II. Give English equivalents of the following:

KnacTM rpouji Ha 6aHKiBCbKnii paxyHOK AOTpHMyeaTMca Kypcy

OAepJKyeaTM bIacotkh cJiiHawcoBi BHTpaTK

3axMCT imepecia cnomMBana BMTpaHaTM rpowi

HopMa npn6yTKy CKnaAHi bjacotkh

Rmepeno npn6ymy CTpaxysaHHH-BKjraA

cnowiiB^HM KpeAMT npiiMMaTM piuieHHfl 3aAOBont>H»TM noTpe6n

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III. Fill in the blanks with appropriate words:

credit

yield

income

insurance

salary

a budget

money

1. ... refers to earning paid on a weekly or monthly basis.

2. Interest and rent are two forms of... that can be earned by wealth.

3. ... is a financial plan that summarizes income and expenditures over a period of time.

A. Banks and savings institutions protect your ... against fire, theft and other disasters. "^

5. ... depends on the rate of return and the frequency of compounding.

6. Property ... protects policyholders against the loss or damage of their property.

7. Change accounts, credit cards, installment plans, car loans and household mortgages are some of the best known forms of... .

IV. Read and translate the text:

Most of the income you are likely to earn will come from work. In return for working, you will receive a wage or salary. {The term «wage» typically refers to the earning of workers paid by the hour or unit of production. «Salary» refers to earning paid on a weekly or monthly basis.) How much you earn will depend on your job, your abilities, your performance," and a number of other factors.

Wealth can be expressed as the, value of the things you own. Adding the value of all your possesions by banks accounts, savings, and the like will give you the total amount of your wealth.

Used in certain ways, wealth can earn income, if you owned a motorcycle, you might be able to let others use it for a fee. In that instance economists would say that you used your wealth to earn «rent». Wealth in the form of money that is loaned to others or deposited in a savings account will earn interest. Interest and rent are the two forms of income that can be earned by wealth.

The number and value of things we are able to buy depends upon the size of our income and how wisely we spend it.

To help keep track of income and expenditures, many people use personal budgets. A budget is a financial plan that summarizes income and expenditures over a period of time. When a budget has expenses that exactly equal income, it is said to be balanced. When proposed expenses are greater than expected income, the budget is said to have a deficit.

Budgets in which income exceeds expenditures will have a surplus.

Although there are as many ways to prepare a budget as there are people who use them, the process usually involves three steps: setting financial goals, estimating income, and planning expenditures.

Bank and savings institutions protect your money against fire, theft and other disasters.

, Qne of the main reasons people save their money is to 'earn'interest, the income from allowing someone else to use one's capital. The amount that they earn is known as the rate of return which is expressed as a percentage of the amount on deposit for a period of a year. > A deposit of $100 in an account paying 5 percent, for example, would earn a total of $5 in interest over a year.i The $5 is the return; the rate of return is 5 percept ($5 divided by $100). """ sfMost accounts offer compound interest. This is interest computed on the principal and on the interest that was previously paid.

The rate of return offered by banks and savings institutions will vary with economic conditions and the length of time they hold your money. It is also important to distinguish between rate of return and yield, the actual amount of interest earned.'Yield depends on the rate of return and the frequency of compounding.)

Liquidity is a measure of the ease with which you can convert your savings to cash. The easier it is to withdraw your funds, the greater is the liquidity.

Theft, accident, sickness, and natural disasters are daily risks of life. Just as we do our best to avoid the physical consequences of these perils, we can also protect ourselves from their financial cost. We do this by sharing the risk of that loss with others through insurance. You can purchase insurance on your life and to pay your medical bills. You can purchase property insurance to protect your car, home, and other major possessions from damage or theft. Liability insurance protects you if you should injure others or damage their property.

One of the principal services offered by savings institutions and banks is the checking account. Some of the things that consumers need to know in using and maintaining a checking account are reviewed in the Study Guide.

Credit allows you to purchase the things you want now and pay for them over a special period of time. Credit can be useful but it does require good character, capital, and capacity to repay the loan. Credit can be expensive. Two of the most

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important things to look for when shopping for a loan are the finance charge and the APR.

The purpose of advertising is to sell goods and services. While certain advertising techniques benefit consumers, others do not. Consequently, consumers ought to be familiar with the kinds of strategies that advertisers use to sell their products.

The principal responsibility for consumer protection lies with government agencies at the federal state and local levels. There are, however, a number of organizations, sponsored by the private sector, whose purpose is to protect consumers. These include such well-known institutions as the Better Business Bureau and local Chambers of Commerce.

Because consumers make up the largest economic sector (business and government are the other two), the level of consumer spending has a direct impact on the economy as a whole (pp. 35—48).