Unit 9 You can learn how to ride the business cycle

 

II. Basic Listening Practice

1.      Script

M: The developing countries must improve their economies if they want to raise their citizen’s standard of living.

W: But how can they do that when developed countries control world trade?

Q: Which of the following is true?

2.      Script

W: What did Professor Smith mean when he said that when America sneezes, Britain

   catches a cold?

M: He meant that what is happening to America’s economy today will have an effect on Britain’s economy in the future.

Q: What did the professor say?

3. Script

M: Your government gives financial subsidies to certain industries, creating unfair competition. This is wrong.

W: But your government sets up import tariffs, which have the same effect.

Q: What can we learn from this conversation?

4. Script

M: The price of oil is going through the roof. It is going to cause economic pain all over the world.

W: I think the high price of oil is good. It will make people more careful in using their cars, and also make them seek alternative fuels which will probably be better for the environment.

Q: What do the man and the woman think about the high price of oil?

5. Script

W: Industries that pollute should either be closed down or made to clean up their act. I’m tired of breathing dirty air.

M: It’s not that simple. People need jobs and that means we need industry. Besides, the sunset looks especially beautiful through the smog.

Q: What does the man say about smog?

 

 

III. Listening In

Task 1  Buying an apartment

M: Oh, miss, is this the Four-Season Garden complex where an apartment is advertised for sale?

W: You’re in luck, sir. It hasn’t been sold yet, but it will soon.

M: Why the rush? What’s so special about it?

W: Simply everything, the price of $630,000 for a start, which works out to a mere $700 a square foot. That’s a bargain price for this desirable Four-Season Garden location, close to the subway and a Walmart store.

M: What’s the catch then? Are there no windows or no bathrooms in the place?

W: You must be kidding. It’s a well-kept apartment with two south-facing bedrooms.

M: And the rest of the apartment?

W: A charming living room and a bright dining room in addition to two bedrooms—all in tip-top condition

M: Why the low selling price then？

W: It’s being sold to settle a divorce. Both sides want to get rid of it as quickly as possible. Hence the fire sale price. Aren’t’ you interested in this apartment?

M: Let me think it over.

W: You’d better act fast. You see, the real estate market is hot, and the property prices may rise soon.

M: OK, I’ll take it. Here’s my down payment. It that fast enough?

W: Sight unseen?

M: Sure, sight unseen.

 

 

 

Task2: Is GDP really so important

Script                             

Joan:   It seems like a miracle that China’s GDP has been growing so fast. The growth last year was over eight percent again.

Vincent: Excuse me, it just slipped my mind. What does GDP stand for?

Joan:   It stands for gross domestic product.

Vincent: Since China’s GDP is increasing so rapidly, its economy must be healthy.

Joan:   It’s hard to say. Along with the economic growth, there are some problems. Pollution; less farmland; a wide economic gap between the coastal areas and the interior, between the urban and the rural residents, and between the high-income groups and the low-income groups; to name just a few.

Vincent: What do you suggest for the Chinese economy then?

Joan:   I’m not an economist, and I’m not in a position to give advice. But I notice the Chinese government is shifting its focus from GDP growth to more balanced, sustainable economic and social development.

Vincent: So, you mean GDP may not be an accurate indicator of a country’ economic performance?

Joan:   Yeah. In my opinion, GDP is simply a gross measure of market activity, of money changing hands. It makes no distinction whatsoever between the desirable and undesirable.

Vincent: Now, I understand why some years ago the GDP of the United States went up, but the President failed to win re-election.

Joan:   Right. In spite of the larger GDP, American people found life harder. Many worked longer hours for less pay. Only the rich forged ahead.

Vincent: Your talk was really enlightening. I’m getting more interested in economics.

 

 

Task 3: A cheap parking lot

Script

Before going to Europe on business, a woman drove her new Rolls-Royce to a (S1) downtown bank in New York City and went in to ask for a (S2) loan of $5,000. The bank officer said the bank would need some kind of (S3) security for the loan, so the women handed over the keys to her Rolls-Royce.

The car was parked on the street in front of the bank. The bank (S4) agreed to accept the car as collateral for the loan. The bank’s president and its officers all enjoyed a good laugh at the woman for using a $250,000 Rolls-Royce as collateral (S5) against a $5,000 loan. An employee of the bank then (S6) proceeded to drive the Rolls into the bank’s underground garage and parked it there.

Two weeks later, the woman walked throuh the bank’s doors and asked to (S7) settle up her loan and get her car back. “(S8) That will be $5,000 principal, and $20.30 in interest,” the loan officer said. The woman wrote out a check and started to walk away.

“Wait, Miss,” the loan officer said, “(S9) We’re very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multi-millionaire. What puzzles us is why you would bother to borrow $5,000.”

The woman replied: “(S10) Where else in Manhattan can I park my car for two weeks for only $20.30 and expect it to be there when I return?”

 

 

 

IV. Speaking Out

MODEL 1   Shop till you drop.

Susan:  Still reading about how the bubble’s going to burst in the U.S. economy?

John:   Yeah, and this is an interesting article called, “Shop Till You Drop.”

Susan:  The rhyme between “shop” and “drop” is cathy, but what does it mean?

John:   “Shop” and “drop”? You know: buy, buy, and buy, until you fall down from exhaustion.

Susan:  Is that what the author is telling people to do—go out and spend money.

John:   No, he’s afraid that consumer consumption is too high at 70 percent of the GDP.

Susan:  You mean 70 percent of the gross domestic product in the United States?

John:   That’s right. France and Japan are worried with 55 percent of the GDP.

Susan:  What’s behind this big rush to buy things in America?

John: I  Apparently the search for status symbols: luxury cars, holiday homes.

Susan:  Amazing. So many people earn enough to buy a Mercedes and two houses.

John:   They don’t; they buy on credit. And too much debt may burst the bubble.

 

MODEL2   The Chinese are working miracles.

Script

Susan:  Hey, John!

John:   Hey! Look at this headline! China’s foreign trade should reach $1 trillion this year!

Susan:  Are you sure the figure is correct? How can they keep up such rapid growth for so many years running?

John:   A senior official of the Ministry of Commerce said so in Beijing Wednesday.

Susan:  As far as I know, China’s foreign trade volume was already $851.2 billion last year, a 37.1 percent jump over the previous year. That volume ranked fourth in the world, following only the United States, Germany, and Japan.

Susan:  But the Chinese are working miracles. In the first half of this year, foreign trade reached $523 billion, up 39.1 percent over last year.

John:   I wonder how it can grow so fast.

Susan:  The U.S. economy has been very good. Booming consumption has created opportunities for China’s exports.

Susan:  Is that the only one reason China’s exports have increased? No other factors?

John:   China encourages exports. Exporters can get rebates from the customs department.

Susan:  What’s happening with Chinese imports?

John:   Well, China has met her commitments to the World Trade Organization since she joined two and half years ago. She has gradually been decreasing tariffs and strengthening intellectual property rights. She has opened her doors to the outside world wider. All these changes have led to an increase in her imports.

Susan:  You seem to be looking at China through rose-colored glasses.

John:   China is not without her problems. Some of her state-owned industries have only a blunt competitive edge. They have a weak anti-risk capability. Some industries still depend on trade protectionism.

Susan:  John, I really admire your wide knowledge. I think you’ll be in line for Nobel Prize in Economics some day.

John:   You’re just pulling my leg again.

 

MODEL3   I don’t know what to say in the seminar.

Script

Nora: Hey John, Professor Brown asked us to discuss the economic gap between the rich and poor nations. But I don’t know what to say in the seminar.

John: If you don’t know anything, don’t say anything.

Nora: But participation counts for 20 percent of the total grade. Will you tell me what you’re going to talk about?

John: Will, according to a report by the World Economic Forum, the technology gap between rich and poor countries is closing.

Nora: Sounds too good to be true. Only a few years ago, I heard that the gap between the North and the South was widening. Many people in developing countries are still struggling below the poverty line.

John: Different people may have different opinions on this issue. The World Bank also says the gap is narrowing.

Nora: Still, it sounds strange to me. How could it be possible now that the United States and other industrialized nations are developing IT so fast?

John: But it’s easier for others to copy new technology. Experts say the technological advantages of the developed countries are getting smaller.

Nora: I’m still unconvinced. Does a narrower technology gap necessarily mean a narrower economic gap?

John: Today, information technology is the most powerful engine for economic growth, so the narrowed technology gap leads to a narrowed economic gap.

Nora: OK, I’ve learned a lot from you. Now I feel more confident about the seminar.

 

 

V. Let’s Talk

 

VI.  Further Listening and Speaking

Task 1: Green GDP: a new concept

Script

Journalist: Professor Williams, some people argue that the GDP does not reflect the true nature of the economy. What’s your opinion of the GDP measurement?

Professor: The GDP is a core index in the calculation of a national economy. But it shows only whether the economy has grown in a region or a country. What isn’t taken into account is the price being extacted from our natural resources and environment to support growth. China’s more than eight percent annual GDP growth in the past depended a lot on high energy consumption and uncontrolled discharge of wastes.

Journalist: Can“green GDP” solve the problems?

Professor: As a brand-new method of calculating a national economy, the“green GDP” index system takes into consideration both the economy and environmental costs. It deducts environmental costs from the traditional gross domestic product. In other words, green GDP equals traditional GDP minus the costs of resources and environmental damage. Green GDP can be regarded as “the genuine GDP”, for it not only reflects economic growth, but also shows the quality of that growth.

Journalist: How will the“green GDP” influence enterprises?

Professor: The system will have direct and far-reaching influence on enterprises. Some enterprises attach importance only to costs directly related to their growth, but turn a blind eye to serious damage to resources and the environment. On the other hand, the macroeconomic departments need to analyze the real economic balance sheet. It is necessary for those departments to calculate the environmental costs in resulting from the activities of enterprises. The“green GDP” index system will effectively restrict an enterprise’s impulse to expand at the expense of resources and the environment. In the long run, the benefits green GDP brings will outweigh the demands imposed on enterprises. China is planning to introduce the“green GDP” index system to ensure balanced, sustainable development and secure the prosperity of future generations.

 

Task 2: How was the problem resolved?

Script

The management of Mecon Insurance Corporation explained to angry employees that their opposition to a management buyout, or MBO, arose from a misunderstanding. The employees believed that with an MBO, the management intended to acquire controlling shares in the insurance firm, which was owned by the government and was undergoing privatization, supported by the Bureau of Public Enterprise.

The Managing Director of Mecon, Ms. Presley Bates, gave this explanation: According to the proposed MBO, the staff and management of the firm would jointly acquire controlling shares in the firm—a process that took place with Guangdong Insurance Corporation not long ago.

When the MBO was first proposed, workers in the company fought against it, saying that they hoped to join the management in buying the insurance firm. They accused the Bates-led management of trying to bypass employees. But the workers have since come to understand the nature of the acquisition and have given their full support to the MBO proposal.

Answering questions from reporters, Bates said that the workers’ opposition was “a matter of their misunderstanding of the acquisition process, thinking the management left out employees in the MBO”.

Giving detail of how the problem was finally resolved, Bates disclosed that the firm organized a seminar to inform the workers that, “Everybody would be involved, not just the management.” She also recalled that it was made clear to the workers at the seminar that job losses were inevitable, no matter what happened. She said, “There would be job losses, and they would be from top to bottom. If the MBO fails, and another investor takes over, the management would probably be the first casualty, depending on the decision of the investor.”

Task 3: Price rises but inflation stays low

Script

Petrol, up. Eating out, up. School fees, up. Everyone in Britain seems to be talking about price rises, but why then is inflation still so low?

Professor Brown gave the seemingly difficult economic issue a simply answer: It is the low-priced “Made-in-China” products that help keep inflation under control.

In his presentation at an economic forum, Brown reminded the price-sensitive Britons that Chinese-made commodities have not only helped bring down the inflation figures, but also made the already rich countries like Britain richer.

Consider the following figures. Over the past 10 years, the total cost of living in Britain, as measured by the official consumer price index, has risen by just 14 percent. But that very modest average increase has included high inflation in some categories: school fees, for example, are up 62 percent, hairdressing up 58 percent, holidays up 52 percent, and eating out up 33 percent on average, with top London restaurant prices showing much faster growth. Why then has the total cost of living remained so stable?

The answer to the question, the professor said, is not just interesting in its own right, but tells Britons a surprising amount about what is happening today not only in Britain but in the world economy as a whole.

Because the prices of mass-produced goods have been plunging: clothes prices down by 42 percent in a decade, shoes by 31 percent and consumer electronics by 63 percent.

Professor Brown said that this relates to China’s entry into the global economy. By becoming the workshop of the world, China has pushed down the prices of all mass-produced goods.