PREFACE. Points for discussion:

Points for discussion:

Ø You run a small bank. What is your policy in managing liquidity?

Ø You run a big bank. How would you manage liquidity?

Ø Assume your bank has the following assets. What are the total risk-weighted assets? What Tier 1 capital do you need to have at least?

Asset	Amount
Cash and equivalents	$40m
Government securities	$80m
Interbank loans	$100m
Mortgage loans	$200m
Ordinary loans	$300m
Standby letters of credit	$80m

Answer: The total risk-weighted assets is 0 x $40m + 0 x $80m + 0.2 x $100m + 0.5 x $200m + 1.0 x $300m + 1.0 x $80m = $500m. The bank must have Tier 1 capital of at least.04 x $500m = $20m and Total capital of at least.08 x $500m = $40m.

Contents

Preface

I. The Concept of Business 5

II. Economics 9

III. Types of Companies 14

IV. Careers in Business 20

V. Management 21

VI. Factory Production 33

VII. Marketing 39

VIII. Advertising 44

IX. Commerce 49

X. Finance and Accounting. 53

Reference Literature 59

PREFACE

Basics of Economics is a business course aimed at developing reading comprehension and speaking skills for lower intermediate to intermediate level correspondence students. It is also intended for upper secondary school students, University students, young adults, and others who have studied English for some time but who want to get some knowledge of business English.

Basics of Economics contains 10 units organized around basic business topics. The topics and vocabulary covered correspond to the Standard Syllabus for Foreign Languages taught in the Republic of Belarus.

Each of the ten units of the course is organized around a topic and related functions. The exercises in each unit of the book are designed to prepare a student for getting background knowledge of the topic.