English For Economics Management

English for Economics and Business
English for Economics and Management

Upper Intermediate Course Book
By Prof. Michael Joseph Ennis
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Michael Joseph Ennis, 2012-2016
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International

License. It uses adaptations of the work of others for non-commercial, educational purposes under fair
use conditions, and may be freely used for non-commercial, educational purposes in other contexts
without expressed permission of the author under those same conditions. Please cite the author where
appropriate.
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Table of Contents
Learning Units
UNIT 1: Facts and Trends: The Study of Economics and Market Trends (p.1)
UNIT 2: Talking about the Past: The Sustainability Movement (p. 7)
UNIT 3: Describing and Comparing: What makes a good manager? (p. 13)
UNIT 4: Past Duration and Future Predictions: The History and Future of the EU (p. 21)
UNIT 5: Conditionals: The Results of Fiscal Policy (p. 30)
UNIT 6: Rules and Regulations and Giving Advice: Advertising Rules (p. 37)
UNIT 7: Past Tenses: Recent Market Trends and Performance (p. 46)
UNIT 8: Being Objective and Linking Ideas: Labor Unions (p. 53)
UNIT 9: Making a Cohesive Argument: The Economics of the Drug Trade (p. 62)
Appendix 1: Morphology (p. 70)
Appendix 2: Solutions (p. 74)
UNIT 1: Facts and Trends: The Study of Economics and Market Trends
Pre-Reading 1.1: Write one sentence to define the term “economics.”
Reading 1.1: What is Economics?
Economics is the study of how society allocates scarce resources and goods.
Resources are the inputs that society uses to produce output, called goods. Resources include
inputs such as labor, capital and land. Goods include products such as food, clothing and
housing as well as services such as those provided by barbers, doctors and police officers.
These resources and goods are considered scarce because of society’s tendency to demand
more resources and goods than are available.
While most resources and goods are scarce, some are not—for example, the air that
we breathe. A resource or good that is not scarce, even when its price is zero, is called a free
resource or good. Economics, however, is mainly concerned with scarce resources and
goods. It is the presence of scarcity that motivates the study of how society allocates
resources and goods.
One means by which society allocates scarce resources and goods is the market
system. The term market refers to any arrangement that allows people to trade with one
another. The market system is the name given to the collection of all markets and also refers
to the relationships among these markets. The study of the market system, which is the
subject of economics, is divided into two main branches or theories; they are
macroeconomics and microeconomics.
The prefix macro means large, indicating that macroeconomics is concerned with the
study of the market system on a large scale. Macroeconomics considers the aggregate
performance of all markets in the market system and is concerned with the choices made by
the large subsectors of the economy—the household sector, which includes all consumers;
the business sector, which includes all firms; and the government sector, which includes all
government agencies.
The prefix micro means small, indicating that microeconomics is concerned with the
study of the market system on a small scale. Microeconomics looks at the individual markets
that make up the market system and is concerned with the choices made by small economic
units such as individual consumers, individual firms, or individual government agencies.
ADAPTED FROM: http://www.cliffsnotes.com/study_guide/topicArticleId-9789,articleId-9722.html
1
Vocabulary 1.1: Match the following words from the text to their definitions.
1) goods a) actor in an economy who purchases goods and services
2) services b) the study of how and why goods and services are produced
and consumed
3) scarcity c) the study of the behavior of individual consumers, firms and

agencies
4) aggregate d) the study of the market system as a whole or market sectors
5) free resource e) products that are produced to be sold
6) market system f) the condition of being in short supply
7) economics g) tasks that are performed for paying customers
8) microeconomics h) all interconnected markets within an economy
9) macroeconomics i) an input that is not scarce
10) allocate j) the sum total of

11) consumer k) to use something you have for a specific purpose
Discussion and Writing 1.1: Work with a partner or a small group to answer the questions
below.
1) What is the central economic problem?
2) What do macroeconomists study and what do microeconomists study?
3) Why are you interested in economics?

Pre-Reading 1.2: Together with a partner, write one sentence to describe current trends in oil
prices.
Reading 1.2: The Energy Crisis
Oil Prices: What’s Behind the Drop?
Why is the price of oil dropping so fast? This a complicated question, but it boils
down to the simple economics of supply and demand.
United States domestic production has nearly doubled over the last six years,
pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that
once was sold in the United States is suddenly competing for Asian markets, and the
producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising
year after year. Even the Russians, with all their economic problems, keep pumping. There
are signs, however, that production is beginning to fall in the United States and some other
oil producing countries because of the drop in exploration investments.
On the demand side, the economies of Europe and developing countries are
weakening and vehicles are becoming more energy-efficient. So demand for fuel is lagging
a bit. China’s recent devaluation of its currency suggests the economy of the world's biggest
oil importer may be worse off than expected.
Who benefits from the price drop? Any motorist can tell you that gasoline prices have
dropped more than a dollar a gallon. Diesel, heating oil and natural gas prices have also fallen
sharply. Households are likely to spend $750 less on gas this year because of the oil prices.
Consumers around the world will enjoy similar benefits. The latest drop in energy prices —
regular gas nationally now averages around $2.30 a gallon, compared with $3.45 a year ago
— is also disproportionately helping lower-income households.
ADAPTED FROM: http://www.nytimes.com/interactive/2015/business/energy-environment/oil-prices.html?_r=0

1) domestic a) to reduce
2) double b) able to perform a function with the least amount of energy

possible
3) imports c) a reduction in market value
4) compete d) by a large amount and/or very fast
5) drop e) to increase by 100%
6) exports f) all individuals living in the same home
7) energy-efficient g) to do or have something as measured per day, month, year,

etc.
8) lag h) to be in a situation that is comparatively more negative
9) devaluation i) to sell goods and services in the same market as another

firm
10) currency j) unequally
11) be worse off k) entirely within a nation’s borders
12) sharply l) the legal money of a nation
13) household m) to move more slowly than average or than expected
14) average n) goods and services that are sold to foreign countries
15) disproportionately o) goods and services that are purchased from foreign
countries
Bonus: Besides the content, what is the difference between the text in Reading 1.1. and the
text in 1.2.?
Discussion and Writing 1.2: Work with a partner or a small group to discuss the questions
below. Then write a few sentences to answer each question.
1) Why is the cost of oil falling?
2) What are the benefits of the drop in oil prices?
3) In your opinion, what are some of the negative impacts?

Grammar 1.1: Present Simple versus Present Continuous
Read the following sentences/questions taken from reading 1.1 and 1.2. Which refer to a fact
that is always true (A) and which refer to a fact that is temporarily true in the present (T)?
1) Economics is the study of how society allocates scarce resources and goods.
2) Why is the price of oil dropping so fast?
3) The prefix macro means large.
4) Oil production and exports are rising year after year.
5) The term market refers to any arrangement that allows people to trade with one another.
6) Demand for fuel is lagging.

7) Gasoline prices are lower now than last year.
Grammar 1.2: Circle the correct answer to complete the grammar rules.
1) We use the present simple to talk about general facts/ current activities.
2) We use the present continuous to talk about general facts/ current activities.
3) We never/always use the present continuous for the verb to be and state verbs like know,
like, feel, etc.
Grammar 1.3: Choose the best sentence. Note: sometimes both sentences are grammatically
correct, but only one makes sense.
A) Petronations currently compete for the Asian market.

B) Petronations are currently competing for the Asian market.
A) Iraq is an oil producing nation.

B) Iraq is being an oil producing nation.
A) Vehicles are becoming more fuel-efficient.

B) Vehicles become more fuel-efficient.
A) The economies of Europe and developing countries weaken.

B) The economies of Europe and developing countries are weakening.
A) The drop in energy prices helps lower-income families.

B) The drop in energy prices is helping lower-income families.
A) Lower oil prices often hurt oil producers.

B) Lower oil prices is often hurting oil producers.
A) Macroeconomists study aggregate supply and demand.

B) Macroeconomists are studying aggregate supply and demand.
UNIT 2: Talking about the Past: The Sustainability Movement
Pre-Reading 2.1: Together with a partner, write one sentence to define the term “socially
responsible.” Can you think of any socially responsible companies or practices?
Reading 2.1: Social Responsibility versus Profit Maximization
Milton Friedman and the social responsibilities of business
In September 1970, The New York Times Magazine published an essay by American
economist Milton Friedman that continues to attract attention and ignite debate. The title of
the article made clear Friedman's opinion on corporate obligations: "The Social
Responsibility of Business is to Increase Its Profits."
Friedman, who supported a free market economic system that urged the government
to butt out of its business, asserted that the first and foremost job of an enterprise was to
produce financial gain for its shareholders. Notions of responsibility that reached into the
community and beyond the bottom line did not fit within Friedman's formula for success.
Vocalizing his views, Milton Friedman — the academic, author, university instructor,
and economic advisor to President Ronald Reagan — fueled the ongoing debates about
citizenship and sustainability in corporate America.
ADAPTED FROM: http://www.cliffsnotes.com/Section/id-305399,articleId-278751.html

1) social responsibility a) to argue or put forth
2) sustainability b) a responsibility to do something for oneself or others
3) free market c) an investor who owns stock in a company
4) academic d) the potential to continue producing and selling into the

future
5) shareholder e) the last line in a company’s ledger (account balance) which

refers to total revenue minus cost, i.e. profit or loss
6) enterprise f) profit
7) financial gain g) a perceived obligation to act in the best interest of society
8) the bottom line h) a company
9) assert i) any system of buying and selling with little or no

government regulation
10) obligation j) a “professional” scholar
1) What did Milton Friedman think about social responsibility?
2) Do you agree or disagree with Friedman? Why or why not?

Pre-Reading 2.2: Together with a partner, write one sentence to define the term
“sustainability.”
Reading 2.2: Sustainability
Triple bottom line

It consists of three Ps: profit, people and planet
The phrase “the triple bottom line” was first coined in 1994 by John Elkington, the founder of
a British consultancy called SustainAbility. His argument was that companies should be preparing
three different (and quite separate) bottom lines. One is the traditional measure of corporate profit—
the “bottom line” of the profit and loss account. The second is the bottom line of a company’s “people
account”—a measure in some shape or form of how socially responsible an organisation has been
throughout its operations. The third is the bottom line of the company’s “planet” account—a measure
of how environmentally responsible it has been. The triple bottom line (TBL) thus consists of three
Ps: profit, people and planet. It aims to measure the financial, social and environmental performance
of the corporation over a period of time. Only a company that produces a TBL is taking account of
the full cost involved in doing business.
In some senses the TBL is a particular manifestation of the balanced scorecard. Behind it lies
the same fundamental principle: what you measure is what you get, because what you measure is
what you are likely to pay attention to. Only when companies measure their social and environmental
impact will we have socially and environmentally responsible organisations.
The idea enjoyed some success in the turn-of-the-century zeitgeist of corporate social
responsibility, climate change and fair trade. After more than a decade in which cost-cutting had
been the number-one business priority, the hidden social and environmental costs of transferring
production and services to low-cost countries such as China, India and Brazil became increasingly
apparent to western consumers. These included such things as the indiscriminate logging of the
Amazon basin, the excessive use of hydrocarbons and the exploitation of cheap labour.
Growing awareness of corporate malpractice in these areas has forced several companies,
including Nike and Tesco, to re-examine their sourcing policies and to keep a closer eye on the
ethical standards of their suppliers in places as far apart as Mexico and Bangladesh, where labour
markets are unregulated and manufacturers are able to ride roughshod over social and environmental
standards. It has also encouraged the growth of the Fair Trade movement, which adds its brand to
products that have been produced and traded in an environmentally and socially “fair” way (of course,
that concept is open to interpretation). From small beginnings, the movement has picked up steam in
the past five years. Nevertheless, the Fair Trade movement is still only small, focused essentially on
coffee, tea, bananas and cotton, and accounting for less than 0.2% of all UK grocery sales in 2006.
One problem with the triple bottom line is that the three separate accounts cannot easily be
added up. It is difficult to measure the planet and people accounts in the same terms as profits—that
is, in terms of cash. The full cost of an oil-tanker spillage, for example, is probably immeasurable in
monetary terms, as is the cost of displacing whole communities to clear forests, or the cost of
depriving children of their freedom to learn in order to make them work at a young age.
ADAPTED FROM: http://www.economist.com/node/14301663

1) operations _ a) difficult or impossible to quantify
2) performance b) the criteria set by or imposed upon a company in terms of

doing what is right and wrong
3) impact c) the phenomenon of increasing average temperatures
4) fair trade d) also called “environmentally friendly” or “green”
5) hydrocarbons e) a large company, usually with international operations
6) roughshod _ f) the purchase of necessary components and materials from

suppliers, usually in a foreign country
7) immeasurable g) to reduce input costs in order to maintain or increase

profit
8) sourcing h) misbehavior or misconduct: doing what is illegal and/or
socially unacceptable
9) cost-cut i) everything a company or organization does
10) corporation j) the success of a company in terms of its aims and goals
11) ethical standards k) includes all fossil fuels, such as crude oil, coal and
methane
12) malpractice l) random and without concern for the results
13) indiscriminate m) the positive or negative effect of doing something
14) climate change n) cruel and harsh, the opposite of fair and ethical
15) environmentally responsible o) a manner of doing business according to high social and
environmental standards
1) What is the “triple bottom line”?
2) Why have some companies adopted the triple bottom line and other measures
of sustainability?
3) How do you think the goal of sustainability has affected the profitability
of companies?
Grammar 2.1: Past Simple versus Present Perfect
Read the following sentences adapted from Reading 2.1 and 2.2. Which sentences refer to a
completed action or event that occurred at a specific time in the past (ST), which sentences refer to a
completed action or event that occurred at an unspecified time before the present (BP), and which
sentences refer to an action or event completed within a time period that includes the present (IP)?
1) In September 1970, The New York Times Magazine published an essay by American economist
Milton Friedman.
2) The triple bottom line measures how socially and environmentally responsible a company has
been.
3) Growing awareness of corporate malpractice has forced several companies to re-examine their
sourcing policies.
4) Friedman supported a free market economic system.
5) The Fair-Trade movement has picked up steam in the past five years.
6) Milton Friedman’s views fueled ongoing debates about citizenship and sustainability in corporate
America.
7) The phrase “the triple bottom line” was first coined in 1994 by John Elkington.
1) We use the past simple to talk about actions and events that were completed at a specified past
time/ at an unspecified time before the present.
2) We use the present perfect to talk about actions and events that were completed at a specified
past time/ at an unspecified time before the present.
3) We use the present perfect/ past simple to talk about actions and events that were completed
during a time period that includes the present.
Grammar 2.3: Choose the correct sentence.
A) In 1970, Milton Friedman has argued that the primary goal of a company was profit maximization.
B) In 1970, Milton Friedman argued that the primary goal of a company was profit maximization.
A) John Elkington coined the term “triple bottom line” as a measure of sustainability.
B) John Elkington has coined the term “triple bottom line” as a measure of sustainability.
A) Many corporations have already adopted fair trade practices.

B) Many corporations already adopted fair trade practices.
A) In recent years, many companies found that being sustainable can reduce costs.
B) In recent years, many companies have found that being sustainable can reduce costs.
A) In the 1990s, companies like Nike were criticized for exploiting the cheap labor of developing countries.
B) In the 1990s, companies like Nike have been criticized for exploiting the cheap labor of
developing countries.
A) Many governments and multinational corporations have not adequately responded to current challenges such
as global warning and the energy crisis.
B) Many governments and multinational corporations did not adequately respond to current challenges such
as global warning and the energy crisis.
UNIT 3: Describing and Comparing: What makes a good manager?
Pre-Reading 3.1: Together with a partner, write one sentence to define the term “leadership”
and include a brief list of the qualities of a good leader.
Reading 3.1: Leadership Part 1: The Characteristics of Leaders
Leadership Traits
Theories abound to explain what makes an effective leader. The oldest theories attempt to
identify the common traits or skills that make an effective leader. Contemporary theorists and theories
concentrate on actions of leaders rather than characteristics.
A number of traits that appear regularly in leaders include ambition, energy, the desire to lead,
self-confidence, and intelligence. Although certain traits are helpful, these attributes provide no
guarantees that a person possessing them is an effective leader. Underlying the trait approach is the
assumption that some people are natural leaders and are endowed with certain traits not possessed by
other individuals. This research compared successful and unsuccessful leaders to see how they
differed in physical characteristics, personality, and ability.
A recently published analysis of leadership traits (S.A. Kirkpatrick and E.A. Locke,
“Leadership: Do Traits Really Matter?” Academy of Management Executive 5, 1991) identified six
core characteristics that the majority of effective leaders possess:
- Drive: Leaders are ambitious and take initiative.

- Motivation: Leaders want to lead and are willing to take charge.
- Honesty and integrity: Leaders are truthful and do what they say they will do.
- Self-confidence: Leaders are assertive and decisive and enjoy taking risks. They admit
mistakes and foster trust and commitment to a vision. Leaders are emotionally stable rather
than recklessly adventurous.
- Cognitive ability: Leaders are intelligent, perceptive, and conceptually skilled, but are not
necessarily geniuses. They show analytical ability, good judgment, and the capacity to think
strategically.
- Business knowledge: Leaders tend to have technical expertise in their businesses.
Traits do a better job at predicting that a manger may be an effective leader rather than
actually distinguishing between an effective or ineffective leader. Because workplace situations vary,
leadership requirements vary. As a result, researchers began to examine what effective leaders do
rather than what effective leaders are.
ADAPTED FROM: http://www.cliffsnotes.com/study_guide/topicArticleId-8944,articleId-8913.html

Vocabulary 3.1: For each adjective, complete the sentence:
A leader who is…

1) effective _ a) …rarely doubts his or her decisions and is usually
able to decide quickly.
2) ineffective b) …enjoys a little risk or danger.
3) analytical c) …is unable to lead a team.
4) ambitious d) …tries to convince other people to think or do what

he or she wants.
5) stable e) …investigates problems rationally and carefully

evaluates all possible solutions.
6) skilled f) …desires to be successful in life.
7) decisive g) …is calm and reserved under pressure.
8) perceptive _ h) …notices things that other people don’t.
9) adventurous i) … performs particular tasks well.
10) assertive _ j) …is able to lead a team.
1) Describe an effective leader. Which traits are most important, in your opinion?
2) How would you describe yourself as a leader?

Pre-Reading 3.2: Together with a partner, determine the difference between a trait and a
skill, and write at least one sentence to explain the difference.
Reading 3.2: Leadership Part 2: The Actions of Leaders
Leadership Skills
Whereas traits are the characteristics of leaders, skills are the knowledge and abilities, or
competencies, of leaders. The competencies a leader needs depends upon the situation.
These competencies depend on a variety of factors:
-The number of people following the leader

-The extent of the leader's leadership skills
-The leader's basic nature and values
-The group or organization's background, such as whether it's for profit or not-for-
profit, new or long established, large or small
-The particular culture (or values and associated behaviors) of whomever is being led
To help managers refine these skills, leadership-training programs typically propose guidelines
for making decisions, solving problems, exercising power and influence, and building trust.
Peter Drucker, one of the best-known contemporary management theorists, offers a
pragmatic approach to leadership in the workplace. He believes that consistency is the key to good
leadership, and that successful leaders share the following three abilities which are based on what he
refers to as good old-fashioned hard work:
- The ability to define and establish a sense of mission: Good leaders set goals,
priorities, and standards, making sure that these objectives not only are communicated
but maintained.
- The ability to accept leadership as a responsibility rather than a rank: Good leaders
aren't afraid to surround themselves with talented, capable people; they do not blame
others when things go wrong.
- The ability to earn and keep the trust of others: Good leaders have personal integrity
and inspire trust among their followers; their actions are consistent with what they say.
In Drucker's words, “Effective leadership is not based on being clever, it is based primarily on
being consistent.” Very simply put, leading is establishing direction and influencing others to follow
that direction. Keep in mind that no list of leadership traits and skills is definitive because no two
successful leaders are alike. What is important is that leaders exhibit some positive characteristics that
make them effective managers at any level in an organization.
ADAPTED FROM: http://www.economist.com/node/14301663
Vocabulary 3.2: Match the following words from the text with their meanings.
1) priority a) a position within an organization
2) integrity b) core beliefs
3) trust c) the quality of being constant and reliable in behavior
4) values d) able to complete a particular task (i.e. competent)
5) rank e) the skill or set of skills required to complete a task
6) guideline f) to motivate or encourage certain behavior
7) inspire g) modern, current, up-to-date
8) capable h) the quality of being honest and fair
9) competency i) faith and confidence in someone
10) contemporary j) the main goal or issue
11) consistency k) an established rule or criterion for completing a task

Reading Comprehension 3.1: According to readings 3.1 and 3.2, which of the following
statements are true and which are false? (unknown = false)
1) Good leaders are usually more assertive and decisive than the True / False
average person.
2) Ambitious people are sometimes better leaders. True / False
3) Liars are often less effective leaders. True / False
4) The best leaders are often emotionally unstable. True / False
5) According to Kirkpatrick and Locke, good leaders are almost True / False
always more intelligent than the people around them.
6) Good leaders earn higher salaries than the people they lead. In fact, True / False
they frequently earn the highest salaries.
7) In order to lead more effectively, it is a good idea to improve your True / False
self- confidence.
8) A good manager typically has above average knowledge about business. True / False
9) Looking at your leadership traits can tell you whether or not True / False
you would be a more or less effective leader.
10) Skills are a better measure of good leadership than traits, because True / False
different situations require different attributes.
11) To lead successfully, you need decision-making skills, but you True / False
don’t need problem-solving skills, because you can tell other people to
solve your problems for you.
12) Leadership training courses typically seek to develop leadership traits. True / False
13) Peter Drucker is one of the least known management theorists. True / False
14) According to Drucker, a bad leader might be more likely to True / False
surround him or herself with less talented and less intelligent people, so
that he or she could blame them for mistakes.
15) According to Drucker, the most effective leaders in the world are True / False
often the friendliest people you will ever meet.
1) What is the most important leadership trait according to Peter Drucker? Do

you agree or disagree?
2) In your opinion, what do all good leaders do better than “normal” people?
3) Which skills do you possess, and which skills should you continue to develop?
Grammar 3.1: Adjectives and Adverbs
Circle ALL correct answers to complete the grammar rules below. Refer to Vocabulary 3.1
and Reading Comprehension 3.1 for examples.
1) Adjectives (e.g. effective, adventurous and pragmatic) are used to better describe
nouns / verbs / other adjectives.
2) Adverbs (e.g. effectively, adventurously and pragmatically) are used to better describe
nouns / verbs / adjectives.
3) Most, but not all, adverbs are formed by just adding ed / ly / ing to the end of adjectives.
4) Adjectives typically come right before nouns / right after nouns / somewhere after
the verb “to be”.
5) Adverbs may come at the beginning of a sentence / after a helping verb (e.g.
“will”) / after an object / before the main verb / after the main verb.
6) To form the comparative form of one-syllable adjectives / two-syllable adjectives
/ adverbs just add an –er at the end.
7) To form the comparative form of one-syllable adjectives / two-syllable adjectives
/ adverbs just add a more or less before the word.
8) To form the superlative form of one-syllable adjectives / two-syllable adjectives / adverbs
just add an –est at the end.
9) To form the superlative form of one-syllable adjectives / two-syllable adjectives / adverbs
just add a most or least before the word.
Grammar 3.2: Complete the table below.
ADJECTIVE ADVERB COMPARATIVES SUPERLATIVES

higher / more
highly
often
inefficiently
frequent
worse
likely
most typical/
most typically
well
friendly
Grammar 3.3: Complete the diagram below with the frequency adverbs provided.
often, always, rarely, sometimes, never, usually, occasionally
________ ________ ________________ _______________ ________ __________ __________

_ _ __ ___ ___
0% of the time 100% of the time

Grammar 3.4: Choose the grammatically correct sentence in each case.
A) A good leader learns more fastly than most people.

B) A good leader learns faster than most people.
A) The bestest leaders always tell the truth.

B) The best leaders always tell the truth.
A) Losing the trust of your team members makes you a worse leader.
B) Losing the trust of your team members makes you a badder leader.
A) An ambitious person often leads more effective.

B) An ambitious person often leads more effectively.
A) A good leader makes sure that his or her team members cooperate good.
B) A good leader makes sure that his or her team members cooperate well.
A) Good leaders lose their cool less oftenly.

B) Good leaders lose their cool less often.
A) Even good leaders make simply mistakes.

B) Even good leaders make simple mistakes.
A) The leader of a group is usually the more confident person in the group.
B) The leader of a group is usually the most confident person in the group.
A) A leadership training course won’t help you become most confident.

B) A leadership training course won’t help you become more confident.
A) A good leader is typically more assertive and decisive then a bad leader.
B) A good leader is typically more assertive and decisive than a bad leader.
A) The best leaders feel bad when their team is unhappy.

B) The best leaders feel badly when their team is unhappy.
A) The less important traits of a good leader are his or her gender and race.
B) The least important traits of a good leader are his or her gender and race.
A) Good leaders can attain the more high positions in an organization.

B) Good leaders can attain the highest positions in an organization.
UNIT 4: Past Duration and Future Predictions: The History and Future of the EU
Pre-Reading 4.1: Together with a partner, write one or two sentences to describe the purpose
of the European Union.
Reading 4.1: A Brief History of the EU and the Euro
1944 – In an attempt to stabilize the global economy, forty countries sign the Bretton Woods Agreement:
all member currencies are fixed to the Dollar, which is backed by the gold standard. The agreement leads to
the creation of the World Bank and the International Monetary Fund.
1951 – The European Coal and Steel Community is founded to promote economic and political
cooperation and lasting peace in Europe.
1957 – The Treaty of Rome seeks to contribute to European unity and prosperity by setting the goal of a
common market, called the European Economic Community (EEC), and the Euratom Treaty establishes the
European Atomic Energy Community (EAEC).
1970 - The Werner Report proposes a full Economic and Monetary Union (EMU) based upon irrevocably
fixed exchange rates and suggests that a common currency might aid the process. The report also calls for
international coordination of fiscal policies and strict budgetary guidelines for membership.
1971 – The United States abandons the gold standard and floats the dollar, thus bringing an end to Bretton
Woods and halting progress toward an EMU.
1979 – The EEC revives the goal of an EMU by adopting the European Monetary System (EMS), which is
founded upon exchange rates that are adjustable within a fixed range.
1986 – The Single European Act sets the goal of a Single European Market without trade barriers, but
member states soon realize that a common currency will be needed to eliminate the costs associated with
currency transactions and fluctuating exchange rates.
1989 – The Delors Report outlines a three-stage plan for the realization of the EMU: (1) the free
movement of capital across national borders, (2) the alignment of fiscal policies across member states with
strict rules regarding budget deficits and the establishment of a European Central Bank (ECB) to govern
monetary policy, and (3) the gradual adoption of a common currency by all member states.
1990 – 1993 – Stage 1 of the EMU, which is completed when the Maastricht Treaty goes into effect
1993 – The Maastricht Treaty of 1991 formally establishes the European Union by adopting the three-
stage plan of the Delors Report and setting guidelines for membership: (1) a debt to GDP ratio less than 60%,
(2) interest rates comparable to the European average, and (3) a budget deficit less than 3% of GDP.
1994 – 1998 – Stage 2 of the EMU, which ends with the establishment of the ECB
1997 – In light of a single European monetary policy with different national fiscal policies, the Stability
and Growth Pact determines financial sanctions for exceeding the deficit ceiling of 3% of GDP.
1999 – Stage three of the EMU begins: member state exchange rates are irrevocably fixed, a single
monetary policy is adopted and the Euro becomes legal tender, but is initially only used for cashless payments
(e.g. payment by check, wire transfer and bank card)
2002 – Euro banknotes and coins are introduced in the Euro Area.
2003 – Germany and France exceed the 3 percent deficit limit for a third year.
2005 – EU finance ministers relax the deficit rules for Germany and France.
2008 – The global financial crisis begins after Lehman Brothers files for bankruptcy. Numerous financial
institutions around the world are bailed out with public funds, and global financial markets panic. Many
politicians, economists and media personality begin to blame an economic system dependent on deregulated
financial markets and massive public debt for economic instability.
Since 2009 – Due to public debts greater than GDP and deficits over 10% of GDP, investors fear that
some of the largest economies in the EU could default and credit agencies begin to downgrade their credit
ratings. The ECB and IMF begin to provide emergency bailout packages to prevent a collapse of the Euro, but
demand austerity measures in return. All European nations begin to raise taxes, cut social programs and
reduce the
wages of government employees. But many citizens feel that they are unfairly paying for the mistakes of market speculato
1) fixed exchange rate a) paper money
2) floating exchange rate b) a limit
3) fluctuate c) to miss scheduled payments on debt
4) budget deficit d) guidelines for taxation and government spending
5) sanction e) to give money to prevent financial ruin
6) banknote f) when gold is held in reserve to give value to the banknotes

in circulation
7) deregulate
g) the amount of money the government owes to the owners
of treasury bills
8) austerity measure h) money whose value is guaranteed by the government
9) default i) guidelines for increasing and decreasing the supply of

money to regulate interest rates and inflation
10) gold standard j) to constantly change
11) legal tender k) when the value of currency A relative to currency B is set
at a specific ratio
12) credit rating l) a cost or restriction to conducting international business
13) public debt m) to lift legal restrictions on a market
14) trade barrier n) economic well being
15) speculator o) the amount by which government spending exceeds tax

revenues
16) bail out p) a punishment
17) ceiling q) an attempt to balance a budget and reduce debt
18) monetary policy r) someone who attempts to earn a profit by anticipating

future market trends and buying and selling stocks, bonds,
foreign currencies, etc.
19) fiscal policy s) when the value of currency A relative to currency B is free
to fluctuate based on the demand of currency A in country B
20) prosperity
t) a score
given to a
borrower of
money
based on the
likelihood
the
borrower
can repay
his/her/its
debts
Reading Comprehension 4.1: According to the timeline above, which of the following
statements are true, and which are false?
1. The Bretton Woods agreement has been in place since 1944. True /False
2. European countries have worked toward economic unity since the 1950s. True / False
3. The Euro was in circulation for ten years. True / False
4. The Euro was used only for cashless payments from 1999 to 2002. True / False
5. The EU has had a debt crisis for over three years now. True / False
6. Bretton Woods has lasted for 27 years. True / False
7. Bretton Woods was in place until 1971. True / False
8. Europe worked toward the free movement of capital from 1990 to 1993. True / False
9. Stage three of the EMU was in progress until 1999. True / False
10. Most European countries sought to balance their budgets for over True / False
three years.
11. Stage 2 of the EMU has been in progress since 1998. True / False
12. The EEC existed in 1957. True / False
13. Deficit ceilings were relaxed in 2005. True / False
14. The ECB governed EU monetary policy in 1998. True / False
15. The Maastricht treaty has been in effect since 1991. True / False
Grammar 4.1: Past Duration: Finished and Unfinished Duration
Which of the following events or actions began and finished in the past (F) and which
began in the past and continue to the present (UF).
1. The Bretton Woods agreement lasted until 1971.

2. The Euro has been legal tender in Europe for 13 years.
3. The Dollar was backed by the gold standard for 27 years.
4. The Euro was used only for cashless payments from 1999 to 2002.
5. The European Economic Community has expanded since the 1950s.
Grammar 4.2: Past Duration: Past Simple versus Present Perfect
Complete the following grammar rules with past simple or present perfect.
1. Use the when describing an event or action that started in the past and
finished in the past.
2. Use the when describing an event or action that started in the past and
continues to the present.
Grammar 4.3: Time Prepositions for Duration
Complete the grammar rules below with the following prepositions: since, for, from… to…,
until [One may be used twice!]
1. Use to state the start time of an event or action that continues to the
present.
2. Use to state the finish time of an event or action that finished in the
past.
3. Use to state the start and finish times of an event or action that
finished in the past.
4. Use to state the length of time of an event or action that finished in
the past.
5. Use to state the length of time of an event or action that continues to
the present.
Grammar 4.4: Go back to Reading Comprehension 4.1. Double check your answers and
rewrite all false statements so that they are true.
Pre-Reading 4.2: Together with a partner, discuss the challenges that the EU and the Euro
currently face.
Reading 4.2: The Challenges Facing the EU
The European Union is in many ways a remarkable political achievement. Economic and
political integration has encouraged economic growth, given Europe a stronger voice in
international economic affairs, and reduced the risk of war. EU membership has also facilitated
the creation of post-communist democracies following the collapse of the Soviet empire.
Unfortunately, it is hard to be optimistic about the EU’s prospects today, especially its
stated goal of an “ever closer union.” Despite its past achievements, the EU now suffers from
growing tensions and several self-inflicted wounds. The EU is likely to experience repeated
crises and internal divisions, and one cannot rule out a gradual and irreversible decline in its
cohesion and influence.
Today, the EU faces five fundamental challenges. None of them will be easy to
overcome. The first is overexpansion. The EU has become an elaborate supranational
organization of
28 members governed by an array of institutions and subsidiary agencies and hamstrung by the
need to reach consensus before making important decisions. Its members are still independent
nation-states with their own governments and their own complicated internal political
arrangements. Moreover, as the EU has expanded, its membership has become increasingly
heterogeneous. The geographic size, population, and economic resources of the member states are
vastly different, and their respective cultures and national histories have become less similar.
The second challenge is that although the disappearance of the Soviet Union was a
welcome development, it removed one of the main motivations for European unity. Security was
a key part of the EU’s rationale from the start. That rationale disappeared when the Warsaw Pact
collapsed. The absence of an external danger has encouraged European leaders to focus more on
selfish national concerns.
The third challenge is that the decision to create the euro was done for political rather
than economic reasons: to renew momentum for unity, to bind a reunified Germany more tightly
inside European institutions, and to put Europe on a more equal footing with the United States.
But the EU lacked the political and institutional mechanisms needed to make a currency union
work. Instead, the euro’s proponents simply assumed the common-currency members would
never get into serious financial trouble, and if this happened, they assumed that it would be easy
to create the institutions that the eurozone lacked. Seven years have passed since the euro crisis
hit, and the EU still lacks the political institutions needed to sustain a currency union. Even
worse, the crisis has sown deeper divisions within the continent, with debtors and creditors
exhibiting a level of resentment and hostility not seen for many years. EU member states now
try to get what they want by threatening to blow up the entire enterprise.
The fourth challenge is a deteriorating regional environment. The EU now faces serious
turmoil on its periphery, with direct consequences for Europe itself. State failures in Libya,
Syria, Yemen, and sub-Saharan Africa have produced a flood of refugees seeking to get in, while
the emergence of al Qaeda, the Islamic State, and other extremist movements has had
repercussions among some of Europe’s Muslim populations. The danger of homegrown or lone-
wolf terrorism is often exaggerated, but it is not zero. And some Europeans now want to roll
back the open internal borders that were a key achievement of the 1986 Single European Act.
The final challenge is that although the elites who launched the original European project
hoped it would transcend existing national loyalties, nationalism remains alive and well
throughout the continent. Britain may vote to leave the EU next year, Scottish nationalism may
lead it to exit the United Kingdom, and nationalist sentiments continue to simmer in Catalonia
and elsewhere. Economic stagnation, high youth unemployment, and concerns about
immigration have also fueled a resurgence of Euroskeptic nationalist parties that reject the core
principles of the EU. Add to this mix Europe’s unfavorable demography — its overall population
is declining and the median age is rising rapidly — and you have a recipe for slow economic
growth and growing dissatisfaction with mainstream parties and existing political institutions.
ADAPTED FROM: http://foreignpolicy.com/2015/07/16/does-europe-have-a-future-stephen-walt-testimony-

house- foreign-affairs-committee/3
1. facilitate
a. detailed and complex
2. collapse
b. to plant (i.e. to create/cause)
3. prospects
c. of each
4. self-inflicted wound
d. inhibited/restricted by
5. elaborate
e. to help/enable
6. an array of
f. a return to importance/power
7. hamstrung by
g. a consequence/result
8. vastly
h. a feeling of dislike/displeasure
9. respective
i. a state of no economic growth
10. rationale
j. to decrease/downsize/reduce
11. put on (a) more equal footing with
k. a state of confusion or commotion
12. proponent of
l. a supporter of
13. sow
m. very/extremely
14. debtor
n. a state of conflict or opposition
15. creditor
o. the fall/decline/ruin
16. resentment
p. still healthy/influential/powerful
17. hostility
q. to make more equal to
18. deteriorating
r. someone acting on their own
19. turmoil
s. expectations/potential
20. repercussion
t. becoming worse
21. lone-wolf
u. a multitude/range of
22. roll back
v. a person or entity that loans money
23. alive and well
w. a person or entity that borrows money
24. stagnation
x. harm caused to oneself
25. resurgence
y. the reason/explanation for something
Pre-Reading 4.3: Together with a partner, make a few predictions for the future of the EU.
Reading 4.3: The Future of the EU
Looking ahead, one can imagine three possible futures for the European Union. First,
Europe’s leaders could find creative new ways to overcome the challenges identified above. In
theory, bold and determined leadership could build the institutions to support the euro, assimilate
immigrant populations more effectively, and adopt reforms to produce stronger economic growth.
Unfortunately, this optimistic scenario for a reinvigorated EU is unlikely. There are no
European leaders today with the vision and stature of an Adenauer, de Gaulle, or Thatcher, and it
would take years for serious reforms to work their way through the EU’s elaborate consensus-
based
governing machinery.
Instead of an “ever closer union,” therefore, the EU will more likely simply muddle
through. It will keep applying Band-Aids to contain the euro crisis and will hope that trade deals
with the United States and China will provide an economic boost. In this scenario — which is the
most likely — the EU will stay in business, but robust growth will remain elusive, support for
the union will decline, and Europe’s global influence will continue to wane.
But there is a third possibility: The EU experiment may start to unravel. A Greek exit
from the eurozone would set a dangerous precedent, nationalist resentments could deepen,
leaders with more authoritarian inclinations could come to power (as has already occurred in
Hungary), and Greece could dissolve into widespread social unrest (or worse). Some European
states might even look to Moscow for help (though they are unlikely to get much). If
disintegration begins, the only question will be: How far and how fast will it go?
ony-house- foreign-affairs-committee/3
1. overcome a. reenergized/brought back to life

2. reinvigorated b. difficult to perceive, find, or realize
3. muddle through c. a lift/stimulus
4. boost d. to disentangle/come undone/break apart
5. robust e. to melt/liquefy/break apart
6. elusive f. to prevail (over)
7. wane g. the decay/breaking apart
8. unravel h. to decrease in strength or intensity
9. dissolve i. strong/booming/steady
10. disintegration j. (barely) survive
Grammar 4.5: Future Certainty and Uncertainty
According to the author, which of the following events are certain (C) to happen in the
future, which are uncertain (U) to happen in the future, which are more certain (MC) than
uncertain to happen in the future, which are less certain (LC) than uncertain to happen in the
future, and which will certainly not (CN) happen in the future?
1. Europe’s leaders could find creative new ways to overcome the challenges.
2. Bold and determined leadership could build the institutions to support the euro.
3. The optimistic scenario for a reinvigorated EU is unlikely (to happen).
4. The EU will stay in business.
5. The EU is likely to experience repeated crises and internal divisions.
6. Robust growth will remain elusive, support for the union will decline, and Europe’s
global influence will continue to wane.
7. The EU experiment may start to unravel.
8. The challenges will not be easy to overcome.
9. Some European states might look to Moscow for help.
10. The EU will likely simply muddle through.
Grammar 4.6: Modals for the Future
Complete the grammar rules with the following modal verbs: will, may, will not, could,
might, will likely/probably, is likely to, will unlikely, is unlikely to
1. To express that something is certain to happen in the future, use:
2. To express that something is uncertain to happen in the future, use ,

,
3. To express that something is more certain than uncertain to happen in the future, use
,
4. To express that something is less certain than uncertain to happen in the future, use
,
5. To express that something is certain not to happen in the future, use:

Discussion and Writing 4.1: Work with a partner or a small group to briefly summarize the
history of the EU and make a couple predictions about its future.
UNIT 5: Conditionals: The Results of Fiscal Policy
Pre-Reading 5.1: Together with a partner or group write a couple sentences to explain how
the government is similar to a firm or household.
Reading 5.1: How does the government manage its money?
The National Budget
Fiscal policy is carried out by the government. The two main instruments of fiscal policy are
government expenditures and taxes. The government collects taxes in order to finance
expenditures on a number of public goods and services—for example, highways and national
defense. When government expenditures exceed government tax revenues in a given year, the
government is running a budget deficit for that year. The budget deficit, which is the difference
between government expenditures and tax revenues, is financed by government borrowing; the
government issues long-term, interest-bearing bonds and uses the proceeds to finance the deficit.
The total stock of government bonds and interest payments outstanding, from both the present
and the past, is known as the national debt. Thus, when the government finances a deficit by
borrowing, it is adding to the national debt. When government expenditures are less than tax
revenues in a given year, the government is running a budget surplus for that year. The budget
surplus is the difference between tax revenues and government expenditures. The revenues from
the budget surplus are typically used to reduce any existing national debt. In the case where
government expenditures are exactly equal to tax revenues in a given year, the government is
running a balanced budget for that year.
ADAPTED FROM: http://www.cliffsnotes.com/study_guide/Fiscal-Policy.topicArticleId-9789,articleId-9749.html
Vocabulary 5.1: Briefly define the following terms from the text.
1. government expenditures:
2. public goods and services:
3. government borrowing:
4. national debt:
5. budget surplus:
6. balanced budget:
Pre-Reading 5.2: Together with a partner or group write a couple sentences to define the
term “fiscal policy” and determine its purpose.
Reading 5.2: What is fiscal policy?
The Keynesian and Classical Views on the Role of the Government
Expansionary fiscal policy is defined as an increase in government expenditures and/or a

decrease in taxes that causes the government's budget deficit to increase or its budget surplus
to decrease. Contractionary fiscal policy is defined as a decrease in government expenditures
and/or an increase in taxes that causes the government's budget deficit to decrease or its
budget surplus to increase. The belief that expansionary and contractionary fiscal policies can
be used to influence macroeconomic performance is most closely associated with John
Maynard Keynes and his followers. Keynesians believe that expansionary fiscal policy can
be used to pull the economy out of a recession and contractionary fiscal policy can be used to
control inflation. However, the classical view of expansionary or contractionary fiscal
policies is that such policies are unnecessary because there are market mechanisms—for
example, the flexible adjustment of prices and wages—which serve to keep the economy at
or near the natural level of real GDP at all times. Accordingly, classical economists believe
that the government should run a balanced budget each and every year.
ADAPTED FROM: http://www.cliffsnotes.com/study_guide/Fiscal-Policy.topicArticleId-

9789,articleId-9749.html
Reading Comprehension 5.1: Match column A to column B to form complete sentences

regarding Readings 5.1 and 5.2.
Column A Column B
1. The government is engaging in a. its deficit decreases or its
expansionary fiscal policy… surplus increases.
2. The government is engaging in b. it increases output and decreases
contractionary fiscal policy… unemployment.
3. When the government adopts an c. it will self-adjust.
expansionary fiscal policy,…
4. When the government adopts a d. when it purposefully runs a deficit
contractionary fiscal policy,… to affect the economy.
5. According to Keynesians, if government e. it ultimately adds to the national debt.
spending increases,…
6. According to classical economists, if f. when it increases taxes and/or decreases
the economy falls out of equilibrium,… spending to affect the economy.
Reading 5.3: The Keynesian Revolution
Expansionary Fiscal Policy
Keynesian theories of output and employment were developed in the midst of the Great
Depression of the 1930s, when unemployment rates in the U.S. and Europe exceeded 25%
and the growth rate of real GDP declined steadily for most of the decade. Keynes and his
followers believed that the way to combat the prevailing recessionary climate was not to wait
for prices and wages to adjust but to engage in expansionary fiscal policy. The Keynesians'
argument in favor of expansionary fiscal policy is illustrated in Figure 1. Assume that the
economy is initially in a recession. The equilibrium level of real GDP, Y1, lies below the
natural level, Y2, implying that there is less than full employment of the economy's
resources. Classical economists believe that the presence of unemployed resources causes
wages to fall, reducing costs to suppliers and causing the short run aggregate supply curve
to shift from SAS1 to SAS2, thereby restoring the economy to full employment. Keynesians,
however, argue that wages are sticky downward and will not adjust quickly enough to reflect
the reality of unemployed resources. Consequently, the recessionary climate may persist for a
long time. The way out of this difficulty, according to the Keynesians, is to run a budget
deficit by increasing government expenditures in excess of current tax receipts. The increase
in government expenditures should be sufficient to cause the aggregate demand curve to shift
to the right from AD1 to AD2, restoring the economy to the natural level of real GDP.
Keynesians argue that expansionary fiscal policy provides a quick way out of a recession and
is to be preferred to waiting for wages and prices to adjust, which can take a long time. As
Keynes once said, “In the long run, we are all dead.”
ADAPTED FROM: http://www.cliffsnotes.com/study_guide/Fiscal-Policy.topicArticleId-

Reading Comprehension 5.2: FIGURE 1
Complete the two graphs based on the reading above. (For help, you may want to complete
Vocabulary 5.2 on the next page first).
Classical Solution to a Recession Keynesian Solution to a Recession
LAS LAS
SAS1 SAS1
price price
level level
AD1 AD1
Y1 Y2 GDP Y1 Y2 GDP
1) GDP a) the level of production
2) real GDP b) when GDP is below the natural level and, therefore,
resources are not fully employed
3) natural GDP c) producers/sellers of goods and services
4) recession d) Gross Domestic Product adjusted for inflation
5) output e) the right amount of
6) sticky wages f) the time period in which, according to Keynes, wages

do not adjust to a change in GDP and price level
7) sufficient g) the optimal Gross Domestic Product
8) suppliers h) when compensation for work does not adjust to a

change in GDP and price level
9) short run i) when the primary resources used for production (i.e.
labor and capital) are utilized at the optimal level
10) full employment j) Gross Domestic Product: the total output of an

economy in terms of total income
Discussion and Writing 5.1: Work with a partner or a small group to briefly describe why
you think wages might be sticky?
Reading 5.4: A Classical Criticism
Secondary effects of fiscal policy
Classical economists point out that the Keynesian view of the effectiveness of fiscal policy
tends to ignore the secondary effects that fiscal policy can have on credit market conditions.
When the government pursues an expansionary fiscal policy, it finances its deficit spending
by borrowing funds from the nation's credit market. Assuming that the money supply
remains constant, the government's borrowing of funds in the credit market tends to reduce
the amount of funds available and thereby drives up interest rates. Higher interest rates, in
turn, tend to reduce or “crowd out” aggregate investment expenditures and consumer
expenditures that are sensitive to interest rates. Hence, the effectiveness of expansionary
fiscal policy in stimulating aggregate demand will be mitigated to some degree by this
crowding-out effect.
TED FROM: http://www.cliffsnotes.com/study_guide/Fiscal-Policy.topicArticleId-

1) interest rate a) the total amount of a currency in circulation
2) mitigate b) the extent to which an action has the desired effect
3) money supply c) where people borrow and loan money
4) crowding-out d) when the intended effect of an economic policy is

limited by secondary effects
5) effectiveness e) to diminish or lessen
6) credit market f) the percentage charged on loans or paid on

investments at specified intervals
Reading Comprehension 5.3: Imagine we are currently in a recession. Complete the dialog
between two economic advisors using the phrases provided.
KEYNESIAN: If we do nothing, a. the market will self-correct.

CLASSICAL: When the markets adjust, b. when that happens.
KEYNESIAN: That’s not true. The c. by the time that happens!
economy will recover _
CLASSICAL: But interest rates will rise d. only if we pursue an expansionary fiscal
policy.
KEYNESIAN: We will just have to e. GDP will return to its natural level.
print more money,
CLASSICAL: If we just wait it out, f. if we borrow more money.
KEYNESIAN: We could all be dead g. the recession might get worse.
Reading Comprehension 5.4: Mark all correct answers to the following questions,
according to Keynesian theory.
1. What would happen if the government pursued an expansionary fiscal policy right now?
Italy’s national deficit and debt would decrease.
Interest rates and price levels would rise, at least in the short run.
Italy’s credit rating would probably be downgraded.
2. What would happen if the government pursued a contractionary fiscal policy right now?
Italy’s national deficit and debt would increase.
Interest rates and price levels would fall, at least in the short run.
Italy’s credit rating would probably be upgraded.
Grammar 5.1: STEP 1: Each sentence below consists of a CONDITION and its RESULT.
Underline all the conditions and circle all the results. STEP 2: now determine if each
sentence refers to (1) a result that is certain (C) to happen given the condition (i.e. a rule or
law), (2) a condition that is probable or possible (P) to happen in the future and the certain or
possible result given that condition, or (3) a condition and result that are both improbable (IP)
to happen in both the present and the future.
The government is engaging in expansionary fiscal policy when it purposefully runs a deficit
to affect the economy.
When the markets adjust, GDP will return to its natural level.
Italy’s national deficit and debt would decrease, interest rates and prices in Italy would fall,
and the country’s credit rating would probably be upgraded if the government pursued a
contractionary fiscal policy right now.
If government spending increases, it increases output and decreases unemployment.
If the government pursued an expansionary fiscal policy right now, Italy’s national deficit and
debt would increase, interest rates and prices in Italy would rise, and the country’s credit
rating would probably be downgraded.
If the economy falls out of equilibrium, it will self-adjust.
If we do nothing, the recession might/may/could get worse.
When the government adopts a contractionary fiscal policy, its deficit decreases or its
surplus increases.
Interest rates will rise, if we borrow more money.

Grammar 5.2: Complete the table below using the elements provided. Refer to the sentences
in Grammar 5.1 for examples.
certainty, might/may/could, if/when, present simple/present continuous,

probability/possibility, would + infinitive, present simple/present continuous,
improbability, if/when, if, will + infinitive, present simple, past simple, comma
CONDITION CLAUSE RESULT CLAUSE FUNCTION
ZERO CONDITIONAL
PRESENT
+ SIMPLE/
CONTINUOUS
FIRST CONDITIONAL
IF/WHEN
+
SECOND CONDITIONAL
IMPROBABILITY
+
Note: Use when the result is possible but not certain, and remember
that the is not necessary when the condition comes after the result.
Discussion and Writing 5.2: Work with a partner or a small group to write a paragraph to
briefly answer the following questions:
What type of fiscal policy is the government currently pursuing?

What do you think will happen if the government continues this fiscal policy?
What do you think would happen if the government radically changed its fiscal policy?
UNIT 6: Rules and Regulations and Giving Advice: Advertising Rules
Pre-Reading 6.1: Together with a partner or group discuss the purpose of advertising. Be
ready to share your ideas with the class.
Reading 6.2: Effective Advertising
Principles of Advertising
“Advertising is both an art and a science. The art comes from writing, designing, and
producing exciting messages. The science comes from strategic thinking and planning,
including research. The creative specialist or team must first deal with the problem of
coming up with a concept. Then the specialist or team must develop a creative strategy,
determine appropriate appeals, and select a style of execution. The ad must then be cast into
a print, television, radio, or other format. At this stage, copywriters generally collaborate
with artistic or production teams to create the actual advertisement. From start to finish, the
process of ad creation involves a multitude of decisions that require understanding both the
product and the consumer as well as knowledge of the various formats and media” (185).
“Television copy consists of two elements—the audio and the visual. The video (visual
elements) is what the viewer sees on the television screen. The visual generally dominates the
commercial, so it must attract the viewer’s attention and communicate a key idea, message
and/or image. The audio includes such elements as voices, music, and sound effects.
Broadcast commercials are demanding to make. They must be credible and relevant.
Research shows that the following techniques work best: the opening should be a short,
compelling attention getter; demonstrations should be interesting and believable; the content
should be ethical, in good taste and entertaining; and the general structure of the commercial
and copy should be simple and easy to follow” (183).
“A company must be able to locate possible customers, wherever they are, and then be able to
understand and communicate with them. Marketing, the process of creating, distributing,
promoting, and pricing goods, services, and ideas to facilitate satisfying exchange
relationships, is the answer. Advertising alone cannot do it all. […] [E]ach market must be
segmented if a company’s advertising is to be successful. Once a target market has been
segmented, advertising must position and differentiate the product or service from its
competitors” (103-104).
“Consumers’ wants and needs are constantly changing, affecting both business and consumer
buyer behavior. If advertisers are to attract and communicate with audiences, they must
acquaint themselves with consumers’ ways of thinking, with those factors that motivate them,
and with the environment in which they live” (107).
“Consumer behavior is […] influenced by various personal (such as demographic) and

psychological factors (such as perception, motivation, attitudes, lifestyles, and personality).
External influences, such as social and economic factors, affect this process. […] With
customized products and messages, marketers have begun to market to the differences
among people, not just the similarities. Some agencies now employ account planners who
attempt to better understand consumer behavior in today’s challenging marketplace” (123).
ADAPTED FROM: Lee, Monle and Carla Johnson. Principles of Advertising. Binghamton, NY: Hayworth, 2005.
Vocabulary 6.1: Match the words in BOLD in the text to their meanings below.
1) patterns of consumption on a micro or macro scale
2) the manner in which a person observes and understands phenomena
3) convincing
4) to find a solution for
5) specially designed for a particular customer
6) trustworthy
7) to distinguish from something else
8) a person who writes the text and/or dialog for an advertisement
9) a plan or guiding principle
10) the application or realization (i.e. of a plan)
11) to create, invent, or think of
12) of importance
13) to aid
14) to analyze the entire market and determine which consumers constitute your target
market and which do not
15) the process of developing an advertisement
16) aspects of a product that are highlighted to gain the attention of particular consumers
17) set in a particular medium
18) the final product of ad creation
19) of high moral standards
20) the segment of the market which you want to attract with advertisements
21) to create, distribute, promote, and price a good or service

Reading Comprehension 6.1: Based on Reading 6.1, which of the following statements are
true, and which are false?
1. It is imperative that advertisers not tell obvious lies in their commercials. True /False
2. A company must employ an account manager in order to True / False

understand consumer behavior.
3. A company could employ an account manager in order to understand True / False

consumer behavior.
4. It is advisable for advertisers to know their target market. True / False
5. It is not advisable that advertisements follow ethical standards. True / False
6. One possibility is to use the visual aspects of a commercial to gain True / False
the audience’s attention.
7. It is not advisable to produce a boring commercial. True / False
8. One possibility is to cast advertisements in a medium. True / False
9. It is possible to cast an advertisement in many different media. True / False
10. To create a good advertisement it is necessary to differentiate True / False

the product from all other products on the market.
11. It is imperative that copywriters collaborate with artistic and True / False
production teams.
12. It is imperative that an advertisement does not contain True / False

relevant information.
13. In addition to advertising, a company might also consider pricing True / False
and distribution.
14. It is a good idea, but not necessary, to plan advertisements in advance. True / False
Grammar 6.1: Step 1: Match the modal verbs below to their functions. Step 2: Rewrite all
false statements in Reading Comprehension 6.1 so that they are true.
must / should / could / shouldn’t / mustn’t / couldn’t
1. To say that an action is a possible solution to a problem, use:
2. To say that an action is not a possible solution to a problem, use:
3. To suggest that someone acts in a particular way, use
4. To suggest that someone does not act in a particular way, use
5. To inform someone that a particular action is imperative, use
6. To inform someone that it is imperative to not act in a particular way, use _

Discussion 6.1: STEP 1: Work with a partner or a small group to complete the following
guidelines for effective advertising with the modal verbs provided. Your answers should be
based on YOUR OWN opinion. STEP 2: Label each suggestion as a POSSIBLE
SOLUTION (PS) to a problem, a SUGGESTION (S), or something that is absolutely
IMPERATIVE (I).
must / mustn’t / should / shouldn’t / could / couldn’t
1. A commercial break strict social taboos.
2. An advertising campaign distinguish a company’s product from

its competitors products.
3. An ad grab the audience’s attention.
4. Commercials be complicated.
5. Commercials be creative.
6. Commercials be funny.
7. The message of an advertisement conveyed textually.
8. An advertisement be informative.
9. An advertisement be too informative.
10. Advertisements appeal to the audience’s senses and emotions.
11. To make a commercial better, the copywriter include a joke or

ironic situation.
12. A television or radio ad be too long.
13. All advertisements be memorable.
14. Ads be more symbolic than informative.
15. Ads be more informative than symbolic.
16. An advertisement be credible and relevant.
17. To appeal to the audience, an advertiser use a celebrity or

physically attractive person in the ad.
Pre-Reading 6.2: Together with a partner or group discuss whether you think advertising
should be regulated by the government. Be ready to share your ideas with the class.
Reading 6.2: Read the following text and then complete the activities that follow with a
partner or small group.
EU Advertising Directives
The European Commission combined legislation on comparative and misleading

advertising to establish the do's and don'ts of advertising in one text: Directive 2006/114/EC.
The previous legislation in this area had been subject to amendment on a number of occasions
and the new directive was presented in the interests of providing a clear and rational text.
This is part of the Commission's goal of having clearer and simpler legislation by publishing
codified versions of legislation once they have undergone a significant number of
amendments. The text of the consolidated directive combines provisions from the
misleading advertising directive, the comparative advertising directive and the unfair
commercial practices directive. The rules set out in the directive impact all companies that
market and advertise their goods or services in the EU
Misleading advertising is conceived as any advertising which, in any way, either in
its wording or presentation deceives or is likely to deceive the audience to which it is
addressed or which it reaches, and which by reason of its deceptive nature, is likely to affect
their economic behaviour, or which injures or is likely to injure a competitor. Product
labelling, information on websites, in catalogues or in instruction manuals can all be
construed, in principle, as forms of advertising. Comparative advertising, on the other
hand, is defined as any advertisement, that explicitly or by implication, identifies a
competitor or goods or services offered by a competitor.
Harmonised rules on misleading and comparative advertising were seen to be
necessary, as the Member States had previously adopted contradictory laws against these
forms of advertising. The different laws throughout the EU on this subject were viewed as
having a negative impact on the smooth running of the common market, as, for example, they
hindered the carrying out of pan-EU advertising campaigns. The new directive deals with the
setting of minimum and objective criteria for determining whether advertising is misleading
or not.
Furthermore, unfair comparative advertising was considered to have a negative effect
on EU competition, as it could potentially allow one competitor to gain an unfair advantage
over another. Thus the directive outlines standard conditions for fair comparative advertising
which relies on material, relevant, verifiable and representative features without misleading
the consumers. Fair comparative advertising is considered to be a stimulus for competition,
which in turn is to the consumer's advantage.
Traders should note that national and international provisions regarding copyright
still apply when the results of comparative tests carried out by third parties are referred to or
reproduced in comparative advertising. Thus, comparative advertising is permitted when:
-it is not misleading;

-it compares goods or services meeting the same needs or intended for the same purpose;
-it objectively compares one or more relevant features of those goods and services;
-it does not create confusion in the marketplace between the advertiser and a competitor's
trademark, trade name or products;
-it does not discredit or denigrate a competitor's trademark, trade name or products;
-it does not take unfair advantage of the reputation of a competitor's trademark or trade name;
-and it does not present goods or services as imitations or replicas of goods or services
bearing a protected trademark or trade name.
Traders should be aware that it is still up to the Member States to decide on how to
control misleading advertising and comparative advertising. National rules may allow
persons or organisations with a legitimate interest in prohibiting misleading advertising, or
controlling comparative advertising, to take legal action or go before an administrative
authority. The national courts or administrative authorities have the power to order that
unlawful advertising cease. They can also order its prohibition if the advertisement has not
yet been published, but publication is imminent. A voluntary control by the national self-
regulatory bodies can also be carried out. Courts and administrative authorities may require
traders to produce evidence as to the accuracy of factual claims they have made. Therefore,
marketers should always be able to justify the validity of any claims they make and be able to
provide evidence of the accuracy of their claims.
ADAPTED FROM: http://info.hktdc.com/alert/eu0703d.htm
1. the specific details of a law

2. written and published as official law
3. misleading
4. to interpret
5. a text accompanying a product that explains how to use it properly
6. advertising which compares two products or services
7. to limit the effects of
8. to harm the reputation of
9. characteristic or demonstrative of something
10. the legal ownership of something in print
11. different and opposed
12. advertising that deceives consumers
13. a company that sells similar products or services _
14. the official name, logo and/or slogan of a product or company
15. a copy
16. to insult, belittle, defame
17. laws passed by a government authority
18. provable
19. a law that requires or prohibits certain behavior
20. official changes to a law
21. to mislead
Reading Comprehension 6.2: Complete the following sentences with the words provided.
can / must / don’t have to / may not / are not allowed to / are supposed to / need to
1. In the EU, companies compare their products

with products of competitors if the comparisons are objective.
2. EU advertisers mislead consumers.
3. EU law states that traders deceive consumers.
4. Advertisers respect international copyright laws.
5. Advertising regulations in the EU clearly state that comparative ads

tell you exactly what you are paying for.
6. National Governments abide by the EU advertising

directives, but in reality member states enforce the laws
in the same way.
Grammar 6.2: Match the modal verbs below to their functions. Use Reading 6.2 and
Reading Comprehension 6.2 for examples.
can / must / don’t have to / may not / are not allowed to / are supposed to / need to / may /
must not / don’t need to / have to / cannot / are allowed to / are not supposed to
1. To say that something is necessary/obligatory, use: ,
2. To say that something is not necessary/obligatory, use: ,
3. To say that something is permissible/possible, use: ,
4. To say that something is not permissible/possible, use: ,
5. To prohibit, use ,
6. To obligate, use
7. To give permission, use
8. To remind people about rules and regulations or to state that something is a rule that is
not very strict, use: ,
Discussion and Writing 6.1: Work with a partner or small group to write a few sentences
about advertising laws in your country, with respect to alcohol, cigarettes, children, sexual
content, talking about competitors, warnings, etc.
Discussion and Writing 6.2: Work with a partner or small group to complete the following
task: You are consulting a winery on an advertisement campaign. Make a few
recommendations for effective advertising and inform the owners of important rules and
regulations in that market. Pay careful attention to your use of modals!
UNIT 7: Past Tenses: Recent Market Trends and Performance
Pre-Reading 7.1: Together with a partner or group discuss current trends in regional,
national and/or international markets. Be prepared to share your ideas with the class.
Reading 7.1: Recent Trends
A.1 Craig, Daniel Craig. Nobody does it better when it comes to James Bond at the box office.
“Spectre”, his latest film in the starring role, was released on November 6th in America and took an
estimated $73m (£48m) in its opening weekend, making it the third-highest of the Bond franchise
there. The previous release, “Skyfall”, took significantly more in 2012, but benefited from publicity
marking the 50th anniversary of the first film, “Dr No”. The markets outside America are just as
important; combined they account for around 70% of the total ticket sales for Bond films. In Britain,
007’s native home, “Spectre” broke box-office records when it opened on October 26th, taking an
eye-popping
£41m ($62m) in its first week. Not only was that double the haul taken by “Skyfall”, but it also
knocked the all-time record-holding film “Harry Potter and the Prisoner of Azkaban” off its
broomstick.
B.2 Britain’s living wage, an hourly rate promoted by the Living Wage Foundation and the mayor of
London to encourage employers to pay above the legally binding minimum wage, has been a
measured success. Since its inception in London in 2008 it has risen by 3% in real terms, while the
gross median wage in the city has fallen by 10%. Some 1,775 firms have signed up and are accredited
as Living Wage Employers. But data published this week by the Office for National Statistics indicate
a downside. Most of the new jobs in Britain’s now-booming economy are in low-skilled, low-paid
work. In 2010, 13% of employees in the capital were paid less than the living wage; but by 2014 that
proportion had risen to 19%. London is the most prosperous region of England and has the second-
biggest workforce. But it also has the highest number of people paid below the living wage: 752,000
employees. In half of the boroughs in the capital, more than a quarter earn less than the living wage.
Harrow is the worst example with a rate of over 40%. A similar trend has occurred outside London.
The ONS notes that 872,000 jobs have been created nationally since 2012, but fully 826,000 of those
pay less than the living wage. With almost 6m people failing to obtain the living wage in such a
flourishing economy it has become a moral cause; ensuring that everybody shares in the prosperity is
proving a moral dilemma.
C.3 European Union ministers have forced through a plan to relocate asylum-seekers across the
block. The scheme will distribute most of the 120,000 asylum-seekers in Greece and Italy to 22 other
European countries. The hope is to relieve some of the pressure of the migrant crisis on frontline
countries. Around 480,000 migrants have arrived by sea to Greece and Italy since the beginning of the
year, according to the UNHCR. The proposal will add to the relocation scheme of 40,000 refugees
agreed in July. Romania, Hungary, Slovakia and the Czech Republic voted against the proposals, and
could be forced to take asylum seekers against their will. Britain, Denmark and Ireland are exempt
from plans that involve asylum and could opt out, but both Denmark and Ireland have said they will
accept some of the relocated asylum-seekers. The relocated asylum-seekers will be migrants from
Syria, Eritrea and Iraq; they are therefore almost certain to be granted refugee status in the country to
which they are relocated. Though the plan will please those sympathetic to the refugees’ plight, it is a
small step. The EU received almost 100,000 applications in June 2015 and the German government
expects almost 1m arrivals this year. It is nonetheless sure to be a divisive one. The scheme will draw
deeper lines between member states, which are increasingly at odds over how to handle the crisis.
Europe’s ministers remain a long way from resolving this crisis.
1
ADAPTED FROM: http://www.economist.com/blogs/graphicdetail/2015/11/daily-chart-5
2
ADAPTED FROM: http://www.economist.com/blogs/graphicdetail/2015/10/britain-s-living-wage
3
ADAPTED FROM: http://www.economist.com/blogs/graphicdetail/2012/12/daily-chart-18
Vocabulary 7.1: Match the words in BOLD in the texts to their meanings below.
1. adjusted for inflation

2. before costs and taxes
3. forcibly
4. drawback/ cost/ disadvantage
5. prospering/ doing well economically or financially
6. refugees applying for residence permits
7. closest to the problem
8. not requiring specific education or training
9. introduction/ start
10. place where movie tickets are sold
11. not legally required to do something
12. surprising/ astonishing/ impressive
13. a series of films
14. to choose not to do something (legally)
15. suffering
16. cause more division
17. the act of officially putting a product on the market
18. approximately
19. sell more than any other film previously
20. causing division
Reading Comprehension 7.1: Match the following headlines to the texts A, B, and C in
Reading 7.1:
1. Europe’s migrant crisis: Relocation quotas

2. Spectre’s opening weekend in America
3. Good pay if you can get it
Reading Comprehension 7.2: Match the charts on the next page to texts A, B, and C in
Reading 7.1 and then add the chart titles from the selection below:
Percentage of jobs paying less than the living

wage Real wages in London (2008=100)
United States box office sales, opening weekend (2015 prices,
$m) Quotas for relocations over the next two years
English for Economics and Business University of Venice Ca’ Foscari
2015-16 Prof. Michael Ennis
1)
2)
3)
48
English for Economics
Reading Comprehension 7.3: Based on Reading 7.1 and the charts in Reading
Comprehension 7.2, which of the following statements are true, and which are false?
(unknown = false)
1. The real living wage in London has been falling. True /False
2. The percentage of low wage jobs has been declining throughout the True /False
U.K since 2010.
3. Spectre grossed the third most of all James Bond films on opening True /False
night in the US.
4. More European countries have agreed to take on asylum seekers True /False
in recent months.
5. Foreign markets accounted for 70% of Spectre’s total ticket sales. True /False
6. Most European nations were taking on relatively few asylum seekers True /False
until September 2015.
7. From 2008 until 2010, the percentage of low wage jobs in London True /False
rose from 13% to 19%.
8. The real living wage in London has been increasing at slightly more True /False
than the rate as inflation since 2012.
9. Italy and Greece have relocated about 480,000 asylum seekers since True /False
the beginning of 2015.
10. The real median hourly wage in London had been increasing at True /False
about the rate of inflation until 2010.
11. The percentage of low income jobs in London started rising in 2010. True /False
12. There had only been two James Bond films that grossed more on True /False
opening night in the U.S. than Spectre.
13. The real median wage in London has increased by about 10% True /False
since 2010.
14. No Bond film has ever grossed more on opening night in the US True /False
than Skyfall.
15. All of Daniel Craig’s Bond films have been flops. True /False
16. Until negotiations in July, Greece and Italy had been accepting only True /False
a small portion of the asylum-seekers.
49
Grammar 7.1: STEP 1: Match the following sentences (1-9) to the types of actions and
events (a-i) they describe. STEP 2: Then match the tenses at the bottom of the page to the
types of actions and events (a-i) for which they are used. STEP 3: Finally, correct all false
statements in Reading Comprehension 7.2 so that they are true.
1. Italy and Greece have relocated about 480,000 asylum seekers since the beginning of
2015.
2. The real living wage in London has been falling.
3. Foreign markets accounted for 70% of Spectre’s total ticket sales.
4. From 2008 until 2010, the percentage of low wage jobs in London rose from 13%
to 19%.
5. No Bond film has ever grossed more on opening night in the US than Skyfall.
6. Most European nations were taking on relatively few asylum seekers until
September 2015.
7. Until negotiations in July, Greece and Italy had been accepting only a small portion
of the asylum-seekers.
8. The percentage of low wage jobs has been declining throughout the U.K since 2010. .
9. There had only been two James Bond films that grossed more on opening night in the
U.S. than Spectre.
10. The real median wage in London has increased by about 10% since 2010.
a. An event or action that was completed at a specific time in the past

b. An event or action that was completed at an unspecific time in the (often recent) past or during a
time period that includes the present
c. The duration of an event or action that started and finished in the past
d. The duration of an event or action that started in the past but continues to the present
e. A change from a particular point in the past to the present, but not necessarily constant
f. The duration of an event or action that started in the past but continues to the present, or a change
from a particular point in the past to the present where the event or action was constant and is
definitely still in progress in the present
g. A recent trend or activity
h. An event or action that was in progress at a point in time in the past
i. An event or action that occurred before a point in time in the past
j. An event or action that was continuously in progress until a point in time in the past
Tenses
present perfect (3X) / simple past (2X) / past continuous / past perfect / present perfect
continuous (2 X) / past perfect continuous
Grammar 7.2: Use the data in the following charts to complete the sentences below. In some
cases there are multiple solutions.
BRIC Euro Zone
World GDP Employment

%
Net Imports %
Growth Rate
$ $
$0
0%
Oct 2007 Oct 2007 NOW Oct 2007 NOW Oct 2007 NOW
NOW
1. have/has been recovering.
2. had been increasing until .
3. was/were surging when the global recession started.
4. started contracting .
5. have/has been expanding.
6. rose .
7. have accounted for most of the growth in
8. have/has been falling since .
9. had been decreasing until recently.
10. have/has stabilized.

Discussion and Writing 7.1: Work with a partner or small group to describe the trends
represented in the charts below. Write at least three sentences to describe the information in
the charts and at least two sentences to speculate on the cause and/or effect of these trends or
connections between the trends. You may add your own numerical data to the X and Y axes.
Firm A Firm B
World GDP Costs Taxes Sales

$ $ % $
2007 2007 2007 2007

UNIT 8: Being Objective and Linking Ideas: Labor Unions
Pre-Reading 8.1: Together with a partner or group share opinions about labor strikes. Do
you think they are positive or negative? Why? Be prepared to share your ideas with the class.
Reading 8.1: More Strikes in Madrid
Madrid – Spanish unions were making final preparations for a general strike Thursday to protest
the new conservative government's labor reforms and austerity cuts. It will be the first general strike
against the government of the new Prime Minister, who was elected in November and took office in
December, in the midst of Spain's deep economic crisis. Leaders of the two main unions – the Socialist-
leaning General Workers Union (UGT) and the Communist-leaning Workers Commissions (CCOO) –
were due in Madrid's central Puerta del Sol plaza late Wednesday to meet with union picketers who will
then spread out across the capital, while other picketers fan out across the nation. The unions are expected
to try to disrupt public transportation and major industry in the early hours of the strike.
The last general strike was against the then-Socialist government, which also had initiated
austerity measures. That strike slowed industry and transport, but much of the country went to work and
many analysts saw it as a draw between the government and unions. Since then, the economic crisis has
deepened. Spain's jobless rate is nearly 23% overall, and nearly 50% for youth. Nearly 5.3 million
Spaniards are out of work. Union protests across the nation this month and last drew large crowds, which
analysts say emboldened the unions to move ahead with a general strike. The government says the latest
labor reforms are needed to bring flexibility to the workplace and to simplify the rules for employers. But
unions say the effect will be to make it easier and cheaper to fire workers.
At the MercaMadrid wholesale fish market, one of the largest in Europe, seafood wholesaler
Alfonso Mozos, who employs 120 people, said he doesn't think striking is good. “It would be better if
unions, the government and employers negotiated and found a solution,” he said. Union picketers are
expected at the entrance to the sprawling market on Madrid's south side, but some employees say they
plan to work despite the strike. “If the boss buys fish and we need to come, we'll come,” said Pedro Marin,
a worker at the wholesale market. “But if the union pickets outside don't let us in, we'll just have to wait,
or maybe go home.”
The strike comes one day before the government unveils its new budget on Friday, with the aim
of reducing Spain's deficit to 5.3% of gross domestic product this year, and to 3% next year, to meet
European Union requirements. The government already approved a $20 billion (15 billion euro) package of
austerity cuts and tax hikes to reduce the deficit, and on Friday it is expected to announce a second package
of the same size or larger. Government critics say it will be the first time the government really shows its
hand on where to make deep cuts in specific programs and agencies.
At a recent European Union summit, the Prime Minister was reported by Spanish media to be
overheard on an open microphone telling another EU leader that the labor reforms would cost him a
general strike. The reforms were approved first as a decree law, with immediate effect, and the unions
called on the government to make amendments as the bill moved through parliament. But the
conservatives have a commanding majority in parliament and later approved the reforms unchanged. The
government says the labor reforms make up only a portion of the elements needed to spur an economic
recovery. It predicts a 1.7% decline in the economy this year. The government also has demanded reforms
in the banking sector, with the aim of getting credit flowing again and to clean up the books of lenders
stuck with huge uncollectible debts left over from Spain's real estate and construction boom that went bust,
precipitating the economic crisis.
ADAPTED FROM: http://edition.cnn.com/2012/03/28/world/europe/spain-strike-preparations/index.html?hpt=hp_t1

Vocabulary 8.1: Match the words in BOLD from the text to their meanings below.
1. union a. a proposed law

2. general strike b. to cause
3. reform c. purpose
4. initiate d. to terminate employment
5. draw e. expansive
6. youth f. to encourage
7. out of work g. to make public
8. deepen h. a tie (i.e. a situation in which a clear victor cannot be
determined)
9. embolden i. someone who sells products in bulk, often to retailers
10. fire j. to discuss and debate the terms of something in the hope of
reaching a consensus
11. wholesaler k. a change intended to improve a situation
12. negotiate l. an organization of workers, typically in the same sector,
that engages in collective bargaining
13. sprawling m. young people
14. picket n. unemployed
15. unveil o. when several unions refuse to work at the same time
16. aim p. to incite or urge, i.e. stimulate
17. bill q. to begin
18. spur r. to fall even further (here: to get even worse)
19. precipitate s. a form of public demonstration in which the demonstrators
block access to a place of business or government
20. decree t. a law with immediate effect, that is not passed by a
parliament, but put into effect by a head of state, usually in
an emergency situation
Reading Comprehension 8.1: Based on Reading 8.1, complete the following sentences with
the words and phrases provided below.
employers / the Spanish people / the government / the Prime Minister / picketers /
the Spanish media / large crowds / Spain / 120 people
1. elected the PM in November.
2. The unions were emboldened by last month to move ahead

with a general strike.
3. According to the government, needs labor reforms to

bring flexibility to the workplace.
4. are employed by MercaMadrid wholesale fish market.
5. reported that the PM expected the labor reforms to result in

a general strike.
6. approved the reforms as a decree.
7. can now fire union workers more easily.
8. are expected at the entrance to the MercaMadrid market.
9. The author expects to announce a second austerity package

on Friday.
Grammar 8.1: An AGENT is the doer of an action, and the PATIENT is the recipient of an
action. For each of the sentences below, underline the PATIENT and circle the AGENT. If
you cannot find the AGENT, look for it in Reading Comprehension 8.1.
1. The PM was elected in November.
2. Large crowds last month emboldened the unions to move ahead with a general strike.
3. According to the government, labor reforms are needed to bring flexibility to the workplace.
4. MercaMadrid wholesale fish market employs 120 people.
5. It was reported that the PM expected the labor reforms to result in a general strike.
6. The reforms were approved as a decree.
7. Union workers can now be fired more easily.
8. The author expects picketers at the entrance to the MercaMadrid market.
9. The government is expected to announce a second austerity package on Friday.

Grammar 8.2: STEP 1: Complete the following grammar rules with either ACTIVE or
PASSIVE. STEP 2: Label each of the sentences in Grammar 8.1 and Reading
Comprehension 8.1 as either ACTIVE (A) or PASSIVE (P).
1. The agent is the subject in the voice.
2. The patient is the subject in the voice.
3. The voice is used to emphasize who or what performed an action.
4. The voice is used to emphasize who was affected by an action

and/or the action itself.
5. The voice is used if the agent is unknown or unimportant, and

therefore excluded from the sentence.
Grammar 8.3: Circle the correct answer to complete the grammar rules below.
1. In the passive voice, the agent is included only as part of a prepositional phrase with
by / from.
2. The passive voice is often used by journalists and academics to sound more
subjective / objective.
3. The passive voice is formed with the helping verb to be / have and the simple past /
past participle of the main verb.
Discussion and Writing 8.1: Together with a partner or small group, write a few sentences
to describe labor unions. Include at least one sentence in the active and one in the passive
voice.
Reading 8.2: Labor Unions
The Pros and Cons of Labor Unions
Labor unions are binding agreements between workers where a selected group of
representatives speak and negotiate with management on behalf of all employees. They
usually require some periodic fee, called “union dues”, with some professions or companies
requiring membership in order to take a position. A "closed shop" requires union membership
to obtain the job. An "open shop", which is more rare nowadays, gives an option of
joining.
Labor unions exist all over the world. They became popular in the era of the Great
Depression, when companies regularly abused workers with low pay, long hours, unsafe
working conditions, and few fringe benefits. Despite efforts of many business owners such
as Henry Ford to squash their creation, labor unions grew as a way for employees to
collectively bargain for better pay, benefits, and working conditions. Unions have always
been able to use the ultimate power play, a strike, which can effectively shut down
all production.
Unions have largely been successful in their efforts to help workers. Nowadays a host of
labor laws exist, such as a minimum wage, mandatory overtime pay, and minimum breaks.
However, unions have had a host of negative impacts on society. The issue of unions has
become particularly important nowadays as governments all over the world try to rein in
unsustainable spending by cutting back benefits of mostly unionized government employees.
The governments of France and Greece are recent examples. In the U.S., the standoff
between governor Scott Walker of Wisconsin and the state unions there touched off a
controversy that dominated the national news.
ADAPTED FROM: http://www.balancedpolitics.org/unions.htm
1. minimum wage a. to negotiate as a group

2. binding agreement b. to regain control of
3. fringe benefit c. work beyond 40 hours (in most western countries)
4. on behalf of d. extra incentives to work at a company
5. squash e. in someone else’s name
6. overtime f. the lowest amount of money a company can legally pay its
employees
7. dues g. to halt
8. rein in h. membership fees
9. collectively bargain i. a contractual arrangement
Reading Comprehension 8.3: Read the following paragraphs about the pros and cons of
labor unions. First label them as either PRO or CON and then match them to the topic
sentences that follow and double-check your answers.
We no longer buy and sell in a national economy, but in a global one. Products and services which
could be developed domestically are now being made more cheaply abroad, most notably in India and
China, which have vast pools of cheap labor. Saddling a domestic company with unrealistic and
inflexible labor costs effectively makes it impossible for it to compete.
One employee in a company usually has very little bargaining power. For most companies, one
employment position is just an interchangeable part where another person can be brought in to fill the
gap if a person quits. Thus, management doesn't always see the need to create a work environment
that's favorable for employees. However, when workers ban together, they can wield the ultimate
labor weapon: a strike. If one person walks off the job, it may be no big deal. If everyone walks off the
job, it shuts down production.
Unions can hurt society as a whole when they strike. Imagine major highways under construction
being shut down by striking workers. Imagine the crime and rioting if police walked off the job.
Imagine all air traffic coming to a halt if controllers held out for more pay. The bargaining then
becomes less about giving employees' deserved wages and benefits and more about paying off
extortion. Companies or government offices have little choice but to concede to the demands, or
society as a whole suffers the consequences.
Members of unions are usually your every-day, middle-class individuals trying to make a living.
Among other costs, they must pay mortgages and car payments, put food on the table, and pay to send
their kids through college. It's difficult and stressful to plan for the future when you're not sure if you
may lose your job, or if your wages and benefits may be cut unexpectedly. A union allows contracts
to be signed to give employees piece of mind that such things won't happen.
The cost of labor is like any other input cost for a business. Increased labor costs reduce profit
margins unless prices can be raised to pass the costs on to consumers. Thus, when we buy cars,
purchase plane tickets, or buy any other product that comes from a unionized business, we all pay
more at the cash register.
The governments of France, Spain, and Greece, as well as state governments in California, Wisconsin,
and Massachusetts all illustrate recent examples of unions putting the good of their members ahead of
society and the world as a whole. Government spending is out of control and completely
unsustainable. Unrealistically high pensions and other benefits cannot be paid indefinitely without
incurring further debt or taking resources from other areas like education and defense. Yet any
reasonable attempt to rein in these costs leads to protests, riots, and strikes.
Union jobs are usually stable and secure; thus, employees have more incentive to stay, to develop
solid relationships with co-workers, and to do their best to make sure the company thrives. On the
employer side, more stable employment means less time training new employees and less time
recruiting replacements.
Many employees are simply inferior at their job, whether it's a lack of motivation, education, or
natural abilities. Given the huge unemployment and underemployment rate today, there is always a
pool of potentially more talented or motivated workers that may be able to do the job better, but union
contracts often tie management’s hands when it comes to replacing workers.
Unions allow employees to appoint or elect representatives that go to management and negotiate for
all workers at once. Union reps can meet regularly to talk about wage levels, fringe benefits, and so
on. The union also allows management and labor to sign contracts which put their negotiations on paper, a step that
In a rough economy, with workers needing their paychecks to pay their bills, employers hold a lot of power. Consequ
Since unions can offer a large block of voters, politicians will often curry favor from unions. Consequently, union repr
ADAPTED FROM:
Topic Sentences:
a. Unions protect workers from company abuses.

b. Unions empower workers.
c. Unions allow workers to collectively bargain.
d. Unions give workers more job security.
e. Unions create a stable, long-term employment relationship between companies and
employees.
f. Unions lead to higher prices for consumers because companies must pay more for
wages and benefits.
g. Unions make the country less competitive.
h. Unions often prevent more qualified workers from getting the jobs.
i. Certain unions yield too much power.
j. Unions have become a source of political power and corruption.
k. Unions focus on the needs of the members at the expense of non-union members.
Vocabulary 8.3: Identify at least ten new words or phrases in Reading Comprehension 8.3
and then work with a partner or small group to determine their meanings. Do not use a
dictionary unless absolutely necessary.
Grammar 8.4: Each of the following sentences taken from Reading Comprehension 8.3
consist of two parts (i.e. clauses) which are connected by a CONJUNCTION. First circle the
conjunction in each sentence and then match each conjunction to one of the functions that
follow.
1. Union representatives go to management and negotiate for all workers at once.
2. Unions lead to higher prices for consumers because companies must pay more for
wages and benefits.
3. Since unions can offer a large block of voters, politicians will often curry favor
from unions.
4. Union leaders have the ability to convince their members to support certain
candidates, even if those candidates do not represent the members’ interests.
5. There is always a pool of potentially more talented workers, but union contracts often
tie management’s hands.
6. Increased labor costs reduce profit margins unless prices can be raised to pass the
costs on to consumers.
7. When we buy products from a unionized business, we all pay more at the cash register.
8. Institutions have to concede to the demands of unions, or society as a whole suffers

the consequences.
9. If everyone walks off the job, it shuts down production.
10. Unrealistic benefits cannot be paid indefinitely without incurring further debt or
taking resources from other areas like education.
Functions:
Addition: ,
Contrast: ,
Cause: ,
Effect
Condition: , ,
Discussion and Writing 8.2: Together with a partner or small group, compose two
paragraphs, one in favor of and one against the labor strikes described in Reading 8.1. Pay
close attention to your conjunctions and which voice you are using in each sentence.
UNIT 9: Making a Cohesive Argument: The Economics of The Drug Trade
Pre-Reading 9.1: Together with a partner or group brainstorm ideas about the organization
of drug cartels and drug gangs as businesses. How do they produce, market and sell their
“products”? How do they manage their “company”? How is an illegal business similar and
different from a legitimate business? Be prepared to share your ideas with the class.
Reading 9.1: Read the following introduction to an academic article paragraph by paragraph.
As you read, underline each word and phrase you either do not understand or have never
encountered before. After reading each paragraph, discuss new vocabulary with a partner or
small group and make a list of the most important items in the space provided in Vocabulary
9.1. Only use a dictionary if absolutely necessary!
AN ECONOMIC ANALYSIS OF A DRUG-SELLING GANG’S FINANCES
STEVEN D. LEVITT AND SUDHIR ALLADI VENKATESH
1. Street gangs have a long history in American cities (Thrasher 1927). Until recently, gangs
were organized primarily as social peer groups. Any economic activities were of secondary
importance (Suttles 1968; Klein 1995). The last two decades, however, have given rise to a dramatic
transformation in street gangs, or what Taylor (1990) terms their ‘‘corporatization.’’ When crack
became widely available in the mid-1980s, sold in small quantities in fragmented street-corner
markets, street gangs became the logical distributors. The potential profit in drug dealing dwarfed that
previously available to gangs through other criminal channels. As a consequence, gangs became
systematically involved in the distribution of various narcotic substances including heroin and crack-
cocaine (Block and Block 1993).
2. Recent academic literature on gangs has examined some aspects of their financial activities.
Hagedorn (1988) and Padilla (1992) suggest that gang members pursue financial activities in response
to alienation from legitimate labor markets. Jankowski’s (1991) study of 37 gangs found that nearly
all of them had an expressed commitment to illicit revenue generation, but that performance differed
according to various factors including organizational structure and community relations. Spergel
(1995) has shown significant racial and ethnic differences in illegal entrepreneurism. Akerlof and
Yellen (1994) present a model analyzing the relationship between police enforcement against gangs
and community cooperation. In spite of this pioneering work, however, many gaps in the literature
remain. Although quantitative data are sometimes used anecdotally, there is little in the way of
systematic data collection. Virtually all of the existing scholarship is based on verbal reports by gang
members, or in exceptional cases, direct observation of trafficking (Bourgois 1989; Williams 1989).
The illicit nature of gang activities and the lack of formal accounting procedures have precluded more
systematic quantitative analysis prior to this study. Finally, many of the studies report that gangs are
embedded in citywide hierarchies, but they do not examine the impact of this organizational structure
on a gang’s financial dealings.
3. A number of researchers have estimated the returns to crime (Freeman 1992; Grogger
1995; Viscusi 1996; Wilson and Abrahamse 1992) and drug selling (Reuter, MacCoun, and Murphy
1990; Fagan 1992; Hagedorn 1994) through the use of self reports. The returns to drug selling tend to
be much greater than that of other criminal activities, with frequent drug sellers reporting mean annual
incomes in the range of $20,000–$30,000. Studies relying on ethnographic observation, however, find
much lower values for drug-related earnings, e.g., Bourgois (1995) and Padilla (1992). One
explanation for this discrepancy is that the self-report and ethnographic studies have focused on very
different populations. The self-report studies have tended to survey independent drug dealers, i.e.,
those with no gang affiliation, whereas ethnographic research has focused on low-level members of a
hierarchy. Independents are likely to have greater ability, experience, and access to capital than ‘‘foot
soldiers’’ who sit at the low end of the street gang’s organizational hierarchy. Our data, which span
the levels of
a gang hierarchy, from rank-and-file members to imprisoned leaders, offer a partial solution to this
problem. Higher-level gang members may tend to have similar characteristics to independents.
4. In contrast to the returns to crime, there has been little attention paid to the ‘‘career path’’
of gang members, market structure, organizational forms, competitive strategies, and how economic
activity is structured in the absence of legally enforceable contracts. In this paper we are able to
directly analyze for the first time a wide range of economic issues related to gangs and drug
distribution. We do so through the use of a unique data set containing detailed financial information
over a recent four-year period for a now-defunct gang. These data were maintained by the leader of
the group as a management tool for tracking the gang’s financial activities and for monitoring the
behavior of gang members. Updated monthly, the data include breakdowns of costs and revenues into
major components, as well as information on the distribution of profits as wages to gang members at
different levels of the hierarchy. Information on both price and quantity is included. These financial
data are supplemented with information on the numbers of violent deaths, injuries, and arrests of gang
members over this period, as well as interviews and observational analysis of the gang. While the data
suffer from important limitations and a number of potential biases (which appear below), they
nonetheless represent a substantial improvement on previously available information.
5. Using these data, we analyze the extent to which the individual and collective actions of
gang participants can reasonably be characterized as emanating out of economic maximization. We
address three different issues in this regard. First, we examine the economic returns to drug dealing
relative to legitimate labor market activities. The higher the returns to drug selling, the more likely it
is that the economic aspects of the gang are paramount. We then consider the causes and
consequences of gang wars. Finally, we analyze the risk trade-offs made by gang members and
whether these can be reconciled with optimizing decision making.
6. A number of insights emerge from the paper. Street-level sellers appear to earn roughly the
minimum wage. Earnings within the gang are enormously skewed, however, with high-level gang
members earning far more than their legitimate market alternative. Thus, the primary economic
motivation for low-level gang members appears to be the possibility of rising up through the
hierarchy, as in the tournament model of Lazear and Rosen (1981). The average wage in the gang
(taking into account all levels of the hierarchy) is perhaps somewhat above the available legitimate
market alternatives, but not appreciably higher.
7. Gang wars are costly, both in terms of lost lives and lost profits. Almost all of the deaths of
drug sellers are concentrated in war periods. Moreover, the violence keeps customers away. This
negative shock to demand is associated with a fall of 20–30 percent in both the price and quantity of
drugs sold during fighting, and the drug operation becomes far less profitable. In spite of this, the
gang discussed in this paper fights with rivals roughly one-fourth of the time. Gang wars are also an
extremely costly means of dispute resolution, but given the absence of legally enforceable property
rights and contracts, other means of resolving conflicts may be circumscribed. There is also evidence
that frequent gang wars are the result of an agency problem, namely the desire of low-level gang
members to build a reputation for toughness may be in their personal interest, but will almost
assuredly be costly to the gang as a whole. We also document that the gang prices below marginal
cost during gang wars. Such pricing can be reconciled with economic optimization if maintenance of
market share is important and there are switching costs among drug purchasers (Klemperer 1995), but
may simply reflect flawed decision making.
8. Finally, drug selling is an extremely dangerous activity. Death rates in the sample are 7
percent annually. Given the relatively low economic returns to drug selling noted above, the implied
willingness to accept risk on the part of the participants is orders of magnitude higher than is typically
observed in value of life calculations. This suggests either that gang members have very unusual
preferences, that the ex post realization of death rates was very different than the ex ante expectation,
systematic miscalculation of risk, or the presence of important noneconomic considerations.
9. Based on these findings, we conclude that even in this gang—one of the most economically
sophisticated and successful gangs—the decision making of members is difficult (but not impossible)
to reconcile with that of optimizing economic agents. Certainly, economic considerations play an
important role in the decisions of members and the activities of the gang. However, we find that
social/nonpecuniary factors are likely to play an important role as well. Of course, all of these
conclusions are based on the analysis of a single gang’s experience. The degree to which these results are broadly gen
10. The structure of the paper is as follows. Section I provides background on the community in which the gang is situ
ADAPTED FROM: An Economic Analysis of a Drug-Selling Gang's Finances." Quarterly Journal of Economics, 2000, 115(3), pp. 755-89.
Vocabulary 9.1: Define the most important new vocabulary in the space below.
Reading Comprehension 9.1: Read the text again and match the following main functions
to paragraphs 1-10 in Reading 9.1.
a. Finding #1
b. Finding #2
c. Finding #3
d. Literature review (i.e. summary of past research)
e. Organization of the paper
f. Description of data
g. Summary of Conclusions
h. Background information/introduction to the topic
i. Summary of research methodology
j. Explanation of how the present study attempts to fill a gap in research
Reading Comprehension 9.2: Based on Reading 9.1, which of the following statements are
true, and which are false? Correct all false statements so that they are true.
1. Gangs became less involved in the drug trade because of the profitability True /False
of crack-cocaine.
2. The reason that previous research is flawed is because it was not True / False
very “pioneering.”
3. A major limitation of previous research is that, as the drug trade is an True / False
illegal enterprise, it is difficult to get accurate financial data on drug-selling
gangs
True / False
4. Studies that rely upon ethnographic observation have found higher
incomes than those relying upon self-reports.
True / False
5. Ethnographic observation is flawed because it tends to focus on the street-
level dealers, rather than the bosses.
6. There has been very little research on the returns of crime. True / False
7. The main difference of this study is that the authors had access to True / False
detailed financial information documented by foot soldiers.
8. The first aspect that the authors analyze in the data is the relationship True / False
between risk and decision-making.
9. Both low-level and high-level drug dealers earn less money than they would True / False
in a legitimate business, so there is very little incentive to selling drugs.
10. One downside to gang wars is that they result in a negative demand shock. True / False
11. One cause of gang wars is that disagreements between gangs cannot True / False
be resolved through litigation.
12. The authors conclude that economic factors can fully explain why people True / False
sell drugs, in spite of the low pay and high risks for low-level dealers.
13. One flaw of the study is that it is based on only one very well managed gang. True / False
Grammar 9.1: Read the following sentences below and match the words and phrases in bold
to their functions in the text.
Stevin Levitt, whose work is very controversial, is a renowned professor at the University of Chicago.
Sudhir Alladi Venkatesh, who earned his PhD. from the University of Chicago, is a
famous sociologist and ethnographer.
Our data, which span the levels of a gang hierarchy, from rank-and-file members to
imprisoned leaders, offer a partial solution to this problem.
Independents are likely to have greater ability, experience, and access to capital than ‘‘foot soldiers’’
who sit at the low end of the street gang’s organizational hierarchy.
While the data suffer from important limitations and a number of potential biases (which appear
below), they nonetheless represent a substantial improvement on previously available
information.
The degree to which these results are broadly generalizable remains an open question.
Section I provides background on the community in which the gang is situated, the
organizational structure of the gang, and the competitive environment within which it operates.
DEFINE (IDENTIFY/DISTINGUISH) A PERSON OR THING: ,_ ,

,
ADD ADDITIONAL INFORMATION ABOUT A PERSON OR THING: ,

, , ,
These words and phrases are called RELATIVE PRONOUNS, and they are used to embed
clauses to describe nouns. How can you tell the difference between DEFINING and NON-
DEFINING relative clauses?
Grammar 9.2: Read the following excerpts below and match the words and phrases in bold
to their function in the text.
ORDERING , ,
ADDITION ,
RESULT ,
CONTRAST ,
EMPHASIS ,
The potential profit in drug dealing dwarfed that previously available to gangs through other criminal
channels. As a consequence, gangs became systematically involved in the distribution of various
narcotic substances including heroin and crack-cocaine.
First, we examine the economic returns to drug dealing relative to legitimate labor market activities.
The higher the returns to drug selling, the more likely it is that the economic aspects of the gang are
paramount. We then consider the causes and consequences of gang wars. Finally, we analyze the risk
trade-offs made by gang members and whether these can be reconciled with optimizing decision
making.
Earnings within the gang are enormously skewed, however, with high-level gang members earning far
more than their legitimate market alternative. Thus, the primary economic motivation for low-level
gang members appears to be the possibility of rising up through the hierarchy.
Gang wars are costly, both in terms of lost lives and lost profits. Almost all of the deaths of drug
sellers are concentrated in war periods. Moreover, the violence keeps customers away. This negative
shock to demand is associated with a fall of 20–30 percent in both the price and quantity of drugs sold
during fighting, and the drug operation becomes far less profitable. In spite of this, the gang
discussed in this paper fights with rivals roughly one-fourth of the time. Gang wars are also an
extremely costly means of dispute resolution, but given the absence of legally enforceable property
rights and contracts, other means of resolving conflicts may be circumscribed.
Certainly, economic considerations play an important role in the decisions of members and the
activities of the gang. However, we find that social/nonpecuniary factors are likely to play an
important role as well. Of course, all of these conclusions are based on the analysis of a single gang’s
experience. The degree to which these results are broadly generalizable remains an open question.
All of the words and phrases above are called DISCOURSE CONNECTORS, as they are
used to link ideas in written and spoken discourse. How are they similar and different from
CONJUNCTIONS (See Unit 8)?
Discussion and Writing 9.1: Together with a partner or group, write a brief summary (one
paragraph) of the article in READING 9.1 in which you identify the main purpose and
findings of the text.
Discussion and Writing 9.2: Compare your summary to the original abstract below and
identify any differences in content and structure.
[The paper] uses a unique data set detailing the financial activities of a drug-selling street
gang to analyze gang economics. On average, earnings in the gang are somewhat above the
legitimate labor market alternative. The enormous risks of drug selling, however, more than
offset this small wage premium. Compensation within the gang is highly skewed, and the
prospect of future riches, not current wages, is the primary economic motivation. The gang
engages in repeated gang wars and sometimes prices below marginal cost. Our results
suggest that economic factors alone are unlikely to adequately explain individual
participation in the gang or gang behavior.
ADAPTED FROM: An Economic Analysis of a Drug-Selling Gang's Finances." Quarterly Journal

of Economics, 2000, 115(3), pp. 755-89.
Discussion and Writing 9.3: Together with a partner or group, write a brief position paper in
which you discuss the intent of the authors and whether or not such research is important for
understanding the economy or society.
Appendix 1
Morphology: Sample Word Forms
NOUNS VERBS ADJECTIVES ADVERBS

success succeed successful, successfully,
unsuccessfu unsuccessfull
l y
entrepreneur, entrepreneurial entrepreneurially
entrepreneuris
m
commerce commercial commercially
optimist, optimistic optimistically
optimis
m
condition condition conditional, conditionally,
unconditional unconditionally
,
conditioned
creator, creation create creative, creatively,
uncreative uncreativel
, y
created
nation, national, nationally,
nationalist, nationalisti nationalisticall
nationalism c y
invention, inventor invent inventive, inventively,
uninventive uninventivel
, invented y
report, reporter report reported reportedly
development develop developed, developmentally
, developer undeveloped,
developmenta
l
offer, offering, offer offered
offerer/offero
r
investment, invest invested
investor
government govern governmental, governmentally
, governor non- , non-
govermental, governmentally
governed
operation operate operative, operationally
, operational , operatively
operator, , operated
operative
executive, executor execute executive, executively,
executoria executoriall
l y
consumer, consume consumed
consumption
production, produce produced,
producer, unproduce
product d
encouragement encourage encouraged, encouragingly
, encourager, , encouraging ,
discouragement discourage , discouragingly
discouraged,
discouragin
g
technology technologic, technologically,
, technocraticall
technocrat, y
technological
, technocratic
Noun Suffixes
Suffix Meaning Example
-acy state or quality of privacy, accuracy
-al act or process of refusal, proposal
-ance, -ence state or quality of maintenance, prominence
-dom place or state of being freedom, wisdom
-er, -or one who producer, inventor
-ism doctrine, belief capitalism, optimism
-ist one who nationalist, capitalist
-ity, -ty quality of scarcity, community
-ment condition of government, encouragement
-ness state of being awareness, willingness
-ship position held leadership, partnership
-sion, -tion state of being production, expansion
Verb Suffixes
-ate make or become allocate, motivate
-en make or become weaken, strengthen
-ify, -fy make or become quantify, identify
-ize, -ise make or become stabilize, customize
Adjective Suffixes
-able, -ible capable of being credible, sustainable
-al pertaining to governmental, natural
-ful notable for successful, truthful
-ic, -ical pertaining to economical, economic
-ious, -ous characterized by ambitious, adventurous
-ish having the quality of selfish, Spanish
-ive having the nature of creative, effective
-less without jobless, cashless
-ary pertaining to monetary, expansionary
-y characterized by steady, sticky
Prefixes
anti- against/opposing anti-government
co- with coworker,
cooperate/cooperation
de- opposite devalue, devaluation
dis- opposite of/not disagree/disagreement
em-/en- cause to/put into empower/empowerment,
encourage/encouragement
ex- former/out of ex-president
il-, im-, in-, not illegal/illegality,
ir-, un- immeasurable/
immeasurability,
ineffective/ineffectiveness,
irreversible/irreversibility,
unemployed/unemployment
inter- between/across international, internet
intra- within intranet
mis- wrongly misbehave/misbehavior
pre- before prefix,
post- after post-communism
re- again recycle, review, return
sub- under subsector
trans- across/beyond transaction/transactional
uni- one universe/universal
English for Economics University of Venice Ca’ Foscari
AY 2015-16 Prof. Michael Ennis
Appendix 1
Solutions
UNIT 1: Facts and Trends: The Study of Economics and Market Trends
1) goods e a) actor in an economy who purchases goods and services

2) services g b) the study of how and why goods and services are produced
and consumed
3) scarcity f c) the study of the behavior of individual consumers, firms and
agencies
4) aggregate j d) the study of the market system as a whole or market sectors
5) free resource i e) products that are produced to be sold
6) market system h f) the condition of being in short supply
7) economics b g) tasks that are performed for paying customers
8) microeconomics c h) all interconnected markets within an economy
9) macroeconomics d i) an input that is not scarce
j) the sum total of
10) allocate k k) to use something you have for a specific purpose
11) consumer a
1) domestic k a) to reduce
2) double e b) able to perform a function with the least amount of energy
possible
3) imports o c) a reduction in market value
4) compete i d) by a large amount and/or very fast
5) drop a e) to increase by 100%
6) exports n f) all individuals living in the same home
7) energy-efficient b g) to do or have something as measured per day, month, year,
etc.
8) lag m h) to be in a situation that is comparatively more negative
9) devaluation c i) to sell goods and services in the same market as another
firm
10) currency l j) unequally
11) be worse off h k) entirely within a nation’s borders
12) sharply d l) the legal money of a nation
13) household f m) to move more slowly than average or than expected
14) average g n) goods and services that are sold to foreign countries
15) disproportionately j o) goods and services that are purchased from foreign
countries
73
Grammar 1.1: Present Simple versus Present Continuous
Read the following sentences/questions taken from reading 1.1 and 1.2. Which refer to a fact that is always
true (A) and which refer to a fact that is temporarily true in the present (T)?
1) Economics is the study of how society allocates scarce resources and goods. A
2) Why is the price of oil dropping so fast? T
3) The prefix macro means large. A
4) Oil production and exports are rising year after year. T
5) The term market refers to any arrangement that allows people to trade with one another. A
6) Demand for fuel is lagging. T
7) Gasoline prices are lower now than last year. _T
1) We use the present simple to talk about general facts/ current activities.
2) We use the present continuous to talk about general facts/ current activities.
3) We never/always use the present continuous for the verb to be and state verbs like know, like, feel, etc.
Grammar 1.3: Choose the best sentence. Note: sometimes both sentences are grammatically correct, but only
one makes sense.
A) Petronations currently compete for the Asian market.

B) Petronations are currently competing for the Asian market..
A) Iraq is an oil producing nation.

B) Iraq is being an oil producing nation.
A) Vehicles are becoming more fuel-efficient.

B) Vehicles become more fuel-efficient.
A) The economies of Europe and developing countries weaken.

B) The economies of Europe and developing countries are weakening.
A) The drop in energy prices helps lower-income families.

B) The drop in energy prices is helping lower-income families.
A) Lower oil prices often hurt oil producers.

B) Lower oil prices is often hurting oil producers.
A) Macroeconomists study aggregate supply and demand.

B) Macroeconomists are studying aggregate supply and demand.
1) social responsibility g a) to argue or put forth

2) sustainability d b) a responsibility to do something for oneself or others
3) free market i c) an investor who owns stock in a company
4) academic j d) the potential to continue producing and selling into the
future
5) shareholder c e) the last line in a company’s ledger (account balance) which
refers to total revenue minus cost, i.e. profit or loss
6) enterprise h f) profit
7) financial gain f g) a perceived obligation to act in the best interest of society
8) the bottom line e h) a company
9) assert a i) any system of buying and selling with little or no
government regulation
10) obligation b j) a “professional” scholar
1) operations i _ a) difficult or impossible to quantify

2) performance j b) the criteria set by or imposed upon a company in terms of
doing what is right and wrong
3) impact m c) the phenomenon of increasing average temperatures
4) fair trade o d) also called “environmentally friendly” or “green”
5) hydrocarbons k_ e) a large company, usually with international operations
6) roughshod n _ f) the purchase of necessary components and materials from
suppliers, usually in a foreign country
7) immeasurable a_ g) to reduce input costs in order to maintain or increase profit
8) sourcing f h) misbehavior or misconduct: doing what is illegal and/or
socially unacceptable
9) cost-cut g i) everything a company or organization does
10) corporation e j) the success of a company in terms of its aims and goals
11) ethical standards b k) includes all fossil fuels, such as crude oil, coal and
methane
l) random and without concern for the results
12) malpractice h m) the positive or negative effect of doing something
13) indiscriminate l n) cruel and harsh, the opposite of fair and ethical
14) climate change c o) a manner of doing business according to high social and
15) environmentally responsible environmental standards
d
Grammar 2.1: Past Simple versus Present Perfect
Read the following sentences adapted from Reading 2.1 and 2.2. Which sentences refer to a completed action or event that occurred
at a specific time in the past (ST), which sentences refer to a completed action or event that occurred at an unspecified time before
the present (BP), and which sentences refer to an action or event completed within a time period that includes the present (IP)?
1) In September 1970, The New York Times Magazine published an essay by American economist Milton Friedman.
ST
2) The triple bottom line measures how socially and environmentally responsible a company has been. BP/IP
3) Growing awareness of corporate malpractice has forced several companies to re-examine their sourcing policies.
BP
4) Friedman supported a free market economic system. ST
5) The Fair-Trade movement has picked up steam in the past five years. IP
6) Milton Friedman’s views fueled ongoing debates about citizenship and sustainability in corporate America.
ST
7) The phrase “the triple bottom line” was first coined in 1994 by John Elkington. ST
1) We use the past simple to talk about actions and events that were completed at a specified past time/ at an
unspecified time before the present.
2) We use the present perfect to talk about actions and events that were completed at a specified past time/ at an
unspecified time before the present.
3) We use the present perfect/ past simple to talk about actions and events that were completed during a time period that
includes the present.
Grammar 2.3: Choose the correct sentence.
A) In 1970, Milton Friedman has argued that the primary goal of a company was profit maximization.
B) In 1970, Milton Friedman argued that the primary goal of a company was profit maximization.
A) John Elkington coined the term “triple bottom line” as a measure of sustainability.
B) John Elkington has coined the term “triple bottom line” as a measure of sustainability.
A) Many corporations have already adopted fair trade practices.

B) Many corporations already adopted fair trade practices.
A) In recent years, many companies found that being sustainable can reduce costs.
B) In recent years, many companies have found that being sustainable can reduce costs.
A) During the 1990s, companies like Nike were criticized for exploiting the cheap labor of developing countries.
B) During the 1990s, companies like Nike have been criticized for exploiting the cheap labor of developing countries.
A) Many governments and multinational corporations have not adequately responded to current challenges such as global
warning and the energy crisis.
B) Many governments and multinational corporations did not adequately respond to current challenges such as global warning and the
energy crisis.
UNIT 3: Solutions
Vocabulary 3.1: For each adjective, complete the sentence:
A leader who is…

1) effective j a) …rarely doubts his or her decisions and is usually able
to decide quickly.
2) ineffective c b) …enjoys a little risk or danger.
3) analytical e c) …is unable to lead a team.
4) ambitious f d) …tries to convince other people to think or do what he
or she wants.
5) stable g e) …investigates problems rationally and carefully
evaluates all possible solutions.
6) skilled i f) …desires to be successful in life.
7) decisive a g) …is calm and reserved under pressure.
8) perceptive h h) …notices things that other people don’t.
9) adventurous b_ i) … performs particular tasks well.
10) assertive d _ j) …is able to lead a team.
1) priority j a) a position within an organization

2) integrity h b) core beliefs
3) trust i c) the quality of being constant and reliable in behavior
4) values b d) able to complete a particular task (i.e. competent)
5) rank a e) the skill or set of skills required to complete a task
6) guideline k f) to motivate or encourage certain behavior
7) inspire f g) modern, current, up-to-date
8) capable d h) the quality of being honest and fair
9) competency e _ i) faith and confidence in someone
10) contemporary g j) the main goal or issue
11) consistency c k) an established rule or criterion for completing a task
Reading Comprehension 3.1: According to readings 3.1 and 3.2, which of the following statements are true
and which are false? (unknown = false)
1) Good leaders are usually more assertive and decisive than the True / False
average person.
2) Ambitious people are sometimes better leaders. True / False
3) Liars are often less effective leaders. True / False
4) The best leaders are often emotionally unstable. True / False
5) According to Kirkpatrick and Locke, good leaders are always True / False
more intelligent than the people around them.
6) Good leaders earn higher salaries than the people they lead. In fact, True / False
they frequently earn the highest salaries.
7) In order to lead more effectively, it is a good idea to improve your True / False
self- confidence.
8) A good manager typically has above average knowledge about business. True / False
9) Leadership traits can be used to distinguish more and less True / False
effective leaders.
10) Skills are a better measure of good leadership than traits, True / False
because different situations require different attributes.
11) To lead successfully, you need decision-making skills, but you True / False
don’t need problem-solving skills, because you can tell other people to
solve your problems for you.
12) Leadership training courses typically seek to develop leadership traits. True / False
13) Peter Drucker is one of the least known management theorists. True / False
14) According to Drucker, a bad leader might be more likely to True / False
surround him or herself with less talented and less intelligent people, so
that he or she could blame them for mistakes.
15) According to Drucker, the most effective leaders in the world are True / False
often the friendliest people you will ever meet.
Grammar 3.1: Adjectives and Adverbs, Comparatives and Superlatives
Circle ALL correct answers to complete the grammar rules below. Refer to Vocabulary 3.1 and Reading
Comprehension 3.1 for examples.
1) Adjectives (e.g. effective, adventurous and pragmatic) are used to better describe nouns / verbs /
other adjectives.
2) Adverbs (e.g. effectively, adventurously and pragmatically) are used to better describe nouns / verbs
/ adjectives.
3) Most, but not all, adverbs are formed by just adding ed / ly / ing to the end of adjectives.
4) Adjectives typically come right before nouns / right after nouns / somewhere after the verb “to be”.
5) Adverbs may come at the beginning of a sentence / after a helping verb (e.g. “will”) / after an
object / before the main verb / after the main verb.
6) To form the comparative form of one-syllable adjectives / two-syllable adjectives / adverbs just add an –
er at the end.
7) To form the comparative form of one-syllable adjectives / two-syllable adjectives / adverbs just add a more
or less before the word.
8) To form the superlative form of one-syllable adjectives / two-syllable adjectives / adverbs just add an –
est at the end.
9) To form the superlative form of one-syllable adjectives / two-syllable adjectives / adverbs just add a most or
least before the word.
Grammar 3.2: Complete the table below.
ADJECTIVE ADVERB COMPARATIVES SUPERLATIVES

high highly higher / more highest / most
highly highly
often more/less often most/least
often
inefficient inefficiently more/less most/least
inefficient/ inefficient/
inefficiently inefficiently
frequent frequently more/less most/least
frequent/ly frequent/ly
bad badly worse worst
likely likely more/less likely most/least
likely
typical typically more/less most typical/
typical/typically most typically
good well better best
friendly friendlily friendlier/ friendliest/
more/less most/least
friendlily friendlily
Grammar 3.3: Complete the diagram below with the frequency adverbs provided.
never rarely occasionally sometimes often usually

always
Grammar 3.4: Choose the grammatically correct sentence in each case.
A) A good leader learns more fastly than most people.

B) A good leader learns faster than most people.
A) The bestest leaders always tell the truth.

B) The best leaders always tell the truth.
A) Losing the trust of your team members makes you a worse leader.
B) Losing the trust of your team members makes you a badder leader.
A) An ambitious person often leads more effective.

B) An ambitious person often leads more effectively.
A) A good leader makes sure that his or her team members cooperate good.
B) A good leader makes sure that his or her team members cooperate well.
A) Good leaders lose their cool less oftenly.

B) Good leaders lose their cool less often.
A) Even good leaders make simply mistakes.

B) Even good leaders make simple mistakes.
A) The leader of a group is usually the more confident person in the group.
B) The leader of a group is usually the most confident person in the group.
A) A leadership training course won’t help you become most confident.

B) A leadership training course won’t help you become more confident.
A) A good leader is typically more assertive and decisive then a bad leader.
B) A good leader is typically more assertive and decisive than a bad leader.
A) The best leaders feel bad when their team is unhappy.

B) The best leaders feel badly when their team is unhappy.
A) The less important traits of a good leader are his or her gender and race.
B) The least important traits of a good leader are his or her gender and race.
A) Good leaders can attain the more high positions in an organization.

B) Good leaders can attain the highest positions in an organization.
UNIT 4: Past Duration and Future Predictions: The History and Future of the EU
1) fixed exchange rate k a) paper money

2) floating exchange rate s b) a limit
3) fluctuate j c) to miss scheduled payments on debt
4) budget deficit o d) guidelines for taxation and government spending
5) sanction p e) to give money to prevent financial ruin
6) banknote a f) when gold is held in reserve to give value to the banknotes
in circulation
7) deregulate m g) the amount of money the government owes to the owners
of treasury bills
8) austerity measure q h) money whose value is guaranteed by the government
9) default c i) guidelines for increasing and decreasing the supply of
money to regulate interest rates and inflation
10) gold standard f j) to constantly change
11) legal tender h k) when the value of currency A relative to currency B is set
at a specific ratio
12) credit rating t l) a cost or restriction to conducting international business
13) public debt g m) to lift legal restrictions on a market
14) trade barrier l n) economic well being
15) speculator r o) the amount by which government spending exceeds tax
revenues
16) bail out e p) a punishment
17) ceiling b q) an attempt to balance a budget and reduce debt
18) monetary policy i r) someone who attempts to earn a profit by anticipating
future market trends and buying and selling stocks, bonds,
foreign currencies, etc.
19) fiscal policy d s) when the value of currency A relative to currency B is free
to fluctuate based on the demand of currency A in country B
20) prosperity n t) a score given to a borrower of money based on the
likelihood the borrower can repay his/her/its debts
Reading Comprehension 4.1: According to the timeline above, which of the following statements are true,
and which are false?
1. The Bretton Woods agreement has been in place since 1944. True / False
2. European countries have worked toward economic unity since the 1950s. True / False
3. The Euro was in circulation for ten years. True / False
4. The Euro was used only for cashless payments from 1999 to 2002. True / False
5. The EU has had a debt crisis for over three years now. True / False
6. Bretton Woods has lasted for 27 years. True / False
7. Bretton Woods was in place until 1971. True / False
8. Europe worked toward the free movement of capital from 1990 to 1993. True / False
9. Stage three of the EMU was in progress until 1999. True / False
10. Most European countries sought to balance their budgets for over True / False
three years.
11. Stage 2 of the EMU has been in progress since 1998. True / False
12. The EEC existed in 1957. True / False
13. Deficit ceilings were relaxed in 2005. True / False
14. The ECB governed EU monetary policy in 1998. True / False
15. The Maastricht treaty has been in effect since 1991. True / False
Grammar 4.1: Past Duration: Finished and Unfinished Duration
Which of the following events or actions began and finished in the past (F) and which began in the past and
continue to the present (UF).
1. The Bretton Woods agreement lasted until 1971. F

2. The Euro has been legal tender in Europe for 13 years. UF
3. The Dollar was backed by the gold standard for 27 years. F
4. The Euro was used only for cashless payments from 1999 to 2002. F
5. The European Economic Community has expanded since the 1950s. UF
Grammar 4.2: Past Duration: Past Simple versus Present Perfect
Complete the following grammar rules with past simple or present perfect.
1. Use the past simple when describing an event or action that started in the past and finished in the past.
2. Use the present perfect when describing an event or action that started in the past and continues to the
present.
Grammar 4.3: Time Prepositions for Duration
Complete the grammar rules below with the following prepositions: since, for, from… to…, until [One may be
used twice!]
1. Use since to state the start time of an event or action that continues to the present.
2. Use until to state the finish time of an event or action that finished in the past.
3. Use from… to to state the start and finish times of an event or action that finished in the past.
4. Use for to state the length of time of an event or action that finished in the past.
5. Use for to state the length of time of an event or action that continues to the present.
Grammar 4.4: Go back to Reading Comprehension 4.1. Double check your answers and rewrite all false
statements so that they are true.
1. facilitate e
2. collapse o a. detailed and complex
3. prospects s b. to plant (i.e. to create/cause)
4. self-inflicted wound x c. of each
5. elaborate a d. inhibited/restricted by
6. an array of u e. to help/enable
7. hamstrung by d f. a return to importance/power
8. vastly m g. a consequence/result
9. respective c h. a feeling of dislike/displeasure
10. rationale y i. a state of no economic growth
11. put on (a) more equal footing with q j. to decrease/downsize/reduce
12. proponent of _l k. a state of confusion or commotion
13. sow b l. a supporter of
14. debtor w m. very/extremely
15. creditor v n. a state of conflict or opposition
16. resentment h o. the fall/decline/ruin
17. hostility n p. still healthy/influential/powerful
18. deteriorating t q. to make more equal to
19. turmoil k r. someone acting on their own
20. repercussion g s. expectations/potential
21. lone-wolf r t. becoming worse
22. roll back j u. a multitude/range of
23. alive and well p v. a person or entity that loans money
24. stagnation i w. a person or entity that borrows money
25. resurgence f x. harm caused to oneself
y. the reason/explanation for something
1. overcome f a. reenergized/brought back to life

2. reinvigorated a b. difficult to perceive, find, or realize
3. muddle through j c. a lift/stimulus
4. boost c d. to disentangle/come undone/break apart
5. robust i e. to melt/liquefy/break apart
6. elusive b f. to prevail (over)
7. wane h g. the decay/breaking apart
8. unravel d h. to decrease in strength or intensity
9. dissolve e i. strong/booming/steady
10. disintegration g j. (barely) survive
Grammar 4.5: Future Certainty and Uncertainty
According to the author, which of the following events are certain (C) to happen in the future, which are
uncertain (U) to happen in the future, which are more certain (MC) than uncertain to happen in the future,
which are less certain (LC) than uncertain to happen in the future, and which will certainly not (CN) happen
in the future?
1. Europe’s leaders could find creative new ways to overcome the challenges. UC
2. Bold and determined leadership could build the institutions to support the euro. UC
3. The optimistic scenario for a reinvigorated EU is unlikely (to happen). LC
4. The EU will stay in business. C
5. The EU is likely to experience repeated crises and internal divisions. MC
6. Robust growth will remain elusive, support for the union will decline, and Europe’s global influence
will continue to wane. C
7. The EU experiment may start to unravel. UC
8. The challenges will not be easy to overcome. CN
9. Some European states might look to Moscow for help. UC
10. The EU will likely simply muddle through. MC
Grammar 4.6: Modals for the Future
Complete the grammar rules with the following modal verbs: will, may, will not, could, might,
will likely/probably, is likely to, will unlikely, is unlikely to
1. To express that something is certain to happen in the future, use: will

2. To express that something is uncertain to happen in the future, use may, might, could
3. To express that something is more certain than uncertain to happen in the future, use
will likely/probably, is likely to
4. To express that something is less certain than uncertain to happen in the future, use will unlikely, is
unlikely to
5. To express that something is certain not to happen in the future, use: will not
UNIT 5: Solutions
Vocabulary 5.1: Briefly define the following terms from the text.
1. government expenditures: all the money the government spends

2. public goods and services: everything the government buys for its citizens, e.g. health care and police
3. government borrowing: when the government issues treasury bonds to finance its expenditures
4. national debt: all the money the government owes
5. budget surplus: when the government spends less money than it collects in taxes
6. balanced budget: when government spending equals government revenue
Reading Comprehension 5.1: Match column A to column B to form complete sentences regarding Readings
5.1 and 5.2.
Column A Column B
1. The government is engaging in a. its deficit decreases or its
expansionary fiscal policy… _d surplus increases.
2. The government is engaging in b. it increases output and decreases
contractionary fiscal policy… _f unemployment.
3. When the government adopts an c. it will self-adjust.
expansionary fiscal policy,… _e
d. when it purposefully runs a deficit
4. When the government adopts a to affect the economy.
contractionary fiscal policy,… _a e. it ultimately adds to the national debt.
5. According to Keynesians, if government
spending increases,… _b f. when it increases taxes and/or decreases
6. According to classical economists, if the spending to affect the economy.
economy falls out of equilibrium,… _c
Reading Comprehension 5.2: FIGURE 1
Complete the two graphs based on the reading above.

Classical Solution to a Recession Keynesian Solution to a Recession
LA LAS
S
SAS1 SAS1
price price
SAS2
level level
AD 2
AD1
AD1
Y1 Y2 Y1 Y2
GDP GDP
Vocabulary Match the following words from the text with their meanings.
1) GDP j a) the level of production

2) real GDP d b) when GDP is below the natural level and, therefore,
resources are not fully employed
3) natural GDP g c) producers/sellers of goods and services
4) recession b d) Gross Domestic Product adjusted for inflation
5) output a e) the right amount of
6) sticky wages h f) the time period in which, according to Keynes, wages
do not adjust to a change in GDP and price level
7) sufficient e g) the optimal Gross Domestic Product
8) suppliers c h) when compensation for work does not adjust to a
change in GDP and price level
9) short run f i) when the primary resources used for production (i.e.
labor and capital) are utilized at the optimal level
10) full employment _i j) Gross Domestic Product: the total output of an
economy in terms of total income
1) interest rate f a) the total amount of a currency in circulation

2) mitigate e b) the extent to which an action has the desired effect
3) money supply a c) where people borrow and loan money
4) crowding-out d_ d) when the intended effect of an economic policy is
limited by secondary effects
5) effectiveness b e) to diminish or lessen
6) credit market c f) the percentage charged on loans or paid on
investments at specified intervals
Reading Comprehension 5.3: Imagine we are currently in a recession. Complete the dialog between two
economic advisors using the phrases provided.
KEYNESIAN: If we do nothing, _g_ h. the market will self-correct.

CLASSICAL: When the markets adjust, _e_ i. when that happens.
KEYNESIAN: That’s not true. The j. by the time that happens!
economy will recover _d_
CLASSICAL: But interest rates will rise _f_ k. only if we pursue an expansionary fiscal
policy.
KEYNESIAN: We will just have to l. GDP will return to its natural level.
print more money, _b_
CLASSICAL: If we just wait it out, _a_ m. if we borrow more money.
KEYNESIAN: We could all be dead _c_ n. the recession might get worse.
Reading Comprehension 5.4: Mark all correct answers to the following questions, according to Keynesian
theory.
3. What would happen if the government pursued an expansionary fiscal policy right now?
Italy’s national deficit and debt would decrease.

X Interest rates and price levels would rise, at least in the short run.
X Italy’s credit rating would probably be downgraded.
4. What would happen if the government pursued a contractionary fiscal policy right now?
Italy’s national deficit and debt would increase.

X Interest rates and price levels would fall, at least in the short run.
X Italy’s credit rating would probably be upgraded.
Grammar 5.1: STEP 1: Each sentence below consists of a CONDITION and its RESULT. Underline all the
conditions and circle all the results. STEP 2: now determine if each sentence refers to (1) a result that is certain
(C) to happen given the condition (i.e. a rule or law), (2) a condition that is probable or possible (P) to happen
in the future and the certain or possible result given that condition, or (3) a condition and result that are both
improbable (IP) to happen in both the present and the future.
The government is engaging in expansionary fiscal when it purposefully runs a deficit to affect the economy.
C
When the markets adjust, GDP will return to its natural level. P
Italy’s national deficit and debt would decrease, interest rates and prices in Italy would fall, and the
country’s
credit rating would probably be if the government pursued a contractionary fiscal policy right now.
upgraded
IP
If government spending increases, it increases output and decreases C
If the government pursued an expansionary fiscal policy right now, Italy’s national deficit and debt would
increase,
interest rates and prices in Italy would rise, and the country’s credit rating would probably be .
downgraded
IP
If the economy falls out of equilibrium, it will self-adjust. P
If we do nothing, the recession might/may/could get worse. P
When the government adopts a contractionary fiscal policy, its deficit decreases or its surplus increases. C
Interest rates will rise, if we borrow more money. P

Grammar 5.2: Complete the table below using the elements provided. Refer to the sentences in Grammar 5.1
for examples.
certainty, might/may/could, if/when, present simple/present continuous, probability/possibility,

would + infinitive, present simple/present continuous, improbability, if/when, if, will + infinitive,
present simple, past simple, comma
CONDITION RESULT CLAUSE FUNCTION
CLAUSE
ZERO
CONDITIONAL if/when PRESENT certainty
+ SIMPLE/CONTINUOU
present S
simple/present
continuous
FIRST probability/possibility
CONDITIONAL IF/WHEN will + infinitive
+
present simple
SECOND
CONDITIONAL if would + infinitive IMPROBABILITY
+
past simple
ay/could when the result is possible but not certain, and remember that the comma is not necessary when the condition co
UNIT 6: Solutions
1) patterns of consumption on a micro or macro scale consumer behavior

2) the manner in which a person observes and understands phenomena perception
3) convincing compelling
4) to find a solution for deal with
5) specially designed for a particular customer customized
6) trustworthy credible
7) to distinguish from something else differentiate
8) a person who writes the text and/or dialog for an advertisement copywriter
9) a plan or guiding principle strategy
10) the application or realization (i.e. of a plan) execution
11) to create, invent, or think of come up with
12) of importance relevant
13) to aid facilitate
14) to analyze the entire market and determine which consumers constitute your target
market and which do not segment
15) the process of developing an advertisement ad creation
16) aspects of a product that are highlighted to gain the attention of particular consumers
appeals
17) set in a particular medium cast
18) the final product of ad creation copy
19) of high moral standards ethical
20) the segment of the market which you want to attract with advertisements target market
21) to create, distribute, promote, and price a good or service market
Reading Comprehension 6.1: Based on Reading 6.1, which of the following statements are true, and which
are false?
1. It is imperative that advertisers not tell obvious lies in their commercials. True / False
2. A company must employ an account manager in order to understand True / False
consumer behavior.
3. A company could employ an account manager in order to understand True / False
consumer behavior.
4. It is advisable for advertisers to know their target market. True / False

5. It is not advisable that advertisements follow ethical standards. True / False
6. One possibility is to use the visual aspects of a commercial to gain True / False
the audience’s attention.
7. It is not advisable to produce a boring commercial. True / False
8. One possibility is to cast advertisements in a medium. True / False
9. It is possible to cast an advertisement in many different media. True / False
10. To create a good advertisement it is necessary to differentiate the True / False
product from all other products on the market.
11. It is imperative that copywriters collaborate with artistic and True / False
production teams.
12. It is imperative that an advertisement does not contain True / False
relevant information.
13. In addition to advertising, a company might also consider pricing True / False
and distribution.
14. It is a good idea, but not necessary, to plan advertisements in advance. True / False
Grammar 6.1: Step 1: Match the modal verbs below to their functions. Step 2: Rewrite all false statements in
Reading Comprehension 6.1 so that they are true.
must / should / could / shouldn’t / mustn’t / couldn’t
1. To say that an action is a possible solution to a problem, use: could

2. To say that an action is not a possible solution to a problem, use: couldn’t
3. To suggest that someone acts in a particular way, use should
4. To suggest that someone does not act in a particular way, use shouldn’t
5. To inform someone that a particular action is imperative, use must
6. To inform someone that it is imperative to not act in a particular way, use mustn’t
1. the specific details of a law provisions

2. written and published as official law codified
3. misleading deceptive
4. to interpret construe
5. a text accompanying a product that explains how to use it properly instruction manual
6. advertising which compares two products or services comparative advertising
7. to limit the effects of hinder
8. to harm the reputation of discredit
9. characteristic or demonstrative of something representative
10. the legal ownership of something in print copyright
11. different and opposed contradictory
12. advertising that deceives consumers misleading advertising
13. a company that sells similar products or services competitor
14. the official name, logo and/or slogan of a product or company trademark
15. a copy replica
16. to insult, belittle, defame denigrate
17. laws passed by a government authority legislation
18. provable verifiable
19. a law that requires or prohibits certain behavior directive
20. official changes to a law amendments
21. to mislead deceive
Reading Comprehension 6.2: Complete the following sentences with the words provided.
1. In the EU, companies can compare their products with products of competitors if the comparisons
are objective.
2. EU advertisers are not allowed to mislead consumers.
3. EU law states that traders may not deceive consumers.
4. Advertisers need to respect international copyright laws.
5. Advertising regulations in the EU clearly state that comparative ads must tell you exactly what you
are paying for.
6. National Governments are supposed to abide by the EU advertising directives, but in reality member states
don’t have to enforce the laws in the same way.
Grammar 6.2: Match the modal verbs below to their functions. Use Reading 6.2 and Reading
Comprehension 6.2 for examples.
1. To say that something is necessary/obligatory, use: have to, need to

2. To say that something is not necessary/obligatory, use: don’t have to, don’t need to
3. To say that something is permissible/possible, use: can, are allowed to
4. To say that something is not permissible/possible, use: cannot, are not allowed to
5. To prohibit, use may not, must not
6. To obligate, use must
7. To give permission, use may
8. To remind people about rules and regulations or to state that something is a rule that is
not very strict, use: are supposed to, are not supposed to
UNIT 7: Past Tenses: Recent Market Trends and Major Investors
Vocabulary 7.1: Match the words in BOLD in the texts to their meanings below.
1. adjusted for inflation real terms
2. before costs and taxes gross
3. forcibly against their will
4. drawback/ cost/ disadvantage downside
5. prospering/ doing well economically or financially flourishing
6. refugees applying for residence permits asylum-seekers
7. closest to the problem frontline
8. not requiring specific education or training low-skilled
9. introduction/ start inception
10. place where movie tickets are sold box office
11. not legally required to do something exempt from
12. surprising/ astonishing/ impressive eye-popping
13. a series of films franchise
14. to choose not to do something (legally) opt out
15. suffering plight
16. cause more division draw deeper lines
17. the act of officially putting a product on the market release
18. approximately around
19. sell more than any other film previously broke box-office records
20. causing division divisive
Reading Comprehension 7.1: Match the following headlines to the texts A, B, and C in Reading 7.1:
1. Europe’s migrant crisis: Relocation quotas C

2. Spectre’s opening weekend in America A_
3. Good pay if you can get it B
1) B Real wages in London (2008=100) Percentage of jobs paying less...
2) AUnited States box office sales, opening weekend (2015 prices, $m)
3)CQuotas for relocations over the next two years

English for Economics University of Venice Ca’ Foscari
AY 2015-16 Prof. Michael Ennis
Reading Comprehension 7.3: Based on Reading 7.1 and the charts in Reading Comprehension
7.2, which of the following statements are true, and which are false? (unknown = false)
1. The real living wage in London has been falling. True / False
2. The percentage of low wage jobs has been declining throughout the U.K True / False
since 2010.
3. Spectre grossed the third most of all James Bond films on opening night in True / False
the US.
4. More European countries have agreed to take on asylum seekers in True / False
recent months.
5. Foreign markets accounted for 70% of Spectre’s total ticket sales. True / False
6. Most European nations were taking on relatively few asylum seekers True / False
until September 2015.
7. From 2008 until 2010, the percentage of low wage jobs in London rose True / False
from 13% to 19%.
8. The real living wage in London has been increasing at slightly more than True / False
the rate as inflation since 2012.
9. Italy and Greece have relocated about 480,000 asylum seekers since True / False
the beginning of 2015.
10. The real median hourly wage in London had been increasing at about the True / False
rate of inflation until 2010.
11. The percentage of low income jobs in London started rising in 2010. True / False
12. There had only been two James Bond films that grossed more on opening True / False
night in the U.S. than Spectre.
13. The real median wage in London has increased by about 10% since 2010. True / False
14. No Bond film has ever grossed more on opening night in the US than Skyfall. True / False
15. All of Daniel Craig’s Bond films have been flops. True / False
16. Until negotiations in July, Greece and Italy had been accepting only a True / False
small portion of the asylum-seekers.
94
Grammar 7.1: STEP 1: Match the following sentences (1-9) to the types of actions and events (a-
i) they describe. STEP 2: Then match the tenses at the bottom of the page to the types of actions
and events (a-i) for which they are used. STEP 3: Finally, correct all false statements in Reading
Comprehension 7.2 so that they are true.
1. Italy and Greece have relocated about 480,000 asylum seekers since the beginning of 2015.
d
2. The real living wage in London has been falling. g
3. Foreign markets accounted for 70% of Spectre’s total ticket sales. a
4. From 2008 until 2010, the percentage of low wage jobs in London rose from 13% to 19%.
c
5. No Bond film has ever grossed more on opening night in the US than Skyfall. b
6. Most European nations were taking on relatively few asylum seekers until September 2015.
h
7. Until negotiations in July, Greece and Italy had been accepting only a small portion of
the asylum-seekers. j
8. The percentage of low wage jobs has been declining throughout the U.K. since 2010. f
9. There had only been two James Bond films that grossed more on opening night in the U.S.
than Spectre. i
10. The real median wage in London has increased by about 10% since 2010. e
k. An event or action that was completed at a specific time in the past PS

l. An event or action that was completed at an unspecific time in the (often recent) past PP
m. The duration of an event or action that started and finished in the past PS
n. The duration of an event or action that started in the past but continues to the present PP
o. A change from a particular point in the past to the present, but not necessarily constant PP
p. The duration of an event or action that started in the past but continues to the present, or a change
from a particular point in the past to the present where the event or action was constant and is
definitely still in progress in the present PPC
q. A recent trend or activity PPC
r. An event or action that was in progress at a point in time in the past PC
s. An event or action that occurred before a point in time in the past PastP
t. An event or action that was continuously in progress until a point in time in the past __PastPC
UNIT 8: Solutions
1. union l a. a proposed law

2. general strike o b. to cause
3. reform k c. purpose
4. initiate q d. to terminate employment
5. draw h e. expansive
6. youth m f. to encourage
7. out of work n g. to make public
8. deepen r h. a tie (i.e. a situation in which a clear victor cannot be
determined)
9. embolden f i. someone who sells products in bulk, often to retailers
10. fire d j. to discuss and debate the terms of something in the hope of
reaching a consensus
11. wholesaler i k. a change intended to improve a situation
12. negotiate j l. an organization of workers, typically in the same sector, that
engages in collective bargaining
13. sprawling e m. young people
14. picket s n. unemployed
15. unveil g o. when several unions refuse to work at the same time
16. aim c p. to incite or urge, i.e. stimulate
17. bill a q. to begin
18. spur p r. to fall even further (here: to get even worse)
19. precipitate b s. a form of public demonstration in which the demonstrators
block access to a place of business or government
20. decree t t. a law with immediate effect, that is not passed by a
parliament, but put into effect by a head of state, usually in
an emergency situation
Reading Comprehension 8.1: Based on Reading 8.1, complete the following sentences with the
words and phrases provided below.
employers / the Spanish people / the government / Mariano Rajoy / picketers /

the Spanish media / large crowds / Spain / 120 people
1. The Spanish people elected the PM in November. A

2. The unions were emboldened by large crowds last month to move ahead with a general strike. P
3. According to the government, Spain needs labor reforms to flexibility to the workplace. A
4. 120 people are employed by bring . P
MercaMadrid
PM wholesale fish
5. The Spanish media reported that the expected the labor reforms to result in a general strike.
A
6. The PM approved the reforms as a decree. A
7. Employers can now fire union workers more easily. A
8. Picketers are expected at the entrance to the MercaMadrid market. P
9. The expects the government to announce a second austerity package on Friday. A
Grammar 8.1: An AGENT is the doer of an action, and the PATIENT is the recipient of an action.
For each of the sentences below, underline the PATIENT and circle the AGENT. If you cannot find
the AGENT, look for it in Reading Comprehension 8.1.
1. The PM was elected in November. P

2. Large crowds last month emboldened the unions to move ahead with a general strike. A
3. According to the government, labor reforms are needed to bring flexibility to the workplace. _ P _
4. MercaMadrid wholesale fish employ 120 people. A
market
5. It was reported that expectedsthe labor reforms to result in a general strike. P
the
6. The reforms were approved as a decree. P
7. Union workers can now be fired more easily. P
8. The expects picketers at the entrance to the MercaMadrid market. A
9. The government is expected to announce a second austerity package on Friday. P
Grammar 8.2: STEP 1: Complete the following grammar rules with either ACTIVE or PASSIVE.
STEP 2: Label each of the sentences in Grammar 8.1 and Reading Comprehension 8.1 as either
ACTIVE (A) or PASSIVE (P).
1. The agent is the subject in the ACTIVE voice.

2. The patient is the subject in the PASSIVE voice.
3. The ACTIVE voice is used to emphasize who or what performed an action.
4. The PASSIVE voice is used to emphasize who was affected by an action and/or the action
itself.
5. The PASSIVE voice is used if the agent is unknown or unimportant, and therefore excluded
from the sentence.
Grammar 8.3: Circle the correct answer to complete the grammar rules below.
1. In the passive voice, the agent is included only as part of a prepositional phrase with by / from.
2. The passive voice is often used by journalists and academics to sound more subjective
/
objective. past
3. The passive voice is formed with the helping verb to be / have and the simple past /
participl of the main verb.
1. minimum wage f a. to negotiate as a group

2. binding agreement i b. to regain control of
3. fringe benefit d c. work beyond 40 hours (in most western countries)
4. on behalf of e d. extra incentives to work at a company
5. squash g e. in someone else’s name
6. overtime c f. the lowest amount of money a company can legally pay its
employees
7. dues h g. to halt
8. rein in b h. membership fees
9. collectively bargain a i. a contractual arrangement
Reading Comprehension 8.3: Read the following paragraphs about the pros and cons of labor
unions. First label them as either PRO or CON and then match them to the topic sentences that
follow and double-check your answers.
We no longer buy and sell in a national economy, but in a global one. Products and services which could be
developed domestically are now being made more cheaply abroad, most notably in India and China, which
have vast pools of cheap labor. Saddling a domestic company with unrealistic and inflexible labor costs
effectively makes it impossible for it to compete. CON g
One employee in a company usually has very little bargaining power. For most companies, one employment
position is just an interchangeable part where another person can be brought in to fill the gap if a person
quits. Thus, management doesn't always see the need to create a work environment that's favorable for
employees. However, when workers ban together, they can wield the ultimate labor weapon: a strike. If one
person walks off the job, it may be no big deal. If everyone walks off the job, it shuts down production. PRO
b/c
Unions can hurt society as a whole when they strike. Imagine major highways under construction being shut
down by striking workers. Imagine the crime and rioting if police walked off the job. Imagine all air traffic
coming to a halt if controllers held out for more pay. The bargaining then becomes less about giving
employees' deserved wages and benefits and more about paying off extortion. Companies or government
offices have little choice but to concede to the demands, or society as a whole suffers the consequences.
CON i
Members of unions are usually your every-day, middle-class individuals trying to make a living. Among
other costs, they must pay mortgages and car payments, put food on the table, and pay to send their kids
through college. It's difficult and stressful to plan for the future when you're not sure if you may lose your
job, or if your wages and benefits may be cut unexpectedly. A union allows contracts to be signed to give
employees piece of mind that such things won't happen. PRO d
The cost of labor is like any other input cost for a business. Increased labor costs reduce profit margins
unless prices can be raised to pass the costs on to consumers. Thus, when we buy cars, purchase plane
tickets, or buy any other product that comes from a unionized business, we all pay more at the cash register.
CON f
The governments of France, Spain, and Greece, as well as state governments in California, Wisconsin, and
Massachusetts all illustrate recent examples of unions putting the good of their members ahead of society
and the world as a whole. Government spending is out of control and completely unsustainable.
Unrealistically high pensions and other benefits cannot be paid indefinitely without incurring further debt or
taking resources from other areas like education and defense. Yet any reasonable attempt to rein in these
costs leads to protests, riots, and strikes. CON k
Union jobs are usually stable and secure; thus, employees have more incentive to stay, to develop solid
relationships with co-workers, and to do their best to make sure the company thrives. On the employer side,
more stable employment means less time training new employees and less time recruiting replacements.
PRO e
Many employees are simply inferior at their job, whether it's a lack of motivation, education, or natural
abilities. Given the huge unemployment and underemployment rate today, there is always a pool of
potentially more talented or motivated workers that may be able to do the job better, but union contracts
often tie management’s hands when it comes to replacing workers. CON h
Unions allow employees to appoint or elect representatives that go to management and negotiate for all
workers at once. Union reps can meet regularly to talk about wage levels, fringe benefits, and so on. The
union also allows management and labor to sign contracts which put their negotiations on paper, a step that
may be impractical on an employee-by-employee basis. PRO c
In a rough economy, with workers needing their paychecks to pay their bills, employers hold a lot of power.
Consequently, management can set impractical hours, create unrealistic work quotas, require work on
holidays, fire and hire indiscriminately, and so on. One individual often has very little bargaining power
since they can easily be replaced. However, a group of abused employees can ban together to prevent
management from carrying out such abuses. PRO a/b/c
Since unions can offer a large block of voters, politicians will often curry favor from unions. Consequently,
union representatives concentrate on helping their favorite politicians and political party rather than doing
what's best for the members. Union leaders have the ability to convince their members to support certain
candidates, even if those candidates do not represent the members’ interests. CON j
ADAPTED FROM: http://www.balancedpolitics.org/unions.htm
Topic Sentences:
l. Unions protect workers from company abuses.

m. Unions empower workers.
n. Unions allow workers to collectively bargain.
o. Unions give workers more job security.
p. Unions create a stable, long-term employment relationship between companies and employees.
q. Unions lead to higher prices for consumers because companies must pay more for wages
and benefits.
r. Unions make the country less competitive.
s. Unions often prevent more qualified workers from getting the jobs.
t. Certain unions yield too much power.
u. Unions have become a source of political power and corruption.
v. Unions focus on the needs of the members at the expense of non-union members.
Grammar 8.4: Each of the following sentences taken from Reading Comprehension 8.3 consist
of two parts (i.e. clauses) which are connected by a CONJUNCTION. First circle the conjunction in
each sentence and then match each conjunction to one of the functions that follow.
1. Union representatives go to management and negotiate for all workers at once.

2. Unions lead to higher prices for consumers becaus companies must pay more for wages and
benefits. e
3. Since unions can offer a large block of voters, politicians will often curry favor from unions.
4. Union leaders have the ability to convince their members to support certain eve
candidates, those candidates do not represent the members’ interests.
5. There is always a pool of potentially more talented workers, but union contracts often tie
management’s hands.
6. Increased labor costs reduce profit unles prices can be raised to pass the costs on to
margins consumers.
7. Whe we buy products from a unionized business, we all pay more at the cash register.
8. Institutions have to concede to the demands of or society as a whole suffers the
unions, consequences.
9.If everyone walks off the job, it shuts down production.
10. Unrealistic benefits cannot be paid indefinitely without incurring further or taking
debt resources from other areas like education.
Functions:
Addition: and, or
Contrast: but, even if
Cause: since, because
Effect or
Condition: if, when, unless
UNIT 9: Making a Cohesive Argument: The Economics of The Drug Trade
Reading Comprehension 9.1: Read the text again and match the following main functions to
paragraphs 1-10 in Reading 9.1.
a. Finding #1 6
b. Finding #2 7
c. Finding #3 8
d. Literature review (i.e. summary of past research) 2
e. Organization of the paper 10
f. Description of data 4
g. Summary of Conclusions 9
h. Background information/introduction to the topic 1
i. Summary of research methodology 5
j. Explanation of how the present study attempts to fill a gap in research 3/4
Reading Comprehension 9.2: Based on Reading 9.1, which of the following statements are true,
and which are false? Correct all false statements so that they are true.
1. Gangs became less involved in the drug trade because of the True / False
profitability of crack-cocaine.
2. The reason that previous research is flawed is because it was not True / False
very “pioneering.”
3. A major limitation of previous research is that, as the drug trade is True / False
an illegal enterprise, it is difficult to get accurate financial data on
drug- selling gangs.
4. Studies that rely upon ethnographic observation have found True / False
higher incomes than those relying upon self-reports.
5. Ethnographic observation is flawed because it tends to focus on the True / False
street- level dealers, rather than the bosses.
6. There has been very little research on the returns of crime. True / False
7. The main difference of this study is that the authors had access to True / False
detailed financial information documented by foot soldiers.
8. The first aspect that the authors analyze in the data is the True / False
relationship between risk and decision-making.
9. Both low-level and high-level drug dealers earn less money than they True / False
would in a legitimate business, so there is very little incentive to
selling drugs.
10. One downside to gang wars is that they result in a negative demand shock. True / False
11. One cause of gang wars is that disagreements between gangs cannot True / False
be resolved through litigation.
12. The authors conclude that economic factors can fully explain why True / False
people sell drugs, in spite of the low pay and high risks for low-level
dealers. True / False
13. One flaw of the study is that it is based on only one very well
managed gang.
Grammar 9.1: Read the following sentences below and match the words and phrases in bold to
their functions in the text.
Stevin Levitt, whose work is very controversial, is a renowned professor at the University of Chicago.
Sudhir Alladi Venkatesh, who earned his PhD. from the University of Chicago, is a famous sociologist
and ethnographer.
Our data, which span the levels of a gang hierarchy, from rank-and-file members to imprisoned
leaders, offer a partial solution to this problem.
Independents are likely to have greater ability, experience, and access to capital than ‘‘foot soldiers’’ who
sit at the low end of the street gang’s organizational hierarchy.
While the data suffer from important limitations and a number of potential biases (which appear
below), they nonetheless represent a substantial improvement on previously available information.
The degree to which these results are broadly generalizable remains an open question.
Section I provides background on the community in which the gang is situated, the organizational
structure of the gang, and the competitive environment within which it operates.
DEFINE (IDENTIFY/DISTINGUISH) A PERSON OR THING: who, to which, in which, within which
ADD ADDITIONAL INFORMATION ABOUT A PERSON OR THING: whose, who, which, which,
These words and phrases are called RELATIVE PRONOUNS, and they are used to embed clauses
to describe nouns. How can you tell the difference between DEFINING and NON-DEFINING
relative clauses?
THE COMMA!
Grammar 9.2: Read the following excerpts below and match the words and phrases in bold to their
function in the text.
ORDERING First, then, Finally

ADDITION Moreover, also
RESULT As a consequence, Thus
CONTRAST In spite of this, However
EMPHASIS Certainly, Of course
All of the words and phrases above are called DISCOURSE CONNECTORS, as they are used to
link ideas in written and spoken discourse. How are they similar and different from
CONJUNCTIONS (See Unit 8)?
Similarity: they both link sentences

Difference: conjunctions make one sentence out of two, while sentences linked with discourse
connectors remain separated by a period (.) or semicolon (;).

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English for Economics and Business

English for Economics and Management

Michael Joseph Ennis, 2012-2016

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Pre-Reading 1.1: Write one sentence to define the term “economics.”

Reading 1.1: What is Economics?

ADAPTED FROM: http://www.cliffsnotes.com/study_guide/topicArticleId-9789,articleId-9722.html

1) goods a) actor in an economy who purchases goods and services

3) scarcity c) the study of the behavior of individual consumers, firms and

4) aggregate d) the study of the market system as a whole or market sectors

5) free resource e) products that are produced to be sold

6) market system f) the condition of being in short supply

7) economics g) tasks that are performed for paying customers

8) microeconomics h) all interconnected markets within an economy

9) macroeconomics i) an input that is not scarce

10) allocate j) the sum total of

1) What is the central economic problem?

2) What do macroeconomists study and what do microeconomists study?

3) Why are you interested in economics?

Reading 1.2: The Energy Crisis

Oil Prices: What’s Behind the Drop?

ADAPTED FROM: http://www.nytimes.com/interactive/2015/business/energy-environment/oil-prices.html?_r=0

2) double b) able to perform a function with the least amount of energy

4) compete d) by a large amount and/or very fast

5) drop e) to increase by 100%

6) exports f) all individuals living in the same home

7) energy-efficient g) to do or have something as measured per day, month, year,

9) devaluation i) to sell goods and services in the same market as another

11) be worse off k) entirely within a nation’s borders

12) sharply l) the legal money of a nation

13) household m) to move more slowly than average or than expected

1) Why is the cost of oil falling?

2) What are the benefits of the drop in oil prices?

3) In your opinion, what are some of the negative impacts?

6) Demand for fuel is lagging.

A) Petronations currently compete for the Asian market.

A) Iraq is an oil producing nation.

A) Vehicles are becoming more fuel-efficient.

A) The economies of Europe and developing countries weaken.

A) The drop in energy prices helps lower-income families.

A) Lower oil prices often hurt oil producers.

A) Macroeconomists study aggregate supply and demand.

Reading 2.1: Social Responsibility versus Profit Maximization

Milton Friedman and the social responsibilities of business

ADAPTED FROM: http://www.cliffsnotes.com/Section/id-305399,articleId-278751.html

1) social responsibility a) to argue or put forth

2) sustainability b) a responsibility to do something for oneself or others

3) free market c) an investor who owns stock in a company

4) academic d) the potential to continue producing and selling into the

5) shareholder e) the last line in a company’s ledger (account balance) which

7) financial gain g) a perceived obligation to act in the best interest of society

8) the bottom line h) a company

9) assert i) any system of buying and selling with little or no

10) obligation j) a “professional” scholar

1) What did Milton Friedman think about social responsibility?

2) Do you agree or disagree with Friedman? Why or why not?

Reading 2.2: Sustainability

Triple bottom line

ADAPTED FROM: http://www.economist.com/node/14301663

1) operations _ a) difficult or impossible to quantify

2) performance b) the criteria set by or imposed upon a company in terms of

6) roughshod _ f) the purchase of necessary components and materials from

7) immeasurable g) to reduce input costs in order to maintain or increase

_ ______