Reading Comprehension Producers and consumers Once people could only trade what they could produce with their hands or find in nature for things that other people had made. Then money became a medium of exchange and economic systems were created. Today, developments in industry and technology have enabled vast quantities of goods to be manufactured, transported, and traded, and a range of services like insurance, banking and retail have also appeared. In the digital age, services such as online shopping have made selling goods even easier and trade is now more global than ever. Have these transformations made our lives better? The most obvious benefits of trade relate to consumer choice. There are so many goods and services to choose from that shopping has now become a leisure activity for many people. The internet has also allowed shoppers to compare prices and choose the best deal. However, there are winners and losers; not all consumers have enough disposable income to be able to enjoy the choice available. Advertising and the media have contributed to a culture of consumerism, in which unhealthy, materialistic lifestyles are encouraged. The over-use of credit cards and loans can result in debt, which allows banks to make further profit through interest payments and fees. Not all products are beneficial to society. In their urge to satisfy consumer demands, companies may manufacture products that are bad for consumers; such as highly refined foods with too much sugar or salt. And it isn’t just the goods themselves that may have negative effects. Our inability to recycle much of what we produce, and surplus, caused by over-production, can lead to unwanted packaging and unsold goods. If this waste is not properly disposed of it can end up polluting the land and the oceans, killing plants and animals. Governments may also choose to regulate the behaviour of large companies to prevent them from competing unfairly with smaller ones. Large companies are in a stronger position to negotiate cheaper prices from suppliers. If a company becomes too big, it can reduce the level of competition in the market and lead to unfairly high prices. Large multinational businesses also sometimes avoid paying tax, for example by locating their offices in countries with low or zero rates of tax. It is possible to reduce the negative effects of ‘free trade’ by setting minimum wages, nationalizing certain companies (often utility providers), giving subsidies to smaller, local suppliers and lowering tax rates for small or local businesses. Although these regulations may help, the financial influence of large companies and the risk of preventing market growth can mean governments don’t regulate fairly. For example, they may avoid closing tax loopholes. Finally, regulations designed to help small businesses can actually harm them, because they often require businesses to make expensive and time consuming changes to the way they run. (467 words) 10) Giving subsidies to smaller, local suppliers is one of the regulations that may help to________________. Select one: a. reduce the negative effects of free trade b. end up polluting the land and the oceans c. create medium of exchange d. make interest payments e. avoid closing tax loopholes
Reading Comprehension
Producers and consumers
Once people could only trade what they could produce with their hands or find in nature for things that other people had made. Then money became a medium of exchange and economic systems were created. Today, developments in industry and technology have enabled vast quantities of goods to be manufactured, transported, and traded, and a range of services like insurance, banking and retail have also appeared. In the digital age, services such as online shopping have made selling goods even easier and trade is now more global than ever. Have these transformations made our lives better?
The most obvious benefits of trade relate to consumer choice. There are so many goods and services to choose from that shopping has now become a leisure activity for many people. The internet has also allowed shoppers to compare prices and choose the best deal. However, there are winners and losers; not all consumers have enough disposable income to be able to enjoy the choice available. Advertising and the media have contributed to a culture of consumerism, in which unhealthy, materialistic lifestyles are encouraged. The over-use of credit cards and loans can result in debt, which allows banks to make further profit through interest payments and fees.
Not all products are beneficial to society. In their urge to satisfy consumer demands, companies may manufacture products that are bad for consumers; such as highly refined foods with too much sugar or salt. And it isn’t just the goods themselves that may have negative effects. Our inability to recycle much of what we
Governments may also choose to regulate the behaviour of large companies to prevent them from competing unfairly with smaller ones. Large companies are in a stronger position to negotiate cheaper prices from suppliers. If a company becomes too big, it can reduce the level of competition in the market and lead to unfairly high prices. Large multinational businesses also sometimes avoid paying tax, for example by locating their offices in countries with low or zero rates of tax.
It is possible to reduce the negative effects of ‘free trade’ by setting minimum wages, nationalizing certain companies (often utility providers), giving subsidies to smaller, local suppliers and lowering tax rates for small or local businesses. Although these regulations may help, the financial influence of large companies and the risk of preventing market growth can mean governments don’t regulate fairly. For example, they may avoid closing tax loopholes. Finally, regulations designed to help small businesses can actually harm them, because they often require businesses to make expensive and time consuming changes to the way they run. (467 words)
10) Giving subsidies to smaller, local suppliers is one of the regulations that may help to________________.
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