2020 English For Economists

Lesson Module

ENGLISH FOR ECONOMISTS

Compiled by :
Murry Darmoko M, SHI, MA

UBHARA Press
2020
English for Economists [1] Compiled by Murry Darmoko 2020

Lesson Module
Compiled by :
Murry Darmoko M., SHI., MA.
ISBN : 978-979-9009-79-1
Cover Design :
Ubhara Press Team
Publisher :
UBHARA PRESS
Redaction Location :
Jl. Ahmad Yani 114
Surabaya 60231
Tel. +62318285602 ext. 106, 129
Fax. +62318285601
Email : [email protected]
First Printing, November 2020
All rights reserved

It is prohibited to reproduce this paper in any form and by any
means without the written permission of the publisher

Preface
Dear reader
English is the most language used in communication

between human in this earth. English is the key of winning
global competition.
This Lesson Module English for Economists is one of

the answer for developing students' knowledge and skills in
language proficiency. This book is a collection of the best
papers from the experts that I can collect about the learning
process.
This book is an introduction of the English for

Economists. I hope it will be the starting point of success in
obtaining good TOEFL score. Amen.
I would like to thank :
a. Architamittra from FluentU Business English Blog

for 26 must-know economics terms in English
which can be downloaded at Google, "I pray that
God always bless you and your family with the
knowledge you share". amen.
b. Writer of English for Economics I
[ภาษาอ ังกฤษสา ํ หร ับเศรษฐศาสตร์ 1] for 20
dialogue in the best interraction of talking in
economics matter.
c. Olga Calina, Nadejda Gisca in their book English
for Economic Studies

d. Caroline Brown and Pearson Brown, "You both
make it easy for us to speak English by learning The
English Grammar Secrets, we do enjoy"
Also, I would like to thank God, Prophet Muhammad

and his family, father and mother, wife and my kids, leaders in
Bhayangkara University of Surabaya and lecturer friends at
Economic and Business Faculty, especially for all of my
students in this Faculty, I believe : “All of my students are my
teachers”. Happy reading with all the shortcomings.
Best Regards
Sidoarjo, September 1, 2020
Murry Darmoko M., SHI., MA.

Contents
Preface
Lesson 1-4
26 must-know economics terms in English
Lesson 5-7
20 Dialogue Economic English
Lesson 8
Midterm Exams
Lesson 9-12
Economic Systems
Lesson 13-15
English Grammar Secrets
Lesson 16
Final Exams

Lesson Module
Compiled by :
Murry Darmoko M, SHI, MA
UBHARA Press
2020

This book belongs to
Name : …………………………………………
NIM : …………………………………………
Address : …………………………………………
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……………………… 2020
……………………..

Lesson from FluentU Business English Blog
by ARCHITAMITTRA
How Can You Improve Your Economics

Vocabulary?
Obviously, one way you can improve your English
economics vocabulary is to read this post, study the
words carefully and start using them in real-life
situations. But when you’ve finished reading this post,
you can also sign up for online courses such as the ones
on Coursera, Open Culture and Alison.
You can also check out other vocabulary lists such
as the ones on FluentU on banking and accounting, or
elsewhere, such as this list from the Guardian. Make
time to read business and economics newspapers and
magazines such as the Economist.
There's a very simple way you can make learning
economics a daily habit, and it only takes fifteen
minutes per day. Spend the first ten minutes speed
learning at least three to five new concepts or words,
and then use the last five minutes to review them by
trying to make sentences or applying them to real-life
situations.

Whenever you learn a new word or concept, try to
use it soon in a conversation or simply practice it by
role-playing with yourself or with a friend. Try doing
this for one or two months at a continuous stretch, and
soon enough, you’ll see amazing results that will
motivate you to take your studies even further.
English for Economics from A to Z: 26 Words
You Should Know
Here are 26 must-know economics terms in
English that will go a long way in aiding you in your
daily job or improving your prospects of finding a new
job.
The definitions provided here have been adapted
from the much longer and more complicated definitions
on Wikipedia, Investopedia and online business
dictionaries, to make for easier understanding. You can
also click on any word to discover more details about it.
o Accounts : These are the records of all financial
transactions, including expenses and receipts, of an
organization or an individual.
"Sheila needs to check her accounts to see if
she can afford the new house".
o Balance Sheet : This is a statement of a
company’s assets, liabilities and capital at a
specific point in time. It’s also called a statement

of financial condition. An organization’s balance
sheet gives an idea of how much they own and
owe, as well as the amount invested by
shareholders.
"One look at the balance sheet told Arjun
that the company wasn’t worth investing in".
o Capital Gains Tax (CGT) : This is the amount of
tax that is payable on the profit from the sale of a
capital asset (either a property or an investment).
"Before you sell off the old farmhouse, keep
in mind the capital gains tax that you’ll have
to pay".
o Deflation : This is just the opposite of inflation;
it’s the reduction in supply of circulated money in
any economy.
"The recent deflation, brought on by
government policies, decreased the prices,
but the wages went down as well".
o Earnings Per Share (EPS) : This is the net
income of a company, divided by its number of
outstanding shares. EPS indicates a company’s
profitability.
“Mark’s team decided to join the company
because of the company’s increasing
earnings per share”.

o Financial Year, or Fiscal Year : These terms
both refer to a period of 12 consecutive months or
52 consecutive weeks, after which financial reports
are prepared. It may not match with a calendar
year, and is also sometimes called a tax year. In
the U.S., it’s called a fiscal year.
“The next fiscal year will begin in October”.
o Golden Rule : This is a term in fiscal policy that
basically means that over an economic cycle, the
government should borrow to pay for investments
that benefit future generations.
“Considering the dismal state of the
economy, the citizens are convinced that the
government hasn’t followed the golden rule”.
o Half Year : This is an assumption that newly
acquired assets are in use halfway through the
year, regardless of the actual length of time the
assets have been in use.
“We need to follow the half year convention
to calculate the company’s annual taxes”.
o Income Tax : This is the tax levied by the
government on the total income generated by
individuals and companies.
“The loopholes in the taxation system helped
the wealthy oil company owner escape

millions of dollars in income tax, without
technically violating the law”.
1. Joint Account : This refers to a bank account
registered under the names of two or more
individuals. All members can deposit and
withdraw money from it.
“Tired of sharing joint accounts with her ex-
husband, Nina opened a new bank account
just for herself long before the divorce was
finalized”.
o Keynesian Economics : This refers to the various
theories formulated by the British economist John
Maynard Keynes during the Great Depression,
which he published in his 1936 book “The General
Theory of Employment, Interest, and Money.”
“While studying the history of how
economics developed as a discipline, make
sure you learn about Keynesian Economics
as well”.
o Liquid Asset : This refers to cash, or any asset that
can be quickly converted to cash without loss in
value.
“He insisted that I need to have enough
liquid assets to qualify for a home loan”.

o Macroeconomics & Microeconomics :
Macroeconomics refers to the study of whole
(aggregate) economies or economic systems, while
microeconomics refers to the study of individual
units, like a person or a company.
“If you want to analyze general trends in an
economy, study macroeconomics. But if
you’re looking to run a successful business,
microeconomics is the key”.
o Net Asset Value (NAV) : The NAV is the value of
an entity’s assets, minus the value of its liabilities.
“A mutual fund’s net asset value will tell you
if your investment is worth it”.
o Oligopoly : An oligopoly is a name for a market
which is dominated by a few sellers, and therefore
has less competition.
“If you want to make it big in an oligopoly,
keep an eye out for rival markets and be
strategic about your financial decisions”.
o Pay As You Earn (PAYE) : This is a tax payment
method where your taxes are deducted from your
salary itself, before you receive your salary.
“I thought the PAYE system would cut down
on my earnings, but it has actually made my
life easier”.

o Quota : This is a share or a set number of things or
people. In economics, quotas are usually
limitations on imports or exports.
“The new reform in the import quota is a
great help for domestic suppliers”.
o Real Interest Rate : This is the current rate of
interest offered by a bank, minus the rate of
inflation.
“The bank’s new interest rate is 5.5% but
with the rate of inflation currently at 2%, the
real interest rate is only 3.5%”.
o Shareholder : A shareholder is any person or
company that owns shares of stock in a
corporation.
“James recently became a shareholder in a
major corporation”.
o Tax Haven : Simply speaking, this refers to an
area where taxes are imposed at a low rate (or not
at all).
“Jimmy wanted to know more about offshore
accounts so I told him to research tax
havens”.
o Unit Trust : This is an organization that pools
money from small investors and invests it in shares
and stocks under a trust deed.

“If you’re a first time investor, consider
partnering with a unit trust”.
o Value-added Tax (VAT) : A value-added tax is a
consumption tax on goods and services.
“Before going to a fancy restaurants, check
their VAT rates unless you want to be
surprised by the bill”.
o White Knight : A white knight is the person or
company that “saves” a corporation from being
taken over by a hostile company.
“Patrick Soon-Shiong is considered a white
knight for investing in Tribune Publishing,
which would have otherwise been taken over
by Gannett Co”.
o X-Efficiency : This is a term that refers to the
production of something at minimum possible
cost. It’s the degree of efficiency maintained by
corporations when there’s a lack of competitive
pressure.
“John’s company, being a small one, is
unable to compete with the major firms. The
workers know this, which is why they don’t
work as hard—no wonder their x-efficiency
fails”.

o Yield : This term refers to the yearly income
earned from an investment. It’s often expressed as
a percentage.
“What’s the minimum yield you expect from
this investment?”.
o Zombie Funds : A colloquial term for a closed
fund, this term refers to a for-profit life insurance
fund that has been closed to new business.
“Joe’s life insurance company is nothing
more than a zombie fund, so it’s better stay
away from it”.

Lesson from English for Economics I
Dialogue 1 Economics and Economy
Student Good morning, ma’am.
Mrs. A Good morning. What can I do for you?
Student Yes, I really need your detailed explanation for
the difference between the words ‘economics’
and ‘economy’?
Mrs. A Oh, O.K. Let’s start from ‘economics’. It means
the study of how a society organizes its scarce
resources to meet the unlimited needs of people
or the society. You see that it refers to a subject
or a field of study. Do you get the point?
Student All right. Your explanation is very clear. What
about ‘economy’?
Mrs. A Um ... m. For the word economy, there are
several meanings, depending on its context.
Anyway, I’ll give you the most common one.
‘Economy’ refers to the economic system of a
country as a whole. An economy is usually
defined by an area or region. For example, we
can say that the Australian economy is
performing very well when compared with the
economies of other countries around the world.
Student I see. Thank you very much for giving me a
clear explanation.
Mrs. A It’s a pleasure. Bye.
Student Bye.

Dialogue 2
Using word economize [economise]
Student Good afternoon, sir. Are you free now?
Professor Not really. Anyway, what can I do to help
you?
Student Yes. I have a question concerning one word.
Would you please give me an idea of how to
use the word “economize”?
Professor Sure, “economize” is a verb. There are two
ways of spelling it. If you follow the
American style, you end the word with “ze”.
On the other hand, it you follow the British
style you end the word with “se”.
Student What does the word mean?
Professor It means to use money, time or other
resources carefully.
Student Could you please give me an example of how
this word is used?
Professor Oh, yes. Listen. This sentence is an example
of how the word “economize” is used. After
World War Two, people tried to economize
on petrol, thus increasing the popularity of
compact and fuel efïcient cars.
Student I see. Thank you very much. I do appreciate
your clear explanation.
Professor You’re welcome. Bye.
Student Bye

Dialogue 3
Economic and Economical
Student Excuse me, ma’am. Do you have a minute?
Professor Oh, yes. For the next session, I’m free from
teaching
Student That’s great. Would you please explain how
to use the words ‘economic’ and
‘economical’? You said that both of them are
adjectives.
Professor Oh, all right. Let’s start with the word
‘economic’. It’s used only before a noun. It
means ‘connected with the economy of a
country or an area, or with the money that a
society or an individual has.’ For example,
‘Firms get direct impacts from the
government’s economic policy’. Another
example is ‘Couples should consider their
economic conditions before having children’.
You see?
Student Yes, I’ve got it. And what about the word
‘economical’?
Professor Oh, O.K. This word is also an adjective, but it
means spending money or using something in
a careful way that avoids waste.
Student Can you give me an example of how it is
used?
Professor Yes. We would say, ‘It might not be
economical to buy a cheap thing with poor

quality because it might not last long’.
Student I see. It’s clear now. Thank you very much for
your time and effort.
Professor It’s my pleasure. Bye.
Student Bye..
Dialogue 4
Economic Agents
Jane Sethapon, I’m not clear about the concept of
‘economic agents’. What are they?
Sethapon Economic agents are individuals and
organizations that engage in production,
exchange, specialization, and consumption.
Jane I see. Do you mean that they can be either
individuals or households?
Sethapon Yes, definitely. Moreover, they can be
businesses, nonprofit organizations, or
governments. However, the main agents
mentioned in Professor White’s class are
businesses and households.
Jane I’ve got that. Thank you.

Dialogue 5
Capitalism and Socialism
Alice Can you do me a favor, Wittaya?
Wittaya Are you asking me to give you a ride to a
department store and carry the crazy stuff you
have bought again?
Alice (Laughing) No, no. Not that kind of favor.
This time it’s about an academic matter. I read
an article this morning, and I came across the
terms ‘capitalism’ and ‘socialism’. I just
wonder what they are. Can you help explain
them to me?
Wittaya I’ll try even though you might not get it easily.
(said jokingly)
Alice O.K. Let’s start with the word ‘capitalism’.
Wittaya Actually, ‘capitalism’ and ‘socialism’ are parts
of economic systems. In capitalism, there is
private ownership of resources and people
have a great deal of freedom in making their
own economic decisions. On the other hand, in
socialism, the government owns most of the
resources and the state makes the major
economic decisions.
Alice That’s clear enough. Thank you.

Dialogue 6
Total GDP & Per capita GDP
Nipada Today I heard of some words from radio
broadcasting and I don’t know what they
mean. I think they are business terms.
Macey What are they?
Nipada They’re ‘total GDP’ and ‘per capita GDP’.
Macey I think they’re economic terms.
Nipada Can you give me an explanation of those
terms?
Macey Sure. Let’s start from the word ‘total GDP’.
‘Total GDP’ or total Gross National Product is
a measure of the market value of goods and
services produced domestically by residents of
one country.
Nipada I see. What about ‘per capita GDP’?
Macey ‘Per capita GDP’ is the average income per
person in a country.
Nipada I see. Now I couldn’t agree with you more.
The terms ‘total GDP’ and ‘percapita GDP’
are economic terms and business bring those
ideas into application.
Macey Definitely.

Dialgue 7
Investing
Brown I’m thinking about investing in Bangladesh.
Ampika What is your product?
Brown Top end household equipment.
Ampika I’m not sure I can agree. Generally, before we
invest in any country, we have to take many
factors into our consideration, and one of the
most important things is the per capita income
of that country. As far as I know, the per capita
GDP of Bangladesh is not very high, which
means that people over there do not have high
purchasing power.
Brown I suppose you’re right.
Dialogue 8
Stock Exchange Market
William Pam has moved to work as an analyst in the
Stock Exchange Market in New York.
Suthasinee Are you sure? Our department head said that
right now Pam has been transferred to
London.
William I’m sorry. I’ve got wrong information from
the website due to my poor eyesight. The
one who is in to New York is Liza.

Dialogue 9
Stock
Student 1 Do you know what stock is?
Student 2 I think I know it very well.
Student 1 Have you ever bought any stock of any public
company?
Student 2 No, never. But my mother always buys stock
as a kind of investment.
Student 1 Do you think that it is a good type of
investment?
Student 2 Yes, I do.
Dialogue 10
Surplus Money
Michelle Lek, may I ask you a personal question?
Lek Yes.
Michelle What do you do with your surplus money?
Lek Are you talking about my savings?
Michelle Something like that.
Lek I divide it into three parts. The first part I save
in the bank. The second portion I buy some
specially designed insurance policies that
yield higher interest than the commercial
bank saving account does. The last part I save
in the form of bullion or some well-designed
jewelry or gold accessories.

Dialogue 11
Opportunity Cost
Decha Lisa, I have got an offer to work as an
assistant manager in XYZ company.
Lisa Wow! Congratulations! I’m so proud of you.
Decha Anyway, ABC Company, the company I’m
working for, just promoted me to the position
of assistant manager.
Lisa Oh, how great!
Decha Yes, it’s great. But now it is hard for me to
decide what to do.
Lisa If I were you, I would get married before
anything and work at either ABC Company or
XYZ Company.
Decha That sounds great.
Dialogue 12
Making money grow
Michael Hi, Dusit. I’m glad you’re here.
Dusit Oh, hi Michael. This party is good. I love it.
Michael Yes, definitely.
Dusit Anyway, how’s life?
Michael I’m doing all right. I have just got a big
bonus.
Dusit Great..
Michael You know, I always respect your ideas on
how to make money grow. Could you please

give me some advice on what to do with my
bonus as well as my savings?
Dusit Thanks a lot for trusting me. If I were you, I
would invest some money in the stock
market, some in gold bullion and the rest I
would keep as cash.
Michael That’s a good idea.
Dusit One important thing is not to forget to take
care of your health and relationships with
your family members and your friends. Those
are your most valuable treasures.
Michael You’re right. Thank you.
Dialogue 13
Sales Volume
Sales Person I’m quite worried about our sales record
this month, especially about our overseas
accounts.
Executive Are your talking about our exports?
Sales Person Yes.
Executive Our sales volume has dropped, but it might
not be as bad as it looks because the sales
value has not decreased at all due to the
currency devaluation.
Sales Person You’re right.

Dialogue 14
Large Scale Retailer
Duangjai You know the small retailer at the top of
the soi near my house has just been closed
down.
Akiko Oh, really? You just told me a few days
ago that a grocery shop in the middle of
the soi was closed down.
Duangjai Yes, and I think many more small grocery
shops might have to be closed in the near
future because they cannot compete with
some giant retailers from abroad.
Akiko Yes, that’s true, but try to look at it this
way … those large scale retailers have
created jobs for local people and we can
buy things at a cheaper price because the
competition among them is so fierce.
Duangjai Um … m.
Dialogue 15
The Theory of Comparative Advantage
Patrick I’m so upset after learning that roses
imported to the U.S. from Southern
American countries are so expensive.
Thongchai Oh, really.
Patrick Yes. I think we would save a lot if
America grew roses instead of importing

them from abroad.
Thongchai Well, why don’t you look at it this way?
Instead of using their resources in growing
roses, Americans can be better off for
producing computers.
Patrick Oh, yes. You’re right. Are you talking
about the theory of comparative
advantage?
Dialogue 16
Industry
Tom Hi, Pipat how have you been?
Pipat Not so good. I’ve just been laid off.
Tom Oh, I’m sorry to hear that.
Pipat Yes, the garments factory I’d worked with
for almost five years has not done very
well, so they do not need to have some of
us to work with them.
Tom I see. I know how you feel. Anyway, it
might not be as bad as it looks because
you may get a new job very soon in a more
technologically intensive industry.
Pipat I guess so. I hope the situation will be
better and follow the pattern of industrial
evolution.

Dialogue 17
The competition in the world market
Cindy What do you think about Thai exports next
year?
Som I speculate that Malaysia will be our
prominent competitor, and the competition
in the world market will be fiercer than
now. What about you? What is your idea
on this?
Cindy I’m sorry. I don’t know much about it.
Dialogue 18
E-commerce
Waterman I’m glad I’m attending this seminar.
Somchai Yes. It’s quite good.
Waterman Uh-huh. Anyway, from the information
the speakers shared with us today, what do
you think E-commerce will be like in the
future?
Somchai I’d guess that it will play a vital role in t r
ading,bothdomesticallyand
internationally. I also speculate that
security for payments through credit cards
when buying via E-commerce will be
improved in the very near future.

Dialogue 19
Trade Exhibition
Brunette Hi, Mr. Boonchu. I’m so glad to meet you
here.
Boonchu Hello. Ms. Brunette. What brings you
here?
Brunette I’m thinking about joining the food trade
exhibition at BITEC (The Bangkok
International Trade and Exhibition Center)
Boonchu Oh, really? I’m here for the same business.
I’ve just paid some money as the deposit
for getting a booth to exhibit my food
products.
Brunette What do you think about the exhibition?
Boonchu I have a hunch that I will be able to get a
lot of purchase orders from visitors
coming from various countries.
Dialogue 20
Trade Barriers
Junko Hey, Paiboon.

Paiboon Hi, Junko. Did you read today’s
newspaper about the EU’s intensive
checks on shipments of Japanese poultry
and shrimps?
Junko Yes, because they are concerned about

chemical residues.
Paiboon Do you think that it’s actually a form of
trade barrier?
Junko It could be.
Paiboon What do you think the Japanese
government will do about this matter?
Junko My guess is that the Japanese Commerce
Ministry will introduce stricter checks on
possible chemical residues in imported
powdered milk and wine from the
European Union.
Paiboon As a form of retaliation?
Junko Yes, kind of.

Lesson from Olga Calina, Nadejda Gisca
English for Economic Studies
There are four types of economic systems:

1. Traditional economy is one in which economic
behaviour is based primarily on tradition, custom
and habit. It is characteristic of primitive societies.
2. Command/planned economy is one in which
some central authority or state determines
economic behaviour. Such type of economic
system was in the former USSR.
3. Market economy is one in which markets play a
dominant role in taking economic decisions
process. It is characteristic of the Western
European countries.
4. Mixed economy is one in which both free markets
and governments have significant effects on the
allocation of resources and the distribution of
income. This type of economic system is
characteristic of the USA, Japan and other highly
industrialized countries.
Perhaps the most important characteristic of
American business is the freedom of individuals to start
a business, to work for a business, to buy or sell

ownership shares in a business, and to sell a business
outright.
Within certain limits imposed mainly to ensure public
safety, the owners of a business can produce any legal
product or service they choose and sell it at any price
they set. This system of business, in which individuals
decide what to produce, how to produce it, and at what
price to sell it, is called free enterprise.
The American system of free enterprise ensures, for
example, the right of Walt Disney to start an
entertainment company, to hire an assortment of artists,
and to experiment in developing theme parks. Their
system gives the current executives at Disney and its
shareholders the right to make a profit from the
company's success, it gives Disney's management the
right to compete with 20th Century Fox, and it gives
movie-goers the right to choose between films produced
by the two companies and many others.
Competition like that between Disney and 20th
Century Fox is a necessary and extremely important by-
product of free enterprise. Because many individuals
and groups can open businesses, there are sure to be a
number of firms offering similar products.
But a potential customer may want only one such
product—say, a Jeep Cherokee or a Chevrolet S-10

Blazer—and not be interested in purchasing both. Each
of the firms offering similar products must therefore try
to convince the potential customer to buy its product
rather than a similar item made by someone else. In
other words, these firms must compete with each other
for sales.
Business competition, then, is essentially a rivalry
among businesses for sales to potential customers. In
free enterprise, competition works to ensure the efficient
and effective operation of the business. Competition
also ensures that a firm will survive only if it serves its
customers well.
Business is the organized effort of individuals to
produce and sell, for a profit, the goods and services
that satisfy society's needs. No person or group of
persons actually organized American business as we
know it today.
Rather, over the years individuals have organized
their own particular businesses for their own particular
reasons. All these individual businesses, and all the
interactions between these businesses and their
customers, have given rise to what we call American
business.
A person who risks his or her time, effort, and money
to start and operate a business is called an entrepreneur.

To organize a business, an entrepreneur must combine
four kinds of resources: material, human, financial, and
informational.
Material resources include the raw materials used in
manufacturing processes, as well as buildings and
machinery. Human resources are the people who furnish
their labour to the business in return for wages.
The financial resource is the money required to pay
employees, purchase materials, and generally keep the
business operating. And information is the resource that
tells the managers of the business how effectively the
other resources are being combined and utilized.
Businesses are generally of three types.
Manufacturing businesses (or manufacturers) are
organized to process various materials into tangible
goods, such as delivery trucks or towels. Service
businesses produce services, such as haircuts or legal
advice. And some firms—called middlemen—are
organized to buy the goods produced by manufacturers
and then resell them. For example, the General Electric
Company is a manufacturer that produces clock radios.
These products may be sold to a retailing middleman,
which then resells them to consumers in its retail stores.
Consumers are individuals who purchase goods or

services for their own personal use rather than to resell
them.
All three types of businesses may sell either to other
firms or to consumers. In both cases, the ultimate
objective of every firm must be to satisfy the needs of
its customers. People generally don't buy goods and
services simply to own them; they buy products to
satisfy particular needs.
People rarely buy an automobile solely to store it in a
garage; they do, however, buy automobiles to satisfy
their need for transportation. Some of us may feel that
this need is best satisfied by an air-conditioned BMW
with stereo cassette player, automatic transmission,
power seats and windows, and remote-control side
mirrors.
Others may believe that a Ford Taurus with a stick
shift and an AM radio will do just fine. Both products
are available to those who want them, along with a wide
variety of other products that satisfy the need for
transportation.
When firms lose sight of their customers' needs, they
are likely to find the going rough. But when the
businesses that produce and sell goods and services
understand their customers' needs and work to satisfy
those needs, they are usually successful.

In the course of normal operations, a business
receives money (sales revenue) from its customers in
exchange for goods or services. It must also pay out
money to cover the various expenses involved in doing
business.
If the firm's sales revenue is greater than its expenses,
it has earned a profit. So profit is what remains after all
business expenses have been deducted from sales
revenue. A negative profit, which results when a firm's
expenses are greater than its sales revenue, is called a
loss.
The profit earned by a business becomes the property
of its owners. So in one sense profit is the return, or
reward, that business owners receive for producing
goods and services that consumers want.
Profit is also the payment that business owners
receive for assuming the considerable risks of
ownership. One of these is the risk of not being paid.
Everyone else—employees, suppliers, and lenders—
must be paid before the owners. And if there is nothing
left over (if there is no profit), there can be no payments
to owners. A second risk that owners run is the risk of
losing whatever they have put into the business.
A business that cannot earn a profit is very likely to
fail, in which case the owners lose whatever money,

effort, and time they have invested. For business
owners, the challenge of business is to earn a profit in
spite of these risks.
Economics is the study of how wealth is created
and distributed. By wealth we mean anything of value,
including the products produced and sold by business.
"How wealth is distributed" simply means "who gets
what."
According to economic theory, every society must
decide on the answers to three questions:
1. What goods and services—and how much of
each—will be produced?
2. How will these goods and services be produced?
(That is, who will produce them and which
resources will be used to do so?)
3. For whom will these goods and services be
produced? (This is the question "Who gets
what?")
The way in which a society answers these
questions determines the kind of economic system, or
economy, that society has chosen. In the United States,
their particular answers have provided them with a
mixed economy, which is based on laissez-faire
capitalism, or private enterprise. Their free enterprise

business system is the practical application of this
economic system.
Laissez-Faire Capitalism
Laissez-faire capitalism stems from the theories of
Adam Smith, a Scot. In 1776, in his book The Wealth of
Nations, Smith argued that a society's interests are best
served when the individuals within that society are
allowed to pursue their own self-interest. Smith
believed that each person should be allowed to work
toward his or her own economic gain, without
interference from government.
In doing so, each person would unintentionally be
working for the good of society as a whole. And society
would benefit most when there was the least
interference with this pursuit of economic self-interest.
Government should therefore leave the economy to its
citizens.
The French term laissez faire implies that there
shall be no interference in the economy; loosely
translated, it means "let them do" (as they see fit).
The features of laissez-faire capitalism are:
Private Ownership of Property Smith argued that
the creation of wealth (including products) is properly
the concern of private individuals, not of government.

Hence the resources that are used to create wealth must
be owned by private individuals.
Economists recognize three categories of
resources: land, labor, and capital, also known as the
factors of production. Land includes the land and the
natural resources on and in the land. Labour is the work
performed by people. Capital includes financial
resources, buildings, machinery, tools, and equipment
that are used in an organization's operations.
We have referred to these resources as material,
human, and financial resources, and we shall continue
to do so. Today, business people use the term capital to
mean both capital goods and the money needed to
purchase them.
Smith argued further that the owners of the factors
of production should be free to determine how these
resources are used. They should also be free to enjoy the
income and other benefits that they might derive from
the ownership of these resources.
Economic Freedom Smith's economic freedom
extends to all those involved in the economy. For the
owners of land and capital, this freedom includes the
right to rent, sell, or invest their resources and the right
to use their resources to produce any product and offer it
for sale at the price they choose.

For workers, this economic freedom means the
right to accept or reject any job they are offered. For all
individuals, economic freedom includes the right to
purchase any good or service that is offered for sale by
producers. These rights, however, do not include a
guarantee of economic success. Nor do they include the
right to harm others during the pursuit of one's own self-
interest.
Competitive Markets A crucial part of Smith's
theory is the competitive market composed of large
numbers of buyers and sellers. Economic freedom
ensures the existence of competitive markets, because
sellers and buyers can enter markets as they choose.
Sellers enter a market to earn profit, rent, or
wages; buyers enter a market to purchase resources and
products. Then, in a free market, sellers compete for
sales and buyers compete for available goods, services,
and resources.
This freedom to enter or leave a market at will has
given rise to the name free-market economy for the
capitalism that Smith described.
Limited Role of Government In Smith's view, the
role, of government should be limited to providing
defense against foreign enemies, ensuring internal order,
and furnishing public works and education. With regard

to the economy, government should act only as rule
maker and umpire.
As rule maker, government should provide laws
that ensure economic freedom and promote competition.
As umpire, it should act to settle disputes arising from
conflicting interpretations of its laws. Government,
according to Adam Smith, should have no major
economic responsibilities beyond these.
What, How and for Whom in the Free-Market
Economy
Smith's laissez-faire capitalism sounds as though it
should lead to chaos, not to answers to the three basic
economic questions. How can millions of individuals
and firms, all intent only on their own self-interest,
produce an orderly economic system?
One response might be simply, “They can and they
do." Most of the industrialized nations of the world
exhibit some form of modified capitalist economy, and
these economies do work. A better response, however,
is that these millions of individuals and firms actually
provide very concrete and detailed answers to the three
basic questions.
What to Produce? This question is answered
continually by consumers as they spend their dollars in
the various markets for goods and services. When

consumers buy specific products, they are casting
"dollar votes" for these products. These actions tell
resource owners to produce more of this product and
more of the capital goods with which the product is
manufactured.
Conversely, when consumers refuse to buy a
product at its going price, they are voting against the
product, telling producers to either reduce the price or
ease off on production. In each case, consumers are
giving a very specific answer concerning a very specific
product.
How to Produce? The two parts of this question
are answered by producers as they enter various markets
and compete for sales and profits. Those who produce
for a particular market answer the question "Who will
produce?" simply by being in that market. Their answer,
of course, is "We will.”
Competition within various markets determines
which resources will be used. To compete as effectively
as possible in the product markets, producers try to use
the most efficient (least-cost) combination of resources.
When a particular resource can be used to produce
two or more different products, then producers must
also compete with each other in the market for that
resource. And, if the price of one needed resource

becomes too high, producers will look for substitute
resources—say, plastics in place of metals. The
resources that will be used to produce are those that best
perform their function at the least cost.
For Whom to Produce? In a market economy,
goods are distributed to those who have the money to
purchase them. This money is earned by individuals as
wages, rents, profit, and interest—that is, as payment
for the use of economic resources.
Money is therefore a medium of exchange, an
artificial device that aids in the exchange of resources
for goods and services. The distribution of goods and
services ("who gets what") therefore depends on the
current prices of economic resources and of the various
goods and services. And prices, in their turn, are
determined by the balance of supply and demand.
FOR YOUR INFORMATION

Adam Smith was born in Kirkcaldy, Scotland, in
1723. In school he proved himself a good scholar as he
studied the usual subjects of the period – English, Latin,
Greek, history, and arithmetic. At 14, along with other
boys of the same age, he entered Glasgow University,
and in 1740 went on to Oxford.

Throughout his student years he encountered many
ideas and individuals that would prepare him for the
eventual writing of his important work: An Inquiry into
the Nature and Causes of the Wealth of Nations. In it he
brought together the economic concepts and theories
that established the basis of modern economics.
Smith’s main argument was that the general
welfare of society is best promoted by allowing
individuals to pursue their own self-interest within the
law, because this alone is “capable of carrying on the
society to wealth and prosperity.” People should be able
to do so through voluntary and mutually beneficial
exchanges in free markets, with limited regulation by
government officials: “Every individual … intends only
his own gain, and he is in this, as in many other cases,
led by an invisible hand to promote an end which was
no part of his intention.”
Smith also believed that any attempt by
government to force the economy beyond this “system
of natural liberty” is counterproductive.
Because of the original ideas Smith put forth in his
works, he is considered the founder of classical
economics.

Economic Systems
The two other economic systems that contrast
sharply with the capitalism of Adam Smith are
socialism and communism. These systems are
sometimes called planned economies because the
answers to the three basic economic questions are
determined, at least to some degree, through centralized
government planning.
Socialism In a socialist economy, the key
industries are owned and controlled by the government.
Such industries usually include transportation, public
utilities, communications, and those producing
important materials such as steel. (In France, the major
banks are nationalized, or transferred to government
control. Banking, too, is considered extremely important
to a nation's economy.) Land and raw materials may
also be the property of the state in a socialist economy.
Depending on the country, private ownership of real
property (such as land and buildings) and smaller or less
vital businesses is permitted to varying degrees. People
usually, may choose their own occupations, but many
work in state-owned industries.
What to produce and how to produce it are
determined in accordance with national goals, which are
based on projected needs, and the availability of

resources—at least for government-owned industries.
The distribution of goods and services is also controlled
by the state to the extent that it controls rents and
wages. Among the professed aims of socialist countries
are the equitable distribution of income, the elimination
of poverty and the distribution of social services such as
medical care to all who need them, smooth economic
growth, and elimination of the waste that supposedly
accompanies capitalist competition.
Britain, France, Sweden, and India are democratic
countries whose mixed economies include a very visible
degree of socialism.
Communism If Adam Smith was the father of
capitalism, Karl Marx was the father of communism. In
his writings (during the mid-nineteenth century), Marx
advocated a classless society whose citizens together
owned all economic resources. He believed that such a
society would come about as the result of a class
struggle between the owners of capital and the workers
they had exploited. All workers would then contribute
to this communist society according to their ability and
would receive benefits according to their need.
Today North Korea is generally considered to have
communist economy. Almost all economic resources
are owned by the government in this country. The basic

economic questions are answered through centralized
state planning, which sets prices and wages as well. In
this planning, the needs of the state generally outweigh
the needs of its citizens. Emphasis is placed on the
production of capital goods (such as heavy machinery)
rather than on the products that consumers might want,
so there are frequent shortages of consumer goods.
Workers have little choice of jobs, but special skills or
talents seem to be rewarded with special privileges.
Various groups of professionals (bureaucrats, university
professors, and athletes, for example) fare much better
than, say, factory workers. Communist economies were
in the former USSR, China, Cuba, former Yugoslavia.
Nowadays all these countries have market economies,
some of them are in the period of transition to the
market one.
The so-called communist economies actually seem
to be far from Marx's vision of communism, but rather
practice a strictly controlled kind of socialism. There is
also a bit of free enterprise here and there. For example,
in the former Soviet Union, the farmers' markets (rinki
in Russian) not only were allowed but were also
essential to the nation's food supply. However, like all
real economies, these economies are neither pure nor
static. Every operating economy is a constantly

changing mixture of various idealized economic
systems. Some evolve slowly; others change more
quickly, through either evolution or revolution. And,
over many years, a nation, such as Great Britain, may
move first in one direction—say, toward capitalism—
and then in the opposite direction. It is impossible to say
whether any real economy will ever closely resemble
Marx's communism.
Supply and Demand

The supply of a particular product is the quantity
of the product that producers are willing to sell at each
of various prices. Supply is thus a relationship between
prices and the quantities offered by producers, who are
usually rational people, so we would expect them to
offer more of a product for sale at higher prices and to
offer less of the product at lower prices.
The demand for a particular product is the quantity
that buyers are willing to purchase at each of various
prices. Demand is thus a relationship between prices
and the quantities purchased by buyers, who are rational
people too, so we would expect them to buy more of a
product when its price is low and to buy less of the
product when its price is high. This is exactly what
happens when the price of fresh strawberries rises

dramatically. People buy other fruit or do without and
reduce their purchases of strawberries. They begin to
buy more strawberries only when prices drop.
Forms of Competition
A free-market system implies competition among
sellers of products and resources. Economists recognize
four different degrees of competition, ranging from
ideal competition to no competition at all. These are
pure competition, monopolistic competition, oligopoly,
and monopoly.
Pure (or perfect) competition is the complete form
of competition. It is the market situation in which there
are many buyers and sellers of a product, and no single
buyer or seller is powerful enough to affect the price of
that product. The above definition includes several
important ideas:
o there is a demand for a single product;
o all sellers offer the same product for sale;
o all buyers and sellers know everything there is to
know about the market;
o the market is not affected by the actions of any one
buyer or seller.
In pure competition the sellers and buyers must
accept the going price. But who or what determines the
price? Actually, everyone does. The price of each

product is determined by the actions of all buyers and
all sellers together, through the forces of supply and
demand. It is this interaction of buyers and sellers,
working for their best interest that Adam Smith referred
to as the “invisible hand” of competition.
Neither sellers nor buyers exist in a vacuum. What
they do is interact within a market. And there is always
one certain price at which the quantity of a product that
is demanded is exactly equal to the quantity of that
product that is produced. Suppose producers are willing
to supply 2 million bushels of wheat at a price of $5 per
bushel and that buyers are willing to purchase 2 million
bushels at a price of $5 per bushel. In other words,
supply and demand are in balance, or in equilibrium, at
the price of $5. This is the "going price" at which
producers should sell their 2 million bushels of wheat.
Economists call this price the equilibrium price or
market price. Under pure competition, the market price
of any product is the price at which the quantity
demanded is exactly equal to the quantity supplied.
In theory and in the real world, market prices are
affected by anything that affects supply and demand.
The demand for wheat, for example, might change if
researchers suddenly discovered that it had very
beneficial effects on users' health. Then more wheat

would be demanded at every price. The supply of wheat
might change if new technology permitted the
production of greater quantities of wheat from the same
amount of acreage. In that case, producers would be
willing to supply more wheat at each price. Either of
these changes would result in a new market price. Other
changes that can affect competitive prices are shifts in
buyer tastes, the development of new products that
satisfy old needs, and fluctuations in income due to
inflation or recession. For example, generic or "no-
name" products are now available in supermarkets.
Consumers can satisfy their needs for products ranging
from food to drugs to paper products at a lower cost,
with quality comparable to brand name items. Bayer
was recently forced to lower the price of its very
popular aspirin because of competition from generic
products.
Pure competition is only a theoretical concept.
Some specific markets may come close, but no real
market totally exhibits perfect competition. Many real
markets, however, are examples of monopolistic
competition. Monopolistic competition is a market
situation in which there are many buyers along with
relatively many sellers who differentiate their products
from the products of competitors and it is very easy to

enter into this market. The various products available in
a monopolistically competitive market are very similar
in nature, and they are all intended to satisfy the same
need. However, each seller attempts to make its product
somewhat different from the others by providing unique
product features — an attention-getting brand name,
unique packaging, or services such as free delivery or a
"lifetime" warranty.
Product differentiation is a fact of life for the
producers of many consumer goods, from soaps to
clothing to personal computers. Actually, monopolistic
competition is characterized by fewer sellers than pure
competition, but there are enough sellers to ensure a
highly competitive market. By differentiating its
product from all similar products, the producer obtains
some limited control over the market price of its
product.
An oligopoly is a market situation (or industry) in
which there are few sellers (2-8). Generally these sellers
are quite large, and sizable investments are required to
enter into their market. For this reason, oligopolistic
industries tend to remain oligopolistic. Examples of
oligopolies are the American automobile, industrial
chemicals, and oil refining industries.

Because there are few sellers in an oligopoly, each
seller has considerable control over price. At the same
time, the market actions of each seller can have a strong
effect on competitors' sales. If one firm reduces its
price, the other firms in the industry usually do the same
to retain their market shares. If one firm raises its price,
the others may wait and watch the market for a while, to
see whether their lower price tag gives them a
competitive advantage, and then eventually follow suit.
All this wariness usually results in similar prices for
similar products. In the absence of much price
competition, product differentiation becomes the major
competitive weapon.
A monopoly is a market (or industry) with only
one seller. Because only one firm is the supplier of a
product, it has complete control over price. However, no
firm can set its price at some astronomical figure just
because there is no competition; the firm would soon
find that it had no sales revenue, either. Instead, the firm
in a monopoly position must consider the demand for its
product and set the price at the most profitable level.
The few monopolies in American business don't
have even that much leeway in setting prices because
they are all carefully regulated by government.

Most monopolies in America are public utilities,
such as we find in electric power distribution. They are
permitted to exist because the public interest is best
served by their existence, but they operate under the
scrutiny and control of various state and federal
agencies.
Enterprises
The general terms for the organizations that
produce and sell goods and services are business,
enterprise, company, firm (US corporation). The word
concern is used mainly to refer to a large organization.
An enterprise is a property complex used for
performing entrepreneurial activity. It comprises all
types of property used for this activity including:
1. plots of land
2. buildings and constructions, highway
transportation facilities and rail facilities
3. equipment
4. inventory
5. raw materials
6. products
7. debts
8. incorporeal rights (company name, trademark,
service mark).

The enterprise is an independent economic entity
based on professionally organized workforce, capable of
manufacturing products demanded by consumers using
capital goods available. So, it uses economic resources
for producing goods and rendering services for the
purpose of satisfying social needs. The enterprise is an
institution which creates the wealth of a country and
from which this wealth is distributed among all people
in a society. Regardless of its size, an enterprise, after it
is registered by the state authorities, opens an account
with a bank and becomes legally autonomous. Like
people, enterprises bear certain names. Usually
enterprises are named after their owners (“Ford”,
“Christian Dior”, “Nina Ricci”) or their names reflect
the type of their economic activity (“Moldcell”,
“Gazprom”, “General Motors”).
An immense amount of enterprises in each country
implies their classification according to the following
criteria:
1. By type of primary profit-generating activity
enterprises are classified into: industrial,
agricultural, commercial, service, investment,
insurance enterprises and others.
2. By the source of origin of the registered capital
enterprises are classified into: (a) public

enterprises – they are owned by the government.
They don’t have the title to the property available,
but only exercise the control right; (b) private
enterprises – they belong to private individuals; (c)
mixed enterprises – they contain both public and
private capital. Here the government assigns the
patrimony to the enterprise which has the title to
the property. The government cannot freely
dispose of the enterprise’s property, it has the right
to dispose of the shares that belong to it in the
enterprise; (d) enterprises with foreign investments
– they can either belong entirely to a foreign
investor or have a mixed capital invested both by a
foreigner and a national.
3. By number of employees enterprises are
classified into: (a) small enterprises – they have
less than 100 employees; (b) medium-sized
enterprises – between 100 and 500 employees; (c)
large-scale enterprises – their staff exceeds 500
employees. This classification differs from country
to country: in our Republic, for example, there are
microenterprises (they employ less than 20
people), small enterprises (they have 20 – 75
employees) and large-scale enterprises (the
number of their employees exceeds 75 people).

4. By form of business ownership enterprises may
be: (a) sole proprietorships; (b) partnerships;
(c) corporations.
5. By the objective of the company’s activity there
are: (a) commercial enterprises – these are for-
profit organizations which exist to earn and
redistribute taxable wealth to employees and
shareholders. They are run for the benefit of their
owners.(b) non-commercial enterprises – these are
non-profit organizations (abbreviated as NPOs,
also known as a not-for-profit organizations). They
do not distribute their surplus funds to owners or
shareholders, but instead use them to help pursue
their goals. Examples of NPOs include charities,
trade unions, and educational and public arts
organizations. They are in most countries exempt
from income and property taxation and exist solely
to provide programs and services that are of self-
benefit.
Medium-sized and large-scale enterprises usually
have headquarters, branch offices and subsidiary
enterprises.
Headquarters or head office is the location of the
central administrative office of the company or
enterprise. It is an office where top management of the

enterprise, board of directors, secretariat and other
important management departments are located. The
head office of a company deals with coordinating the
regional offices and developing the global strategy for
running the business.
Branch office (from Latin filialis) is an
economically autonomous subdivision of a legal entity
which is situated somewhere other than the firm's main
office location and exercises all or any part of the main
office’s functions including the functions of the regional
offices. Branch offices are not legal entities. They are
vested by the legal entities that have founded them and
operate on the basis of the adopted regulations. Branch
managers are appointed by the legal entity and act on
the power of attorney basis.
Subsidiary enterprise is an enterprise set up as a
legal entity by another enterprise called holding (the
parent company or promoter) by means of transferring
part of its property under the operating control of the
former. The promoter of the subsidiary enterprise
adopts the organization charter, appoints its manager
and exercises another kind of proprietary rights in
relation to this subsidiary. So, the holding is a “parent
company” and subsidiaries are “sister companies” to
each other. Together, the holding and its subsidiaries

form a group (e.g. a newspaper group). A large group is
called a giant.
Generally, a firm starts by producing one good or
service, called core business. As the company gets
bigger, it also produces other different products. A
group containing a lot of different companies in
different businesses is a conglomerate (e.g. a media
conglomerate). As companies grow, they may also
expand geographically. At present, many companies are
multinational with manufacturing plants and trading
locations in several countries worldwide.

English Grammar Secrets
by Caroline Brown and Pearson Brown
Present continuous
The present continuous is used to talk about present
situations which we see as short term or temporary. We use
the present simple to talk about present situations which we
see as long-term or permanent.
In these examples, the action is taking place at the
time of speaking: It is raining / Who is Kate talking to on
the phone? / Look, somebody is trying to steal that man's
wallet / I'm not looking. My eyes are closed tightly.
In these examples, the action is true at the present
time but we don't think it will be true in the long term :
I'm looking for a new apartment / He's thinking about
leaving his job / They're considering making an appeal
against the judgment / Are you getting enough sleep?
In these examples, the action is at a definite point in
the future and it has already been arranged : I'm
meeting her at 6.30 / They aren't arriving until Tuesday /
We are having a special dinner at a top restaurant for all the
senior managers / Isn't he coming to the dinner?

Present simple
We use the present simple to talk about actions we see
as long term or permanent. It is a very common and very
important tense.
Here, we are talking about regular actions or events
: They drive to the office every day / She doesn't come here
very often / The news usually starts at 6.00 every evening /
Do you usually have bacon and eggs for breakfast?
Here, we are talking about facts : We have two
children / Water freezes at 0° C or 32° F / What does this
expression mean? / The Thames flows through London.
Here, we are talking about future facts, usually found
in a timetable or a chart : Christmas Day falls on a Monday
this year / The plane leaves at 5.00 tomorrow morning /
Ramadan doesn't start for another 3 weeks / Does the class
begin at 10 or 11 this week?
Here, we are talking about our thoughts and feelings
at the time of speaking. Although these feelings can be
short-term, we use the present simple and not the present
continuous : They don't ever agree with us / I think you are
right / She doesn't want you to do it / Do you understand
what I am trying to say.

Past simple
We use the past simple to talk about actions and states
which we see as completed in the past.
We can use it to talk about a specific point in time :
She came back last Friday / I saw her in the street / They
didn't agree to the deal.
It can also be used to talk about a period of time :
She lived in Tokyo for seven years / They were in London
from Monday to Thursday of last week / When I was living
in New York, I went to all the art exhibitions I could.
You will often find the past simple used with time
expressions such as these: Yesterday, three weeks ago, last
year, in 2002, from March to June, for a long time, for 6
weeks, in the 1980s, in the last century, in the past
Past continuous
We use the past continuous to talk about past events
which went on for a period of time.
We use it when we want to emphasize the continuing
process of an activity or the period of that activity. (If we
just want to talk about the past event as a simple fact, we
use the past simple.) : While I was driving home, Peter was
trying desperately to contact me / Were you expecting any
visitors? / Sorry, were you sleeping? / I was just making
some coffee / I was thinking about him last night / In the
1990s few people were using mobile phones.
We often use it to describe a "background action"
when something else happened : I was walking in the street
when I suddenly fell over / She was talking to me on the
phone and it suddenly went dead / They were still waiting

for the plane when I spoke to them / The company was
declining rapidly before he took charge / We were just
talking about it before you arrived / I was making a
presentation in front of 500 people when the microphone
stopped working.
Present perfect
(Please note that British and American English have
different rules for the use of this tense. The explanation and
exercises here refer to British English. In American
English, it is often acceptable to use the past simple in some
of these examples.)
We use the present perfect when we want to look back
from the present to the past.
We can use it to look back on the recent past : I've
broken my watch so I don't know what time it is / They
have cancelled the meeting / She's taken my copy. I don't
have one / The sales team has doubled its turnover.
When we look back on the recent past, we often use
the words 'just' 'already' or the word 'yet' (in negatives and
questions only) : We've already talked about that / She
hasn't arrived yet / I've just done it / They've already met /
They don't know yet / Have you spoken to him yet? / Have
they got back to you yet?
It can also be used to look back on the more distant
past : We've been to Singapore a lot over the last few years
/ She's done this type of project many times before / We've
mentioned it to them on several occasions over the last six
months / They've often talked about it in the past.

When we look back on the more distant past, we often
use the words 'ever' (in questions) and 'never' : Have you
ever been to Argentina? / Has he ever talked to you about
the problem? / I've never met Jim and Sally / We've never
considered investing in Mexico.
Present perfect continuous

This tense is used to talk about an action or actions
that started in the past and continued until recently or that
continue into the future:
We can use it to refer to an action that has finished
but you can still see evidence : Oh, the kitchen is a mess.
Who has been cooking? / You look tired. Have you been
sleeping properly? / I've got a a stiff neck. I've been
working too long on computer.
It can refer to an action that has not finished : I've
been learning Spanish for 20 years and I still don't know
very much / I've been waiting for him for 30 minutes and he
still hasn't arrived / He's been telling me about it for days. I
wish he would stop.
It can refer to a series of actions : She's been writing
to her regularly for a couple of years / He's been phoning
me all week for an answer / The university has been
sending students here for over twenty years to do work
experience.
The present perfect continuous is often used with
'since', 'for', 'all week', 'for days', 'lately', 'recently', 'over the
last few months' : I've been wanting to do that for ten years
/ You haven't been getting good results over the last few
months / They haven't been working all week. They're on

strike / He hasn't been talking to me for weeks / We've been
working hard on it for ages / I've been looking at other
options recently / He's been working here since 2001.
Irregular verbs
All new verbs in English are regular : I photocopied
the report / She faxed it to me / They emailed everybody
about it / I googled my name and got more than 20000
responses.
There are approximately 180 irregular verbs. You
don't need to learn all of them because some of these are
very rare but many others are very useful and you do need
to know them.
What is the easiest way to learn them? Some people
think you should learn a list 'by heart'. Others think you
should not learn them at all – you will just gradually
acquire them over time.
One useful method is to note down new irregular
verbs as you meet them. It is useful to write these verbs (or
any vocabulary you want to learn) in sentences and learn
those rather than the individual word.
Which is easier to learn? stick stuck stuck / I stuck the
photo into my album.
Another technique is to classify the irregular verbs
into 4 categories.
1. All forms the same : set set set / cost cost cost
2. Similar sound groups : beat beat beaten / eat ate
eaten / blow blew blown / throw threw thrown / drink drank
drunk / sing sang sung / speak spoke spoken / wake woke
woken

3. The second and third forms are the same : bend
bent bent / sleep slept slept / spend spent spent / bring
brought brought / buy bought bought / teach taught taught /
have had had / pay paid paid / say said said
4. The "unclassifiable" : come came come / do did
done / go went gone / show showed show
Going to
There is no one 'future tense' in English. There are 4
future forms. The one which is used most often in spoken
English is 'going to', not 'will'.
We use 'going to' when we want to talk about a plan
for the future : I'm going to see him later today / They're
going to launch it next month / We're going to have lunch
first / She's going to see what she can do / I'm not going to
talk for very long.
Notice that this plan does not have to be for the near
future : When I retire I'm going to go back to Barbados to
live / In ten years time, I'm going to be boss of my own
successful company.
We use 'going to' when we want to make a prediction
based on evidence we can see now : Look out! That cup is
going to fall off / Look at those black clouds. It's going to
rain soon / These figures are really bad. We're going to
make a loss / You look very tired. You're going to need to
stop soon.
We can replace 'going to go' by 'going' : I'm going out
later / She's going to the exhibition tomorrow.

Will - future
Some people have been taught that 'will' is 'the future'
in English. This is not correct.
Sometimes when we talk about the future we cannot
use 'will'. Sometimes when we use 'will' we are not talking
about the future.
We can use 'will' to talk about future events we
believe to be certain : The sun will rise over there tomorrow
morning / Next year, I'll be 50 / That plane will be late. It
always is / There won't be any snow. I'm certain. It's too
warm.
Often we add 'perhaps', 'maybe', 'probably', 'possibly'
to make the belief less certain : I'll probably come back
later / He'll possibly find out when he sees Jenny / Maybe it
will be OK / Perhaps we'll meet again some day.
We often use 'will' with 'I think' or 'I hope' : I think I'll
go to bed now / I think she'll do well in the job / I hope
you'll enjoy your stay / I hope you won't make too much
noise.
We use 'will' at the moment we make a new decision
or plan. The thought has just come into our head : Bye. I'll
phone you when I get there / I'll answer that / I'll go / I
won't tell him. I promise.

Shall
We don't use 'Shall' very frequently in modern
English, particularly in American English.
It is used to make offers and suggestions and to ask
for advice : What time shall we meet? / Shall we vote on it
now? / What dress shall I wear? / Shall I open the window?
You only really need to know that about 'shall' in
modern English. Read the rest of this only if you want to
know more about how some older speakers still use 'shall'.
Formerly, in older grammar, 'shall' was used as an
alternative to 'will' with 'I' and 'we'. Today, 'will' is
normally used. When we do use 'shall', it has an idea of a
more personal, subjective future : I shall go to see the boss
and I shall ask him to explain this decision
Notice that the negative of 'shall' can be 'shall not' or
'shan't' – though the second one is now very rare in
American English : I don't like these people and I shall not
go to their party / I shan't object if you go without me.
The imperative
We can use the imperative to give a direct order :
Take that chewing gum out of your mouth / Stand up
straight / Give me the details.
We can use the imperative to give instructions : Open
your book / Take two tablets every evening / Take a left
and then a right.
We can use the imperative to make an invitation :
Come in and sit down. Make yourself at home / Please start
without me. I'll be there shortly / Have a piece of this cake.
It's delicious.

We can use the imperative on signs and notices : Push
/ Do not use / Insert one dollar.
We can use the imperative to give friendly informal
advice : Speak to him. Tell him how you feel / Have a quiet
word with her about it / Don't go. Stay at home and rest up.
Get some sleep and recover.
We can make the imperative 'more polite' by adding
'do' : Do be quiet / Do come / Do sit down.
The Passive
We use the active form to say what the subject does.
For example : I speak English every day at work / I repaired
the flat tire on the car.
We use the passive form to say what happens to
people and things, to say what is done to them. For example
: English is spoken here / The car is being repaired.
We use the passive form when we don't know who
did the action. For example : The car was damaged while it
was parked on the street / The shirts were made in Turkey.
We use the passive form when what was done is more
important than who did it. For example : It was approved
by Gerry last week / I was informed by the Human
Resources Manager only two days ago.

The -ing form
The –ing form can be used like a noun, like an
adjective or like a verb : Smoking is forbidden / I have a
long working day / I don't like dancing.
When it is used like a noun it may or may not have an
article before it : Marketing is a very inexact science / The
marketing of the product will continue for a few months
yet.
It can also be part of a 'noun phrase' : Speaking to an
audience is always stressful / Swimming after work is very
relaxing.
In formal English, we would use a possessive with the
–ing form. In informal English, many people do not : I'm
angry about his missing the meeting / Do you mind my
coming?
As an adjective, the –ing form can be used before a
noun : I was met by a welcoming party at the airport / Let's
go to the meeting room.
The –ing form is used after prepositions : Before
leaving, you need to speak to Sarah / After discussing it
with her, I've changed my mind / Instead of feeling sorry
for yourself, do some work for charity
Notice that when 'to' is used as a preposition, it is
followed by the –ing form : I don't object to working this
Sunday / I'm looking forward to seeing him again / I'm used
to working long hours.
There are many verb + -ing combinations. Here are
some common ones : I admit telling her / I appreciate
having the raise / I avoid speaking to him / I consider
blowing your nose in public to be wrong / I delayed coming

until the last possible moment / He denied telling her / I
detest going to parties / I enjoy dancing / I feel like having
a party / I've finished writing the report / I've given up
going to the gym / I can't help thinking about it / I can't
imagine ever leaving this company / I don't mind doing that
/ He put off talking to her as long as he could / I can't stand
drinking beer.
Some verbs can be followed by either the infinitive or
–ing form but with different meanings. Here are some
common ones : I stopped smoking last month. (I no longer
smoke.) / I stopped to smoke a cigarette. (I stopped what I
was doing and had a cigarette.) / I remember telling him. (A
memory of the past.) / I must remember to tell him.
(Something to remember for the future.) / I'm interested in
finding out more details. (Interested about the future.) / I
was interested to read his report. (Interested in the past.)
Some verbs can be followed by either the infinitive or
–ing form but with the same meaning. Here are some
common ones : I love to go shopping / I love going
shopping / I'm afraid to fly / I'm afraid of flying / I started
to learn English 5 years ago / I started learning English 5
years ago.
Can
We use 'can' to talk about 'possibility' : Can you do
that? I can't manage to do that / You can leave your car in
that parking space / You cannot smoke in here.
Notice that there are two negative forms: 'can't' and
'cannot'. These mean exactly the same thing. When we are

speaking, we usually say 'can't'. We use 'can' to talk about
'ability' : I can speak French / I can't drive.
We use 'can' to ask for and give permission. (We also
use 'may' for this but is more formal and much less
common) : Can I speak to you or are you too busy? / You
can use my phone / You can't come in.
We use 'can' in offers, requests and instructions : Can I
help? / Can you give me a hand? / When you finish that,
you can take out the garbage.
We use 'can' with 'see' 'hear' 'feel' 'smell' 'taste' to talk
about something which is happening now . (Where you
would use the present continuous with most other verbs) : I
can smell something burning / Can you hear that noise? / I
can't see anything.
We can use 'can't' for deduction. The opposite of
'can't' in this context is 'must' : You can't be hungry. You've
just eaten / You must be hungry. You haven't eaten
anything all day / He was in London one hour ago when I
spoke to him. He can't be here yet.
Could
'Could' can be used to talk about the past, the present
or the future.
'Could' is a past form of 'can' ; When I was living in
Boston, I could walk to work / He phoned to say he couldn't
come / I could see him clearly but I couldn't hear him and
then the video conference line went dead.
'Could' is used to make polite requests. We can also
use 'can' for these but 'could' is more polite : Could you

help me, please? / Could you lend me some money? / Could
I have a lift? / Could I bother you for a moment?
If we use 'could' in reply to these requests, it suggests
that we do not really want to do it. If you agree to the
request, it is better to say 'can' : Of course I can / I could
help you if it's really necessary but I'm really busy right
now / I could lend you some money but I'd need it back
tomorrow without fail / I could give you a lift as far as
Birmingham.
'Could' is used to talk about theoretical possibility and
is similar in meaning to 'might' : It could rain later. Take an
umbrella / He could be there by now / Could he be any
happier? / It could be Sarah's.
May / might
We can use 'may' to ask for permission. However this
is rather formal and not used very often in modern spoken
English : May I borrow your pen? / May we think about it?
/ May I go now?
We use 'may' to suggest something is possible : It may
rain later today / I may not have time to do it today / Pete
may come with us.
We use 'might' to suggest a small possibility of
something. Often we read that 'might' suggests a smaller
possibility that 'may', there is in fact little difference and
'might is more usual than 'may' in spoken English : She
might be at home by now but it's not sure at all / It might
rain this afternoon / I might not have time to go to the shops
for you / I might not go.

For the past, we use 'might have' : He might have tried
to call while I was out / I might have dropped it in the
street.
Should
We use 'should' for giving advice : You should speak
to him about it / He should see a doctor / We should ask a
lawyer.
We use 'should' to give an opinion or a
recommendation : He should resign now / We should invest
more in Asia / They should do something about this terrible
train service.
'Should' expresses a personal opinion and is much
weaker and more personal than 'must' or 'have to'. It is often
introduced by ' I think' : I think they should replace him / I
don't think they should keep the contract / Do you think we
should tell her.
We can use 'should' after 'reporting verbs' such as
demand insist propose recommend suggest : He demanded
that we should pay for the repair / She insisted that she
should pay for the meal / I have proposed that he should
take charge of the organization / The committee
recommends that Jane should be appointed / We have
suggested that Michael should be given a reward for his
hard work.
However, it is also possible to say exactly the same
thing by omitting the 'should' and just using the infinitive
form without 'to'. Some people call this the 'subjunctive'
form : He demanded that we pay for the repair / She
insisted that she pay for the meal / I have proposed that he

take charge of the organization / The committee
recommends that Jane be appointed / We have suggested
that Michael be given a reward for his hard work.
We can use 'should' after various adjectives. Typical
examples are funny interesting natural odd strange
surprised surprising typical: It's funny that you should say
that. I was thinking exactly the same thing / It's interesting
that they should offer him the job. Not an obvious choice /
It's natural that you should be anxious. Nobody likes
speaking in public / Isn't it odd that he should be going to
the same tiny hotel? What a coincidence / It's strange that
you should think so. Nobody else does.
We can use 'should' in 'if clauses' when we believe
that the possibility of something happening is small : If you
should happen to see him before I do, can you tell him that
I want to speak to him urgently? / If there should be a
problem, just give me a call and I'll sort it out / If anyone
should ask where I am, say I'm in a meeting.
We use 'should' in various fixed expressions. (a) To
show strong agreement : They're paying you compensation?
I should think so. (b) To express pleasure when you receive
a gift: What a fantastic present. You really should not have
(c) To emphasize a visible emotion: You should have seen
the look on her face when she found out that she had got
the promotion.

Must or have to
We can use 'must' to show that we are certain
something is true. We are making a logical deduction based
upon some clear evidence or reason: There's no heating on.
You must be freezing / You must be worried that she is so
late coming home / I can't remember what I did with it. I
must be getting old / It must be nice to live in Florida.
We also use 'must' to express a strong obligation.
When we use 'must' this usually means that some personal
circumstance makes the obligation necessary (and the
speaker almost certainly agrees with the obligation): I must
go to bed earlier / They must do something about it / You
must come and see us some time / I must say, I don't think
you were very nice to him.
We can also use 'have to' to express a strong
obligation. When we use 'have to' this usually means that
some external circumstance makes the obligation
necessary: I have to arrive at work at 9 sharp. My boss is
very strict / We have to give him our answer today or lose
out on the contract / You have to pass your exams or the
university will not accept you / I have to send a report to
Head Office every week.
In British English, we often use 'have got to' to mean
the same as 'have to'; I've got to take this book back to the
library or I'll get a fine / We've got to finish now as
somebody else needs this room
We can also use ' will have to' to talk about strong
obligations. Like 'must' this usually means that that some
personal circumstance makes the obligation necessary.
Remember that 'will' is often used to show

'willingness'): I'll have to speak to him / We'll have to have
lunch and catch up on all the gossip / They'll have to do
something about it / I'll have to get back to you on that.
As you can see, the differences between the present
forms are sometimes very small and very subtle. However,
there is a huge difference in the negative forms : We use
'mustn't' to express strong obligations NOT to do something
/ We mustn't talk about it. It's confidential / I mustn't eat
chocolate. It's bad for me / You mustn't phone me at work.
We aren't allowed personal calls / They mustn't see us
talking or they'll suspect something.
We use 'don't have to' (or 'haven't got to' in British
English) to state that there is NO obligation or necessity:
We don't have to get there on time. The boss is away today
/ I don't have to listen to this. I'm leaving / You don't have
to come if you don't want to / He doesn't have to sign
anything if he doesn't want to at this stage / I haven't got to
go. Only if I want to

Zero conditional
When we talk about things that are generally or
always true, we can use: If/When/Unless + a present form
+ present simple or imperative: If he gets there before me,
ask him to wait / When you fly budget airline, you have to
pay for your drinks and snacks / Unless you need more
space, a small car is big enough for one person.
Note that we are not talking about a specific event but
something which is generally true. In the condition clause,
we can use a variety of present forms. In the result clause,
there can only be the present simple or imperative: If you
visit London, go on the London Eye / If unemployment is
rising, people tend to stay in their present jobs / If you've
done that, go and have a coffee / When you go on holiday,
take plenty of sun cream. It'll be very hot / When I'm
concentrating, please don't make so much noise / When I've
finished an article, I always ask Kate to read it through.
Notice that 'unless' means the same as 'if not': Unless
he asks you politely, refuse to do any more work on the
project / Unless prices are rising, it's not a good investment
/ Unless you've been there yourself, you don't really
understand how fantastic it is.

The first conditional
We use the First Conditional to talk about future
events that are likely to happen: If we take John, he'll be
really pleased / If you give me some money, I'll pay you
back tomorrow / If they tell us they want it, we'll have to
give it to them / If Mary comes, she'll want to drive.
The 'if' clause can be used with different present
forms: If I go to New York again, I'll buy you a souvenir
from the Empire State Building / If he's feeling better, he'll
come / If she hasn't heard the bad news yet, I'll tell her.
The "future clause" can contain 'going to' or the future
perfect as well as 'will': If I see him, I'm going to tell him
exactly how angry I am / If we don't get the contract, we'll
have wasted a lot of time and money.
The "future clause" can also contain other modal
verbs such as 'can' and 'must': If you go to New York, you
must have the cheesecake in Lindy's / If he comes, you can
get a lift home with him.

Second conditional
The Second Conditional is used to talk about
'impossible' situations: If we were in London today, we
would be able to go to the concert in Hyde Park / If I had
millions dollars, I'd give a lot to charity / If there were no
hungry people in this world, it would be a much better
place / If everyone had clean water to drink, there would be
a lot less disease.
Note that after I / he/ she /it we often use the
subjunctive form 'were' and not 'was'. (Some people think
that 'were' is the only 'correct' form but other people think
'was' is equally 'correct'.): If she were happy in her job, she
wouldn't be looking for another one / If I lived in Japan, I'd
have sushi every day / If they were to enter our market,
we'd have big problems.
Note the form 'If I were you' which is often used to
give advice: If I were you, I'd look for a new place to live /
If I were you, I'd go back to school and get more
qualifications.
The Second Conditional is also used to talk about
'unlikely' situations: If I went to China, I'd visit the Great
Wall / If I was the President, I'd reduce taxes / If you were
in my position, you'd understand.
Note that the choice between the first and the second
conditional is often a question of the speaker's attitude
rather than of facts. Compare these examples: Otto thinks
these things are possible, Peter doesn't / Otto – If I win the
lottery, I'll buy a big house. Peter – If I won the lottery, I'd
buy a big house / Otto – If I get promoted, I'll throw a big
party. Peter – If I got promoted, I'd throw a big party / Otto

– If my team win the Cup, I'll buy champagne for
everybody. Peter – If my team won the Cup, I'd buy
champagne for everybody.
Note that the 'If clause' can contain the past simple or
the past continuous: If I was still working in Brighton, I
would commute by train / If she were coming, she would be
here by now / If they were thinking of selling, I would want
to buy.
Note that the main clause can contain 'would' 'could'
or 'might: If I had the chance to do it again, I would do it
differently / If we met up for lunch, we could go to that new
restaurant / If I spoke to him directly, I might be able to
persuade him.
Also note that sometimes the 'if clause' is implied
rather than spoken: What would I do without you? ("if you
weren't here") / Where would I get one at this time of
night? ("if I wanted one") / He wouldn't agree. ("if I asked
him")
Third conditional
We can use the Third Conditional to talk about
'impossible' conditions, impossible because they are in
the past and we cannot change what has happened: If I
had worked harder at school, I would have got better grades
/ If I had had time, I would have gone to see him. But I
didn't have time / If we had bought that house, we would
have had to rebuild the kitchen / If we had caught the
earlier train, we would have got there on time but we were
late.

Notice that the main clause can contain 'would',
'could' or 'might: If I had seen him at the meeting, I would
have asked him. (But he wasn't there so I didn't) / If I had
seen him at the meeting, I could have asked him. ( But he
wasn't there so it wasn't possible)/ If I had seen him at the
meeting, I might have asked him. (But I'm not sure. Perhaps
if the opportunity had arisen) / If I had paid more attention
in class, I would have understood the lesson.
Also notice that sometimes the 'if clause' is implied
rather than spoken: I'd have done it. ("if you had asked
me but you didn't") / I wouldn't have said that. ("if I'd been
there.") / He wouldn't have let him get away with that. ("if
he had tried that with me.")
Wish
Let's start off with the easy part. 'I wish to' can mean
the same as 'I want to' but it is much, much more formal
and much, much less common: I wish to make a complaint /
I wish to see the manager.
You can also use 'wish' with a noun to 'offer good
wishes': I wish you all the best in your new job / We wish
you a merry Christmas.
Notice that when you want to offer good wishes using
a verb, you must use 'hope ' and not 'wish': We wish you the
best of luck / We hope you have the best of luck / I wish
you a safe and pleasant journey / I hope you have a safe and
pleasant journey.
However, the main use of 'wish' is to say that we
would like things to be different from what they are, that
we have regrets about the present situation: I wish I was

rich / He wishes he lived in Paris / They wish they'd chosen
a different leader.
Notice that the verb tense which follows 'I wish' is
'more in the past' than the tense corresponding to its
meaning: I'm too fat. I wish I was thin / I never get invited
to parties. I wish I got invited to parties / It's raining. I wish
it wasn't raining / I went to see the latest Star Wars film. I
wish I hadn't gone / I've eaten too much. I wish I hadn't
eaten so much / I'm going to visit her later. I wish I wasn't
going to visit her later.
In the case of 'will' , where 'will' means 'show
willingness' we use 'would': He won't help me. I wish he
would help me / You're making too much noise. I wish you
would be quiet / You keep interrupting me. I wish you
wouldn't do that.
Where 'will' means a future event, we cannot use
'wish' and must use 'hope': There's a strike tomorrow. I
hope some buses will still be running / I hope everything
will be fine in your new job.
In more formal English, we use the subjunctive form
'were' and not 'was' after 'wish': I wish I were taller / I wish
it were Saturday today / I wish he were here.
Had better
We use “had better” plus the infinitive without “to” to
give advice. Although “had” is the past form of “have”, we
use “had better” to give advice about the present or
future: You'd better tell her everything / I'd better get back
to work / We'd better meet early.

The negative form is “had better not”: You'd better
not say anything / I'd better not come / We'd better not miss
the start of his presentation.
We use “had better” to give advice about specific
situations, not general ones. If you want to talk about
general situations, you must use “should”: You should
brush your teeth before you go to bed / I shouldn't listen to
negative people / He should dress more appropriately for
the office.
When we give advice about specific situations, it is
also possible to use “should”: You shouldn't say anything /
I should get back to work / We should meet early.
However, when we use “had better” there is a
suggestion that if the advice is not followed, that something
bad will happen: You'd better do what I say or else you will
get into trouble / I'd better get back to work or my boss will
be angry with me / We'd better get to the airport by five or
else we may miss the flight.
Used to
Used to do. We use 'used to' for something that
happened regularly in the past but no longer happens: I
used to smoke a packet a day but I stopped two years ago /
Ben used to travel a lot in his job but now, since his
promotion, he doesn't / I used to drive to work but now I
take the bus.
We also use it for something that was true but no
longer is: There used to be a cinema in the town but now
there isn't / She used to have really long hair but she's had it
all cut off / I didn't use to like him but now I do.

'Used to do' is different from 'to be used to doing'
and 'to get used to doing' to be used to doing. We use
'to be used to doing' to say that something is normal, not
unusual: I'm used to living on my own. I've done it for quite
a long time / Hans has lived in England for over a year so
he is used to driving on the left now / They've always lived
in hot countries so they aren't used to the cold weather here.
We use 'to get used to doing' to talk about the process
of something becoming normal for us: I didn't understand
the accent when I first moved here but I quickly got used to
it / She has started working nights and is still getting used
to sleeping during the day / I have always lived in the
country but now I'm beginning to get used to living in the
city.
Asking questions
The basic rule for asking questions in English is
invert the order of the subject and the first auxiliary
verb: It is snowing. = Is it snowing? / He can speak
German. = Can he speak German? / They have lived here a
long time. = Have they lived here a long time? / She will
arrive at ten o'clock. = Will she arrive at ten o'clock? / He
was driving fast. = Was he driving fast? / You have been
smoking. = Have you been smoking?
If there is no auxiliary, use part of the verb 'to do':
You speak fluent French. = Do you speak fluent French? /
She lives in Brussels. = Does she live in Brussels? / They
lived in Manchester. = Did they live in Manchester? / He
had an accident. = Did he have an accident?

Most questions with question words are made in the
same way: How often does she use it? / Why don't you
come? / Where do you work? / How many did you buy? /
What time did you go? / Which one do you like? / Whose
car were you driving?
Note who, what and which can be the subject.
Compare: Who is coming to lunch? (who is the subject of
the verb) - Who do you want to invite to lunch? (you is the
subject of the verb) - What happened? (what is the subject
of the verb) - What did you do? (you is the subject of the
verb)
Note the position of the prepositions in these
questions: Who did you speak to? / What are you looking
at? / Where does he come from?
Question tags
We use tags in spoken English but not in formal
written English. They are not really questions but are a way
of asking the other person to make a comment and so keep
the conversation open.
Making a tag is very mechanical. To make a tag, use
the first auxiliary. If there is no auxiliary, use do, does or
did. With a positive sentence, make a negative tag and
with a negative sentence, make a positive tag: It's
beautiful, isn't it? / He has been, hasn't he? / You can, can't
you? / It must be, mustn't it? / You know him, don’t you? /
He finished it, didn't he? / He will come, won't he? / It isn't
very good, is it? / It hasn't rained, has it? / It can't be, can it?
/ Jenny doesn't know James, does she? / They didn't leave,
did they? / He won’t do it, will he?

Notice these: There isn't an ATM here, is there? /
Let's have a cup of coffee, shall we?
To reply, use the same auxiliary: It's beautiful, isn't it?
~ Yes, it is. I think it's fabulous / It isn't very good, is it? ~
No, it isn't. In fact, it's terrible.
Although, the rules are very simple and mechanical,
in order to use them easily in conversation, they have to be
automatic. So you need to hear and practice them very
often.
Reported speech
We use reported speech when we are saying what
other people say, think or believe: He says he wants it /
We think you are right / I believe he loves her / Yesterday
you said you didn't like it but now you do! / She told me he
had asked her to marry him / I told you she was ill / We
thought he was in Australia.
When we are reporting things in the present, future or
present perfect we don't change the tense: He thinks he
loves her / I'll tell her you are coming / He has said he'll do
it.
When we tell people what someone has said in the
past, we generally make the tense 'more in the past': You
look very nice. = I told him he looked very nice / He's
working in Siberia now. = She told me he was working in
Siberia now / Polly has bought a new car. = She said Polly
had bought a new car / Jo can't come for the weekend. =
She said Jo couldn't come for the weekend / Paul called and
left a message. = He told me Paul had called and had left

me a message / I'll give you a hand. = He said he would
give me a hand.
However, when we are reporting something that was
said in the past but is still true, it is not obligatory to make
the tense 'more in the past'. The choice is up to the speaker.
For example: (a) "The train doesn't stop here.": He said the
train doesn't stop here / He said the train didn't stop here.
(b) "I like Sarah.": She said she likes Sarah / She said she
liked Sarah.
When we are reporting what was said, we sometimes
have to change other words in the sentence. We have to
change the pronoun if we are reporting what someone else
said. Compare these two sentences. In each case the person
actually said "I don't want to go": I said I didn't want to go /
Bill said he didn't want to go.
We have to change words referring to 'here and now'
if we are reporting what was said in a different place or
time. Compare these two sentences. In each case the person
actually said "I'll be there at ten tomorrow": (If it is later the
same day) He said he would be there at ten tomorrow / (If it
is the next day) He said he would be there at ten today.
Now compare these two sentences: (If we are in a
different place) He said he would be there tomorrow at ten /
(If we are in the place he is coming to) He said he would be
here at ten tomorrow.
We also use reported speech when we are saying
what other people asked or wanted to know. We do not
use do or question marks in indirect questions : "What time
is it?" = He asked me what time it was / "Why hasn't he
come? = She wondered why he hadn't come / "When will

you be arriving?" = He wanted to know when we would be
arriving / "What were you doing?" = They questioned him
about what he had been doing.
We use the same structure when we report answers:
"147 Oak Street." = I told him what my address was / "I
didn't have time to do it." = She explained why she hadn't
done it / "Look at this dress and bag." = She showed me
what she had bought / "Put the paper here and press this
button." = He demonstrated how the scanner worked.
Yes/no questions are reported with if or whether: Do
you want a ride? = Mike asked me if I wanted a ride / Are
you coming? = They wanted to know if I was coming / Will
you be here later? = She asked me whether I would be here
later.
Suppose
We often use 'suppose' to mean 'imagine' or 'guess':
I suppose you'll be meeting Danielle when you go to Paris?
/ When you weren't there, I supposed you must have been
held up / I suppose you two know each other?
Notice that 'suppose' is not normally used in the
continuous form. We DO NOT usually say 'I am
supposing': Now I suppose we'll have to do something else
/ We're waiting for John and I suppose he must be stuck in
traffic / At this moment I suppose it doesn't matter.
Notice that for 'imagine not' or 'guess not' that we
make 'suppose' negative, not the other verb: I don't
suppose you know where Mary is? / I don't suppose he'll do
anything / I don't suppose you have a Nokia phone charger
here?

When responding to an idea with 'suppose', you can
use 'so' to avoid repeating the idea that has already been
expressed: Is Susan coming to this meeting? ~ I suppose so.
'Supposed to be' can be used to mean 'it is
said/believed': The new James Bond movie is supposed to
be excellent / He is supposed to have been rude to Mark but
I don't believe it / It is supposed to be the best restaurant in
town.
'Supposed to be' can also be used to talk about what
is arranged, intended or expected. It is a bit like 'should':
I'm supposed to get to work by 8 / John is supposed to turn
off all the lights when he leaves / I'm supposed to pay my
rent on the first of the month / It's not supposed to be here.
Often there is a suggestion that the action 'supposed
to' happen does not actually happen: I'm supposed to be
there before 8 but I'm often late / You were supposed to
phone me / I'm supposed to be getting on a plane to Tokyo
at this very minute.
'Not supposed to' often suggests that something is not
allowed or prohibited: You're not supposed to smoke in
here / I'm not supposed to tell you / We're not supposed to
use the Internet for personal reasons at work.
'Suppose' can also be used as a conjunction to mean
'what if'. Notice that the verb which follows it is
sometimes, but not always, put 'more in the past': Suppose
we take the earlier train to Munich? It would give us more
time there / Suppose we took the plane instead? That would
give us even more time / There's nobody in reception to let
our visitors in. Suppose I sit there until somebody comes? /

I'm going to ask him for a pay increase. ~ Suppose he said
'no'? What would you do?
Have something done

If you 'have something done', you get somebody else
to do something for you: I'm going to have my hair cut /
She's having her house redecorated / I'm having a copy of
the report sent to you
In informal English, we can replace 'have' by 'get':
We're getting a new telephone system installed / They will
be getting the system repaired as quickly as they can / I got
the bill sent direct to the company
We can also use 'have/got something done' in
situations where something bad has happened to people or
their possessions. This is not something they wanted to
happen: John had all his money stolen from his hotel
bedroom / We had our car damaged by a falling tree / I got
my nose broken playing rugby.
Should have
We can use 'should have' to talk about past events
that did not happen: I should have let her know what was
happening but I forgot / He should have sent everybody a
reminder by email / They should have remembered that
their guests don't eat pork.
We can also use 'should have' to speculate about
events that may or may not have happened: She should
have got the letter this morning. I expect she'll give us a call
about it later / He should have arrived at his office by now.

Let's try ringing him / They should have all read that first
email by this stage. It's time to send the next one.
We can use ' should not have' to speculate negatively
about what may or may not have happened: She
shouldn't have left work yet. I'll call her office / He
shouldn't have boarded his plane yet. We can probably still
get hold of him / They shouldn't have sent the report off for
printing yet. There is still time to make changes.
We can also use 'should not have' to regret past
actions: I shouldn't have shouted at you. I apologize / We
shouldn't have left the office so late. We should have
anticipated this bad traffic / They shouldn't have sacked
him. He was the most creative person on their team.
Can have / Could have

We can use 'could have' to talk about something
somebody was capable of doing but didn't do: I could
have gone to Oxford University but I preferred Harvard /
She could have married him but she didn't want to / They
could have bought a house here 20 years ago but chose not
to.
Often, there is a sense of criticism: You could have
phoned me to let me know / They could have helped me
instead of just sitting there / I could have done more to help
you. Sorry.
We can use 'couldn't have' to talk about something
we were not capable of doing: I couldn't have managed
without you / I couldn't have got the job. He was always
going to appoint his nephew / I couldn't have enjoyed
myself more. Thank you for a lovely day.

We can use 'could have' to speculate about what has
happened. (We can also use 'may have' or 'might have' in
these situations): She could have taken the earlier train /
Simon could have told her / They could have overheard
what we said.
We can also use 'can have' to speculate about what
has happened but only in questions and negative
sentences and with words such as 'hardly', 'never' and
'only': Can she have forgotten about our meeting? / He
can't have seen us / They can hardly have thought that I was
not interested in the job.
We can also use 'could have' to speculate about
something that didn't happen: You could have broken
your neck, jumping out the window like that / He could
have hurt somebody, throwing a bottle out of the window
like that / I could have done well in my exam if I'd worked
harder.
You can also use 'could have' to talk about possible
present situations that have not happened: I could have
been earning a lot as an accountant but the work was just
too boring / He could have been Prime Minister now but he
got involved in a big financial scandal / They could have
been the market leaders now if they had taken his advice.
Will be doing
We can use 'will be doing' to talk about something
that will be in progress at a particular moment in the
future: This time next week, I'll be sitting on the beach in
Barbados / I'll be thinking about you all back in the office –

and I'll be laughing / We'll be enjoying ourselves too, boss.
We won't be doing any work while you are not here.
We can use 'will be doing' to talk about future
events that are fixed or decided: I'll be visiting your
country on a regular basis. In fact, I'm going to be coming
next month / He'll be looking after the factory until we can
appoint a new manager / They'll be thinking about this very
carefully over the next few months.
We can use 'will be doing' to predict what is
happening now: Try phoning his hotel. He'll probably still
be having breakfast / They'll be deciding who gets the
contract at this very moment. I'm very nervous / She's not
in her office. She'll be having lunch in the canteen.
We can use 'will be doing' to ask extremely politely,
and with no pressure, about future plans: Will you be
eating with us this evening? / Will you be needing anything
else? / Will they be joining us for dinner?
Will have done

We can use 'will have done' to talk about what will
have been achieved by a certain moment in time: We'll
have been in these offices for eight years next month /
She'll have visited ten countries in twelve days by the time
she gets back / I'll have finished this project by Friday.
If we want to emphasize the continuity of the
activity, we can use the continuous form: I'll have been
working here for 35 years by the time I retire / She'll have
been driving for more than fifteen hours straight by the time
she gets here / They'll have been working with us for 15
years by the end of this year.

We can also use 'will have done' to predict what we
think has already happened at present: He'll have
already read the report by now. Too late to change it / She'll
have boarded her plane. It's too late to contact her / They'll
have decided by now. We should hear the result today or
tomorrow.

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Lesson Module

ENGLISH FOR ECONOMISTS

English for Economists [1] Compiled by Murry Darmoko 2020

First Printing, November 2020

All rights reserved

English for Economists [2] Compiled by Murry Darmoko 2020

English is the most language used in communication

This Lesson Module English for Economists is one of

This book is an introduction of the English for

I would like to thank :

a. Architamittra from FluentU Business English Blog

English for Economists [3] Compiled by Murry Darmoko 2020

Also, I would like to thank God, Prophet Muhammad

Murry Darmoko M., SHI., MA.

English for Economists [4] Compiled by Murry Darmoko 2020

English for Economists [5] Compiled by Murry Darmoko 2020

English for Economists [6] Compiled by Murry Darmoko 2020

English for Economists [7] Compiled by Murry Darmoko 2020

How Can You Improve Your Economics

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English for Economists [9] Compiled by Murry Darmoko 2020

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English for Economists [11] Compiled by Murry Darmoko 2020

English for Economists [12] Compiled by Murry Darmoko 2020

English for Economists [13] Compiled by Murry Darmoko 2020

English for Economists [14] Compiled by Murry Darmoko 2020

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English for Economists [17] Compiled by Murry Darmoko 2020

English for Economists [18] Compiled by Murry Darmoko 2020

English for Economists [19] Compiled by Murry Darmoko 2020

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Junko Hey, Paiboon.

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English for Economists [31] Compiled by Murry Darmoko 2020

There are four types of economic systems:

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English for Economists [34] Compiled by Murry Darmoko 2020

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FOR YOUR INFORMATION

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