Está en la página 1de 65

TRƯỜNG ĐẠI HỌC CẦN THƠ

GIÁO TRÌNH TIẾNG ANH CHUYÊN NGÀNH

ANH VĂN NGOẠI THƯƠNG 2

Biên soạn: LƯU NGUYỄN QUỐC HƯNG, Th.S.

2009

1
TRƯỜNG ĐẠI HỌC CẦN THƠ CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM
TRUNG TÂM NGOẠI NGỮ Độc lập - Tự do - Hạnh phúc

ABOUT THE AUTHOR

I. THÔNG TIN VỀ TÁC GIẢ

Họ và tên: Lưu Nguyễn Quốc Hưng

Sinh năm: 26.01.1970

Cơ quan công tác: Trung tâm Ngoại ngữ,


Trường Đại học Cần Thơ

Địa chỉ email để liên hệ: lnqhung@ctu.edu.vn

II. PHẠM VI VÀ ĐỐI TƯỢNG SỬ DỤNG

• Giáo trình có thể dùng tham khảo cho những ngành nào: sinh viên ngành ngoại
thương

• Có thể dùng cho các trường nào: Khoa Kinh tế & Quản trị Kinh doanh, Trường Đại
học Cần Thơ, chuyên ngành ngoại thương, các trường Kinh tế

• Các từ khóa: (Đề nghị cung cấp 10 từ khóa để tra cứu): internatinal trade, import,
export, world trade, WTO, compete, SWOT, business trend, globalization, e-
commerce

• Yêu cầu kiến thức trước khi học môn này: học viên cần có kiến thức anh văn tổng
quát tương đương trình độ B (trung cấp) để bắt đầu chương trình 1 (international trade
1) và hoàn thành chương trình 1 để tiếp tục chương trình 2 (international trade 2).

• Đã xuất bản in chưa, nếu có thì nhà xuất bản nào: chưa

2
CONTENT
ABOUT THE AUTHOR................................................................................................................. 2
CONTENT ...................................................................................................................................... 3
UNIT 1: INTRODUCTION ............................................................................................................ 4
LESSON 1: GREETINGS AND INTRODUCTION.................................................................. 4
UNIT 2: YOU AND YOUR COMPANY....................................................................................... 7
LESSON 2: PERSONAL AND ORGANIZATIONAL PROFILE ............................................ 7
LESSON 3: COMPANY CULTURE ......................................................................................... 9
LESSON 4: COMPANY ORGANIZATION ............................................................................... 13
UNIT 3: COMPANY ACTIVITIES ............................................................................................. 17
LESSON 5: SELLING AND BUYING.................................................................................... 17
LESSON 6: SALES AND NEGOTIATION ............................................................................ 23
LESSON 7: SALES DOCUMENTATIONS ............................................................................ 28
UNIT 4: FOREIGN EXCHANGE................................................................................................ 31
LESSON 8: CURRENCY EXCHANGE.................................................................................. 31
LESSON 9: PAYMENT IN INTERNATIONAL TRADE ...................................................... 35
UNIT 5: TRANSPORTATION .................................................................................................... 38
LESSON 10: METHODS OF TRANSPORTATION .............................................................. 38
LESSON 11: DISTRIBUTION................................................................................................. 41
UNIT 6: IMPORT & EXPORT .................................................................................................... 44
LESSON 12: IMPORT & EXPORT REGULATIONS............................................................ 44
LESSON 13: INTERNATIONAL TRADE REGULATIONS................................................. 46
LESSON 14: QUOTATIONS................................................................................................... 50
UNIT 7: CONSOLIDATION........................................................................................................ 53
LESSON 15: REVISION .......................................................................................................... 53
REFERENCES.............................................................................................................................. 63
GLOSSARY.................................................................................................................................. 64

3
UNIT 1: INTRODUCTION

LESSON 1: GREETINGS AND INTRODUCTION


Starting a conversation.
1.1
Look at the following pictures. What do you think people say in each situation to start
the conversation?

1.2
Match the conversation openings on the left with the places where they can be asked
on the right. The first one is done as an example.

a) Have you been waiting long? At a bus stop: a


b) Excuse me, does your company have a stand here? On a factory visit
c) Have you worked here long? On a train
d) Do you fly a lot? At a trade fair
e) Excuse me, is this seat free? On a plane

1.3
Think of more conversation openings

4
1.4
Complete the following conversations.
a) I don’t think we’ve met. My name’s Tim Reed.
- ………………………………… I’m Mike Lam.
b) Are you going to Osaka on business?
- ………………………………… .
c) Nice party, isn’t it?
- Really nice. I’m ………………………………… .
d) May I sit here?
- ………………………………… .

Listen and check your answers.

1.5
Introduce yourself to another student.
Hello, / Hi, nice to meet you. I’m …
I come from / I’m from … . I work for …

1.6
Find out about some other students. Ask and answer these questions
Where do you live?
Who do you work for?
What does your company do?
How many employees does it have?
Who are your main customers?
What are you responsible for?
What do you like doing in your free time?

Ending a conversation

1.7
Here are some ways of ending a conversation. Listen and complete the blanks with
missing words.

Dialogue 1
A: Well, it was very nice ……………. to you.
B: Yes, we must ……………. again sometime.
A: That would be ……………. Here’s my card. Maybe we can get together …
……………. time you’re in town.
B: I ……………. so. And here’s my card.

Dialogue 2
A: Well, it was ……………. to see you ……………., Harry.
B: Yes. And we should get together again soon. How about ……………. next week?
A: That would be great. Give me a call at the office, and we’ll ……………. a time.
B: Fine. ……………. you next week, Frank.
5
Dialogue 3
A: Your new ……………. sounds very interesting. Could you send me a price
…………….?
B: Yes, of course. I’m very sorry, but would you ……………. me? I have to make
an ……………. phone call.
A: …………….

Dialogue 4
A: Your new product sounds very …………….. Could you …
B: Sorry. I have to ……………. to that woman over there. She’s an important
……………. .
A: Oh! … of course.

In which dialogue(s):
- Do A and B know each other well?
- Does A decide to end the conversation?
- Does B decide to end the conversation?
- is B impolite? Why?

1.8
Can you think of any other ways of ending a conversation?

1.9
With a partner, practice meeting someone for the first time at a business reception. Use
real or imaginary information about yourself. Try to continue the conversation for as
long as possible, using the following table as a guide.

Begin the conversation



Introduce yourself

Continue the conversation
(talk about your company, job, family, hobbies, and interests, etc.)

End the conversation

Review questions:
• What are ‘ice-breakers’? What are some useful expressions to start and end a
conversation formally?

Reference:
• Barnard, R. and Cady, J. (1994). Business Venture 1. Oxford: Oxford University
Press.
• Barnard, R. and Cady, J. (1994). Business Venture 2. Oxford: Oxford University
Press.

6
UNIT 2: YOU AND YOUR COMPANY
LESSON 2: PERSONAL AND ORGANIZATIONAL PROFILE

2.1
Two presenters introduce themselves at a conference. Which words do you hear?

Dialogue 1
I work _______ Ricoh. (at, with, for)
I’m a project _______ in the manufacturing division. (manager, supervisor, coordinator)
Ricoh _______ office equipment. (produces, manufactures, makes)

Dialogue 2
I’m a sales _______. (manager, administrator, executive)
I work _______ Nokia _______ Helsinki. (in, on, for, with, to)
My company _______ cell phones. (produces, makes, distributes)

Company activities
2.2
Make sentences about the companies below. Use the words in the boxes.

Philips Adidas McDonald’s


Nikon Microsoft Hyundai
È
produce develop
sell distribute
È
sporting goods computer software
cars stereo equipment
fast food camera and optical equipment

For example: Philips produces stereo equipment.

Talk about other companies in the same way.

Company and Jobs


2.3
Use the words from the box to fill the gaps.

deal with develops sells department orders administrator

I’m a sales ________1 . I work in the sales ________2 of Philips. I check customer
________3, prepare sales report, and ________ ________4 complaints. Philips
________5
stereo equipment around the world, and ________6 many new products every year.

7
Listen and check your answers.

2.4
Read other descriptions of people in a company. Then talk about other people in your
company / organization / class.
− I’m a sales administrator.
− I prepare / write sales reports.
− I check customer orders.
− I organize / supervise deliveries.
− I deal with complaints.

A World Without Borders

2.5
Read the following text.

Some of the larger countries of the world are breaking up into smaller units. The former
Soviet Union is now a collection of smaller states or countries less formally tied together.
Dozens of new nations have been created since the end of the 1980s. Currently, over 180
countries are members of the United Nations. The U.N. began with only 50 countries
when it was founded in 1945.

This trend toward more and smaller nations does not tell the whole story, however.
Although many nations now exist, in some ways our borders are disappearing.
Independent countries are joining together so that they can improve trade, discuss
regional and world issues, and share technology. Some of the important alliances today
are NAFTA, E.U., and Mercosur.

Was your native country once part of a larger country? Has your native
country joined another? Has it made any economic or political agreements
with other countries?

2.6
What do you know about these abbreviations? Give a presentation of each
organization.

AFTA APEC ASEAN GATT NAFTA WTO

Review questions:
• Prepare a brief introduction of your present / future company.

Reference:
• Barnard, R. and Cady, J. (1994). Business Venture 1. Oxford: Oxford University
Press.

8
LESSON 3: COMPANY CULTURE

3.1
A director of Starbucks, an American coffee manufacturer, is giving a talk about his
company. Listen and choose the correct answer, a or b.

Activity: a) Sells coffee in the b) Sells coffee all over the


USA and Canada. world.
Location of stores: a) West Coast b) West and East Coasts
Head Office: a) Seattle b) Washington DC
Annual Sales: a) $225 million b) $285 million
Annual growth: a) More than 5% b) More than 75%
Name of President: a) Mr. Howard b) Mr. Schultz
Employees: a) 3,500 b) 6,000
Company philosophy: a) Customer comes b) Customer and
first. employee both come first.

3.2
Think about some companies you know well. Does the customer come first, or
the employee? In your opinion, which is better?

3.3
Semco is a company which is run by Ricardo Semler and is famous for its unusual
management structure. Semco gives its new employees a survival manual. Read the
following extract from the manual and match the headings 1-6 to the gaps a-f.

1. Working environment
2. Authority
3. Hiring
4. Clothing and appearance
5. Working hours
6. Participation

a) ____________ b) ____________
Our philosophy is built on Before people are hired or promoted,
participation and involvement. Don’t the others in that unit have the
settle down. Give opinions, seek opportunity to interview and evaluate
opportunities and advancement, always the candidates.
say what you think. Don’t be just one
more person in the company. Your
opinion is always interesting, even if
no one asked you for it. Get in touch
with your factory committees, and
participate in elections. Make your
voice count.
c) ____________ d) ____________
Semco has flexible working hours, and We want all our people to feel free to

9
the responsibility for setting and change and adapt their working area as
keeping track of them rests with each they please. Painting walls or
employee. People work at different machines, adding plants, or decorating
speeds and differ in their performance the space around you is up to you. The
depending on the time of day. Semco company has no rules about this, and
does its best to adapt to each person’s doesn’t want to have any. Change the
desires and needs. area around you, according to your
tastes and desires and those of the
people who work with you.
e) ____________ f) ____________
Neither has any importance at Semco. Many positions at Semco carry with
A person’s appearance is not a factor them hierarchical authority. But efforts
in hiring or promotion. Everyone to pressure subordinates or cause them
knows what he or she likes or needs to to work out of fear or insecurity, or
wear. Feel at ease – wear just your behavior that shows any sign of
common sense. disrespect, are considered an
unacceptable use of authority and will
not be tolerated.

3.4
Complete the second column of the chart with information from the texts to summarize
the ways in which Semco is different from more traditional types of companies.

In more traditional companies: At Semco:


1. people are expected to just do
their job and keep their opinions
to themselves.
2. management decides who will
be hired or promoted.
3. management decides workers’
hours.
4. management controls the
working environment.
5. management often say what you
can and can’t wear.
6. managers can sometimes make
staff feel pressured.

3.5
Read this information.
Empowerment
In many companies and organizations, employees do only what they
expect to do, and are expected to do, within their level of the hierarchy.
However, there are now a number of organizations around the world that
have adopted different management styles in order to ‘empower’ their
employees. This means that they encourage individuals to use their own
initiative and to play an active role in the success of the organization.

10
A survey conducted by the Gallup Organization discovered that twenty-four per cent of
US workers would fire their boss if they had the chance. What would the results be for
your country?

3.6
Listen and decide if these statements are true (T) or false (F).
1. _____ Semler started the company himself.
2. _____ Semler gave control to the managers.
3. _____ The company does not have a hierarchy of levels.
4. _____ There is a new CEO every three years.
5. _____ Everyone is responsible for their own secretarial work.
6. _____ Workers can elect their managers.
7. _____ Semler decides on the number of working hours and pay.
8. _____ Semler feels that people become more responsible when they make the
decisions.

3.7
Listen to a short description about St Luke’s Advertising Agency, and answer the
following questions.
1. How many people work at St Luke’s?
2. Who are Andy Law and David Abrahams?
3. Who makes most of the management decisions?
4. How did Abrahams and Law prepare their staff to accept more responsibility?
5. What do companies need to do for empowerment to be successful?

3.8

Work in groups and discuss these questions.


- How practical do you think these ideas would be in your country or
culture?
- What do you think the advantages are of working in organizations like
Semco?
- What are the advantages of working in a traditional company hierarchy?

3.9
How much do you know about international business etiquette? Choose the correct
answer.

If you are doing business in Israel, you In Saudi Arabia, you should avoid showing
should not expect to have any meetings onpeople
a) the palm of your hand
a) Friday b) Saturday c) Sunday
b) the sole of your foot
You should refer to Japanese visitors to If you were giving a gift of soap in the

11
your country as Philippines, which scent should you avoid
a) oranges b) lemons c)
a) Orientals b) foreigners c) Asians
strawberries
When doing business in Japan, you don’t When you have finished eating a Chinese meal
need to take any business cards with you. with chopsticks, it is polite to cross the chopsticks
a) True b) False on the plate.
In Japan, which of the following would be a a) True b) False
suitable gift? In the United States, smoking is acceptable in
a) four red roses almost all business and social situations.
b) six white carnations a) True b) False
c) ten pink lilies You should not criticize the King or Queen in
Which color should you avoid if you are a) England b) Thailand c) Spain
giving a present in Mexico or Brazil? A man should not shake hands with a woman in
a) white b) blue c) purple a) South Korea
In England, you don’t need to say anything b) Iceland
at the start of a meal. c) Ethiopia
a) True b) False

3.10

Think of some useful advice you could give to foreigners about business and
social situations in your country. Think of six things that they should do,
shouldn’t do, or don’t need to do.
Example: You should be very punctual for business appointments, but you don’t
need to be so punctual for social engagements.

Review questions:
• What is business culture? What are some business ‘rules’ foreign business partners
should know when doing business in your country?

Reference:
• Barnard, R. and Cady, J. (1994). Business Venture 1. Oxford: Oxford University
Press.
• Hollett, V. (1994). Business Objectives. Oxford: Oxford University Press.
• Nauton, J. (2000). Head for Business – Intermediate Student’s Book. Oxford:
Oxford University Press.

12
LESSON 4: COMPANY ORGANIZATION
4.1
− What’s your nationality?
− Name your neighboring countries. What nationalities are the people who
live there?
− What other countries do you have business dealings with? What
nationalities are your business contact?

Company Location and Types of Business


4.2
Do you know any of these companies? What products and services do they sell? Are
any of them in the same business as you? Where are their headquarters located?

13
4.3
What type of businesses are they? Find:
a. a car manufacturer
b. a publisher
c. a freight company
d. a bank
e. a pharmaceutical company
f. a telecommunications company
g. a petroleum company
h. an electricity company
i. a retailer
j. a white goods producer

4.4
What does each company do? Find one which:
a. develops drugs and medicines
b. publishes newspapers and operates TV networks
c. sells skin and hair care products
d. delivers mail, packages, and freight
e. explores for oil and operates refineries
f. manufacturers cars
g. produces refrigerators, freezers, etc.
h. provides commercial banking services
i. supplies electricity
j. supplies telephone and cable services

4.5
Tell your partner about your company.
• What business is it in?
• What does it do?
• Who are its main clients?
• When was it founded?
• Where’s the head office?
• Where does it operate?

Company Organization
4.6
Study the three diagrams representing the structure of an organization.
In diagram 1, which group of people
1. own the company?
2. sell to the company?
3. formulate policy?
4. buy from the company?
5. work for the company?

14
In diagram 2 and 3, which part of this organization

1. manufactures the products?


2. sells the products?
3. deals with personnel matters?
4. creates new products?
5. buys supplies?
6. gets the products to the consumers?
7. records transactions, collects cash, makes payments, and calculates costs?
8. plans, schedules, monitors, measures, and gives direction?

4.7
Do any of these diagrams represent the structure of your organization? How
are they similar? How are they different? Draw a diagram of your
organization and explain it to your friends.

4.8
Many companies are multinational: they operate in several different
countries.
• What advantages and disadvantages do multinational companies have
(compared with smaller companies)?
• Would you prefer to work for a big multinational company, or a small
company? Why?

15
4.9
Shigeru Kanemori and some colleagues from Japan are attending a presentation of
ICL. A senior executive is talking about how the company is organized.
Listen and complete the chart.

Write your answers:


___________ ___________ ___________ ___________
___________ ___________ ___________ ___________

4.10
Draw an organization chart for your own company or a company you know.
Present your company to your partner.

Review questions:
• Describe your company organization. Draw a chart of organization.

Reference:
• Grant, D. and McLarty, R. (1994). Business Basics. Oxford: Oxford University
Press.
• Hollett, V. (1994). Business Opportunities. Oxford: Oxford University Press.
• Hollett, V. (2000). Quick Work – A short course in Business English. Oxford:
Oxford University Press.

16
UNIT 3: COMPANY ACTIVITIES
LESSON 5: SELLING AND BUYING
5.1
Look at the photos and discuss these questions:
− What is happening in each picture?
− What do all the situations have in common?
− What might the people be saying?
− What sort of relationship do the people have with each other?

A Sale Simulation
5.2
Work in pairs. One student is a BUYER and the other is a SELLER.
Follow the steps below according to your roles as SELLERS or BUYERS.

BUYER: You have received a memo from your head asking you to buy some furniture.
Choose either of the memos below and do not read the other one. Take your information
from the memo you have chosen and talk to the ‘sales assistant’ (do not show him / her
the memo). You can choose from the chairs pictured below, but the sales assistant will
tell you how much they cost and anything else you want to know. You must not pay more
than the amount your head says in the memo, but try and get the best terms you can.

17
SELLER: A customer wants to buy some chairs from you. This is the range you have in
stock.

You can offer a 10% discount on sales of £500 or over if you think it will help you get a
sale. Do not show your catalogue to the customer. She has pictures of the chairs.

Start the conversation by saying: Can I help you?

18
5.3
Sums of Money
Notice the following points:

£62,573.22 $25.02 38p 67¢

− The pound (£) or dollar ($) signs go before the numbers.


− A decimal point (full stop) separates pounds from pence and dollars from cents.
− We only write p or ¢ after sum of money when cents or pence are written alone
without pounds or dollars, e.g. 6¢ (but $.06)
− Note: £5m = five million pounds
− $6.2m = six point two million dollars, or six million, two hundred thousand dollars

5.4
Read the following text. Which of the points do you agree or disagree with? Give your
reasons.

Anyone who has contact with customers is a salesperson – that includes the
telephonist who answers the phone and the service engineer who calls to repair a
machine. So that probably includes you!

The relationship between a salesperson and a client is important: both parties


want to feel satisfied with their deal and neither wants to feel cheated. A
friendly, respectful relationship is more effective than an aggressive,
competitive one.

A salesperson should believe that his or her product has certain advantages over
the competition. Customers want to be sure that they are buying a product that is
good value and of high quality. People in business are not going to spend their
company’s money on something they don’t really need (unlike consumers, who
can sometimes be persuaded to buy ‘useless’ products like fur coats and solid
gold watches!).

Some salespeople adopt a direct ‘hard sell’ approach, while others use a more
indirect ‘soft sell’ approach. Which approach do you prefer? Whichever
approach is used, in the end perhaps a good salesperson is someone who can
persuade anyone to buy anything. On the other hand, maybe a good salesperson
is someone who knows how to deal with different kinds of people and who can
point out how his or her product will benefit each individual customer in special
ways. After all a buyer is called a ‘buyer’ because he or she wants to buy. All
you need to do is to convince them that your product is the one they want. A
successful sales meeting depends on both the salesperson and the customer
asking each other the right sort of questions.

19
5.5
Fill the gaps in these sentences with these words

before buying client individual product wants weaknesses

If you want to be a successful salesperson and negotiator, you should …

1. know your __________ and its main features.


2. know the strengths and __________ of competing products.
3. find out who makes the __________ decisions in your client’s firm.
4. plan each sales interview __________ it takes place.
5. Match what you’re selling to each client’s __________ and needs.
6. Listen to what your __________ tells you.
7. Remember that each client is an __________, not a number.

Process of Sales

5.6
You’ll hear part of a talk at a workshop for people who have little experience of selling.
Listen and fill the gaps of the summary of the talk.

The __________ Stage:


Usually on a phone call. You have to talk to __________ in person,
not his / her __________.
Identify yourself and arrange an __________.
The __________ Stage:
a) prepare and __________ with a __________ or __________.
b) dress suitably for the __________.
c) behave in a __________, confident but __________ manner.
d) don’t spend too long on __________.
e) show that you’re a __________, __________ person.
f) mention __________ firms who use your product.
g) tell the client about the __________ of your product.
h) encourage your client to talk by __________ and only __________ talk __________
the time yourself.
The __________ Stage:
recognizing exactly when your client is ready to __________ the order.
This depends on __________.
Finally, __________ your client for the order and leave.

Negotiation on an International Deal


5.7
Discuss some of the different behavioral styles in negotiation which you
know or have experience of.

20
5.8
Complete the following sentences using suitable form of the word ‘negotiate’
1. She is a really ……….., she’ll always get us the best deal.
2. ……….. have broken down again between the government and the train drivers.
3. Never forget that ……….. is a science; there are techniques you can learn.
4. I’m sorry, the price is not ……….., you’ll have to take it or leave it.

Listen and check your answer.

5.9
Listen to the following passage and complete the missing words.

International Trade Does Not Just Happen

International trade does not just happen. It is the result of ________1 relationships and
processes to ease the ________2 of goods and services.
This week, we spoke with David Good in Washington, D.C. He is the chief ________3
for Tata Sons in North America. The Indian company Tata Sons is part of the Tata
Group, India’s largest and best-known company.

Tata wants to increase economic ________4 with the United States. That is what David
Good’s job is all about. He ________5 his office as an embassy for Tata Sons in
Washington. Mister Good explains Tata’s products and services to American businesses
and government officials. He seeks to build ________6 and understanding. He also
advises Tata on American ________7 and policies and provides information on business
conditions.

Mister Good learned the ________8 he uses every day working for the Department of
State and the United States Information Agency. He spent thirty-four years in
government before ________9 Tata.
The Tata Group is made up of ninety-six companies that ________10 more than two
hundred thousand people. Tata operates in more than fifty-four countries. Its companies
run hotels, provide engineering services and business ________11. They also make cars
and steel, among other things.
The group’s yearly ________12 are about twenty-two thousand million dollars, or almost
three percent of India’s total economic ________13.

Tata has ________14 in the United States mainly by buying ownership ________15 in
other companies. For example, Tata Sons bought thirty percent of a New York-based
company that makes Vitamin water products. Expanding in America is good business for
Tata. It also ________16 American jobs. Mister Good says Tata employs about ten
thousand people in this country.

Tata continues to grow ________17. This week, Tata Steel proposed to buy the British
steel maker Corus Group. Tata also plans major ________18 in South Africa.

21
Tata also is proud of its tradition of giving money to important causes. Two-thirds of
Tata Sons is ________19 by charitable trusts that are part of the Tata Group. The Group
says it gives about one hundred million dollars a year to support science, health and
________20 in India.

Review questions:
• What are main stages of selling process?
• What is negotiation? How is negotiating important selling and buying?

Reference:
• Jones, L. (1997). New International Business English. Cambridge: Cambridge
University Press.
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.

22
LESSON 6: SALES AND NEGOTIATION
6.1

What is gong in this picture? Discuss these questions in groups or as a class.


1. Is it usual to pay the full asking price for gods or services in your country?
2. Does this depend on the type of goods or services you are buying?
3. Are negotiations of price lively and noisy, or businesslike and quiet?
4. Are you comfortable with negotiating the price of something you want to buy?

Negotiating Ability Quiz: How’s your haggling?


6.2
Work in pairs. Ask and answer the questions together.

1. You want to do a course of twelve driving lessons. Each lesson costs $10. Do you:
(a) ask for 10% off the price of each lesson?
(b) ask what discount is available for a course of twelve lessons?
(c) book ten lessons and ask for two extra free lessons?
2. A poor person is selling a painting for $100 which is worth five times as much. Do
you:
(a) tell them the full value of the painting?
(b) pay their asking price and be happy it was a bargain?
(c) offer $75, take it or leave it?
3. The table you’ve reserved in a restaurant won’t be ready for half an hour. Do you:
(a) smile and wait?
(b) say that you will never use the restaurant again?
(c) suggest that you should get free drinks as a concession for waiting?
4. You pay $1,000 to do a computing course which is as waste of time. Do you:
(a) forget about it?
(b) ask for a refund?
(c) ask for a refund plus compensation?

23
6.3
A lot of people regard negotiations as a win-lose contest in which there must always be
a winner and a loser. How possible is it for a negotiation to be win-win, where both
sides are satisfied?

6.4
Read the suggestion in The Guide to Tough Trading.

1. Is the philosophy a win-lose or a win-win one?


2. Who is each piece advice for: the buyer, the seller, or both?
3. How good is the advice?
4. Are there any rules you would change, or others you would add?
5. Think of occasions when you followed, or broke these rules.

THE GUIDE TO TOUGH TRADING


No price is fixed, everything is negotiable.
Never accept anyone’s first offer.
Be tough, but pleasant.
Do not be afraid to shock with your first offer.
Don’t just haggle about the price, negotiate the whole deal.
It’s always easier to get extra goods than a lower price.
Never say how much you can spend.
When selling, pretend not to have total authority.
Don’t be the first to make a concession.
Never just complain, always try to get something in return.

6.5
Listen and match the negotiations a-d with 1-4 below.

1. an antique dealer and a customer …


2. two people discussing the price of a second-hand car …
3. a buyer calling a printer …
4. a salesman selling a notebook computer to a customer …

6.6
Listen again. Which rule(s) in the list above were broken in each conversation? Which
of the situations, if any, would you describe as win-win?

6.7
Listen again and complete the expressions below.

1. I must say Malcolm, I __________.


2. I __________ you are saying.
3. __________, ring me with a better offer.
4. __________ I include a case and a battery.

24
5. How does that __________?
6. This is really my __________ offer.
7. I’m __________ to pay £13,000.

Which expression above:

1. asks the other person to try harder? __________


2. shows you have registered the other person’s position? __________
3. asks for someone’s reaction to an offer? __________
4. states a position strongly? __________
5. states a final position? __________
6. expresses disappointment? __________

6.8
Work in pairs. Follow the pattern to complete the negotiation.

Proposal Æ Objection
Ë
Second proposal Æ Counter proposal
Ë
Concession Æ Agreeing / Closing the deal

Student A:

You have booked a week’s holiday for next month. You would like to take next week off
instead as a good friend is visiting from overseas. Your boss says that you can do this if
you find someone to swap with you. Your colleague, Student B, has booked next week as
holiday. Persuade him / her to swap holidays with you using this information.

Student B has been given three evenings shifts per week for the whole of next month.
You have two night shifts next week. You know that Student B hates working evenings.
You would be prepared to work some but not all of Student B’s evening shifts next week.

You work in Student B’s restaurant. Student B is a hard and unkind employer.
You don’t want to work on New Year’s Eve because you have been invited to a party.
You would consider working for double time, i.e. twice your normal salary and an extra
day off in January.

Student B:

You are looking forward to your holiday next week. You haven’t planned much as you
really need to relax.
Next month you have been asked to work three evenings per week which you hate.
You’d be happy to swap holidays if someone would do all your evening shifts.

You own a restaurant. You are looking for staff to work on New Year’s Eve. It is always
hare to find people who are willing to work then. Ask student A to work.
You are prepared to pay overtime at time and a half, i.e. 50% more.
You could also give the person an extra day off but you don’t want to.

25
6.9
Read the following article about negotiating and answer the questions that follow.
Choose the correct letters of the answer.

The ability to negotiate successfully, to reach agreements with other people or parties, is
a key skill in any business. This negotiation could be with a buyer or seller and it almost
always involves an element of compromise. But, when entering negotiations, you should
always keep in mind that it is almost impossible to negotiate and make agreements
successfully if you think you can’t afford to ‘lose’ or walk away from what is on offer.
This will result in your avoiding becoming a passive observer, with the other side
dictating the terms.

In most negotiations one side has more to offer than the other and proper planning can
help minimize the effects of this imbalance. Decide on set limits for what you can offer
before negotiations begin. There are always advantages you can offer the other side, and
you clearly have benefits they want or need or they would not be negotiating with you. In
fact, the buyer or seller often wants you more than you think, so it is to your advantage to
try and see things from their point of view. The better you know their real needs or wants
– not just the ones they have told you – the more successful you will be, and the less
likely you are to fall into the trap of giving them more than you really need to.

But it is also true that a concession they really need or will value from you won’t cost
you as much as it benefits them, and yet may still leave you with everything you want. If
you know the other side must reach agreement on a deal by a certain date for financial
reasons, our willingness to comply with that date could be worth a great deal of money to
them, without costing you much, if anything at all. It is up to you to find out what the
other side really needs.

Untrained negotiators often allow their feelings to become too involved and they may
take each rejection of a proposal as personal rejection. So they become angry with the
other person, or blame them for falling to reach an agreement. While it is important to be
yourself and, on occasion, not be afraid to express how you honestly feel, it is important
to judge carefully when to do this. It is particularly important to maintain a polite and
friendly personal relationship when you are facing a difficult negotiation, but keeping
negative personal feelings out of negotiation doesn’t mean hiding your personality.

Think carefully about your negotiation schedule. Take breaks, particularly during times
when you cannot agree over a particular point. But if you have to continue the
negotiation on another day, make it soon, and keep the momentum of the negotiations. As
long as you are still talking and meeting, you build rapport with the other party; learn
more about what they need and ensure that your company is the one most likely to make
the deal. This may require both patience and perseverance – but patience pays!

26
To ‘win’ a negotiation then, means that neither side should feel that they have ‘lost’. You
should know what you can offer the other side and know exactly what they want. If you
have done everything you can and the deal remains outside the limits you have defined
for yourself beforehand, then walk away from it. Either way, you’re a winner!

1. What does the writer advise us to remember when we start negotiations?


(A) You should not ask for too much.
(B) You shouldn’t feel you have to accept the proposed deal.
(C) It is better not to be aggressive in negotiations.
(D) You should have many different offers ready.
2. Why does the writer suggest that you put yourself in the other side’s position?
(A) because they may have lied about what they want.
(B) in order to avoid being trapped into making a deal you cannot change
(C) because it is likely that they have more to offer than you do
(D) in order to be able to see your real value to them
3. The writer says that one advantage of making a concession to the other side is that
(A) you will be able to get something from them in return.
(B) it will please them without any inconvenience to you.
(C) the other party will be more willing to meet deadliness.
(D) you will make more money on the deal.
4. The writer feels that expressing personal feelings
(A) is especially beneficial when negotiations are going badly.
(B) may result in bad decisions being made.
(C) often leads to anger during negotiations.
(D) may be positive at certain times.
5. What advice does the writer give concerning the negotiating schedule?
(A) Use breaks to discover more about the other party’s needs.
(B) If serious disagreement occurs, postpone the meeting until another day.
(C) Don’t lose the rhythm of the discussions.
(D) Continue the meeting until you reach an agreement.
6. What important piece of general advice is given in the article as a whole?
(A) Find out about the personalities of the people you will be negotiating with.
(B) When negotiating, be prepared to offer more than you originally planned.
(C) You shouldn’t worry if negotiations break down.
(D) Do not allow your personality to intrude on negotiations.

Reference:
• Jones, L. and Alexander, R. (1996). New International Business English.
Cambridge: Cambridge University Press.
• Naunton, J. (2000). Head for Business. Oxford: Oxford University Press.
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.
• UCLES (2002). Cambridge BEC Higher. Cambridge: Cambridge Examination
Publishing.

27
LESSON 7: SALES DOCUMENTATIONS
7.1
Read the following text and answer the questions that follow.

When you travel by train, you need a ticket as proof that you have paid. When you send a
consignment of goods by rail or road you also need a receipt to prove the transport
company has taken the goods. A consignment note is both a ticket and a receipt. A
consignment note for goods sent by air is called an air consignment note or an air
waybill. A consignment note for goods sent by sea is a Bill of Lading. A combined
transport document is for goods sent by more than one means of transport.

When companies buy goods, they send an order to the suppliers. If the buyers are regular
customers, the suppliers send the goods and then send an invoice. The buyers do not
always pay the invoice immediately. Usually the suppliers send a statement at the end of
the month which shows all the transactions between the suppliers and the buyers in that
month. The buyers then pay the amount outstanding on the statement.

Sometimes when the suppliers receive an enquiry, they send a pro-forma invoice. This is
a quotation which looks like the final invoice so the buyers know how much they have to
pay. If the suppliers do not know the buyers, the buyers might pay in advance against the
pro-forma when placing their order.

These questions refer to the words in italics in the text:

1. Which ones are requests for payment?


2. Which ones are a sort of ticket for transporting goods?
3. Which two mean exactly the same thing?
4. Which one is a request for goods?
5. Which ones are receipts for goods?
6. HANACO in Ha Noi is a regular customer of CATAIMEX in Can Tho.
CATAIMEX usually sends goods by train. Which documents will be used when
they do business?
7. Funi Designs in Dak Lak sent goods to a customer in Nha Trang by trailer. This
was the first time the customer had bought anything from Funi Designs. Which
documents do you think were used?
8. Funi Designs sent goods by air to a regular customer in China. Which documents
do you think were used?

28
Method of Payment
7.2
Cheques
Look at this cheque Anne paid into her account and give short answers to the questions
below.

Some of the questions mean the same. Which ones?


1. Who wrote the cheque?
2. When was the cheque written?
3. Who is the payee?
4. Who does Liz Sheperd work for?
5. Whose account number is 013378234?
6. At which bank do Transworld have an account?
7. Who made out the cheque?
8. Who is the cheque made out to?
9. Who is the person receiving the money?
10. Who signed the cheque?
11. Who is the drawer?
12. Is 0133782234 Liz Shepherd’s account number?
13. Each branch of Counts has its number. What is the number of the Trafford branch?

7.3
Letter of Credit
Read the following text and give short answers to the questions below.

Bruce Stevens of Harbor Imports Pty, Melbourne, Australia, wanted to pay Peter Weaver
of Clothco Ltd, Manchester, UK, for some cloth. Bruce wrote to his bank on a special
form and asked them to open an irrevocable documentary credit. This is a Letter of Credit
from Bruce’s bank guaranteeing payment in Britain at a late date. If it is irrevocable, it
cannot be canceled. Neither Bruce nor his bank can change their minds and refuse to pay.
Peter’s bank knows Bruce’s bank very well and they know they will receive the money,
so they confirmed the Letter of Credit. This means that they guaranteed to pay the money
so Peter was sure he would be paid. However a Letter of Credit is not negotiable, so Peter
had to wait until the Letter of Credit was paid before he received his money.

29
Was Peter paid immediately for the cloth?
Who applies for a L/C, the importer or the exporter?
Who issues a L/C?
If a L/C is not irrevocable, who might not pay?
If a L/C is not confirmed, who might not pay?
Can you discount a L/C?
Do you think an exporter would rather be paid by B/E, D/P or by L/C?
How many reasons can you think of why importers or banks might not pay a B/E or an
unconfirmed revocable L/C?

7.4
You will hear a recording of a banker talking about some of the common mistakes that
are made when people complete letters of credit. Fill in the items missing below.

Results of the survey:


Reasons for rejecting 25% of the documents:
• the letter of credit had __________1
• the documents were presented __________2 the period stipulated in the letter of
credit
• the shipment was __________3
Documents were often inconsistent with one another in the following ways:
• the description (or __________4) of goods on invoice(s) differed from that in the
letter of credit
• the __________5 differed between export documents
• the amounts of __________6 shown on the invoice(s) and bill of exchange (draft)
differed
• the __________7 differed between documents
• the letter of credit was __________8 the value of the order
• the __________9 was short
• some documents __________10
• __________11, where required, on documents presented
• __________12 were used when not allowed

Reference:
• Jones, L. and Alexander, R. (1996). New International Business English.
Cambridge: Cambridge University Press.
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.

30
UNIT 4: FOREIGN EXCHANGE
LESSON 8: CURRENCY EXCHANGE

8.1
Anne Bell and Sandra Parr are talking about holidays.
Listen to the tape and give short answers to the following questions.
1. Where did Anne put the brochures?
2. Which ‘continent’ do you think Anne wanted to go?
3. If your currency is weak, can you buy more or less foreign currency?
4. If your currency is strong, will more or less foreigners buy your country’s goods?
5. If there is inflation, do prices go up or down?
6. Does improve mean (a) get better or (b) get worse?

World Currency Quiz


8.2
Identify these common money units used in the world. Choose the correct letter of the
answer.

1. In Thailand you pay with...?


(A) Baht (B) Rupees (C) Ringgit (D) Rupiah
2. In Sweden you pay with...?
(A) Marks (B) Malmoes (C) Guilders (D) Krona
3. In Spain you pay with...?
(A) Pesos (B) Euro (C) Escudo (D) Drachmas
4. In Israel you pay with...?
(A) Pounds (B) Telavivs (C) New Shekels (D) Dinars
5. In Malaysia you pay with...?
(A) Baht (B) Yuan (C) Rupees (D) Ringgit
6. In Australia you pay with...?
(A) Pounds (B) Kroner (C) Rand (D) Dollars
7. In Belgium you pay with...?
(A) Dinars (B) Guilders (C) Euro (D) Marks
8. In Brazil you pay with...?
(A) Pesos (B) Real (C) Escudo (D) Rubles
9. In The Netherlands you pay with...?
(A) Francs (B) Pounds (C) Marks (D) Euro
10. In Indonesia you pay with...?
(A) Rupees (B) Rupiah (C) Rand (D) Yen

31
8.3
Listen and complete the missing words.

Dollar Is World's Most Traded Currency. But Why?

Stability in the value of a nation’s __________1 depends on foreign exchange markets


and economic __________2.

The clearest measure of stability is the exchange value of a currency over time. Trading
takes place on foreign exchanges around the world.

Since nineteen seventy-six, most major economies have used a system of floating
exchange __________3 to value their currency. This means the value of one currency is
always changing in relation to others.

People who travel pay the spot exchange rate when they have to trade currency. If they
wait long enough at the __________4 office, they might see the rates change a little
within hours or even minutes.

Companies and individuals buy and sell an __________5 six hundred thousand million
dollars on the spot market each day.

The dollar is by far the world's most traded currency. And it is worth more than most.
The euro, however, is currently worth about one dollar and twenty-seven cents. And the
British pound __________6 almost two dollars.

A costly currency adds to the __________7 of exports. That can hurt economic growth.
Trade __________8 can also grow because a strong currency lowers the cost of imports.
Inflation is another influence on the __________9 of money. High inflation cuts the
buying power of a currency over time.

The United States currently has a yearly inflation rate of about three percent. The
Federal Reserve considers this within __________10 limits.

This week the central bank left interest rates unchanged for the third month, after
seventeen __________11. Economic growth has slowed this year and inflationary
__________12 are expected to ease over time.

Even the strongest currencies change in value over time. But there is one basic reason
why the market for dollars is mostly __________13. The dollar is the currency of the
world's biggest economy, worth twelve million million dollars.

Larger __________14 are generally more stable than smaller ones. And nations that
__________15 with the United States, especially in East Asia, continue to accept dollars
for the goods they sell to Americans.

32
8.4
Read the following text and answer the questions that follow.

Nominal Exchange Rates versus Real Exchange Rates

As we begin discussing exchange rates, we must make the same distinction that we made
when discussing GDP. Namely, how do nominal exchange rates and real exchange rates
differ?

The nominal exchange rate is the rate at which currency can be exchanged. If the nominal
exchange rate between the dollar and the lira is 1600, then one dollar will purchase 1600
lira. Exchange rates are always represented in terms of the amount of foreign currency
that can be purchased for one unit of domestic currency. Thus, we determine the nominal
exchange rate by identifying the amount of foreign currency that can be purchased for
one unit of domestic currency.

The real exchange rate is a bit more complicated than the nominal exchange rate. While
the nominal exchange rate tells how much foreign currency can be exchanged for a unit
of domestic currency, the real exchange rate tells how much the goods and services in the
domestic country can be exchanged for the goods and services in a foreign country. The
real exchange rate is represented by the following equation: real exchange rate =
(nominal exchange rate X domestic price) / (foreign price).

Let's say that we want to determine the real exchange rate for wine between the US and
Italy. We know that the nominal exchange rate between these countries is 1600 lira per
dollar. We also know that the price of wine in Italy is 3000 lira and the price of wine in
the US is $6. Remember that we are attempting to compare equivalent types of wine in
this example. In this case, we begin with the equation for the real exchange rate of real
exchange rate = (nominal exchange rate X domestic price) / (foreign price). Substituting
in the numbers from above gives real exchange rate = (1600 X $6) / 3000 lira = 3.2
bottles of Italian wine per bottle of American wine.

By using both the nominal exchange rate and the real exchange rate, we can deduce
important information about the relative cost of living in two countries. While a high
nominal exchange rate may create the false impression that a unit of domestic currency
will be able to purchase many foreign goods, in reality, only a high real exchange rate
justifies this assumption.

Net Exports and the Real Exchange Rate

An important relationship exists between net exports and the real exchange rate within a
country. When the real exchange rate is high, the relative price of goods at home is
higher than the relative price of goods abroad. In this case, import is likely because
foreign goods are cheaper, in real terms, than domestic goods. Thus, when the real
exchange rate is high, net exports decrease as imports rise. Alternatively, when the real
exchange rate is low, net exports increase as exports rise. This relationship helps to show
the effects of changes in the real exchange rate.

33
Questions:
1. What is nominal exchange rate?
2. What is real exchange rate?
3. What is the relationship between these two types of exchange rates?
4. How does real exchange rate influence exports?

Reference:
• Jones, L. and Alexander, R. (1996). New International Business English.
Cambridge: Cambridge University Press.

34
LESSON 9: PAYMENT IN INTERNATIONAL TRADE
9.1
When was the last you dealt with figures or numbers in English? What did
you do?
How much of your time do you spend dealing with figures?

Dealing with Figures


9.2
Here are some phrases using numbers in payments. Decide which of the phrases on the
right go with which figures on the left.

Invoice No. 508/19G three pounds sixty-six


a gross profit of 14.5% fourteen point five per cent
31 August 2006 twenty-six point eight per cent
The list price is £41,337 forty-one thousand three hundred and thirty-
seven
Profit before interest and tax of one million four hundred and fifty-seven
£1,457,000 thousand
An annual rate of interest of 26.8% seventeen hundred and ninety-seven
A handling charge of 11/2% six hundred and seventy-three million
Total interest charges of £3.66 the thirty-first of August two thousand and six
$673m operating profits three point six six
one and a half per cent
five o eight stroke nineteen G or five zero eight
oblique nineteen G
one and a quarter per cent

Which items are left over? Write them out as figures.

Cash Flow
9.3
Read this article containing advice on dealing with cash-flow problems. Match these
statements with the points in the article.

According to the article …


1. How can you deal with smaller debts?
2. What is a good way of protecting yourself against bad debts?
3. What should you do if present customers delay in paying?
4. What should you do in order to be sure your invoice has not been forgotten?
5. What should you do before sending goods to a customer?
6. When should you use credit insurance?
7. What can you do if customers pay up swiftly?
8. How do factors work?
9. What should you write clearly on the invoice?
10. Whose name do you need to know?

35
Managing CASH FLOW in the everyday sense is about making sure
you have money coming in to finance the costs of the goods and
services you are producing.
If you ‘re a small business, the chances are that for every £100 you owe,
others owe you £155. What’s more, you’re probably waiting up to 12
weeks to get paid. It’s not right. Some business people have very definite
ideas about what should be done to make things fairer.
Improving credit control can make a world of difference to your
business prospects. Profit is good, but it’s cash that pays the wages.
So here are ten tips to help you get what’s due to you.

ASSESS the credit risk of every customer and assign a credit limit to
them before any goods are supplied. Trade and bank references should
always be taken up before accepting a customer on credit terms.
STATE the credit terms clearly on each invoice (a pay-by-date and
details of interest charges).
Late
ASK for a percentage of the invoice value in advance as protection
payers
against bad debt and to help cash flow.
can kill a
TRY credit insurance if credit checks do not come up to standard. It’s
business
not always available, but it can provide up to 100 per cent cover on
approved debts, guaranteeing payment by a specified date.
THINK about using debt collection agencies for smaller debts. Agency
fees, usually based on a percentage, are only payable if the debt is
successfully recovered.
INVESTIGATE the potential of factoring. Factors purchase a firm’s
unpaid invoices, paying up to 70 per cent or more of the face value, but
they often take on the best customers.
MAKE SURE you know the name and department of the person to
whom each invoice is being sent.
CHECK how long existing customers take to pay – and negotiate new
credit terms if they’re not meeting bills on time.
OFFER your customers discounts for paying up promptly when
invoiced.
FOLLOW UP with a fax to make sure your invoice isn’t overlooked,
disregarded or left at the bottom of the pile.

9.4
Which of the above methods are you familiar with in your own country and
company (or a company you have worked for)?
How useful is such advice in your country?

36
9.5
Listen and complete the missing words.

For a Country, a Lot of Debt Is Not Always a Bad Thing

Generally, a nation's public __________1 is considered along with the size of its
economy in terms of the __________2 domestic product. The G.D.P. represents the
value of all goods and services produced within a territory in a year.

The United States debt is the world's largest: more than eight and one-half million million
dollars. But so is the G.D.P.: more than twelve million million dollars.

__________3 often look at public debt as a percentage of gross domestic product.


Measured this way, the United States had the thirty-fifth largest debt last year, about
sixty-five percent of G.D.P.

That was less than Canada, Germany or France -- and a lot less compared to Japan and
Italy. Both have public debts larger than their G.D.P. So, in this way, the United States
debt is not considered oversized compared to other __________4 nations.

Still, many experts remain concerned about federal __________5 deficits. The historical
average is a little more than two percent of G.D.P. The White House Office of
Management and Budget reported a deficit of just over three and one-half percent in two
thousand four.

Since then the deficit has fallen. But there are concerns that future costs could grow
sharply, in part because of the Iraq war and federal programs for older people. At the
same time, the economy has slowed. Increased borrowing in times of slow growth can
quickly __________6 to the debt.

In the past, the government borrowed mostly from Americans. Today, foreign countries -
- especially China and Japan -- have been willing to buy huge amounts of American debt
even at low __________7 rates.

Americans have been hearing a lot lately about the economic __________8 should that
willingness ever change. But the issues involved, including international trade, are more
complex than that.

Foreign direct __________9 in the United States continues at record levels. The
Congressional Budget Office says America's foreign investments add up to almost ten
million million dollars. And that is more than the __________10 of its debt.

Reference:
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.

37
UNIT 5: TRANSPORTATION
LESSON 10: METHODS OF TRANSPORTATION
10.1
Read the following text and answer the questions below.

Kevin Hughes arranged for the transportation of a consignment of machinery by rail and
by sea. The place of departure was Beeton and the destination was Norton. The cargo (the
freight) was 10 cases of machinery. The measurement of each case were 1m by 2m by
1.1m, so the volume of the whole consignment was 22 cubic meters. Each case weighed
20 kilos, so the weight of the consignment was 200 kilos. The freight rate was £1.50 per
kilo or per cu meter, whichever was the greater. The charge by volume was £33 (22m3 ×
£1.50) and the charge by weight was £300 (22k × £1.50). However, Kevin decided not to
send the goods as conventional cargo because he could get a discount if he packed the
goods in a standard sized container.

Use the clues to help you fill in this puzzle. All the words are in the text.

Clues:
1 and 2: Two words meaning cost
3: The place the goods leave from is the place of …
4: The place the goods are going to is the …
5: A large box is also called a …
6: To put goods into boxes ready for traveling is to … them
7: The … (size) of the consignment was 22 cu m
8: The … of each case were 1m × 2m × 1.1m
9 and 10: Goods packed separately, not in containers, are called …

38
10: Goods traveling from one place to another are called a …
11: This word has two meanings
(a) goods traveling from one place to another
(b) the cost of transporting goods from one place to another
12: How heavy something is
13: A large box of a standard size for transporting goods is called a …
14: This word means usual, regular, always the same

Hidden word: Moving goods from one place to another

Problem-solving
10.2
Work out the answers to the following questions. Use the information from the text
above.

The charge by volume is £33. The charge by weight is £300. Which rate will Kevin pay?
When he sent the goods in a container, Kevin got a 10% discount on the

Dimensions
10.3
Study the diagram of the chocolate box and then read how dimensions are expressed.

Dimensions are described in the following order: length, then width, then thickness,
depth, or height.

We write: 20 cm × 12 cm × 5 cm but we say:


− It’s twenty by twelve by five (if the units of measurement are known).
− It’s twenty centimeters long by twelve wide / across by five deep.
− It’s twenty centimeters in length by twelve in width and five in depth.

We can say the box is twenty centimeters long / wide / deep or it’s a twenty centimeter
long / wide / deep box. (Note: centimeter here is singular.)

For round or square items we say it’s 60 cm round and it’s 10 meters square.

39
10.4
Write these dimensions (measurements) in full as you say them and give the area or
volume, like this:

23 × 12m: Twenty three by twelve.


That’s two hundred and seventy-six square meters.
9.5 × 2 × 5cm: Nine point five by two by five.
That’s ninety-five cubic centimeters.

1. 16 × 5cm 5. 1.1 × 5k
2. 30 × 2.5 × 1m 6. 60 × 12 × 10cm
3. 20 × 4 × 30cm 7. 7 × 1 × 1k
4. 19 × 0.1m 8. 20 × 2k

Comparing
10.5
This table shows the comparative speed and cost of sending a consignment of cloth
from London to Madrid.

Means of Frequency of Total


Transit time
transport departure cost
Ship 10 days Every 12 days £246
Plane 1 day Every day £433
Truck 4 days Every 5 days £149
3 days 3 days Every 7 days £145

In pairs, compare the different means of sending the consignment, like this:
~ Is it quicker by sea than by air? ~ No. It’s slower.
~ Are trains more frequent than trailers? ~ No. They’re less frequent.
~ Is it more expensive by train than by plane? ~ No. It’s less expensive.

10.6
Robert Dillon is in England on business. He has a meeting in Paris tomorrow evening.
He must decide how to travel from London to Paris: by plane or by train. He is talking
to a colleague.

Listen to the conversation and tick (√) the correct box.

Plane Train
faster
cheaper
more comfortable
better

40
LESSON 11: DISTRIBUTION
Read the text.

Manufacturers produce finished goods from raw materials or from components. The
places where they produce the goods are called factories. When they sell the goods on the
domestic market, they usually sell them in bulk to a wholesaler. The wholesaler supplies
the goods to many different retailers and then retailers sell them to individual customers.
Companies usually store goods in bulk in warehouses until they sell them.

Sometimes manufacturers, wholesalers or retailers export goods to wholesalers, retailers


or manufacturers in other countries. Sometimes they import goods from other countries.
A freight forwarder (or forwarding agent) is a company which arranges the transportation
of goods to and from other countries. Anyone who sells goods abroad is an exporter.
Anyone who buys goods from abroad is an importer.

11.1
Processes and procedures are often described in the passive. Rewrite the text above in
the passive, starting like this:

Finished goods are produced from raw materials or from components.

11.2
Use the clues to help you complete the following puzzle. All the words are from the text
above.

41
Clues
Things from which goods are made which have not already been manufactured
This person buys from the manufacturer and sells to the retailer
In large quantities
To give or send goods to someone
A place where goods are made
A shop which sells goods to individual customers
To make
If you sell goods in the country where they are produced, you sell them on the …
A place where goods and raw materials are stored in bulk
A person or company selling goods abroad
The parts of which finished goods are made
A forwarding agent

Hidden word: A person or company producing goods

Telex
11.3
Read the following samples of telexes. What are some basic rules of writing a telex.

Telex 1:

GLOBALIMEX

ATTN LONG

PLS INF DEPART TIME AND FREQUENCY BA 962


MANCHESTER FRANKFURT VIA BIRMINGHAM?+

REGARDS STORKE

Telex 2:

GLOBALIMEX

ATTN BAKER

BA962 ARR. 1450 WED AND SAT+

REGARDS LONG

42
11.4
Explain the meaning of the following telex.

THKS YR LET 6 SEP. PLS NOTE PHIL WANG ARR LATE OCT 8.
CAN YOU ARRNG HOTEL ACC CENTRAL CANTHO? AS
AGREED, WILL DRAW UP FINAL DOCS FOR PHIL’S SIGNATURE
AND YOURS, BUT THE SUM WILL HAVE TO BE CONF BY YR
BNK IN NY. THE CREDIT OF TEN THOUSAND DLRS WILL BE
VAL UNTIL MAY 31, 2007. SINCE THIS IS OUR FRST ORDER
FROM YOU WE HAVE FLWD OUR USUAL POLICY
CONCERNING CREDIT DOCS. TRST YOU WILL BE SATISFIED
WITH OUR NEW PRODUCT, AND SHALL BE PLSD TO MEET U
WHEN U ARE OVER HERE NXT YR.

KND REGARDS,

11.5
Write the following messages into the form of a telex.
1.
WE HEREBY CONFIRM THAT THE TRAINING COURSE
IS TO BE HELD IN VIRGINIA TWICE YEARLY. PLEASE
NOTIFY US OF THE PROPOSED NUMBER OF
APPLICANTS FOR 2007.

2.
WE TRUST THAT THE ABOVE INFORMATION IS WHAT
YOU REQUIRE CONCERNING OUR PRODUCT. WE
SHALL BE PLEASED TO SEND YOU SAMPLES OF THE
ABOVE IF NECESSARY.

3.
I AM PLEASED TO INFORM YOU THAT THE SHIPMENT
OF PLASTIC TUBES IS ON THE WAY TO PERTH AND
WILL ARRIVE ON APPROXIMATELY JUNE 26.

4.
IT IS UNLIKELY THAT JONES WILL ATTEND THE
CONFERENCE IN SEPTEMBER. WE SHALL SEND A
REPLACEMENT.

43
UNIT 6: IMPORT & EXPORT
LESSON 12: IMPORT & EXPORT REGULATIONS
12.1
Complete the sentences with the anagrams in brackets by putting the letters in the
correct order.
Do you agree with _______ / _______? (efer / rdtae)
The government has introduced new regulations on the _______ of beef. (iptmoorntai)
They expect free access to our market, but use _______ to guard their own!
(rmcotetspioni)
Their _______ is terrible; just look at all these forms and paperwork. (bruceayurac)
We could introduce _______ to limit the number of cars we buy from abroad. (auqots)
Fixing high _______ would make them less attractive to potential customers. (rtfaisf)
Just because their products are cheap doesn’t mean that they are _______ goods on the
market. (pumdgin)
Too many _______ are bad for the balance of trade. (tipmosr)
The explorers _______ jewelry and guns for gold and ivory. (abrerdet)
The _______ market is also known as the home market. (oecmsidt)

12.2
Read the information in the box below. What comparative advantages does your own
country have?

Comparative Advantage
An economic theory which claims that all countries will be better off if
each of them concentrates on doing the things it does best. For example, a
country that produces cotton and cotton textiles efficiently and cheaply
should concentrate on this.

12.3
Listen and make notes.
− What two examples of comparative advantage are given?
− How can countries without clear or natural comparative advantages succeed?
− What country is a good example of this?

12.4
Listen and complete the following summary about protectionism.

Protectionism is justified for developing countries when they want to start


………….…………..(1) This helps them become less dependent on
………….………….. (2) and this is good for the country’s
………….………….. (3) Protectionism is even justified for developed
countries when they have problems with ………….………….. (4), for
example, when aggressive competitors ………….………….. (5) The
competitor doesn’t make ………….………….. (6) but it ………….…………..
(7)

44
12.5
Does your country belong to a free trade areas such as the EU, ASEAN,
WTO? If so, what benefits and disadvantages has membership brought you?

12.6
Read the text below and answer the questions.
− What was the cause of the disagreement between the USA and the EU?
− How did the USA punish the EU for refusing to accept the decision of the WTO?
− What is the future likely to be for West Indian producers? Why?

The Banana War


It is perhaps strange that a fruit should be at the center of what was
almost a trade war between the USA and the European Union. France and
Britain wanted to protect the interests of banana producers in their ex-
colonies, especially in the West Indies, against US companies operating
out of Central America. The USA claimed that this was against the rules
of international competition and free trade. The WTO decided in favor of
the USA but the Europeans refused to recognize the decision. It was only
following a second WTO judgment against the EU, and the USA’s
imposition of huge tariffs on unrelated goods, that they finally agreed to
obey the decision. It remains to be seen how well banana growers in the
West Indies can survive as Central American countries have a
comparative advantage in climate, land, and labor costs.

Reference:
• Nauton, J. (2000). Head for Business – Intermediate Student’s Book. Oxford:
Oxford University Press.
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.

45
LESSON 13: INTERNATIONAL TRADE REGULATIONS
13.1
Read the text and answer the questions
1. Which countries manufacture motorbikes?
2. Where is the biggest market for motorbikes?
3. How much does it cost to manufacture motorbikes in each country?
4. Do Aland motorbike manufactures need an import license to sell bikes in Aland?
5. Who needs an import license?
6. Which document must every importer fill in?
7. On which country’s motorbikes do importers have to pay duty?
8. Why don’t importers have to pay duty on Celand’s bikes?
9. Why do importers need a Certificate of Origin for bikes manufactured in Celand?
10. Would importers want a Certificate of Origin for bikes manufactured in Beland?

Import Regulations

Aland, Beland and Celand all manufacture motorbikes. The biggest market for
motorbikes is in Aland, so both Beland and Celand export to Aland. It is cheaper to
manufacture motorbikes in Beland than in Aland, so the Beland bikes could sell at a
cheaper price. However, the Aland government wants to protect its own manufacturers,
so it has imposed import restrictions. The first restriction is that only a certain number of
motorbikes may be imported into Aland each year, so anyone who wants to import
motorbikes must have an import license (permission to import).

The second regulation is that importers of motorbikes manufactured in Beland must pay
import duty on them. There is no duty on bikes manufactured in Celand. When
motorbikes arrive in Aland from abroad, the importer fills in a customs entry form giving
details of the goods and where they are coming from. These details must be the same as
the details on the commercial invoice. (This is the name of an invoice for imported
goods. The commercial invoice may contain charges for transport and insurance as well
as giving details of the goods and price like an invoice for the domestic market.) The
Customs officials use the details on the commercial invoice to calculate the duty.

When goods are imported from Beland, the Customs officials want to be sure that the
details on the commercial invoice are correct. When motorbikes are imported from
Beland, a special commercial invoice must be signed by a representative of Aland’s
government who lives in Beland. This person is called the consul and the special invoice
is called a consular invoice.

Goods from Celand have to travel through Beland to reach Aland. All motorbikes from
Celand have a Certificate of Origin to prove that they have come from Celand.

46
13.2
Take your information from the text and write notes to replace the numbers to
complete this flow chart.

MOTORBIKES DOCUMENTS AT BELAND / PAY


FROM NEEDED ALAND ________4
BELAND ⇒ ________1 ⇒ BORDER ⇒
________2 FILL IN
________3

MOTORBIKES DOCUMENTS AT ________7


FROM NEEDED BORDER ________9
CELAND ⇒ ________5 ⇒ FILL IN ⇒
________6 ________8

13.3
Read the text and answer the questions that follow.

Problems Facing Potential Exporters

Many firms fail because when they begin exporting they have not researched the target
markets or developed an international marketing plan. To be successful, a firm must
clearly define goals, objectives and potential problems. Secondly, it must develop a
definitive plan to accomplish its objective, regardless of the problems involved. Unless
the firm is fortunate enough to possess a staff with considerable expertise, it may not be
able to take this crucial first step without qualified outside guidance.

Often top management is not committed enough to overcome the initial difficulties and
financial requirements of exporting. It can often take more time and effort to establish a
firm in a foreign market than in the domestic one. Although the early delays and costs
involved in exporting may seem difficult to justify when compared to established
domestic trade, the exporter should take a more objective view of this process and
carefully monitor international marketing efforts through these early difficulties. If a
good foundation is laid for export business, the benefits derived should eventually
outweigh the investment.

Another problem area is the selection of the foreign distributor. The complications
involved in overseas communications and transportation require international distributors
to act with greater independence than their domestic counterparts. Also, since a new
exporter’s trademarks and reputation are usually unknown in the foreign market, foreign
customers may buy on the strength of the distributing agent’s reputation. A firm should
therefore conduct a thorough evaluation of the distributor’s facilities, the personnel
handling its account, and the management methods employed.

Another common difficulty for the new exporter is the neglect of the export market once
the domestic one booms: too many companies only concentrate on exporting when there
is a recession. Others may refuse to modify products to meet the regulations or cultural

47
preferences of other countries. Local safety regulations cannot be ignored by exporters. If
necessary modifications are not made at the factory, the distributor must make them,
usually at a greater cost and probably not as satisfactorily. It should also be noted that the
resulting smaller profit margin makes the account less attractive.

If exporters expect distributing agents to actively promote their accounts, they must be
trained, and their performance continually monitored. This requires a company marketing
executive to be locally permanently in the distributor’s geographical region. It is there
advisable for new exporters to concentrate their efforts in a few geographical areas until
there is sufficient business to support a company representative. The distributor should
also be treated on an equal basis with domestic counterparts. For example, special
discount offers, sales incentive programs and special credit terms should be available.

Considering a joint-venture or licensing agreement is another option for new exporters.


However, many companies still dismiss international marketing as unviable. There are a
number of reasons for this. There may be import restrictions in the target market, the
company may lack sufficient financial resources, or its products line may be too limited.
Yet, many products that can compete on national basis can be successful in the majority
of world markets. In general, all that is needed for success is flexibility in using the
proper combinations of marketing techniques.

1. In the first paragraph, the writer suggests that firms thinking about exporting
should
(A) get professional advice.
(B) study international marketing.
(C) identify the most profitable markets.
(D) have different objectives to other exporters.
2. The writer believes that if sufficient preparation is undertaken
(A) initial difficulties can be easily avoided.
(B) the costs can be recovered quite quickly.
(C) management will become more committed.
(D) the exporter will be successful in the long term.
3. An exporter should choose a distributor who
(A) has experienced personnel.
(B) has good communication skills.
(C) is well-established in the target market.
(D) is not financially dependent on the import business.
4. New exporters often make the mistake of ignoring the export market when
(A) distribution costs are too high.
(B) their product is selling well at home.
(C) there is a global economic recession.
(D) distributors cannot make safety modifications.

5. For a distributor to be successful, the exporter must


(A) focus on one particular region.
(B) finance local advertising campaigns.
(C) give the same support as to domestic agents.
(D) make sure there are sufficient marketing staff locally.

48
6. In the last paragraph, the writer states that some companies are reluctant to
export because
(A) there is little demand for their products.
(B) the importation of certain goods is controlled.
(C) they do not have good marketing techniques.
(D) they re not able to compete with local businesses.

13.4
Find out about the international business of the firms your partners work for
(or firms they have worked for in the past, or in their work experience):
− How much of the company’s business is with foreign countries?
− What proportion of their suppliers are foreign?
− What proportion of their customers are foreign?
− If these proportions are different, why is this so?
− Why is trade with foreign companies more difficult than with domestic
companies?

Reference:
• Jones, L. (1997). New International Business English. Cambridge: Cambridge
University Press.
• Nauton, J. (2000). Head for Business – Intermediate Student’s Book. Oxford:
Oxford University Press.
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.

49
LESSON 14: QUOTATIONS
14.1
Which five terms used in quotations represented by these initials?

FOR FOB FAS C&F CIF

The words are all in this box.

Free Alongside Freight


On Ship
Insurance Rail
Cost And Board

14.2
When an exporter quotes a price for goods, the price may include some or all of the costs
of transporting the goods to the importer. The exporter uses an abbreviation after the
price to show what is included, e.g. $500 FOB.

Draw a chart like the one above. The list in the first column shows all the costs of
sending a consignment of tartan cloth from Chris Faram’s factory in Halifax to Jack
Hyam’s warehouse in New York. Fill in a tick on your chart for things you think are
included in each price abbreviation and put a cross if you think things are not
included. For example, a price franco (which means free) includes the price of the
goods and packing, plus all transportation and insurance to the importer’s warehouse.
The price ex works (out of the factory) only includes the cost of the goods and the
packing. The first column is filled for you.

What is included in Costs Ex FOR FAS FOB C&F CIF FRANCO


the price? Works
1) Goods
2) Packing √
3) Rail transport ×
4) Loading charges ×
5) Sea freight ×
6) Insurance ×
7) Landing charges ×
8) Customs duty ×
9) Transport to ×
importer
Price charged

50
14.3
An American importer, Jack Hyam, is dictating a letter to his secretary Polly Ware.
Listen and give short answers to these questions.

1. Had Jack and Chris met before they saw each other at the trade fair?
2. Where was the trade fair?
3. How many times has Jack been to England?
4. Has Jack bought this tartan cloth before?
5. Is this tartan cloth already sold in America?
6. How did Polly write ‘FOB’ at first?
7. Has Chris ever been to New York?

14.4
Work in groups of three or four. Read about these trading problems and the possible
ways of dealing with them. When your group has agreed on the action you would take,
tell another group what you decided and state your reasons.

1)
An exporter of perfumes in your country is complaining that the
authorities in Westland have refused to allow imports of its perfumes
because they do not satisfy their safety and packaging regulations. The
exporter says that exactly the same products are exported to other
countries without similar problems. Your country imports $100m worth
of hi-tech products from Westland each year.

a) Westland has the right to change or enforce its packaging regulations. Tell the
perfume manufacturer that it should make any necessary changes.
b) Speak unofficially to the trade minister for Westland. Ask them to make a special
case for your perfumes.
c) Make life difficult for exporters from Westland through similar action, such as
setting unrealistic health or packaging regulations.
d) Go directly to the WTO and accuse Westland of protectionism.

2)
A domestic manufacturer of kitchen appliances and microwave cookers is
complaining because cheap imports from Southland are killing their
business. Supermarkets are selling imported microwave ovens for just
$25; it costs the domestic manufacturer $40 simply to make them. The
domestic company employs more than 6,000 workers. According to
reports, the same microwaves sell for $30 in Southland where salaries are
much slower.

A. Accept it. This is what the free market is all about. Consumers will benefit from
lower prices for kitchen appliances. The factory must make its own decisions
about its products and its market position.
B. Accuse Southland of trying to kill domestic producers by dumping its products.
Ask Southland to agree to limit its exports of these appliances.
51
C. Encourage supermarkets and distributors to buy products from domestic
producers.
D. Set tariffs and quotas raise the price of imports and protect the domestic
manufacturer.
3)
One of your country’s specialties is Globdi, a delicious dish made from
raw fish and unpasteurized milk. This is exported in tins and is popular
with men and women from your country who live in other countries
around the world. However, after some serious cases of food poisoning,
countries in your trading group insist that your country should comply
with the food agreement you have signed. This sets out regulations for
health and hygiene in the production of food and drink products. They
say they will not accept imports of Globdi until these conditions are met.

a. Make sure that Globdi is made under the new regulations.


b. Tell the other countries that Globdi is a traditional dish and part of your national
heritage and that the food poisoning cases were rare and isolated.
c. Point to examples of dangerous foods from your trading partners’ countries.

Reference:
• Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.

52
UNIT 7: CONSOLIDATION
LESSON 15: REVISION
15.1
Read and guess what the missing words. Check your answers with your friends.

__________1 should countries trade? __________2 does trade work? __________3 is


the effect of international trade? __________ do exchange rates affect trade? Can the
government interfere in free trade? __________4 is the trade deficit?

Take a minute and look around. You might be surprised to __________5 how many of
the everyday items in your life are made __________6. Your shirt might be made in
China. Perhaps your stereo was __________7 in Japan. The watch you're wearing could
be from Switzerland. And yes, the shoes that you are sporting might have been assembled
in the United States.

The importing and __________8 of goods is big business in today's global __________9.
When goods are produced in one country and sold in another, international __________10
occurs. It is so common to find items produced __________11 that people rarely even
think about it. Not too long ago, countries consumed goods predominately produced
within their __________12. As transportation has become increasingly less expensive and
telecommunications have improved, international trade has __________13.

In general, international trade __________14 countries to focus on the industries in which


they can be most productive and __________15. In this way, trade often raises the
__________16 of living of both producers and consumers. International trade also has a
__________17 side.

The benefits and __________18 of trade affect the economy at its core. Everything from
output to standard of living to interest rates remains under the partial control of
international trade. By understanding international trade, we will __________19 one of
the most important real life applications of __________20.

15.2
Listen and check your answers.

53
15.3
Work in groups or pairs. Discuss and choose the correct answer to the following
questions.

1. Why should countries trade?


(A) To help them thrive
(B) To increase output
(C) To decrease output
(D) To keep them busy
2. Which of the following is a situation in which trade is advantageous?
(A) Two countries produce the same goods for the same costs
(B) Two countries produce different goods for different costs
(C) Two countries are isolated
(D) Two countries have the same markets
3. When one producer can create a given amount of output with fewer inputs, what
exists?
(A) Comparative advantage
(B) Comparative disadvantage
(C) Absolute advantage
(D) Absolute disadvantage
4. When one producer has a lower opportunity cost of production than another producer
for a given item, what exists?
(A) Absolute disadvantage
(B) Absolute advantage
(C) Comparative disadvantage
(D) Comparative advantage
5. Farmer John has a pistachio farm. It takes him 5 hours worth of work to harvest 1
pound of nuts. Farmer Rick also has a pistachio farm. It takes him 10 hours worth of
work to harvest 1 pound of nuts. Finally, Farmer Erica owns a third pistachio farm.
She can harvest 1 pound of nuts in 2 hours. Who has the absolute advantage in this
example?
(A) Farmer Erica
(B) Farmer Rick
(C) Farmer John
(D) Unclear

54
6. There are three producers. Producer A spends $10 to make a widget. Producer B
spends $50 to make a widget. Producer C spends $4. Who has the absolute
advantage?
(A) Producer B
(B) Producer C
(C) Producer A
(D) Unclear
7. Mechanic A can change a tire in 1 hour and change a sparkplug in 2 hours. Mechanic
B can change a tire in 0.5 hours and change a sparkplug in 0.25 hours. Who has the
comparative advantage in changing sparkplugs?
(A) Need more information
(B) Both mechanics
(C) Mechanic B
(D) Mechanic A
8. Rancher Tom can raise 10 goats and 20 pigs in a year. Rancher Joe can raise 20 goats
and 100 pigs in a year. Who has the comparative advantage for raising pigs?
(A) Need more information
(B) Both ranchers
(C) Rancher Tom
(D) Rancher Joe
9. What term applies when one option is chosen from among several possibilities?
(A) Opportunity cost
(B) Absolute advantage
(C) Comparative advantage
(D) Lost possibilities
10. If there are two producers and two products, which of the following cannot happen?
(A) A producer has an absolute advantage on one product
(B) A producer has the comparative advantage on both products
(C) A producer has the comparative advantage on one product
(D) A producer has an absolute advantage on both products
11. When a comparative advantage exists, what should the producer with the comparative
advantage do?
(A) Produce the item for which he does not have the comparative advantage
(B) Produce both items
(C) Produce the item for which he does have the comparative advantage
(D) Produce neither item

55
12. When an absolute advantage exists, what should the producer with the absolute
advantage do?
(A) Produce the item for which he does not have the absolute advantage
(B) Produce both items
(C) Produce the item for which he does have the absolute advantage
(D) Produce neither item
13. Is it possible for a producer to have both an absolute advantage and a comparative
advantage?
(A) Yes
(B) No
(C) Only if the market is small
(D) Only if there are two producers
14. What equation describes output?
(A) Y = C + I + G + X
(B) Y = C + I + G + NX
(C) Y = C + I + G + I
(D) Y = C + I + G
15. What else does the equation Y = C + I + G + NX describe?
(A) Interest rate
(B) Exchange rate
(C) Income
(D) Growth rate
16. In the equation Y = C + I + G + NX, what does Y stand for?
(A) Real output
(B) Real wages
(C) Nominal wages
(D) Nominal output
17. What is the equation that describes net exports?
(A) Net exports = exports - imports
(B) Net exports = output - exports
(C) Net exports = exports - output
(D) Net exports = imports - exports

56
18. When a country exports and imports the same amount of goods, what is its net
exports?
(A) Need more information
(B) Zero
(C) Exports plus imports
(D) Output plus exports
19. When a country exports more than it imports, what is the value of net exports?
(A) Negative
(B) Zero
(C) Positive
(D) Need more information
20. When a country imports more than it exports, what is the value of the net exports?
(A) Need more information
(B) Zero
(C) Positive
(D) Negative
21. When net exports are negative, what accounts for the difference?
(A) Net foreign investment
(B) Imports
(C) Exports
(D) Net exports
22. What is the equation that relates net exports to net foreign investment?
(A) NX = NFI + C
(B) NX = NFI
(C) NX = NFI - C
(D) NX = 1 - NFI
23. If a country always imports more than it exports, what will its net foreign investment
look like?
(A) Low
(B) Medium
(C) High
(D) Need more information

57
24. If a country always exports more than it imports, what will the net foreign investment
look like?
(A) Need more information
(B) High
(C) Medium
(D) Low
25. Which of the following pairs go together?
(A) Negative NX and high NFI
(B) Negative NX and low NFI
(C) Positive NX and high NFI
(D) None of the above
26. Which of the following pairs go together?
(A) High imports and high net exports
(B) Need more information
(C) Low imports and high net exports
(D) Low imports and low net exports
27. What do you call the number that represents the nominal value of currency in two
countries?
(A) Interest rate
(B) Output
(C) Exchange rate
(D) Price
28. What do you call the number that compares the real cost of goods between two
countries?
(A) Nominal exchange rate
(B) Real interest rate
(C) Nominal interest rate
(D) Real exchange rate
29. Which is easier to calculate, the nominal exchange rate or the real exchange rate?
(A) Nominal exchange rate
(B) Real exchange rate
(C) Need more information
(D) None of the above

58
30. Which of the following is not necessary to calculate the real exchange rate?
(A) Domestic price
(B) Domestic interest rate
(C) Foreign price
(D) Nominal exchange rate
31. What is the equation for the real exchange rate?
(A) real exchange rate = (domestic price) / (foreign price)
(B) real exchange rate = (nominal exchange rate X domestic price)
(C) real exchange rate = (nominal exchange rate X domestic price) / (foreign price)
(D) real exchange rate = (nominal exchange rate X foreign price)
32. How are the nominal exchange rate and the real exchange rate related?
(A) Inversely
(B) Indirectly
(C) Directly
(D) Proportionally
33. What is the real exchange rate if the domestic price is $5, the foreign price is 3
pounds, and the exchange rate is 1.5?
(A) 2.5
(B) 3
(C) 8
(D) 4.5
34. What is the real exchange rate if the domestic price is $2, the foreign price is 2
pounds, and the exchange rate is 1.5?
(A) 1
(B) 1.5
(C) 0
(D) 2
35. What is the real exchange rate if the domestic price is $10, the foreign price is 30
pounds, and the exchange rate is 2?
(A) 0.5
(B) 0.55
(C) 0.67
(D) 0.70

59
36. What can be determined from the real exchange rate?
(A) Standard of living
(B) Interest rate
(C) Output
(D) Cost of living
37. Which of the following situations is best if you wish to travel to a foreign country?
(A) High nominal exchange rate and high real exchange rate
(B) High nominal exchange rate and low real exchange rate
(C) Low nominal exchange rate and high real exchange rate
(D) Low nominal exchange rate and low real exchange rate
38. What is the effect on net exports of an increase in the real exchange rate?
(A) They rise
(B) They fall
(C) No effect
(D) Need more information
39. When the real exchange rate falls, what is likely to increase?
(A) Cost of living
(B) Imports
(C) Exports
(D) Standard of living
40. What is the general term for when a government interferes in free trade?
(A) Policy
(B) Intercession
(C) Hindrance to trade
(D) Barrier to trade
41. Which of the following is not a reason that the government might impose a barrier to
trade?
(A) To hurt the economy
(B) To help young domestic industries
(C) To raise money
(D) To make domestic producers competitive

60
42. What do you call barriers to trade that help domestic producers?
(A) Barriers to trade
(B) Protectionist policies
(C) Jingoist policies
(D) Fiscal policies
43. What is it called when the government places limits on the number of a given good
that can be imported?
(A) Subsidies
(B) Taxes
(C) Quotas
(D) Tariffs
44. What is it called when the government places taxes on imported goods?
(A) Subsidies
(B) Taxes
(C) Quotas
(D) Tariffs
45. What is it called when the government gives domestic industries grants to keep them
running competitively?
(A) Subsidies
(B) Taxes
(C) Quotas
(D) Tariffs
46. What develops when exports exceed imports?
(A) Trade deficit
(B) Trade surplus
(C) Barrier to trade
(D) Tariff
47. What develops when imports exceed exports?
(A) Tariff
(B) Quota
(C) Trade deficit
(D) Trade surplus

61
48. Which of the following is not an effect of a trade deficit?
(A) High net foreign investment
(B) Decreased domestic ownership
(C) Increased balances due
(D) Increased output
49. Which of the following is not a way to cure the trade deficit?
(A) Increase imports
(B) Decrease imports
(C) Increase exports
(D) Pay balances due
50. Which of the following is thought to be related to a high trade deficit?
(A) A low budget deficit
(B) A high budget deficit
(C) An even balance of trade
(D) Protectionist policies

62
REFERENCES

Barnard, R. and Cady, J. (1994). Business Venture 1. (4th edition) Oxford: Oxford
University Press.
Barnard, R. and Cady, J. (1994). Business Venture 2. (4th edition) Oxford: Oxford
University Press.
Bradley, J. and Clarke, S. (1997). Business Objectives Pairwork. Oxford: Oxford
University Press.
Catlin, L. B. and White T. F. (2001). International Business – Cultural Sourcebook and
Case Studies. Ohio: South-Western.
Comfort, J. (1997). Effective Socializing. Oxford: Oxford University Press.
Cordell, J. (2000). Cambridge Business English Activities. Cambridge: Cambridge
University Press.
Daniels, J. D., Radebaugh, L. H. and Sullivan, D. P. (2002). Globalization and Business.
(9thed.) New Jersey: Prentice Hall.
Grant, D. and McLarty, R. (1996). Business Basics. (3rd edition) Oxford: Oxford
University Press.
Hollett, V. (1994). Business Opportunities. (2nd edition.) Oxford: Oxford University
Press.
Hollett, V. (2000). Quick Work – A Short Course in Business English. Oxford: Oxford
University Press.
Hollett, V. (2000). Quick Work – A Short Course in Business English - Workbook.
Oxford: Oxford University Press.
Jones, S. and White, G. (1993). Getting Ahead – Communication Skills for Business
English. Cambridge: Cambridge University Press.
Jones, L. and Alexander, R. (1996). New International Business English. Cambridge:
Cambridge University Press.
Naunton, J. (2000). Head for Business. Oxford: Oxford University Press.
Naunton, J. (2000). Head for Business - Workbook. Oxford: Oxford University Press.
Norman, S. (1988). We’re in Business. (9th edition) Harlow: Longman Group.
UCLES (2002). Cambridge BEC Preliminary: Practice Tests. Cambridge: Cambridge
Examinations Publishing.
UCLES (2002). Cambridge BEC Higher: Practice Tests. Cambridge: Cambridge
Examinations Publishing.

63
GLOSSARY

Exchange Rates - Numbers that tell how much foreign product can be purchased with
similar domestic product.

Exports - Goods sent to another country for sale.

Free Trade - Trade with which the government does not interfere.

Goods - Products that consumers, manufacturers, and governments

Imports - Goods produced in a foreign country and consumed in a domestic country.

Investment - Money spent to improve a company's growth and productivity.

Output - Goods and services produced.

Tariff - Fees charged by the government on imported goods to help raise the price and
decrease the quantity sold. Use of tariffs is a protectionist policy.

Trade - When goods from one producer are exchanged for goods from

Trade Deficit - A trade deficit occurs when a country imports more than it exports.

INCOMTERMS 2000 are internationally accepted commercial terms defining the


respective roles of the buyer and seller in the arrangement of transportation and other
responsibilities and clarify when the ownership of the merchandise takes place. They are
used in conjunction with a sales agreement or other method of transacting the sale.

• EXW - Ex Works -- Title and risk pass to buyer including payment of all
transportation and insurance cost from the seller's door. Used for any mode of
transportation.
• FCA - Free Carrier -- Title and risk pass to buyer including transportation and
insurance cost when the seller delivers goods cleared for export to the carrier. Seller is
obligated to load the goods on the Buyer's collecting vehicle; it is the Buyer's
obligation to receive the Seller's arriving vehicle unloaded.
• FAS - Free Alongside Ship -- Title and risk pass to buyer including payment of all
transportation and insurance cost once delivered alongside ship by the seller. Used for

64
sea or inland waterway transportation. The export clearance obligation rests with the
seller.
• FOB - Free On Board and risk pass to buyer including payment of all transportation
and insurance cost once delivered on board the ship by the seller. Used for sea or
inland waterway transportation.
• CFR - Cost and Freight -- Title, risk and insurance cost pass to buyer when delivered
on board the ship by seller who pays the transportation cost to the destination port.
Used for sea or inland waterway transportation.
• CIF - Cost, Insurance and Freight -- Title and risk pass to buyer when delivered on
board the ship by seller who pays transportation and insurance cost to destination
port. Used for sea or inland waterway transportation.
• CPT - Carriage Paid To -- Title, risk and insurance cost pass to buyer when delivered
to carrier by seller who pays transportation cost to destination. Used for any mode of
transportation.
• CIP - Carriage and Insurance Paid To --Title and risk pass to buyer when delivered to
carrier by seller who pays transportation and insurance cost to destination. Used for
any mode of transportation.
• DAF - Delivered at Frontier -- Title, risk and responsibility for import clearance pass
to buyer when delivered to named border point by seller. Used for any mode of
transportation.
• DES - Delivered Ex Ship -- Title, risk, responsibility for vessel discharge and import
clearance pass to buyer when seller delivers goods on board the ship to destination
port. Used for sea or inland waterway transportation.
• DEQ - Delivered Ex Quay (Duty Paid) -- Title and risk pass to buyer when delivered
on board the ship at the destination point by the seller who delivers goods on dock at
destination point cleared for import. Used for sea or inland waterway transportation.
DDU - Delivered Duty Unpaid -- Title, risk and responsibility of import clearance
pass to buyer when seller delivers goods to named destination point. Used for any
mode of transportation. Buyer is obligated for import clearance.
• DDU - Delivered Duty Unpaid -- Seller fulfills his obligation when goods have been
made available at the named place in the country of importation.
• DDP - Delivered Duty Paid -- Title and risk pass to buyer when seller delivers goods
to named destination point cleared for import. Used for any mode of transportation.
EXW, CPT, CIP, DAF, DDU and DDP are commonly used for any mode of
transportation. FAS, FOB, CFR, CIF, DES, and DEQ are used for sea and inland
waterway.

65