agent and you want to
advertise your merchandise. The goods to be advertised are a radio (TV),
refrigerator, personal computer, photocamera, country house etc.
Rules of the Game
Salesmen one by one introduce their production to prospective customers. A
person who managed to convince his audience that his model is the best is a winner.
The customers decide who is a winner by a majority vote. The game can be
arranged as a question and answer session.

GAME 5. JUST A MINUTE


Rules of the Game
A student speaks for one minute on a subject given by the teacher. The rest
of the class listen for 3 things: repetition, deviation, hesitation. If anyone hears one
of these things, he interrupts the speaker and is asked to continue until he, in turn,
is interrupted. The student speaking within 60 seconds of speaking time is a winner.
Subjects to speak on:
1. The customer is always right.
2. Manufactured products in which Japan specializes.
3. Switzerland – land of the Banks.
4. Missed opportunity in business.
5. In today's business world new opportunities arise continuously.
6. The best climate for investment.
7. How to make one's business more competitive?
8. Tasks that face managers every day.
9. Making decisions faster is the key to success.
10. The video revolution.
11. Communication unites.
12. The future of commercial television.

101
ЛИТЕРАТУРА
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S. Ramsey. – USIA, 1981, 1984, 1991.
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W. Ashworth. – fourth ed. – Longman, 1987.
3. Randy, Charles Epping. Beginner s Guide to the World Economy. – 3 Sub.
edition. – Vintage, 2001. – 256 p.
4. Samuelson, P.A. Economics / P.A. Samuelson, D.W. Nordhaus – Fourteenth ed.
– McGraw-Hill, INC, 1992.
5. Samuelson, W.F. Manageral economics / W.F. Samuelson, S.G. Marks. – Second
ed. – The Dryden Press, 1995.
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Книжный мир, 2012. – 272 с.
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Н.М. Дюканова; под общ. ред. И.С. Богацкого. – 5-е изд., испр. – Киев:
Логос, 2003. – 352 с.
8. Буданов, С.И. Деловой английский язык / С.И. Буданов, А.А. Борисова. –
М.: Эксмо, 2007. – 160 с.
9. Мороз, В. English for Small Business Management: учебное пособие /
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10.Петухова, М.В. Business English in Fiction: практикум / М.В. Петухова,
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NB-ПРЕСС. – М., 1992.
12.Сергейчик, Т.С. Английский язык в сфере делового общения: учебное
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С.А. Шевелева. – М.: ЮНИТИ, 2001. – 375 с.
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102
Учебное электронное издание

ЧИТАО Ирина Айтечевна


ХАТХЕ Асиет Асланбечевна
ХАБЕКИРОВА Зарема Схатбиевна
АУТЛЕВА Фатима Аскербиевна
АСЛАНОВА Марина Александровна
ХАЧЕЦУКОВА Зарема Кушуковна

BASIC OF ECONOMICS AND BUSINESS


ENGLISH FOR ECONOMISTS

ОСНОВЫ ЭКОНОМИКИ И БИЗНЕСА


АНГЛИЙСКИЙ ЯЗЫК ДЛЯ ЭКОНОМИСТОВ

учебно-методическое пособие
для студентов магистратуры

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ООО «ЭлИТ». 385020, РФ, Республика Адыгея, г. Майкоп, а/я 09.
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