Unit 23 The business cycle

Comprehension Complete the following sentences.

1 A downturn begins when... there is less demand for goods

2 People spend, and borrow money, when... there is a good economy

3 People tend to spend less when... they might become unemployed

4 When interest rates rise... people have to spend more on housing like mortage or
rent

5 Companies only invest while... when costumer buy or consume more

6 Creative destruction means that... innovativeness makes established companies

go obsolete.

listening 1: Consumption and the business cycle

1 What does Kitson say many economists believed a year or so previously?

That the business cycle had ended and there was now a consistent economic growth

2 According to Kitson, were they right?

No there is always a chance for a downturn

3 What does Kitson say causes economic booms?

Increased spending and comsuption when people have good expectations

4 What about depressions?

That they occur when credit is no longer available and assets decline in value so
people start saving more.

listening 2: Keynesianism

1 Fill in the gaps below:

1. Downturn
2. Manipulate
3. Balances
4. Deficits
5. Booming
6. Recession
7. Expenditure
8. Harmful
2 Which of the following do you think is the British government's golden rule' of
fiscal policy? The government should:

A. cut taxes and increase spending in the months before an election.

B. Ensure that there is never a budget defcit.

C only borrow to invest for the future and not to fund current spending, which
should be paid for with today's taxes.

D spend any budget surplus on boosting or stimulating the economy.

3 What does 'ironing out' mean?

Ironing out means to solve a problem

Comprehension

Match up the following half-sentences.

1. C
2. A
3. B
4. E
5. F
6. G
7. D

UNIT 24 Corporate social responsibility

Comprehension

1. According to Friedman, why should business executives only seek to

maximize profits?

Because that’s the objective of most business owners.

2. Who are the employers of corporate executive?

The stockholders or the owners of the corporation

3. In what negative way do 'socially responsible actions affect stockholders,

customers and employees?

As it usually means higher costs it is usually àid in lower dividend, lower wages or
higher prices.

4. According to Friedman, in what way are 'socially responsible' actions by

businesses 'undemocratic?

Because those are actions that a government should do.

5. According to the text, what other desires might stockholders have, apart from
making as much money as possible?

A more eco-friendly society and less social problems

6. What is a 'stakeholder?

Any person with an interes in a business or company

listening 1: Socially responsible investment

1 Which expression about business does Anna-Kim attribute to Milton

Friedman? What does it mean?

The business of business is business it means that companies should only focus on
making business and profiting off of them.

2 What assumption is Friedman's argument based on?

On that shareholder only look to maximize profits

3 According to what Anna-Kim says, what do you think 'socially responsible

investment' means?

Investing in companies that have some standards on their enviroment

4 How significant does Anna-Kim say socially responsible investment is?

listening 2: Different stakeholder groups.

1. Responsive
2. Shareholders
3. Community
4. Employees
5. Policies
6. Practices
7. Reputation
8. Supply chain
9. Human rights
10. Child labour

2 What does Anna-Kim say genuine corporate social responsibility involves?

Responding to both internal and external stakeholders

3 Why is it not sufficient for a company to do things for the community?

Because a company must also take care of their own employees