English Test for Business Intermediate Level Reading Comprehension You can spend 45 minutes on the Reading test.

Write your answers on the ANSWER SHEET. Reading passage 1

Engineering a recovery

Transforming an old-economy manufacturer requires not only costcutting, but also growth and innovation, says Peter Marsh A Siemens was once a symbol of all that was wrong with Europes high-technology industry. Now the German electrical and electronic-goods maker has become a case study in what good management and hard decisions can put right. B As recently as 1998, the company was derided as old-economy. It had management methods rooted in the 19th century and financial returns to match. Much of its manufacturing was based on rigid production processes that could not easily be adapted to new products. C There is still much to do, but Heinrich von Peter, Siemens longserving chief executive, has increased productivity and innovation in many of its businesses and the group has begun to return some decent financial results. Last year saw a 37 per cent surge in after-tax profits to DM3.6bn (1.1bn) on sales of DM134bn. Investors cheered and the share price has tripled to 162.7 since the start of 1999. D The pace of change has been as great in the past few years as at any time in the companys 153-year history. Some of its progress can be put down to industrial and financial restructuring. Siemens has shed poor business with sales of DM17bn a year, introduced share option schemes and ensured that its accounting is more transparent. It has also started to list valuable subsidiaries, the latest being Unisphere, an Internet infrastructure company. E But at the heart of Siemenss new start lies a management strategy that it calls time-optimised processes, or Top. Nobody in Siemens is more closely identified with the nuts and bolts of Top than Edward Krubasik, a former nuclear physicist who became a consultant at McKinsey. F Indeed, Mr Krubasiks arrival on Siemens 10-strong management board in early 1997 was a sign that change was on the way. A decade earlier, Siemens top directors gained their jobs only after decades on the lower rungs.

G Ostensibly, Mr Krubasiks role is to look after Siemens industrial and transport activities, manufacturing machine-tool control, drives, railequipment and vehicle parts. It is one of the six divisions in the company the others cover power station equipment, mobile telephones, semiconductors and medical systems and accounts for a third of sales and 40 per cent of profits. Financial Times, August 8, 2000

Questions 1-4 In boxes 1-4 on your Answer Sheet write T F NS if the statement is TRUE according to the text if the statement is FALSE according to the text if the statement is NOT STATED in the text

1. Siemens used to be Europes best electrical and electronic-goods maker. 2. Its management methods were old-fashioned in 1998. 3. Last year there was an increase in after-tax profits. 4. Edward Krubasik is the most competent person in questions related to Top. Questions 5-7 Answer the following questions with NOT MORE THAN EIGHT WORDS. Write your answers on the Answer Sheet. 5. How old is the company? 6. Mention two divisions of the company. 7. How did someone become a member of the board in 1987? Questions 8-11 The reading passage has 7 paragraphs marked A-G. Match the headings under 8-11 with the proper paragraphs by writing the letter A-F in boxes 8-11 on the Answer Sheet. 8. Signs of Progress in Figures 9. Steps Taken 10. Old Times 11. A Division Worth Saving

Reading Passage 2

How low can you go?

Central banks disagree on the rate of inflation to aim for All central bankers agree that price stability should be the primary goal of monetary policy. But what exactly does price stability mean? This question was debated last week at a conference organised by the European Central Bank (ECB). The issue is more controversial than most central bankers would have you believe. Some economists argue that very low inflation rates can curb economic growth. The ECB defines price stability as a year-on-year increase in consumer prices of less than 2% over the medium term. The central banks of Austria, Britain, Canada, New Zealand and Sweden all have inflation targets with mid-points between 1.5% and 2.5%. Americas Fed has no explicit target, but the countrys current inflation rate of 3.5% suggests that it is happy to tolerate a somewhat higher rate than the ECB. So is the ECBs inflation goal too restrictive? One reason that no central bank actually aims for zero inflation is that official price indices tend to overstate true inflation, partly because they fail to take full account of improvements in the quality of products. But there are two potentially more important reasons why some economists favour an inflation rate of 3-4%, say, rather than the ECBs target of below 2%. The first is that wages tend to be sticky downwards. Workers may be prepared to accept zero wage increases if inflation is 3%, implying a 3% real pay cut. But they are reluctant to accept a pay cut in money terms. So if inflation is zero, real wages cannot easily fall in declining regions or industries, and unemployment will rise. Inflation, the argument runs, greases the wheels of the labour market and lowers unemployment. But inflation also throws sand into the economic gears by distorting price signals and causing a misallocation of resources. When inflation is high, people find it hard to tell if a rise in price of a product reflects general inflation or an increase in demand for that product. High rates of inflation are therefore bad for growth and jobs. This suggests that the optimal rate of inflation depends on the effects of the grease and the sand. The Economist, 11 November, 2000 Questions 12-15 Indicate which bank the following statements refer to. They can refer to both of them or neither of them as well. Tick the appropriate boxes on your answer sheet. ECB 12. Price stability is the most important aim of monetary policy. Fed Neither Both

13. Price stability means that consumer prices dont rise by more than 2% a year. 14. The ultimate aim of monetary policy is zero inflation. 15. Price stability is not defined.

Questions 16-18 Answer the following questions with NOT MORE THAN EIGHT WORDS. Write your answers on the Answer Sheet. 16. How can improvements in the quality of products influence inflation figures? 17. How does zero inflation affect real wages in declining industries? 18. What can the price of a product reflect if inflation is high? Questions 19-20 Choose the most appropriate of the alternatives and write the letter of your answer against the question number on the Answer Sheet. 19. To grease in the text means 20. to increase B. to accelerate, to stimulate down C. to slow

20. To throw sand into the economic gears in the last paragraph means 21. to stimulate the economy B. to slow down the economy C. to lead to recession

English Test for Business Intermediate Level Grammar and Vocabulary You can spend 40 minutes on this test. Write your answers on the ANSWER SHEET. I. Write the business words or expressions defined below on the Answer Sheet. 1. A draft payable on presentation. 2. An official document that gives the holder the sole right to make, use or sell an invention. 3. An article which is sold very cheaply to encourage customers to come into a shop and once they are there, they may buy other things at profitable prices. 4. Negotiations between unions and employers about their members wages and working conditions 5. Making false declarations to tax authorities II. Write on your Answer Sheet what the following abbreviations stand for. 6. FOB 7. SMEs 8. FPA 9. WTO 10. CEO III. There is a logical connection among three of the four words in each of the following groups. Which is the odd one out? 11. subordinates, report to, monopoly, hierarchy 12. balance sheet, balance of trade, balance of payments, balance of current account 13. face value, market value, nominal value, par value 14. autarky, counter trade, invisible trade, visible trade 15. competitions, coupons, free samples, line-stretching IV. Choose the correct answer. 16. Buying products or processed materials from other companies rather than manufacturing them: 17. outsourcing B. sourcing out C. down-sizing D. outcontracting 17. A document stating the companys name, its purpose, registered office or premises and the amount of authorised capital:

A. Memorandum of Association and Loss Account

B. Articles of Association D. Income statement

C. Profit

18. A tax levied at a higher rate on higher incomes is called: A. indirect tax D. VAT B. progressive tax C. wealth tax

19. A bank offering a wide range of services to businesses and to the general public. A. commercial bank building society B. merchant bank C. central bank D.

20. The Brussels-based administrative and executive body of the EU, it is a guardian of the Treaties and is responsible for proposing and implementing the Unions legislation: A. The European Parliament B. The Council B. The Court of Justice C. The Commission

V. Re-write the following sentences. The beginning of each sentence is given for you. Write your sentences into boxes 2130 on the Answer Sheet. It is pointless placing the order once again. 21. Its not worth ........................................................................................................ .... They asked us to hand over the documents. 22. We .......................................................................................................... .................. I wish the company did not lay off the workers. 23. Id rather ....................................................................................................... ............ If he happens to sign the contract, inform me immediately. 24. Should he ............................................................................................................. .... I am sure that we have already sent this fax. 25. This fax ............................................................................................................ .........

We would never have succeeded without the merger of the two companies. 26. If the two companies ................................................................................................ ... The last time I had a meeting with the General Manager was a month ago. 27. I ...................................................................................................... for a month. It would be necessary to contact an advertising agency. 28. I suggest ..................................................................................................... ................ Why didnt you apply for the job if you really wanted to work as a marketing manager? 29. You should ....................................................................................................... ......... Last week the company raised all the workers wages. 30. Last week the company gave ....................................................................................... VI. Complete each sentence with the correct form of the word in capital letters. Write on the Answer Sheet. 31. SUBSIDISE Our country has received considerable agricultural ....................... . 32. RESTRICT 33. LOSE at a China imposed tough import ....................... last year. I was shocked to realise that the company was operating .......................... .

34. COMPETITION The food retail market is becoming increasingly ..................... 35. ECONOMY The country is in danger of collapsing ......................... and politically. VII. Choose the best alternative by writing a) d) on the Answer Sheet. 36. Lets get ............ to business, shall we? a. for b. on c. down d. to

37. You could contribute more ...... the success of the company.

a. for

b. to

c. by

d. at

38. Your children would benefit ....... this insurance. a. out of b. from c. on d. with

39. Our management is strongly opposed .... increasing the wages. a. against b. for c. to d. at

40. We have placed an order ...... a very famous manufacturer. a. with b. at c. by d. for

VIII. Fill in the gaps in the sentences with one of the following linking words or expressions. You will not need two of the expressions. since because of that on the contrary however despite but although in order to before unless which

41. Im afraid well have to do some market research ......... we decide how to develop the product. 42. ................... the goods were delivered with great care, most of them got damaged. 43. .................... the latest quotation was not favourable, we are not going to place further orders. 44. The management will lay off 10% of the workers ............. financial problems. 45. Lloyds is not a company, .............. a society of investors, called underwriters. 46. ............... the high overheads, we decided to rent the office in Rkczi street. 47. Enclosed I am sending our latest catalogue .................... arouse your interest. 48. The applicant did not get the job, ................., he was offered another position at the same company. 49. You wont get promoted ................. you work hard. 50. We couldnt get any loans from the bank, .................. is very disappointing.

English Test for Business Intermediate Level Writing You can spend 45 minutes on the writing test. You are George Newton of Campbells PLC, 62 Riverside Lane, Birmingham CF1 1JW. Your company is a producer of printers and scanners. Write a reply in 150-200 words to the following fax you have just received: FAX: 032 625 1456 Time: 10:08 Date: 18 June 2001

Harrison & Son Ltd

16 Madison Road London SW61 8DN To: Fax 0856 325108 18 June 2001 Campbells PLC 62 Riverside Lane Birmingham CF1 1JW Dear Sirs We are writing to point out that the consignment of Campbells printers, our order No. 761, which we ordered from your catalogue No. BC112, has not arrived yet. We placed the order on 1 May, 2001. This is the second time we have had to write to you on this subject. We have tried to contact you by phone, but could not get anyone in your factory who knew anything about this matter. It is essential that we deliver the printers to our customers on time. Unless you can fulfil our orders efficiently in the future, we will have to consider other sources of supply. Please ensure that this sort of problem does not arise again. Yours faithfully Jack Taylor In your letter: apologise for the delay inform your partner that a strike at the factory held up all production over the past few weeks Date:

 the debate between management and workers seems to be settled now, you are back on normal production the catalogue No. BC112 is out-of-date, the latest (including new prices) is enclosed you will deliver the printers as soon as possible you are ready to give a 5% discount because of the inconvenience

 English Test for Business Intermediate Level Reading Comprehension ANSWER SHEET KEY

1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . 16 . 17 . 18 . 19 . 20 .

NS T T T 153 years old power station equipment, mobile telephones after spending decades in lower positions C D B G ECB X X X distort inflation figures (overstate, increase ...) real wages cannot fall general inflation or an increase in demand B B Fed Neither Both X

English Test for Business Intermediate Level Grammar and Vocabulary ANSWER SHEET 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . 16 . 17 . 18 . 19 . 20 . 21 . 22 . 23 . 24 . 25 . sight-draft patent loss-leader collective bargaining tax evasion Free On Board Small- and Medium-sized Enterprises Free of Particular Average World Trade Organisation Chief Executive Officer monopoly balance sheet market value autarky line-stretching A A B A C placing the order once again were asked to hand over the documents the company had not laid off the workers sign the contract, inform me immediately must have been sent

KEY

26 . 27 . 28 . 29 . 30 . 31 . 32 . 33 . 34 . 35 . 36 . 37 . 38 . 39 . 40 . 41 . 42 . 43 . 44 . 45 . 46 . 47 . 48 . 49 .

had not merged, we would never have succeeded have not met the General Manager / have not had a meeting with the General Manager contacting an advertising agency / that we should contact an advertising agency have applied for the job if you really wanted to work as a marketing manager a pay-rise for all the workers / all the workers a pay-rise subsidies restrictions loss competitive economically C B B C A before although since because of but despite in order to however unless

50 which .

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