Questões de Língua Inglesa da Escola de Administração Fazendária (ESAF)

Read the text below in order to answer questions 34 to 36:

Fed steers US rates lower by quarter point

The US Federal Reserve last night demonstrated its determination to steer the American economy away from recession when it cut its key interest rate for the seventh time this year and signalled that borrowing costs could fall again.

The Fed announced it was cutting its funds rate by a quarter of a point to 3.5 per cent, its lowest for seven years, and also reduced its largely symbolic discount rate. The discount rate fell a quarter of a point to 3 per cent, matching lows seen in the early 1990's.

In a statement released alongside the rate decision, the Fed reiterated its so-called "easing bias", a signal that rates are more likely to fall than rise, saying that the risks to the US economy remained "weighted mainly toward economic weakness".

The Fed said: "Business profits and capital spending continue to weaken and growth abroad is slowing, weighing on the US economy".

In connection with recession in the American economy, the aim of the Fed is to

• A. sustain it.
• B. bide its time.
• C. avert it.
• D. restore it.
• E. interpret it.

Read the text below in order to answer questions 37 to 40:

Shocks to the system

At the start of the year, it was not uncommon to hear businessmen saying that Brazil was enjoying its best economic conditions for a generation. The country appeared to be well on the way to a period of sustained economic expansion. Most economists were looking to another strong year of growth, with gross domestic product expanding by 4.5 per cent in 2001, on top of 4 per cent in 2000. Real interest rates were about to fall to single digits for the first time in decades.

However, within just a few months, the outlook for the Brazilian economy has deteriorated dramatically. A whole series of unexpected factors are to blame. "We have been confronted by a series of shocks", admits Armínio Fraga, president of the central bank.

The main cause of this turnaround has been the energy crisis. It had been well known for several years that Brazil ran the risk of power shortages because the expansion of capacity was not accompanying growth in demand, leaving the reservoirs that fuel the power stations precariously low. Yet, even with so much advance warning, the introduction of rationing still came as a surprise.

Concerning the Brazilian economy, the year 2001 has been

• A. disappointing.
• B. predictable.
• C. invaluable.
• D. satisfactory.
• E. profitable.

Read the text below in order to answer questions 16 to 18.

INSURANCE AGENTS

Insurers deliver their insurance products to policyowners primarily through independent or exclusive agents. Historically, almost all insurance agents were independent business people paid on commission. More recently, many insurance companies have adopted a system where the agent is a paid employee of the firm. These agents are referred to as exclusive agents. Economists studying the differences between these two distribution systems have long argued that the independent agency system is a less efficient method of getting the product to the customer as measured by the ratio of expenses incurred to premiums written and other statistics. But recent studies suggest the reason for the higher expenses with independent agents is that they offer higher quality to policyowners through more personalized service, more advice on policy limits as well as more help when a claim is filed with the company. So one thing you could consider is how much guidance and service you want.

The text suggests that exclusive agents

• A. are not paid employees of the company
• B. have long been paid on commission
• C. were the first category of insurance agents
• D. are part of the current distribution system
• E. have been providing below the average service

Read the text below in order to answer questions 16 to 18.

INSURANCE AGENTS

Insurers deliver their insurance products to policyowners primarily through independent or exclusive agents. Historically, almost all insurance agents were independent business people paid on commission. More recently, many insurance companies have adopted a system where the agent is a paid employee of the firm. These agents are referred to as exclusive agents. Economists studying the differences between these two distribution systems have long argued that the independent agency system is a less efficient method of getting the product to the customer as measured by the ratio of expenses incurred to premiums written and other statistics. But recent studies suggest the reason for the higher expenses with independent agents is that they offer higher quality to policyowners through more personalized service, more advice on policy limits as well as more help when a claim is filed with the company. So one thing you could consider is how much guidance and service you want.

According to the text, economists

• A.

  have proposed a system called independent distribution system.

• B.

  have questioned the efficiency of the independent system.

• C.

  are responsible for delivering the premium to the policy holders.

• D. have been advising professional insurance agents.
• E. specialize in providing legal consultancy.

Read the text below in order to answer questions 16 to 18.

INSURANCE AGENTS

Insurers deliver their insurance products to policyowners primarily through independent or exclusive agents. Historically, almost all insurance agents were independent business people paid on commission. More recently, many insurance companies have adopted a system where the agent is a paid employee of the firm. These agents are referred to as exclusive agents. Economists studying the differences between these two distribution systems have long argued that the independent agency system is a less efficient method of getting the product to the customer as measured by the ratio of expenses incurred to premiums written and other statistics. But recent studies suggest the reason for the higher expenses with independent agents is that they offer higher quality to policyowners through more personalized service, more advice on policy limits as well as more help when a claim is filed with the company. So one thing you could consider is how much guidance and service you want.

The author

• A.

  has proposed higher investments in the exclusive system in the future.

• B.

  suggests that policy holders must provide more personalized feedback.

• C.

  has shown two distinguishable systems of distribution.

• D.

  has been researching alternative ways of filing a claim.

• E.

  has devised two distinguishable systems of distribution.

Read the text below in order to answer questions 19 and 20.

WHEN APPLYING FOR AN INSURANCE POLICY...

When you apply for an insurance policy, you will be asked all sorts of questions. For example, the agent will ask you demographic questions such as your age, gender, address, etc. You will also be asked questions which will be used to determine what type of risk you are. For example, when a company is deciding whether or not to offer you automobile insurance, it will want to know about your driving record, whether you have any recent accidents or tickets, and what type of car you drive. This information will help them decide whether your profile is consistent with the type of risks they are trying to attract. Some insurers specialize in offering insurance only to very safe drivers and will only accept applications from people who fit the profile of a safe driver. Once the insurer has decided your profile is consistent with the types of risks it accepts, your information will be used to determine which rate to charge you. For example, the company will decide whether you should be offered insurance at the high-risk driver rate or the low-risk driver rate. Collectively, this entire process is known as the underwriting process. Once a company's underwriting department has decided to offer you insurance, it next determines the "quality" of the risk so the proper premium can be charged. That is, high-risk people should pay more than low-risk people.

According to the text,

• A. a safe driver will not be asked questions.
• B.

  accidents and tickets prevent drivers from applying for an insurance.

• C.

  the applicant's profile relates exclusively to his educational background.

• D.

  policy holders guarantee the quality of the risk involved.

• E.

  high-risk drivers might be refused by some insurers.

Read the text below in order to answer questions 19 and 20.

WHEN APPLYING FOR AN INSURANCE POLICY...

When you apply for an insurance policy, you will be asked all sorts of questions. For example, the agent will ask you demographic questions such as your age, gender, address, etc. You will also be asked questions which will be used to determine what type of risk you are. For example, when a company is deciding whether or not to offer you automobile insurance, it will want to know about your driving record, whether you have any recent accidents or tickets, and what type of car you drive. This information will help them decide whether your profile is consistent with the type of risks they are trying to attract. Some insurers specialize in offering insurance only to very safe drivers and will only accept applications from people who fit the profile of a safe driver. Once the insurer has decided your profile is consistent with the types of risks it accepts, your information will be used to determine which rate to charge you. For example, the company will decide whether you should be offered insurance at the high-risk driver rate or the low-risk driver rate. Collectively, this entire process is known as the underwriting process. Once a company's underwriting department has decided to offer you insurance, it next determines the "quality" of the risk so the proper premium can be charged. That is, high-risk people should pay more than low-risk people.

The premium established by the insurer

• A. is related to the customer's income tax.
• B. relies on the agent's financial stability.
• C. is consistent with the local political scenario.
• D. is based on the quality of the risk.
• E. is made available by the local government.

Read the text below in order to answer questions 14 to 16.

THE BUDGET FOR THE YEAR 2000

Most analysts believe that the budget for the year 2000 presented by the government is feasible, but many points used to design the budget depend on negotiations with Congress. "If first impressions are confirmed, the budget corresponds to reality", says former Central Bank President Affonso Celso Pastore. According to the Chief Economist for Citibank, the budget is feasible but not easy to accomplish.

Specialists say that the government would have to reduce monthly expenses immediately until the end of the year from R$ 3.5 billion to R$ 2.87 billion, which would correspond to a 20% reduction. "It's quite a tight budget", said former Minister Maílson da Nóbrega. The main problem is that state employees' salaries have been raised and an extra R$ 3.1 billion will have to be paid next year.

Analysts predict

• A.

  a necessary cut in the public expenditure

• B.

  a further increase in state employees' salaries

• C.

  a considerable surplus for the public sector

• D.

  a substantial change in the fiscal responsibility law

• E.

  a huge technological investment

Read the text below in order to answer questions 14 to 16.

THE BUDGET FOR THE YEAR 2000

Most analysts believe that the budget for the year 2000 presented by the government is feasible, but many points used to design the budget depend on negotiations with Congress. "If first impressions are confirmed, the budget corresponds to reality", says former Central Bank President Affonso Celso Pastore. According to the Chief Economist for Citibank, the budget is feasible but not easy to accomplish.

Specialists say that the government would have to reduce monthly expenses immediately until the end of the year from R$ 3.5 billion to R$ 2.87 billion, which would correspond to a 20% reduction. "It's quite a tight budget", said former Minister Maílson da Nóbrega. The main problem is that state employees' salaries have been raised and an extra R$ 3.1 billion will have to be paid next year.

According to the text, the state employees'salaries

• A.

  must have been reduced

• B.

  have not been negotiated

• C.

  must be taken into account

• D.

  represent a 20% cut in the budget

• E.

  have undoubtedly been neglected

Read the text below in order to answer questions 14 to 16.

THE BUDGET FOR THE YEAR 2000

Most analysts believe that the budget for the year 2000 presented by the government is feasible, but many points used to design the budget depend on negotiations with Congress. "If first impressions are confirmed, the budget corresponds to reality", says former Central Bank President Affonso Celso Pastore. According to the Chief Economist for Citibank, the budget is feasible but not easy to accomplish.

Specialists say that the government would have to reduce monthly expenses immediately until the end of the year from R$ 3.5 billion to R$ 2.87 billion, which would correspond to a 20% reduction. "It's quite a tight budget", said former Minister Maílson da Nóbrega. The main problem is that state employees' salaries have been raised and an extra R$ 3.1 billion will have to be paid next year.

In connection to the budget for year 2000, analysts believe that it

• A.

  ought to be designed by the Congress

• B.

  might be achieved

• C.

  is hardly attainable

• D.

  will be increased by 20%

• E.

  has been endorsed by the Congress