Exercise 10.
Read the text. Give title to it. Define its main points and summarize them. Explain the essence of the work of insurance agents.
Use phrases: to be responsible for, to be in charge of, special training, to be involved in, to be associated with, to work for, to be a representative of.
An Insurance Agent is a person who has a license given by a state and has been authorized by the Insurance Company for selling Insurance. An Insurance Agent is a Representative of the Insurance Company who serves the Insurance Policyholders. The knowledge of an Insurance Agent regarding an insurance transaction is also considered as the Insurance Company's knowledge. The company is responsible for unfair practices of the Insurance Agent and the company is answerable to the customer for this.
An Insurance Agent is responsible for facilitating businesses, families, and individuals to choose Insurance Policies for protection of health, life, and properties.
Usually, the Insurance Agents sell a variety of insurance types like property insurance, health insurance, life insurance, disability insurance, and long-term care insurance.
For becoming an Insurance Agent, a person has to complete special training. For this purpose, most of the Insurance Companies look for individuals with graduation degrees in business or economics, but non-graduates are also eligible if they have previous sales experience or expertise in other business areas. Obtaining a license is also necessary for selling insurance in a particular state. For obtaining the license, the completion of Pre-Licensing Course and State Examination is required in most of the states.
The Insurance Agents can be categorized into two types:
Captive Agents: Captive Agents only work for one insurance company and is only responsible for providing business to that particular company. If they belong to parent company, still they have to prioritize for bringing business to the parent company only. In return, the Captive Agent receives office allowances, advantages like health and life insurance, pensions, credit union membership, and continued insurance training.
Non-Captive Agents: Non-Captive Agents or Independent Agents represent and work for a large number of Insurance Companies. They work on the client's behalf for searching a policy for them. In return, they are usually paid through commissions.
Notes:
Captive Agents
Non-Captive Agents
VI. Oral practice:
Exercise 11.
Role play the following situation:
Situation 1. Student1 Your friend works as an insurance agent. Ask him about his work, the insurance company he works for. Learn about advantages and disadvantages of such job.
Student2 You are an insurance agent. Tell your friend about the peculiarities of your job. Speak about career in insurance.
Situation 2. Student1 You came to the insurance company office. You are interested in property insurance. Ask a representative of a company about the procedure of this kind of insurance.
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Student2 You are a representative of an insurance company. Tell your customer about the property insurance. Offer him another services.
Exercise 12. Speak on the topic using the chart:
Unit 2
FISCAL POLICY
Vocabulary
Exercise 1. Study the vocabulary:
fiscal policy -
monetary policy -
interest rate
supply of money
impact
variables -
Aggregate demand
pattern ,
overall
budget outcome
expansionary -
contractionary -
xpenditure, spending
transfer payments
welfare benefits
siegniorage
treasury bills
bonds
repayment (),
default on debts
incur ,
slump
II Reading
Exercise2. Read and translate:
Text A
The term fiscal policy refers to government efforts to keep the economy stable by increasing or decreasing taxes and/or government spending. The idea of using fiscal policy to combat recessions was introduced by John Maynard Keynes in the 1930s, partly as a response to the Great Depression. Fiscal policy can be contrasted with the other main type of economic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and the supply of money. The two main instruments of fiscal policy are government expenditure and taxation. Changes in the level and composition of taxation and government spending can impact on the following variables in the economy:
Aggregate demand and the level of economic activity;
The pattern of resource allocation;
The distribution of income.
Fiscal policy refers to the overall effect of the budget outcome on economic activity. The three possible positions of fiscal policy are neutral, expansionary, and contractionary:
Ø A neutral position of fiscal policy implies a balanced budget where G = T (Government spending = Tax revenue). Government spending is fully funded by tax revenue and overall budget outcome has a neutral effect on the level of economic activity.
Ø An expansionary position of fiscal policy involves a net increase in government spending (G > T) through rises in government spending, a fall in taxation revenue, or a combination of the two. This will lead to a larger budget deficit or a smaller budget surplus than the government previously had, or a deficit if the government previously had a balanced budget. Expansionary fiscal policy is usually associated with a budget deficit.
Ø A contractionary fiscal policy (G < T) occurs when net government spending is reduced either through higher taxation revenue, reduced government spending, or a combination of the two. This would lead to a lower budget deficit or a larger surplus than the government previously had, or a surplus if the government previously had a balanced budget. Contractionary fiscal policy is usually associated with a surplus.
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Methods of funding
Governments spend money on a wide variety of things, from the military and police to services like education and healthcare, as well as transfer payments such as welfare benefits.
This expenditure can be funded in a number of different ways:
Taxation
Siegniorage, the benefit from printing money
Borrowing money from the population, resulting in a fiscal deficit
Consumption of fiscal reserves.
Sale of fixed assets (e.g., land).
Funding the deficit
A fiscal deficit is often funded by issuing bonds, like treasury bills. These pay interest, either for a fixed period or indefinitely. If the interest and capital repayments are too large, a nation may default on its debts, usually to foreign creditors.
Consuming the surplus
A fiscal surplus is often saved for future use, and may be invested in local (same currency) financial instruments, until needed. When income from taxation or other sources falls, as during an economic slump, reserves allow spending to continue at the same rate, without incurring additional debt.
III. Language
Exercise 3. Find in the text and put down English equivalents to the following word combinations:
, , - , , , , , , `, - , , .
Exercise 4. Fill the blanks with the suitable words:
1. The term refers to government efforts to keep the economy stable by increasing or decreasing taxes and/or government spending.
(foreign policy, fiscal policy, monetary policy)
2. . fiscal policy is usually associated with a budget deficit.
(contractionary, neutral, expansionary)
3. Contractionary fiscal policy is usually associated with a...
(deficit, surplus; balanced budget)
4. A fiscal deficit is often funded by issuing
(treasury bills, shares; bonds)
5. Monetary policy attempts to stabilize the economy by controlling and the supply of money
(interest rates, taxes, prices)
Exercise 5. Make up the possible word combinations out of the following and translate them:
| Fiscal government aggregate tax budget economic monetary | demand supply policy activity spending deficit surplus activity reserves revenue |
Exercise 6. Match the definitions to the economic terms in the left column:
| a). position occuring when net government spending is reduced either through higher taxation revenue, reduced government spending, or a combination of the two; b). government efforts to keep the economy stable by increasing or decreasing taxes and/or government spending; c). position implying a balanced budget where G = T (Government spending = Tax revenue); d). attempts to stabilize the economy by controlling interest rates and the supply of money; e). position involving a net increase in government spending (G > T) through rises in government spending, a fall in taxation revenue, or a combination of the two; f). the benefit from printing money; |
IV. Text understanding
Exercise 7. Find in the text and translate a passage describing:
5. definition of the terms fiscal policy, monetary policy
6. an expansionary position of fiscal policy
7. ways of funding government expenditures
8. fiscal deficit funding.
Exercise 8. Agree or disagree with the statements:
9. The idea of using fiscal policy to combat recessions was introduced by Adam Smith in the 1830s.
10. Fiscal policy refers to the overall effect of the budget outcome on economic activity.
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11. Monetary policy attempts to stabilize the economy by increasing or decreasing taxes and/or government spending.
12. Government spending can`t be funded by sale of fixed assets.
13. Governments spend money on transfer payments such as welfare benefits.
14. A fiscal surplus is never saved for future use.
15. When income from taxation or other sources falls, reserves allow spending to continue at the same rate.
16. Changes in the level and composition of taxation and government spending can impact on aggregate demand and the level of economic activity.
Exercise 9. Answer the questions:
- What is the difference between fiscal and monetary policy?
- What are two main instruments of fiscal policy?
- What can changes in the level and composition of taxation and government impact on?
- Explain the essence of three possible positions of fiscal policy: neutral, expansionary, and contractionary.
- How can government spending be funded?
- How does government consume fiscal surplus?
