The Key Answers of Unit 3 Finance

Unit 3 Finance
3.1 Recessions and depressions
Possible answers
1 The worst financial crisis is an economic depression: ‘The Wall Street Crash of 1929 led to at least 10 years of
worldwide economic depression. It was the most severe financial crisis of modern times.’
2 a recession (similar to a ‘credit crunch’): ‘We're in the worst economic depression in my lifetime; economic
recession, we're not supposed to call it a depression yes, but it feels pretty depressing.’
(Howard Stringer)
3 a crash: ‘… when the stock market suffers a devastating drop in value… Market crashes don’t always lead to
economic depression… In 1987, the market losses were the biggest in history, by percentage, but the markets
recovered quite quickly. So there was no economic depression.’
1 on Black Tuesday, 29th October
2 Markets had been booming / doing very well and shares had been increasing in value.
3 By the time the stock market / Dow Jones stopped falling, the value in shares had fallen by a total of 90 percent.
4 No, stock markets fell in Europe and around the world. No part of the western world was left unaffected.
5 Hong Kong
6 No, they recovered quite quickly.
7 Portugal, Italy, Ireland and Greece are some examples.
8 ‘Real economy’ refers to areas of the economy related to the production of goods and services, rather than
buying and selling on financial markets.
Students’ own answers
1 investment - 2 savings - 3 Losses - 4 stock market - 5 bankruptcy - 6 loan - 7 credit crunch - 8 mortgage
9 recession - 10 depression
1b - 2c - 3b - 4a - 5c - 6a
1 booming - 2 dropped - 3 bankruptcies - 4 savings - 5 losses - 6 recovered - 7 depression - 8 recession

3.2 Catching up with rivals
Possible answers Nike, Adidas, Reebok (part of Adidas), Puma, North Face, Asics
1 profitability - 2 make your mark - 3 boost - 4 bottom line - 5 make up ground
German sportswear company races to catch up with rival Nike.
(The headline could also be: Rival German sportswear company races to catch up with Nike
or even: Nike races to catch up with rival German sportswear company,
1 15 percent - 2 20 and 22 percent, three - 3 59 percent, €1 bn - 4 Six percent - 5 €1 bn - 6 three, €4 bn
5A
1 - a certain - b improbable - c certain - d improbable
2 - a planned - b probable - c probable - d planned
5B
1a and 1c have the same meaning; they are certain.
1b and 1d have the same meaning; they are less likely, although both sentences are negative.
2a and 2d have the same meaning; they are planned.
2b and 2c have the same meaning; they are probable/likely, but not 100 percent certain.
1 are going to - 2 certain - 3 unlikely that - 4 will probably - 5 probably won’t
1 after, before - 2 after, before
1 Our online sales will probably rise sharply in the next quarter.
2 They probably won’t achieve their sales targets by the end of the month.
3 It is also unlikely that the share price will go up this year.
4 She is also due to make a presentation at the end of the week.
9A
For students who are still studying

1 Course sales in the next quarter are looking good and the university’s revenues will probably go up by 10 percent
because of an increase in the number of foreign students.
2 The marketing department will also improve the user experience on the university website to attract more
national students.
3 It is likely (that) the IT team will create an app to help students choose their courses and timetables.
For students in work
1 Projected sales in the next quarter are looking good and revenues will probably go up by 10 percent.
2 We’ll probably create an app and we’ll also improve the user experience on our website to boost online sales.
3.3 Communication skills: Managing bad news
1A
People who see the glass as half full are optimists who focus on the positive aspects of a situation.
People who see the glass as half empty are pessimists (some would say realists) who focus on the negative aspects
and risks of a situation.
1 Costs are 20 percent over forecast and there are technical problems.
2 She says it sounds worse than it is and that they’ve dealt with worse. She is optimistic and indicates that she has
successfully dealt with things like this before.
3 He will see them as a major problem.
4 Go Global might take more control of the project and insist on production in China.
5 Respect Claudio’s concerns. Tone down her positivity and plan ahead so that she has alternative plans which
address Claudio’s probable concerns.
3B
Option A
1 He recommends moving production to China.
2 No – ‘only a little over budget. It’s not a bad result’. She explains the costs away as start-up problems that have
now been overcome.
3 She mentions that ‘they are on schedule, at least.’
4 Claudio agrees to continue production in Bangladesh provided that Katie gets things back on track by the end of
the month, as she has promised.
Option B
1 Yes – ‘It isn’t good enough. We won’t reach our targets unless we change something.’
2 Because they may miss an opportunity to set up a new production centre not only for Bangladesh but also for the
wider region.
3 sending a couple of technical people to Bangladesh
4 Claudio agrees to organise sending a couple of technical people to Bangladesh for support in order to keep
production running.
1 See answer key for Exercise 5 below.
2 Possible answer: Optimists bring passion, joy and hope – which can be motivating; pessimists bring a sense of
reality and need to analyse.
5
In Option A, Katie was herself and focused on the positives. This can be motivational but, in this case, it seemed to
Claudio that the issues weren’t being acknowledged. In the end, Katie guaranteed to deliver in four weeks and
Claudio became calmer as his priority is the results. However, Katie now has to deliver on her promise.
In Option B, Katie was more careful. By acknowledging the fact that costs are too high, she gives Claudio the
impression that she is practical and this makes him more open to her suggestions. The result of this approach is
that they find a way to agree on managing the risks effectively, and together decide to send experts to the local
area to monitor the situation.
7A
1 f - 2 c - 3 a - 4 e - 5 c - 6 g - 7 b - 8 d
7B
1 d (a – highlight positives) - 2 h (c – emphasise negatives) - 3 b (d – show confidence) - 4 a (e – express doubt)
5 g (f – support current strategy) - 6 f (c – emphasise negatives) - 7 c (b – minimise negatives)
8 e (g – propose changes)

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Unit 3 Finance

3.1 Recessions and depressions

1 on Black Tuesday, 29th October

6 No, they recovered quite quickly.

7 Portugal, Italy, Ireland and Greece are some examples.

Students’ own answers

1 booming - 2 dropped - 3 bankruptcies - 4 savings - 5 losses - 6 recovered - 7 depression - 8 recession

1 profitability - 2 make your mark - 3 boost - 4 bottom line - 5 make up ground

German sportswear company races to catch up with rival Nike.

or even: Nike races to catch up with rival German sportswear company,

1 15 percent - 2 20 and 22 percent, three - 3 59 percent, €1 bn - 4 Six percent - 5 €1 bn - 6 three, €4 bn

1 - a certain - b improbable - c certain - d improbable

2 - a planned - b probable - c probable - d planned

1a and 1c have the same meaning; they are certain.

2a and 2d have the same meaning; they are planned.

1 are going to - 2 certain - 3 unlikely that - 4 will probably - 5 probably won’t

1 after, before - 2 after, before

3 It is also unlikely that the share price will go up this year.

4 She is also due to make a presentation at the end of the week.

For students who are still studying

For students in work

3 He will see them as a major problem.

1 He recommends moving production to China.

3 She mentions that ‘they are on schedule, at least.’

3 sending a couple of technical people to Bangladesh

1 See answer key for Exercise 5 below.

1 d (a – highlight positives) - 2 h (c – emphasise negatives) - 3 b (d – show confidence) - 4 a (e – express doubt)

5 g (f – support current strategy) - 6 f (c – emphasise negatives) - 7 c (b – minimise negatives)

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