Unit 2

U.

УІ

PART II. FINANCr

The budget is an estimate of national revenue and expenditure for the ensuing fiscal year. When expenditure exceeds the revenue the budget has a deficit.

Revenue and expenditure forecasting is the most fundamental step in the process of budget preparation. Adequate planning of recurrent and capital expenditure depends critically on an accurate forecast of revenue availability. The determination of the expected overall deficit in the public sector and therefore the macroeconomic impact of fiscal policy requires accurate forecast of tax collection and expenditures.

In Ukraine, public finance is a sum of budgets of all levels of subjects of the state, extra-budgetary and reserve funds.

Budget preparation at the state level involves a number of institutions. The Ministry of Finance (MoF) is the central coordinating institution in charge of compiling and presenting the budget. It has major inputs from ministries in various sectors of the economy and the state tax bodies.

.OCABULARY provision - забезпечення ensuing - наступний, майбутній

■0TES entity - організація fiscal year - фінансовий рік

allocation - розміщення, розподіл recurrent expenditure - поточні витрати

national revenue - національний дохід capital expenditure - капітальні витрати

estimate - оцінка, кошторис, калькуляція to compile - складати

LXERCISES I. Answer the following questions:

1. What is finance and financial system?

2. What parts does finance comprise?

3. What functions does public finance perform?

4. What is a country's budget?

5. What does the process of budget include?

II. Match the verbs from A with the nouns from В below:

A. to make	B. funds
to approve	payments
to provide	expenditure
to formulate	revenue
to cut	deficit
to cover	proposal
to provide for	provisions
to consider	budget

III. Who's Who in Finance? Match each job title on the left with the correct definition on the right (a-j)

1. tax inspector	a) The person who is responsible for an individual bank.
2. tax consultant	b) Someone who advises people on how to manage their financial affairs.
3. bank manager	c) Someone who prepares an individual's (or a company's) tax return.
4. commodity trader	d) The person who is responsible for the financial side of running a business.

NIT 1. FINANCIAL SYSTEM 85

1 5. accountant	e) A government official who checks that you are paying enough tax.
6. finance director	f) The person who finds you the best insurance policy at the best price.
7. market analyst	g) Someone who buys and sells stocks and shares for clients, and charges a commission.
8. financial advisor	h) Someone who advises you or a company on how to pay less tax.
9. insurance broker	i) Someone who comments on business and share prices in a particular sector of economy.
10. stockbroker	j) Someone who buys and sells things in large quantities, especially food products such as tea. coffee, cereals and other raw materials.

IV The World's Major Financial Centre. Supply the text with the. articles where necessary. Write down 3-5 questions about the text.

The financial heart of England is the City. It is_____ square mile in London on the bank

of___ Thames. In the centre there is the Bank of England, and the head offices and

foreign departments of other English banks.

It is ____ home of commodity, financial, and insurance markets that are all

concentrated in the narrow streets, which form the financial core (серцевина) of_______ City.

The position that the City holds is due in no small measure to the integrity of its members. The City is jealous of its honour, punctilious (пунктуальний) in fulfilling its obligations and, where deals of thousands of pounds are made merely by a word, is proud to make its word its bond (зобов'язання).

The population of the City is almost entirely_______ daytime one. Each morning about

half a million people come in from north, south, east and west, and then as evening comes

and business finishes they hurry home by_____ train, bus, car or_____ underground. Prior to

1914 this population was almost completely_____ male one, with top hat. black tail coat,

black and white striped trousers, stiff (накрохмалений) fronted shirt and stiff white collar. Two wars have changed all that. There are probably as many women employed in the City as there are men these days.

From___ earliest times the City has been ruled by its own elected Lord Mayor and

Aldermen, and to this day____ king or queen of England may not pass the bounds of the

City until he or she has had permission of_____ Lord Mayor, and then he or she comes only

as___ guest.

Generally speaking, the City performs four financial functions:

a) the City gathers in____ country's savings and provides channels and machinery for

their investment;

b) it provides____ safe, speedy and convenient means of payment without the actual

use of banknotes or coins;

c) through the medium of ______ Foreign Exchange Market it makes it possible to

exchange one currency for another;

d) it provides the organization to finance, transport and insure foodstuffs,
manufactures and raw materials on their way from producer to consumer.

V Choose the best world to complete the text. Reread the text and say what you know about the budget process in Ukraine.

1.	a) proceeds	b)revenues	c) bonuses	d) earnings
2.	a) quarter	b) day	c) month	d) year
3.	a) loss	b) cost	c) expenditure	d) experience
4.	a) economic	b) monetary	c) credit	d) budget
5.	a) budgets	b) programmes	c) requirements	d) expenses

PART II. FINANCE

6.	a) transactions	b) deals	c) operations	d) relations
	a) sum	b) deficit	c) shortage	d) lack
8.	a) financial	b) fiscal	c) coming	d) current
9.	a) Treasury	b) Parliament	c) Queen	d) Prime Minister
10.	a) announcement	b) achievement	c) report	d) statement

In market economies the budget is the proposed and later the authorized statement of

(1)___ and expenditures for a period, normally a fiscal (2)_______. The government budget

may show the planned or authorized (3) ________ of central government alone, or may

incorporate (включати) also expenditures and revenues of regional and local governments.

The budget is the key instrument for expression and execution of the government's (4)
__ policy.

Government (5)____ have a wide implication (значення) for the national economy.

There are various practical approaches to budgeting, including the administrative budget (адміністративний фінансовий кошторис), which emphasizes the expenditures of

ongoing government (6)_____; the capital budget (бюджет капіталовкладень), which

gives separate treatment to public works projects and their special financing requirements; the cash budget (бюджет готівкових коштів), which simplifies budgetary procedures, etc.

In the United States the federal budget deals mainly with expenditure programmes,

and revenues are covered only briefly. The size of the budget (7) ___________ or surplus is

regarded as very important. An important aspect of the budgetary process is a great

influence of the Congress. The US budget is submitted in January for the (8)__________ year

coming in July. It is then considered by several sub-committees of the House of Representatives and the Senate.

In Great Britain the preparation of the budget is the function of the (9)________, which is

headed by the Chancellor of the Exchequer (міністр фінансів). The emphasis of the British Budget is on taxation and the state of the economy.

The Budget is the Government's main economic (10)______ of the year. It is announced

by the Chancellor of the Exchequer who reviews the nation's economic performance and describes the Government's economic objectives and the policies it intends to follow in order to achieve them.

VI. Discussion. Give extensive answers to these discussion questions:

1. Do you agree with the definitions of finance and financial system given in the main text?

2. What role do financial intermediaries play° Is financial intermediation developed in Ukraine?

3. What is public finance? What functions does it perform?

4. What is the major instrument of any financial system?

5. What is crucial for budget preparation?

6. What bodies are involved in the budget formulation? How is the budget process arranged in Ukraine now?

7. Describe the budget system existing in Ukraine now.

8. Do you happen to know what classification of revenues is accepted now in Ukraine?

9. What are the sources of revenues?

10. How are the budget revenues spent?

VII. Writing Practice. In order to get prepared for participation in the class discussion of these questions, write several paragraphs on the following:

a) Finance and a financial system.

(Use: monetary relations, formation, distribution, turnover, network of institutions, surplus funds, financial intermediaries, to comprise, public, economic entities, functions)

b) A budget as a major instrument of a financial system.

UNIT 1. FINANCIAL SYSTEM

(Use: to achieve priorities, to allocate, to distribute resources, revenue, expenditure, to exceed, to prepare, to forecast, macroeconomic impact)

c) Budget organization and budget process in Ukraine.

(Use: state, regional, local, to approve, consolidated, source of revenue, expenditure responsibilities, autonomy)

d) Revenue sources and revenue-sharing arrangements in Ukraine.

(Use: taxes, to transfer, subject of the State, fixed revenue, regulating revenue, balance among budgets, to levy taxes, to meet the cost of services, insufficient, subventions, to grant assistance, "equalization")

VIII. Prepare a short talk on the following:

a) Say what you think about supervision over budget execution. If you have ever worked in the sphere of public finance, say what do you think about the treasury system and budget execution supervision.

b) People have long used machines to help process data. Are computers used effectively in finance? Have you ever had any problems that were caused by computers? If so, describe the situation. How might the problems have been avoided if the computer system had been managed better?

PART II. FINANCE

Дата добавления: 2014-12-23