Миловидов В.А. Английский разговорный язык. Практическое пособие по развитию устной речи
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particular – ,
portfolio – ()
predict –
random – ,
reliable –
rumour – ,
stick – , «»
subscribe –
succeed – ()
technique – , ,
tip –
hang on to it –
blue chips – «», ,
over the long run –
pay attention to – ()
random walk theory – ,
at random – ,
Exercise 7
Answer the questions:
1. What do investors buy stock for?
2. What is the surest way of making money?
3. Who can supply an investor with information?
4. What do investors do in order to avoid high brokerage fees?
5. What is the simplest investment strategy?
6. What are common mistakes that investors make?
7. How do investors carry out the fundamental analysis?
8. What do «chartists» do?
9. What is the random walk theory?
10. How do contrarians perform in the market?
Great Stock?
A stockbroker was cold calling about a penny stock and found a taker. «I think this one will
really move,» said the broker, «it's only $1 a share.» «Buy me 1,000 shares,» said the client.
The next day the stock was at $2. The client called the broker and said, «You were right, give
me 5,000 more shares.»
The next day the client looked in the paper and the stock was at $4. The client ran to the phone
and called the broker, «Get me 10,000 more shares.»
«Great!» said the broker.
The next day the client looked in the paper and the stock was at $9.
Seeing what a great profit he had in just a few days, the client ran to the phone and told the
broker, «Sell all my shares!»
The broker said, «To who? You were the only one buying that stock.»
:
taker – .
cold call – ,
penny stock – . «»
Exercise 8
Answer the question (only one):
What would the client have to do with all the stock purchased, as well as the broker who had
sold him this stock?
Junk Bonds
Junk bonds are high yield securities which are issued by corporate borrowers. Junk bonds are
rated as less than «investment grade» by the bond-rating services, such as Moody or Standard
and Poor.
Bond ratings is a special tool to measure the riskiness of bonds, that is the chance that the
issuing company will not be able to pay the principal or make interest payments. The riskier a
bond, the lower its rating. Bonds with more A's are less risky than bonds with fewer A's, and the
highest rating (for Standard and Poor's) is AAA, or triple-A. This means that the companies
must pay higher rates of interest on their bond issues than other corporations pay on
investment-grade bonds. That is why non-investment-grade bonds also go by the name of high-
yield bonds. For the same reason junk bonds are attractive to both debtors and investors. Low-
rated debt earns a high risk-adjusted rate of return. In other words, the interest-rate premium on
low-rated debt is higher than is justified by the added risk of default. Therefore, someone who
buys a diversified portfolio of these risky bonds would do better than someone who buys
investment-grade bonds, even after deducting losses on the bonds that defaulted.
The bonds of 95 percent of U.S. companies with revenues over $35 million and of all companies
below that amount – are rated non investment grade or junk. Some of the largest corporations,
such as IBM and General Motors, and even the U.S. government were at times below
investment-grade rating.
For many companies in periods of major structural economic changes (foreign competition,
technological shifts, deregulation) capital is a missing element for economic adjustment. The
high-yield market effectively provides funds to overcome the problems of this period. In addition,
junk bonds make it possible for weaker companies to compete more successfully with
investment-grade companies for financing.
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junk – , ,
tool –
principal – ()
triple –
debtor –
premium –
justify –
deduct – ,
losses –
default –
shift – ,
deregulation – ,
miss – ,
effectively –
overcome –
junk bonds – «»
high-yield –
corporate borrowers –
investment grade – (,
)
bond-rating services –
riskiness of bonds –
interest payments –
risk-adjusted – ()
rate of return –
added risk of default – ()
diversified portfolio –
missing element – ,
Exercise 9
Answer the questions:
1. Who are junk bonds issued by?
2. In what way are junk bonds rated?
3. What is bond rating?
4. What is the riskiness of bonds?
5. How much interest do companies pay on junk bonds, if compared to the investment– grade
bonds?
6. Why are junk bonds so attractive to debtors and investors?
7. Why do some investors prefer to hold a diversified portfolio of junk bonds?
8. How do junk bonds work in times of economic changes?
6. , , …
(Taxes… taxes… taxes…)
Fiscal Policy
Fiscal policy is the use of the government budget to affect an economy. The government is
engaging in fiscal policy when it decides on taxes, the transfer payments, or the goods and
services that it purchases. The economic impact of changes in the government budget tells on
interested groups – a tax cut for businesses, for example, raises their disposable income and
allows them to reinvest and develop.
To define the fiscal policy one has to look at the difference between the government spendings
and revenues, that is, the government deficit. Fiscal policy is tight or contractionary when
revenue is higher than spending (the government budget is in surplus) and loose or
expansionary when spending is higher than revenue (the budget is in deficit).
The fiscal policy changes the aggregate demand for goods and services. A fiscal expansion
raises it in two ways. If the government increases purchases but keeps taxes the same, it
increases demand directly. Second, if the government cuts taxes or increases transfer
payments, people's disposable income rises, and they will spend more on consumption. This
rise in consumption will, in turn, raise aggregate demand.
Fiscal policy also changes the structure of aggregate demand. When the budget is in deficit, the
government can issue bonds, thus competing with private borrowers for money lent by savers
(say, general public). The interest rates rise affecting private investment (reducing its output). In
this case fiscal policy can also influence the exchange rate and the trade balance of the country.
The rise in interest rates attracts foreign capital, causing an exchange rate appreciation. This, in
turn, makes imported goods cheaper, exports more expensive abroad, which causes a decline
of the trade balance. And, the other way round, the fall in the interest rates caused by fiscal
policies, raises the trade balance of the country.
To the general public fiscal policies are more often associated only with taxes.
:
contractionary – ), )
decline – ,
define – ,
loose – ,
reinvest –
revenue – ()
tight – , ,
engage in – ()
transfer payments –
tell on –
disposable income –
general public –
Exercise 1
Answer the questions:
1. When does the government engage in fiscal policy?
2. How does a tax cut tell on tax payers?
3. When do we call fiscal policy tight?
4. When do we call fiscal policy loose?
5. How can a government increase demand directly by using fiscal instruments?
6. What is the relation between consumption and output?
7. What happens to the structure of aggregate demand in case the government issues bonds?
8. How is the exchange rate affected by the governmental bonds emission?
9. What happens to the trade balance if the government issues bonds.
10. What aspect of fiscal policies is the general public mostly concerned with?
Tax Collectors… We Love Them All So Much!
1
A fine is a tax for doing something wrong.
A tax is a fine for doing something right.
2
If an economist and an tax inspector agent were both drowning and you could only save one of
them, would you go to lunch or read the paper?
Corporate Taxation
The corporate income tax is the major method by which governments in many countries collect
money. This tax is popular with the general public, who thinks, incorrectly, that the corporate
income tax is paid by corporations. On the other hand, corporations often believe, just as
incorrectly, that this tax is simply passed along to consumers. This is why the corporate income
tax is so popular among politicians.
The corporate income tax differs from the individual income tax in two major ways. First, it is a
tax not on gross income, but on net income or profits, with deductions for most costs of doing
business. Second, in the USA, for example, it applies only to some businesses – those
chartered as corporations – and not to partnerships or sole proprietorships.
In the USA the federal tax is levied at three different rates on different brackets of income: 15
percent on taxable income under $50,000; 25 percent on income between $50,000 and
$75,000; and 34 percent on income above that. The lower-bracket rates are beneficial to small
corporations. Of the 3.2 million corporate tax returns filed in one recent year, more than 90
percent were from corporations with assets of less than $1 million.
The lower rates, however, had little economic significance. Nearly 94 percent of all corporate tax
revenue came from the 8.8 percent of corporations with assets greater than $1 million. States
levy further income taxes on corporations, at rates ranging from 3 percent to 11.5 percent.
Because states typically permit deductions for federal taxes paid, net rates range from 1.9
percent to 4.9 percent. Some local authorities tax corporations as well. A good reason that state
and local corporate income taxes remain low is that corporations could easily relocate out of
states that imposed unusually high taxes.
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assets –
beneficial – ,
charter – – )
deduction – ,
file – , ,
impose – ,
incorrectly – ,
levy – ()
partnership – ,
relocate – ,
taxable –
corporate income tax –
general public –
pass along to – ,
gross income – ()
net income – ()
sole proprietorship –
bracket of income –
tax return –
range from… to… – … …
Exercise 2
Answer the questions:
1. Why is the corporate income tax so popular with the general public?
2. Why is it popular with corporations?
3. Why do politicians love the corporate income tax?
4. What is the difference between the corporate income tax and the individual income tax?
5. What businesses does the corporate income tax apply to in the USA?
6. What tax is levied on American corporations with taxable income under $50,000?
7. What businesses pay the most of the aggregate corporate income tax?
8. What authorities besides the federal government can tax corporations?
1
The difference between the short and long income tax forms is simple. If you use the short form,
the government gets your money. If you use the long form, the tax advisor gets your money.
2
– What is the difference between tax avoidance and tax evasion? – The jail walls.
3
– Why won't sharks attack tax inspectors? – Professional courtesy.
4
– How do you know you've met a good tax accountant?
– He has a loophole named after him.
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avoid –
courtesy – ,
evade – ,
jail –
loophole – «» (: )
shark –
name after – ( )
tax advisor –
tax avoidance –
tax evasion –
Progressive Taxes
Taxes are the price people pay for civilized society. The progressivity of taxes largely
determines how that price varies among individuals. A progressive tax structure is one in which
an individual or family's tax liability as a fraction of income rises with income. If, for example,
taxes for a family with an income of $20,000 are 20 percent of income and taxes for a family
with an income of $200,000 are 30 percent of income, then the tax structure over that range of
incomes is progressive. One tax structure is more progressive than another if its average tax
rate rises more rapidly with income.
Judged by the top income tax rates alone, tax progressivity in many developed countries
declined markedly in the eighties. In the United States in 1980 the highest tax rate stood at 70
percent. The Economic Recovery Tax Act of 1981 reduced that rate to 50 percent, and the Tax
Reform Act of 1986 further reduced it to 33 percent. Although the highest rate has since been
returned back up to around 34 percent, it is still less than half what it was in 1980. Other
developed countries have emulated the United States in reducing their top rates, although
usually by less.
This picture, though, is distorted by numerous exclusions. First, the tax base – the income that
is taxed – is generally much less than total income due to an array of adjustments, deductions,
omissions, andmismeasurement.
Second, the tax burden – the hurt caused by taxes – is not borne entirely by the people who
write the checks to the Internal Revenue Service. To some extent many taxes are «shifted» to
other members of society. For example, because highly progressive taxes discourage people
from entering high-paying professions, salaries in these professions will be higher than
otherwise.
Therefore, the taxes paid by the upper-income taxpayers who do enter these professions
overstate the true burden of taxation on them. Also burdened by these high taxes are the
people who pay higher prices for the goods and services provided by the people with higher
salaries. On the other hand, taxes paid by high-income people who take advantage of the
federal tax exemption for interest on state and local government bonds understate their true
burden.
Third, the progressivity of the tax structure cannot be judged by looking at only one component
of taxes. Federal income taxes are only about 25 percent of total revenues collected by all
levels of government. In recent years the fastest-growing component of federal taxes has been
the payroll tax, which is regressive (the opposite of progressive) in its impact, because it taxes
at a flat rate only on wages below $63,400 (in 1991). The Social Security system, however, is
progressive because it pays higher benefits – relative to taxes paid in – to lower-income
workers.
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adjustment – ,
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