Business English Exam Prep
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Questions and Answers

Which of the following is NOT a measure that the European Central Bank (ECB) can use to combat inflation?

  • Raising the discount rate
  • Selling securities on the open market
  • Raising minimum reserve ratios
  • Increasing government spending (correct)

Which of the following is a possible explanation for the ineffectiveness of traditional countermeasures like cutting interest rates to address unemployment?

  • Rising inflation
  • Automation and globalization (correct)
  • Increased government spending
  • Decreased consumer demand

What is the primary goal of the ECB's open market policy when combating inflation?

  • To decrease the money supply and reduce inflation (correct)
  • To stabilize exchange rates
  • To provide loans to banks at a discounted rate
  • To increase the money supply and stimulate economic growth

What is the main difference between demand-pull inflation and cost-push inflation?

<p>Demand-pull inflation is caused by increased consumer demand, while cost-push inflation is caused by an increase in production costs. (C)</p> Signup and view all the answers

Which of the following is a government measure that can be used to curb inflation?

<p>Reducing subsidies (C)</p> Signup and view all the answers

What does the term "minimum reserves" refer to?

<p>The minimum amount of money banks are required to keep in their vaults (C)</p> Signup and view all the answers

What is the primary goal of freezing budget funds as a measure to combat inflation?

<p>To reduce the money supply (C)</p> Signup and view all the answers

What is the discount rate?

<p>The interest rate at which banks can borrow money from the central bank (C)</p> Signup and view all the answers

What is the primary purpose of a trade union?

<p>To protect and improve the economic status of its members. (C)</p> Signup and view all the answers

What is the usual process for a trade union to achieve its goals?

<p>Conducting collective bargaining with employers' associations. (C)</p> Signup and view all the answers

What is the term used to refer to a situation where a disagreement between a trade union and an employer cannot be resolved through negotiation?

<p>Arbitration (A)</p> Signup and view all the answers

What is the potential outcome if a trade union and an employer cannot agree on a solution through arbitration?

<p>The union may call for a strike, and the employer may threaten or implement a lock-out. (A)</p> Signup and view all the answers

What is the primary reason why industrial disputes are economically damaging?

<p>They can disrupt the supply chain and lead to higher prices for consumers. (B), They can lead to job losses and a decline in productivity. (C), They can discourage investment and reduce economic growth. (D)</p> Signup and view all the answers

What is the term used for a strike that is not officially authorized or supported by the union leadership?

<p>Wildcat strike (A)</p> Signup and view all the answers

What action might the employer take if negotiations with a trade union fail and industrial action is threatened?

<p>Threaten or actually implement a lock-out. (A)</p> Signup and view all the answers

What is the process where union members vote to authorize industrial action?

<p>Strike ballot (D)</p> Signup and view all the answers

What is a measure that is considered a violation of free trade according to the provided content?

<p>Setting up trade bans on specific goods. (D)</p> Signup and view all the answers

What is an example of a retaliatory measure in a trade war, according to the content?

<p>Imposing import quotas on goods imported from the opposing country. (D)</p> Signup and view all the answers

Which of the following is NOT mentioned as a method to boost exports in the provided content?

<p>Imposing import quotas on competing goods. (C)</p> Signup and view all the answers

What does the content suggest could happen as a consequence of a country imposing import restrictions?

<p>A potential retaliation from trade partners leading to a trade war. (A)</p> Signup and view all the answers

Which of the following is NOT a valid reason for a country to engage in a trade war according to the provided content?

<p>A country's attempt to force another country to adopt its political ideology. (D)</p> Signup and view all the answers

What is the most likely consequence of raising tariffs on imported goods?

<p>A decrease in the demand for imported goods. (D)</p> Signup and view all the answers

Which of the following is NOT a trade barrier mentioned in the content?

<p>Implementing export subsidies. (B)</p> Signup and view all the answers

Which term refers to a formal agreement negotiated between employers and a trade union?

<p>Collective bargaining (D)</p> Signup and view all the answers

What is one of the primary goals of the European Union?

<p>Promote peace and well-being of its citizens (A)</p> Signup and view all the answers

Which term describes a temporary work stoppage to demonstrate against working conditions?

<p>Token strike (B)</p> Signup and view all the answers

What does 'workers codetermination' refer to?

<p>Employees' rights to vote on company decisions (D)</p> Signup and view all the answers

What is the outcome of a 'strike ballot'?

<p>A decision to go on strike (C)</p> Signup and view all the answers

Which of the following describes an illegal strike organized without union authorization?

<p>Wild-cat strike (B)</p> Signup and view all the answers

Which goal of the EU focuses on economic stability and employment?

<p>Sustainable development (D)</p> Signup and view all the answers

Which term refers to the practice of following rules strictly to slow down productivity?

<p>Work to rule (A)</p> Signup and view all the answers

What is one major disadvantage of transitioning to the euro for 19 countries?

<p>Cost of changing over existing currencies (D)</p> Signup and view all the answers

Which advantage of the euro helps reduce costs for businesses?

<p>Price transparency (B)</p> Signup and view all the answers

What role does the Federal Reserve Bank (FED) play?

<p>Supervise and regulate banks (A)</p> Signup and view all the answers

How can governments influence the money supply in circulation?

<p>Cut or increase taxes depending on budget deficit (B)</p> Signup and view all the answers

What is one impact of the euro on interest rates?

<p>Lower interest rates in the eurozone (B)</p> Signup and view all the answers

What is a consequence of having a strong currency?

<p>Higher demand from foreign investors (D)</p> Signup and view all the answers

Which of the following is NOT an advantage of adopting the euro?

<p>Exclusion from international trade agreements (D)</p> Signup and view all the answers

What effect does high oil prices typically have on the economy?

<p>Inflation due to higher transportation costs (C)</p> Signup and view all the answers

What is primarily indicated by a high level of consumer spending and investment?

<p>A boom (C)</p> Signup and view all the answers

Which event signifies the beginning of a recession?

<p>Fall of Gross National Product in successive quarters (A)</p> Signup and view all the answers

What is a likely effect when the quantity demanded exceeds the quantity supplied?

<p>Increase in prices (C)</p> Signup and view all the answers

What is the term used when a country imports more than it exports?

<p>Trade deficit (C)</p> Signup and view all the answers

What characterizes a trade war?

<p>Imposition of trade barriers between nations (B)</p> Signup and view all the answers

Which of the following best describes globalization?

<p>Increased connections between societies (D)</p> Signup and view all the answers

What is a potential negative aspect of economic globalization?

<p>Evasion of legal and environmental standards (B)</p> Signup and view all the answers

Which of the following indicates an expectation of increasing demand for products by firms?

<p>Increase in consumer spending (B)</p> Signup and view all the answers

Flashcards

Trade Union

A group of workers organized to improve their economic situation.

Collective Bargaining

Negotiating better pay and working conditions with employers.

Arbitrator

An independent person who helps settle disagreements between workers and employers.

Strike

A work stoppage by employees to pressure employers.

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Lock-out

An employer refusing to let workers work during a dispute.

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Unemployment

When a worker is no longer employed, often due to economic reasons.

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Unemployment Rate

The percentage of the workforce who are unemployed.

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Unemployment Benefit

Government payments to people who are unemployed.

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Inflation

A situation where the general price level of goods and services in an economy rises, resulting in a decrease in the purchasing power of currency.

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Credit Policy

A policy aimed at controlling the money supply and credit conditions to influence economic activity, often used to combat inflation.

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Discount Policy

A tool of central bank credit policy that involves adjusting the interest rate at which commercial banks can borrow money from the central bank.

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Minimum Reserve Policy

A policy requiring banks to maintain a certain percentage of their deposits as reserves, which influences the amount of money available for lending.

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Open Market Policy (OMP)

A policy where a central bank buys or sells government securities to influence the money supply and interest rates.

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Automation

The replacement of human labor by machines or technology, often attributed to advancements in automation and computing.

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Globalization

The interconnectedness of economies around the world through trade and finance.

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Employers' association

A group of employers who come together to represent their interests and negotiate with unions.

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Go-slow

A work stoppage where employees intentionally slow down their work pace, without fully stopping work, to pressure employers.

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Industrial action

Any type of action taken by employees to express their dissatisfaction with their work conditions, including strikes, work slowdowns, and boycotts.

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Industrial law

A set of laws that govern the relationship between employees, employers, and trade unions.

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Industrial peace

A situation where there is little or no conflict between employees and employers, leading to a stable and productive workplace.

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Labour dispute

A disagreement between an employer and an employee or group of employees about wages, benefits, working conditions, or other employment issues.

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Trade War

A situation where countries impose trade barriers on each other in response to perceived unfair trade practices.

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Free Trade

A set of principles that encourage open trade between countries, minimizing restrictions like tariffs and quotas.

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Tariffs

Taxes imposed on imported goods, increasing their price and potentially discouraging purchases.

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Import Quotas

Limits on the quantities of specific goods that can be imported into a country.

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Currency Controls

Actions taken by a government to control the value of its currency in relation to other currencies.

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Export Subsidies

Government financial assistance provided to businesses to make their products more competitive in international markets.

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Export Incentives

Tax reductions or exemptions offered to encourage businesses to export their goods.

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Devaluing Currency

Lowering the value of a country's currency, making exports cheaper and imports more expensive.

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Economic Boom

An economic situation characterized by high levels of consumer spending, investment, and rising profits and wages.

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Recession

A significant decline in a country's economic activity, marked by falling GDP for two consecutive quarters.

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Supply and Demand

The relationship between the quantity of a good that buyers are willing to purchase (demand) and the quantity that sellers are willing to offer (supply) at a specific price.

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Trade Deficit

A situation where a country imports more goods and services than it exports, resulting in a negative balance of trade.

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Economic Globalization

The economic integration of countries through global trade, investment, and technology, leading to increased interconnectedness and interdependence.

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Social Globalization

The interconnectedness of cultures, ideas, and values across national boundaries, facilitated by global communication and travel.

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Currency Transition Costs

The process of converting multiple currencies into a single currency, involving expenses like new currency production, accounting system changes, and employee training. It can be costly and challenging for businesses and consumers.

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Loss of Interest Rate Control

The ability of individual countries to adjust interest rates to manage their economies is lost when they adopt a single currency.

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Strong Currency Impact on Exports

A strong currency makes a country's exports more expensive for other countries, affecting demand and potentially hurting some industries.

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What is the Federal Reserve (FED)?

A central bank that manages the US monetary system, responsible for regulating banks, implementing monetary policy, and issuing US Treasury Bonds.

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Structure of the FED

The Federal Reserve, the central bank of the US, is a private corporation established in 1913. It has a central Board of Governors and 12 regional banks located in major cities.

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Federal Reserve's Tasks

The FED's tasks include overseeing and regulating banks, controlling the money supply through monetary policy, and issuing US Treasury Bonds.

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Government Influence on Money Supply

Government actions that influence the amount of money in circulation, such as adjusting taxes, creating or reducing public sector jobs, providing subsidies, or freezing budget funds.

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Oil Price Impact on Economy

The price of oil reflects global supply and demand, influencing economic activity. High oil prices increase costs for businesses and consumers, impacting inflation and economic growth.

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Study Notes

Compendium Content

  • The document is a compendium (a collection) for preparing for an exam on foreign language correspondence (English) for business training.
  • It's the 18th edition and was published in March 2021.
  • Topics covered include: the economy, the European Union, other international organizations, international trade, mergers, takeovers, joint ventures, and the stock exchange.
  • The document is structured into chapters and sections, covering different aspects of international commerce and economics.

The Economy

  • The main national economic policies focus on currency stability, employment, and economic growth.
  • National economic equilibrium is challenging to maintain.

Business Cycles

  • The goals of national economic policy are to stabilize the currency and prices, ensure full employment, and assure overall economic growth.

Inflation

  • Inflation is characterized by a rise in prices, and a decrease in the purchasing power of money.
  • Inflation can be caused by rising costs (cost-push inflation) or demand exceeding supply (demand-pull inflation) or too much money in circulation
  • Countries employ various measures to combat or influence inflation.

Unemployment

  • The unemployment rate is a vital indicator of an economy's health.
  • High unemployment rates can indicate a range of underlying economic problems.

Trade Unions

  • Trade unions are worker organizations focused on improving workers' economic status.
  • They negotiate with employers using collective bargaining.
  • Disagreements can lead to various forms of industrial action such as strikes or lockouts.

Other International Organizations

  • Covers organizations, such as the World Trade Organization (WTO), the International Monetary Fund (IMF), the Organization of Petroleum Exporting Countries (OPEC), Asia-Pacific Economic Cooperation (APEC), and the North Atlantic Treaty Organization (NATO).
  • Each discussed in terms of their role, objectives, and significance within international relations.

International Trade

  • Discusses free trade, protectionism, the role of free trade areas like the European Union, and trade barriers (tariffs, quotas, sanctions)

Mergers, Takeovers, and Joint Ventures

  • Explores mergers, takeovers, and joint ventures as ways in which companies can expand their footprint or market.

Stock Exchange

  • Describes the stock exchange as a market for buying and selling company shares.
  • Explains that companies use the exchange to raise capital for expansion.
  • Discusses the potential risks and benefits of share ownership.

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Compendium 18th Edition (Englisch) PDF

Description

Prepare for your foreign language correspondence exam with this comprehensive 18th edition compendium. Topics include the economy, European Union, international trade, and business cycles, providing a solid foundation for understanding international commerce and economic policies.

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