6.4. Translate the sentences paying attention to the words and phrases in bold type. If it is necessary consult a dictionary.

1. As a result of specializing a country produces a surplus.

2. Goods bought from and sold to other countries are called invisibles.

3. Letters, labels and catalogues are translated from, for example, Russian into German.

4. The United Kingdom government helps exporters in a number of ways.

5. If the UK government sets a quota of 10 000 Japanese cars per year then no more than 10 000 Japanese cars could be imported into the UK in that year.

6. At present the price for telephone calls is higher than it was last year.

7. For instance, it is difficult to grow oranges in the United Kingdom.

6.5. Read text 6a. Answer the questions after the text. Text 6a

International Specialization

Countries find it very difficult to produce all the goods and services which they might need and, therefore, have to buy from other countries. These countries concentrate on the production of particular goods and services. Examples of such specialization, which is called international specialization, are given in Fig. 4.

Name of country Specializing in, for example

Saudi Arabia Oil

Canada Wheat

West Germany Machinery

Switzerland Banking

Spain Tourism

The United Kingdom Insurance

Fig. 4. Examples of international specialization

As a result of specializing a country produces a surplus, that is, more goods and services than it needs for its own consumption. For example, a country might produce 500 000 cars yet only sells 100 000 of these cars within the country. This leaves a surplus of 400 000 cars. The surplus produced by one country will then need to be exchanged for the goods and services it cannot produce. Thus the 400 000 cars will be sold to other countries and the money received will be used to buy, for example, the oil that the country needs but cannot produce. Countries, therefore, have to take part in foreign trade which is the buying and selling of goods between countries. For example, the United Kingdom needs to buy from other countries for several reasons. Some raw materials do not occur in the United Kingdom, for example, the United Kingdom cannot produce large quantities of gold. The country does not have the right climate to grow certain products. For instance it would be difficult to grow oranges here and it is easier to buy them from countries such as Spain. Some goods would be too expensive to produce, for example, the United Kingdom no longer produces motorcycles because it is cheaper for Japan to produce them. Foreign trade gives the people in the United Kingdom the chance to buy a variety of goods and services from all over the world, such as coffee from Brazil and tourist services from Spain.

The United Kingdom needs to sell to other countries so that foreign currency can be earned, to create jobs and to increase the income of workers. Foreign currency can be earned, for example, from American tourists visiting the country and spending dollars. These dollars can then be used to buy American films which can be shown in the United Kingdom. This applies also to other countries and goods. Jobs are created for the people in the United Kingdom. The incomes of workers are increased which results in higher standard of living because they can afford to buy more goods and services.

Exports and Imports

Goods and services sold to other countries are called exports.By exporting a country gains foreign currency. Goods and services bought from other countries are called imports. By importing a country loses foreign currency. Goods bought from and sold to other countries are called visibles. Thus cars, cocoa and steel are examples of visibles. Finally services bought from and sold to other countries are called invisibles. Thus banking, insurance and tourism are examples of invisibles.

Examples of visibles and invisibles are given in Fig. 5.

The UK buys cars from Japan The UK sells whisky to the USA A Canadian firm insures with a UK company A UK businessman travels on a French airline

For the UK this is a visible import a visible export an invisible export an invisible import

Fig.5. Visibles and invisibles