Individual are those possessions or the liabilities of others to him, which have a positive money

value.

2. Financial assets are titles to cash, such as a bank deposit or income and/or capital gains.

Financial assets may be classified according to their liquidity, the protection they offer against

inflation (indexation) or changes in exchange rates and the risk of default. Some financial assets

are income-certain (for example, gilt-edged securities), while some are not (for example, ordinary

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shares). Some assets are capital-certain, for example, a fixed-interest security which is redeemable

at par, but ordinary shares are subject to a price risk.

3. Real assets are tangible assets such as land, buildings or equipment.

Commentary and Notes to Text 14.7.1.4

1. current assets (liquid assets) — ликвидные, текущие активы, оборотный капитал

2. fixed assets — основные активы, основной капитал

3. intangible assets (intangible property, intangibles) — нематериальные активы

4. financial assets — финансовые активы

5. tangible assets — материальные активы, реальный основной капитал

6. ...is redeemable at par — выкупается по номиналу

14.7.1.5. Read the text “The Balanced Budget” and explain in English the importance of the

balanced budget multiplier.

A situation where the government’s planned expenditure equals its expected income is a balanced

budget. In public finance it refers to a situation where current income from taxation and

other receipts of central government are sufficient to meet payments for goods and services, transfer

payments and debt interest. The UK budget is often in deficit (does not balance) on both current

account and capital account and these deficits are financed by net borrowing and changes in

the money supply.

The importance of the budget balance and how it is financed is that it may affect levels of

demand and prices in the economy. But a mere change in prices does not result in an adequate

change in the budget. The balanced budget multiplier is of great importance. It is the effect upon

the national income of equal changes in government expenditure and revenues. If government

expenditure is increased by ￡100 million and income-tax rates are increased to raise an additional

￡100 million in revenue, aggregate demand may not, as might be expected, remain the same since,

although personal disposable income has been reduced by ￡100 million, some of that income would

have been saved, whereas all the increase in government expenditure results in increased demand.

If the savings ratio were 10 per cent, then the additional demand would be ￡10 million, which

would have a multiplier effect upon the national income.

Vocabulary Notes to Text 14.7.1.5

1. public finance — государственное финансирование

2. net borrowing — чистое заимствование (прямой заем)

3. revenues — доходные статьи

4. disposable income — чистый доход, доход после уплаты налогов

( ! ) The Balanced Budget

14.7.2. Match the following terms with the correct definition

Work with a partner.

1. balanced budget 2. balance of payments3

. balance of trade4. deficit financing5. balanced growth6. capitalization7. bok value

b) The value of assets in the bala )ances tsdgo it’acebnow ifraopm irscednfv

,aeh itfrsdn itsT teh .tIrsaenopxym tfeho ltfsacebhnom.ta ltfenom itropm sheet of a firm. This is often

the purchase price, and may be less than the market value.

c) The state of an economy in which there is a constant relationship

between the components of aggregate national income.

Consumption expenditure, investment and employment grow

at the same rate as national income. The model is applied to

the study of equilibrium conditions in growth theory.

d) A situation where the government’s planned expenditure

equals its expected income.

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e) 1. The amount and structure of the capital of a company.