Iff D Vocabulary

Complete each sentence with a word or phrase from the box.

bankrupt current debt inevitable lay off pay off

put up reasonable secure

shrink stages turnover

Each month I put 100 euros into the bank to my loan.

If you feel................... about your job. you don't

think there is a danger of losing it.

In Britain if it's sunny in tho morning, rain ia later!

A company's................... is how much money it

spends and earns each year.

The................... price of oil is unbelievable.

Painting the body is one of the final...............

of manufacturing a car.

.................. prices are prices you think are fair.

If you wash some clothes ш very hot water, they

The opposite of taking on staff is to...................

staff.

If a company goes..................... it cannot pay

back the money it owes and it must close down.

I have a large................... and I have to pay back

a lot of money «very month.

Farmers have................... their prices so the

cost of fruit and vegetables has increased.

в Reading 2

The business cycle

in the king term, ovir nian> years, an economy will grow at a steady rate However, the climb up iln hillside or economic growth is actually quite rocks l ong-term growth is made up ot many short-term steps. Kacl) short-term step may last for live or ten years. < H er this short-term period the economy goes through a cycle ol growth and recession. This is called the Шик or business

ryc/t. and it has tour stages boom, shutip. recession and rixwery

During a boom, everything is good. Demand for g(><hIs and services is high and business is going well. To meet demand, companies need to take on more staff, so unemployment is low. Confidence is in the air! Consumers feel confident about spending because their jobs seem secure What's more, interest rates are reasonable, so jx'ople take out loans and use their credit cards. Low interest rates also encourage companies to invest in new capital, and businesses grow Covernments are happy too. K-cause tax revenues are increasing. However, the government has to 1ч- careful. Boom economies are alw ays in danger of overheating. Demand-pull or cost-push inflation will eventually bring the good times to an end

When the slump conies, the economy continues to grow, but not so fast Once inflation starts to rise, confidence falls. The government have probably- put up interest rates to slow down Ixirrow ing. People w ith mortgages have to spend more money to pay off their debt, so they have less to spend on other things Higher interest rates discourage business investment Things are moving slowly, and people just ho|x that the economy w ill improve again. But will it?

If the government have not acted quickly enough, its fiscal ami monetary jxiliey changes may lx> t<«> late. In this ease, recession is inevitable. Some economists say a recession exists when the current rate of growth falls below the long-term rate of growth. Others say a recession is when there is 110 growth at all. and the economy actually shrinks Whatever it is, a recession is bad news. Companies have to reduce costs because turnover is so low. The first thing they do is to lay off staff. If the recession is very bad. some companies may even go bankrupt and close. When this happens, thousands of workers may lose their jobs. As unemployment rises, the gov ernment needs to spend more on providing unemployment benefit for those who are out of work. In the worst recessions, these conditions can last for a number of years.

hventually. with good government policy and a demand for goods or services from healthier economies abroad recovery will come. Slowly, confidence returns, investment grows and the cycle begins again.

National Output A

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Time

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