UNIT 23 THE BUSINESS CYCLE
STRONG WORD PARTNERSHIP FULL DEFICIT INTEREST DECISIONS CONSUMPTION BUDGET INTERNAL CAPACITY THEORY RATES
SCIENTIFIC INVENTIONS POLITICAL ADVANCES TECHNOLOGICAL INTERVENTIONS GOVERNMENTAL SHOCKS
PREPOSITIONS work AT full capacity demand FOR goods it is based ON expectations people feel confident ABOUT the future people are worried ABOUT losing their jobs it leads TO a fall IN demand it is linked TO consumption investment IN new factories it contributes TO the downturn Keynesianism came back INTO fashion
COLLOCATIONS HIT RUN UP ENCOURAGE REACH DESTROY FORESEE PEOPLE ESTABLISHED COMPANIES A PEAK THE RECESSION DEBTS A TROUGH
WHAT CAUSES THE BUSINESS CYCLE? ENDOGENOUS EXOGENOUS INTERNAL EXTERNAL Ø good times →high spending + higher debts → Ø debts have to be paid →raise of interest rate →higher payments on mortgages or rents → Ø lower consumption →worries about losing jobs →tendency to save money →fall in demand →supply exceeds demand → Ø prices fall →people start buying again Ø Ø scientific advances natural disasters elections or political shocks technological inventions (steam engine, railways, microchips) →period of creative destruction when radical innovations destroy firms and industries
KEYNES Øgovernmental intervention should counteract the business cycle Ø inflationary boom – governments can decrease spending and increase taxation Ø recession – governments can increase expenditure, decrease taxation, increase money supply and reduce interest rates FRIEDMAN Ø interventions have negative effects in a long run Ø the only government activity should be making sure that there is a constant and noninflationary growth in the money supply
FIVE STAGES FROM BOOM TO BUST IN FINANCIAL MARKETS happens to DISPLACEMENT somethingperceptions changethe investors’ about markets BOOM investors’ hopes about the benefits of this displacement EUPHORIA excitement takes hold and banks lend ever more money to increase profits and they invent new financial instruments to facilitate it PROFIT-TAKING smart investors start selling for the first time PANIC prices are falling , sales are more massive , banks stop lending
Working abroad 1 An increasing number of people are finding IT necessary to spend at least part of their working life abroad. An international career used to be something people opted into from 2 choice, but FOR/WITH many it has now become a requirement of staying in work. You do not have to be working in a huge multi 3 national corporation to find YOURSELF being asked to work abroad. Companies that not so 4 MANY years ago reserved foreign travel for directors, are now sending middle managers and even new recruits on projects overseas.
The characteristics of international travel will vary widely. For some people it will mean that they will 5 occasionally have to spend a FEW days in a foreign city, while for others it will mean that they 6 will constantly be moving from ONE country to another until they eventually lose touch with 7 THEIR original national identity. The growing demand for people with the skills and experience to work in cross-national contexts places a premium on those who have developed the skills 8 to enable them to rise to that challenge. WHAT is needed is flexibility and adaptability, both of 9 WHICH arise from a state of mind rather than from innate ability.
10 Teamworking skills are also important and SO is the ability to communicate effectively, especially OVER/ACROSS long distances, via new 11 communications technologies, such as videoconferencing and teleconferencing. An international career
a) supervisors b) principal c) entailed d) subordinates e) in charge of f) supervision g) authoritarian h) imposed i) responsibility j) decisions I do not believe in all this talk about 1 motivation. My _d_ , the people working 2 under me, need constant _f_. We have to check what they are doing all the time. Some 3 people think this is _g_ , but I think it is the 4 only way of managing. Decisions must be _h_ from above without consultation. We do not 5 discuss _j_ with workers, we just tell them what to do.
a) do b) decision c) take d) eliminate e) valued f) impulses g) motivation h) impact i) routines j) cost-effective I believe that our employees can find satisfaction in what they do. We give them responsibility, which means that the 1 2 decisions they _c_ have a direct _h_ on our success, and encourage them to use their initiative, so they do not have to ask me 3 about every _b_ they make. We hope this gives employees the feeling that they are 4 _e_, with management knowing the effort they make. We believe that all this leads to 5 a higher sense of _g_ among them.
a) project b) restructure c) staff d) announce e) effective f) flatter g) subsidiary h) costs i) consciousness j) stuff Hierarchy refers to the distance between 1 different layers of _c_ and management in an organisation. Recently there has been a 2 trend to _b_, removing levels of 3 management and producing a _f_hierarchy, 4 in order to cut _h_ and improve communication. Some organisations have also seen moves towards regrouping staff 5 into _a_ teams.
