ingles

LESSON

20

Financial Systems
Target Words
1. allocate
2. commodity
3. decline
4. equity
5. inflation

6.
7.
8.
9.
10.

net
per capita
regulate
subsidy
tangible

Definitions and Samples
1. allocate v. To give out different amounts for different purposes
The budget allocates $58 billion to the military and only about
$2 billion to education.

Usage tips Things that canbe allocated are things that can be
“spent”—money, time, energy, etc.

Parts of speech allocation n
2. commodity n. A thing that can be bought and sold, such as grain, oil,
or wood
Tulip bulbs were one of the most valuable commodities in
seventeenth-century Holland.

Usage tips A thing is called a commodity only in the context of
buying or selling it.

Copyright © 2005 by TheMcGraw-Hill Companies, Inc. Click here for terms of use.

Money

98

3. decline v. To decrease in power or amount
America’s railroads declined because the automobile dominated
American life.

Parts of speech decline n
4. equity n. The value of one’s share in an investment
Barnard’s equity in the business was one-third, or about $350,000.

Usage tips In this meaning, equity is alwayssingular and usually
followed by an in phrase.

5. inflation n. A situation in which prices for many items rise quite fast
During the rapid inflation of the 1970s, prices for food and fuel
sometimes rose 20 percent in a single month.

Parts of speech inflate v, inflationary adj
6. net adj. After all costs have been subtracted from an amount
My gross salary is around $35,000, but my net pay iscloser to
$29,000.

Parts of speech net v, net n
7. per capita adv. For each person
Research shows we’re likely to sell 15 light bulbs per capita per
year in medium-sized cities.

Parts of speech per capita adj
8. regulate v. Control according to a set of rules
Trading on the New York Stock Exchange is regulated by officials of
the exchange and by federal law.

Parts of speechregulation n, regulatory adj
9. subsidy n. Money given by a government or other organization to support an activity
Federal subsidies to grain farmers have helped them stay in business
despite three years of bad weather.

Parts of speech subsidize v

Financial Systems

99

10. tangible adj. Obviously real because it can be seen, touched, or otherwise observed
One tangible benefit of puttingelectrical cables underground is a
clearer view of the sky.

TOEFL Prep I Cross out the one word or phrase that doesn’t fit
into each of the lists.
1. things that can be allocated
money time temperature attention
2. kinds of commodities
oil sadness corn meat
3. tangible things
fairness a road trees money
4. things you can have equity in
a company a house a child a racehorse

TOEFL PrepII Circle the word that best completes each sentence.
1. Buy a car now, before (equity / inflation) drives the price up.
2. Most investors make a mistake. During a stock-market (decline /
subsidy) they get frightened and sell.
3. The government is giving a (regulation / subsidy) to tobacco farmers so they can compete with foreign producers.
4. Cortecal Inc. estimates that it spends $80.00(per capita / net) on
its annual picnic and on its New Year party for the company’s 1,300
employees.
5. I think that artificial “holidays”like Valentine’s Day or Secretary’s Day
are just an attempt to turn private feelings into a(n) (commodity /
equity).

TOEFL Success Read the passage to review the vocabulary you
have learned. Answer the questions that follow.
The great unsettled questionof economics is: “How much should the
government regulate business?” Conservatives generally argue for a

Money

100

decline in government involvement, but they favor certain subsidies to
farmers, steelmakers, or airplane manufacturers. Some conservatives also
see no conflict between their small-government views and their eagerness
for the government to allocate more money for roads...