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finances

Index

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Vocabulary for this thematic unit .......... 03 What about Finances? .... 04 What is money? ...................... ..................... ... 10
Counting

...............

05 6
money

How many types of money do you know?

Using the Bank ...................... What is a tax? ........................... What is a bill? .......................... What is a Budget? ... 17
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The experience of Communicating ........... 18 Information sources ... 20 ...................

VOCABULARY FOR THIS THEMATIC UNIT


Words alike igual, parecido ATM
(automatic teller machine) (cajero automtico

measurement medicin, medida notice darse cuenta pago al azar, aleatorio outflows flujo, salidas payment, random rate penalties castigo, penalizacin ndice, tarifa, ahorros

average media, promedio bill factura, proyecto de ley, billete budget presupuesto cash dinero, efectivo channel cause, canal, banda charge cargar, cobrar. cheap barato each cada earpiece auricular endorse endosar, aprobar expensive caro, costoso governance gobierno government gobierno however sin embargo, no obstante income ingresos insurance seguro

revenue ingresos (de empresa) savings solve resolver source fuente taxes impuestos unforeseen imprevisto wave onda, ondear

withdraw retirar withdrawal retiro de dinero Expressions a great deal Una gran cantidad credit card tarjeta de crdito

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itself a si mismo, si mismo lend prestar (algo a alguien) length (medida) largo, extension, duracin level nivel link enlace, conexin loan prstamo location ubicacin, localizacin match partido, hacer pareja debit card tarjeta de dbito

deposit slip boleta de depsito go shopping ir de compras money order giro (de pago) pay by mail pagar por correo electrnico

WHAT ABOUT FINANCES?


Finances is the science of fund management. The general areas of finances are

business finances, personal finances, and public finances. Finances include saving money
and often include lending money. The field of finances deals with the concepts of time, money and risk and how they are interrelated. It also deals with how money is spent and budgeted. Basically, finances work through individuals and business organizations that deposit money in a bank. Banks then lend that money out to other individuals or corporations for consumption or investment, and charge interest on the loans. Central banks act as lenders of last resort and control the money supply which affects the interest rates charged. As money supply increases, interest rates decrease.

Personal finances
Questions in personal finance revolve around * How much money will be needed by an individual (or by a family), and when? * Where will this money come from, and how? * How can people protect themselves against unforeseen personal events, as well as those in the external economy? * How can family assets best be transferred across generations (bequests and inheritance)? * How does tax policy (tax subsidies or penalties) affect personal financial decisions?
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* How does credit affect an individual's financial standing? * How can one plan for a secure financial future in an environment of economic instability? Personal financial decisions may involve paying for education, financing durable goods such as real estate and cars, buying insurance, health and property insurance, investing and saving for retirement. Personal financial decisions may also involve paying for a loan or debt obligations.

Capital
Capital, in the financial sense, is the money that gives the business the power to buy goods to be used in the production of other goods or the offering of a service.

What is money?
The main functions of money are

An easy definition for money could be: anything generally accepted as payment for goods and services and other financial operations (like loans). distinguished as:

Medium of exchange: When

money is used to get goods and services, it is performing

a function as a medium of exchange.

Unit of account: Its

a standard numerical unit of measurement of the market value of

goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. To function as a 'unit of account', money must be: Divisible into smaller units without loss of value; precious metals can be coined from bars, or melted down into bars again.

Fungible: that is, one unit or piece must be perceived as equivalent to any other, which is why diamonds, works of art or real estate are not suitable as money.

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A specific weight, or measure, or size to be verifiably countable.

Storage of value:

To act as a store of value, a commodity, means of money, or accepted as a form of payment. The functions are: financial capital must be able to be reliably saved, stored, and retrieved and be predictably useful when it is so retrieved.
Medium of exchange, unit of exchange, account and storage of value value

Please dont forget the definition for money: anything generally

Counting money

In order to count money and facilitate the commercial transactions, a monetary unit has been established whose name is different in every country, even though it accomplishes the same functions. Such monetary unit has multiples and sub multiples, for example: Monetary unit: Dollar Sub multiples:

Penny: its a one cent coin. Nickel: its a five cent coin. Dime: its a ten cent coin. Quarter: its a twenty-five cent coin. Half dollar: its a fifty cent coin.

Multiples: Two dollar bill Five dollar bill. Ten dollar bill. Twenty dollar bill. Fifty dollar bill. One hundred dollar bill and more denominations.

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Exercises
Complete the chart. Write the amount.

$ 1.76 1.

$ 10.57 2.

3.

$ 6.11

$ 25.35 4.

$ 527.00 5.

$ 22. 55
6.

$ 1023.00 7.
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$ 2020.01 8.

Circle the word or phrase that doesnt match


A money order A check A bill A check Charge Expensive A bank Charge A travelers check cheap expensive a check a money order go shopping credit card a mall payment plastic money a credit card cheap a money order an ATM pay cash electronic money a market a bill money order cash average cash a credit card pay by mail cash an ATM a bank charge

1. 2. 3. 4. 5. 6. 7.
8.

9.

Complete the conversations by choosing the correct answer.

1. A: This cold medicine is not cheap!


B: How much is it? A: a. Great! b. Its $13.99 c. I will take it.

2. A: Ill take it
B: Great. Will you pay Cash or charge? A: a. No.
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b. Here you are.

c. cash.

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3. A: What are you going to do on Saturday?


B: Im going to go shopping. How about you? A: a. me too. I want to pay my bills. b. Not me. I have a credit card.

4. A: How much is that jacket?


B: The red one? Its $129.00 on sale. A: a. let me check my agenda. b. Its OK. May I pay by check?

Draw or paste the bills and/or coins to illustrate the correct amount of

money.

$ 85.36

$ 327.55

$ 2.75

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$ 14.25

$ 7.61

$ 1,357.07

How many types of money do you know?

Currently, money has the same functions all around the world (medium of exchange, unit of account and storage of value). However, people use it in different types according to their necessity or convenience. Sometimes people use cash, other times they use checks or credit cards, Etc. When people travel to different countries, most of them use travelers checks or plastic money. Even when you make a purchase on the internet, you use electronic money.

different denominations and it can be used immediately. It is generally used in purchases that require a little amount of money. Bills Coins

Cash money: physical money that you have into your wallet, your purse, Etc. It has 6

Credit documents: they are documents that represent money, but they are not
accepted in all places. banking institution. Checks Travelers checks Money orders You can generally transform them into cash by charging them in a

Plastic money: now-a-days, plastic money is accepted in most places like malls,
restaurants, hotels, trades, flights, deals, etc. Sometimes, there are additional requirements before getting plastic money, especially when it is about a credit card.
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Credit cards Debit cards

Electronic money:

generally, people use this type of money to operate banking

transactions between different countries, between different banks, for international deals, etc. or for purchases on the internet. Wire transfers

In the next chart you will appreciate the different types of money:

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Conversation
A bank is a good place to keep your money. Your money is safe and it earns interest.

USING THE BANK

A: Id like to deposit this check. B: Fine. Please endorse the check. A: Do I sign here? B: Thats correct. Heres your receipt. A: Thanks.

what is a bank?
A bank provides checking accounts, savings

A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. accounts, and money market accounts and accepts time deposits. Commercial banking can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public. Commercial banks generally perform the following activities: *Processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or
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other means. * Issue bank drafts and bank checks. * Accepting money on term deposit. * lending money by overdraft, installment loan, or other means. * Providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures *safe keep of documents and other items in safe deposit boxes.

Exercise

There is important information that you must not miss when youre filling out a deposit

slip. What is this important information? 1. 2. 3. 4. 5.

In the US, you can either save money to your account or make a withdrawal from your account. In Guatemala, there is a specific slip to make deposits and withdrawals.

B
There is also important information that you must not miss when youre filling out a check. What is this important information?

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1. 2. 3. 4. 5.

In Guatemala many employers use to pay by check. Other ones do it by depositing on a bank. If you receive your salary by check, dont forget to endorse it before change it

WHAT IS A TAX?
To tax (from the Latin taxare: to estimate,) is to impose a financial charge or other levy taxare upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state.

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Taxes are also imposed by many sub national entities.

Taxes consist of direct tax or

indirect tax, and may be paid in money or as its labor equivalent (often but not always
unpaid). A tax may be defined as a "pecuniary burden laid upon individuals or property to pecuniary support the government, a payment exacted by legislative authority." authority A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government whether under the name of toll, tribute, impost, duty, custom, excise, subsidy, aid, supply, or other name."

The Four "R"s


Taxation has four main purposes or effects: Revenue, Redistribution, Reprising, and

Representation.
The main purpose is revenue: taxes raise money to spend on roads, schools and hospitals, and on more indirect government functions like market regulation or legal systems. This is the most widely known function. A second is redistribution. Normally, this means transferring wealth from the richer sections of society to poorer sections. A third purpose of taxation is reprising. Taxes are levied to address externalities: tobacco is taxed, for example, to discourage smoking, and many people advocate policies such as implementing a carbon tax. A fourth, consequential effect of taxation in its historical setting has been representation. The American revolutionary slogan "no taxation without representation" implied this: rulers tax citizens and citizens demand accountability from their rulers as the other part of this bargain. Several studies have shown that direct taxation (such as income taxes) generates the greatest degree of accountability and better governance, while indirect taxation tends to have smaller effects.

WHAT IS A BILL?
A bill in monetary term is a kind of debt that people acquire with an institution for the benefit of a service like a credit card or a banking loan. month and some of them incorporate an interest rate. Bills usually must be paid every

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In Guatemala, bills are supposed to be paid every month. For example: Electrical energy service. T.V. Cable service. Credit cards. Loans. Internet service. Telephone service. Cell phone service, etc.

Exercise
Illustrate or paste the receipts of the bills that you have observed at home, at the job or at the school.

WHAT IS A BUDGET?
From French bougette it generally refers to a list of all planned expenses and revenues. It is a plan for saving and spending and an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, it is an organizational plan stated in monetary terms. The main purpose of budgeting is to provide a
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forecast of revenues and expenditures like construct a model of how our business might perform financially speaking if certain strategies, events and plans are carried out. out

Personal or family budget


In a personal or family budget all sources of income (inflows) are identified and expenses (outflows) are planned with the intent of matching outflows to inflows (making ends meet).

Types of budget
Sales budget: The sales budget is an estimate of future sales. It is used to create company sales goals. Production budget: It is created by Product oriented companies to estimate the number of units that must be manufactured to meet the sales goals and the various costs involved with manufacturing those units, including labor and material. Cash Flow/Cash budget: The cash flow budget is a prediction of future cash receipts and expenditures for a particular time period. The cash flow budget helps the business determine when income will be sufficient to cover expenses and when the company will need to seek outside financing. Marketing budget: It is an estimate of the funds needed for promotion, advertising, and public relations in order to market the product or service. Project budget: It is a prediction of the costs associated with a particular company project. These costs include labor, materials, and other related expenses. The project budget is often broken down into specific tasks, with task budgets assigned to each. Revenue budget: The Revenue Budget consists of revenue receipts of government and the expenditure met from these revenues. Tax revenues are made up of taxes and other duties that the government levies. Expenditure budget: A budget type which include of spending data items.

THE EXPERIENCE OF COMMUNICATING


Suppose that two people, separated by a considerable distance, wish to communicate with one another. If there is a pair of conducting wires extending from one location to another and if each place is equipped with a microphone and earpiece the communication problem may be solved.
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The microphone, at one end of the wire communications channel, impresses an electric signal voltage on the line, which voltage is then received at the other end. The received signal, however, will have associated with it an erratic, random, unpredictable voltage waveform which is described by the term noise. The origin of this noise will be discussed more fully in the career of electronics, in the future. Here we need but to note that at the atomic level the universe is in a constant state of agitation, and that this agitation is the source of a very great deal of this noise. Because of the length of the wire link, the received message signal voltage will be greatly attenuated in comparison with its level at the transmitting end of the link. As a result, the message signal voltage may not be very large in comparison with the noise voltage, and the message will be perceived with difficulty or possibly not at all. An amplifier at the receiving end will not solve the problem, since the amplifier will amplify the signal and noise alike. As a matter of fact, as we shall see, the amplifier itself may well be a source of additional noise.

Exercise
Read again the article in the previous page and answer the following questions:

1. What is the meaning of wire communications channel?

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2. What type of communication are people trying to establish, according to the previous reading? 3. What types of communication do you know? 4. According to your interpretation, what is the meaning of the expression greatly attenuated?

Write on the lines the elements that form the Communications process.

INFORMATION SOURCES
Cover: Cover: www.thevoiceofschoolchoice.files.worldpress.com/2009/01/south-carolinashool-finances.jpg Subjects:
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www.Wikipedia.com Pictures: www.nochoiceatall.blogspot.com www.theragblog.blogspot.com www.etc.usf.edu www.scavenging.wordpress.com www.bradfitzpatrik.com/store/images/products7bo007-cartoon-money-clipart.jpg www.emeraldinsight.com/fig/0670360909003.png www.insidesocal.com/bargain/TwentyDollarBill.jpg www.medianowpublic.net/images www.marshu.com/articles/images-website www.marshu.com/articles/images-website/articles/presidents-on-us-papermoney/one-thousand-1000-dollar-bill.jpg www.pective.com www.startswithabang.com www.satic.howstuffworks.com www.fredholmknitting.com www.thefreemarketeers.wordpress.com www.upload.wikimedia.org/wikipedia/commons/b/b2.Coins.jpg www.clancunningham.us/images/checks.jpg Exercises and conversations: English ASAP. Book 1 Teacher Fabricio Trinidad

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