U6_Chapter 16 - Capitalism and the American Economy

Unit 6: The Word of American Business

[Guess] How many Americans own shares of stock in companies traded on the two major stock exchanges?

120 million

[Guess] About how many Americans go bankrupt each year?

1 million

[Guess] About how many women own their own business?

9 million

[1] In a capitalistic e….., businesses are privately owned and operated.

economy

[1] The government's role in the business world is l…..

limited

[1] In American capitalism, even such basic needs as transportation, communications, and health care are provided by p….. companies.

private

[2] Prices of g….. and s….. are affected by the cost of producing them.

goods / services

[4] C….. is an essential element of capitalism.

Competition

[4] When there is a lack of competition in an industry, a m….. may develop.

monopoly

[5] Disagreements between employees and employers can lead to work stoppages called s……

strike

[5] A s….. occurs when unionized employees refuse to work until their demands are satisfied.

strike

[6] Although capitalism has made most Americans p….., not all have benefited.

prosperous

[7] At the end of the twentieth century, several multinational treaties greatly expanded the idea of competition to what is called a "free g….. e….."

 global economy

[7] A free global economy is good for the c….., but it is not good for American w….. who may lose their jobs as a result of that competition.

consumer / workers

[8] Today's American capitalism benefits most workers as well as b….. owners.

business

[9] American businesses need huge amounts of money to develop new products, purchase new equipment,… This money is known as c…..

capital

[9] Much of capital comes from i….. (capitalists)

investors

[9] A capitalist economy depends on c….. to keep it growing.

capitalists

[10] Most investments take one of two forms: s….. or b……

stocks / bonds

[10] Stockholders purchase s….. of a business.

shares

[10] lf the business does well, they share in the profits of the company by receiving d……

dividends

[10] On the other hand, people who purchase bonds lend their money to a business in exchange for a fixed rate of return (a percentage of the face value of the bond) known as i…...

interest

[10] The New York Stock Exchange is located on Wall Street in New York City. As a result, the world of investors is commonly known as W….. S…….

Wall Street

[10] S….. prices are usually affected by the profits of the company, the general economic climate, and the outlook for the company in the near future.

Stock

[10] B….. prices are primarily influenced by interest rates.

Bond

[12] Today, more than ….. million individuals are stockholders.

120

[13] One very popular method of making payments is by c……

check

[13] Most Americans have checking accounts and have access to their money at the many ….. (automatic teller machines)

ATMs

[14] Another form of payment is the use of c….. cards.

credit

[14] One type of credit card is issued by a particular s….. to its regular customers.

store

[14] Most credit cards permit the user to pay only a s….. portion of the total due.

small

[15] Another type of credit card is issued by b..… or other f..… institutions.

banks / financial

[15] These cards can be used for purchases at a….. business establishment that has agreed to accept them.

any

[16] The easy availability of credit has given American consumers tremendous purchasing power, which can lead to a huge amount of d……

debt

[16] If payments are not made for several months, the seller may sue the debtor in court or take legal action to r..… the merchandise.

repossess

[17] The debtor who thinks that there is little chance to repay the debts may choose to go into b….. to be relieved of them.

bankruptcy

[17] About ….. million Americans go into bankruptcy each year.

1

[18] A recent development in the cashless society is the use of d….. cards.

debit

[18] When a debit card is used, money is immediately d….. from the user’s bank account and paid to the seller.

deducted

[18] The use of a credit or debit card is necessary in purchases made by t..… or on the I……

telephone / Internet

[19] Another way of making purchases without cash is by obtaining a l…..

loan

[19] Loans enable Americans to buy the things they need and want b..… they have all the money to pay for them.

before

[20] Many changes in the way businesses operate: C..… in Business, S….. Business Trends, W… and Minority Business Ownership, H… Businesses.

Computer / Small / Woman / Home-based

[22] Americans who go into business for themselves are called e……

entrepreneur

[23] A successful company may license other companies to operate similarly and under the same name. That license is called a f……

franchise

[23] The original company is the f..…, and the licensed companies are f……

franchisor / franchisees 

[25] In 1999, about ….. million women owned businesses, while members of minority groups owned another 2 million.

9

[26] Home-based business and people doing their employers' work from h….. is also on the rise.

home

[26] There are now ….. million people operating their businesses out of their homes.

4

[I_1] Paragraph 1 says that the American government …..
a. is not allowed to regulate business
b. regulates businesses to some extent

b

[I_2] Paragraph 5 says that …..
a. workers shouldn't go on strike
b. strikes sometimes create problems for the American public

b

[I_3] According to paragraph 10, people who buy stocks and bonds
a. hope to make a profit
b. usually become wealthy

a

[I_4] According to paragraphs 16 and 17, buying on credit
a. usually leads to bankruptcy
b. can lead to more debt than the consumer can handle

b

[I_5] The U.S. is called a cashless society because …..
a. most people don't have enough cash
b. people use checks and credit cards instead of paper money to pay for many things

b

[I_6] According to paragraphs 23 and 24, buying a franchise is
a. one common way to become an entrepreneur in the U.S.
b. a form of business ownership used only in the fast-food industry

a

[II_1] The American c….. is sometimes called a cashless society because most people pay for things with checks and c….. cards.

economy / credit

[II_2] People lend money to a business by buying b….., or they purchase a piece of a business by buying shares of s……

bonds / stock

[II_3] A person can buy part of a business by purchasing s….. sold on a stock exchange.

shares

[II_4] When you get your hair cut at the barber or beauty shop or your coat cleaned at the dry cleaner’s, you are purchasing ……

service

[II_5] When you buy a jacket or some milk, you are purchasing g……

goods

[II_6] ….. depends on competition to keep prices down and quality high.

Capitalism

[II_7] When American Telephone and Telegraph was providing nearly all the telephone service in the U.S., it had a(n) ……

monopoly

[II_8] A person who has a lot of ….. may decide to go into bankruptcy. 

debt

[II_9] Valuable things that you own (such, as a car, a house, or stock) are your ……

assets

[II_10] If you buy 100 shares of stock for $45 a share and sell those shares a year later for $60 a share you have made a nice ….. on your investment. 

profit

[III_1] What does strike mean in "to go on strike"? (5)
a. to hit a person or an object
b. to refuse to work until one's employer makes some improvement in working conditions, benefits, and/or salary

b

[III_2] What does return mean in "a profitable return"? (9)
a. to come back to a place
b. income from an investment

b

[III_3] What does interest mean in "interest rates"? (10)
a. something someone wants to know about
b. a fixed return on an investment

b

[III_4] What does stock mean in "stocks and bonds are traded"? (10)
a. shares of companies for sale to the public
b. merchandise sold in a store

a

[IV_1] Change hands (11)

transfer from one owner to another

[IV_2] Cut off (5)

prevent access to something

[IV_3] Earn a living (8)

make enough money to pay one's expenses

[IV_4] Face value (10)

original price of a bond when issued

[IV_5] Laid off (5)

terminated, sometimes temporarily, from a job because one is not needed

[IV_6] Out of business (4)

a company has been permanently closed

[IV_7] Settle for (6)

accept less than you wanted or expected

[IV_8] Shut down (5)

closed, usually temporarily

[IV_9] Supply and demand (2)

how much of a product is available compared to the amount consumers want to buy

[IV_10] Wall Street (10)

where stocks and bonds are sold