Passage Twenty-one (The Result of the Falling US Dollar)
Like a ticking time bomb, the falling dollar has grabbed the attention of Japan and West Germany, forcing them to consider adopting economic polices the United States advocates. The U.S. government wants the dollar to fall because as the dollar declines in value against the yen and Deutsche mark, U.S. good becomes cheaper. U.S. companies then sell more at home and abroad, and U.S. trade deficit declines. Cries for trade protection abate, and the global free-trade system is preserved.
Then, the cheaper dollar makes it cheaper for many foreign investors to snap up U.S. stocks. That prompts heavy buying from abroad—especially from Japan. Also, if the trade picture is improving, that means U.S. companies eventually will be more competitive. Consequently, many investors are buying shares of export-oriented U.S. companies in anticipation of better profits in the next year or so. But that is a rather faddish notion right now; if corporate earnings are disappointing in interest rates, the stock market rally could stall.
Improving U.S. competitiveness means a decline in another’s competitiveness.
Japan and West Germany are verging on recession. Their export-oriented economies are facing major problems. Japan is worried about the damage the strong yen will do to Japanese trade. West Germany is also worried. Share prices in Frankfurt plummeted this past week. Bonn is thought to be considering a cut in interest rates to boost its economy.
Could the falling dollar get out of hand? If the dollar falls too far, investors might lose confidence in U.S. investments—especially the government bond market. The money to finance the federal budget and trade deficits could migrate elsewhere. Inflation could flare up, too, since Japanese and German manufacturers will eventually pass along price hikes—and U.S. companies might follow suit to increase their profit margins. The U.S. federal Reserve then might need to step in and stabilize the dollar by raising interest rates. And higher interest rates could cause the U.S. economy to slow down and end the Wall Street Rally.
Worried about these side effects, Federal Reserve chairman Paul Volcher has said the dollar has fallen far enough. What is the equilibrium level? Probably near where it is or slightly lower. It all depends on when the U.S. trade deficit turns around or if investors defect from U.S. Treasury Bonds. “It requires a good deal of political patience on the part of the U.S. Congress,” says Dr. Cline, “And there must be an expectation of patience on the part of private investors. The chance are relatively good that we will avoid an investor break or panic.”
1. What is the main idea of this passage?
[A]. The impression of the falling U.S. dollar.
[B]. The result of the U.S. falling dollar.
[C]. The side effect of U.S. falling dollar.
[D]. Japan and West Germany are worried about U.S. falling dollar.
2. What does the word “rally” mean.
[A]. prosperity. [B]. decline. [C]. richness. [D]. import.
3. Why are Japan and West Germany worried about the falling dollar?
[A]. Because the falling dollar may cause inflation in their countries.
[B]. Because it may force them to sell a lot of U.S, stocks.
[C]. Because it may do damage to their trade.
[D]. Because it may make Japanese company less competitive.
4. If dollar-falling got out of hand, and the U.S. Federal Reserve might step in , what would happen?
[A]. The prosperity of the U.S. economy would disappear.
[B]. The U.S. economy might face serious problems.
[C]. Investors might lose confidence in U.S. investments.
[D]ation could flare up.
Vocabulary
1. ticking 滴答作響的
2. grab 抓住
3. abate 減弱
4. snap up 爭購，搶購
5. heavy buying 大量買進
6. export-oriented 以出口爲方向的
7. in anticipation of 期待，預期
8. faddish 一時流行的
9. spree 無節制的瘋狂行爲
10. buying spree 狂購亂買
11. plummet 垂直落下，驟然跌落，暴跌
12. stall 停滯
13. verge 處於……邊緣
14. verging on recession 正處於衰退的邊緣
15. boost 振興，吹捧
16. bond market 債券市場
17. flare up 突然閃耀，發火，爆發
18. hike 提高，增加
19. follow suit 照着做，跟出同花色的牌
20. profit margin 利潤幅度
21. step in 介入
22. rally 繁榮
23. equilibrium 平衡，均勢
24. defect 逃跑，開小差
25. break or panic 崩潰或大恐慌
難句譯註
1. cries for trade protection 貿易保護的呼聲
2. the global free-trade system 全球自由貿易體系
3. that is a rather faddish notion right now 只是一時流行的概念
4. get out of hand 失控
5. What is the equilibrium level? Probably near where it is or slightly lower. 什麼是平衡水平？可能是接近現在水平或者稍低一些。
6. trade deficit 貿易赤字，貿易逆差。
寫作方法與文章大意
這是一篇論述“美元下跌的後果”的文章，採用對比，順序，因果等寫作。先提出問題：美元下跌，美國得利有二：一是（第一段）商品便宜，銷售量大，赤字下降，全球自由貿易體系保住。二是（第二段）外國投資者會搶購美國股票。總之，美國競爭力加強。
這兩段中都有對比。第一段美國和日本的對比，開頭“就像滴答作響的定時炸彈，日見下跌的美元抓住了日本和西德的注意力，迫使他們考慮採取美國提出的經濟政策。“第二段是美國本身之利弊對比。“……許多外國投資者搶購出口導向的美國股票，期望在下一年左右的時間裏得到較多的利潤。如果公司收益在今後幾個季度裏令人失望的話，這種買進古片的狂熱行爲就可能消失。最後，如果美元價格直線下跌導致利率上升，股票市場價格回升就會停頓。“ 後面兩段是這兩段負效應的進一步論證。
答案祥解
1. B. 美元下跌的結果。全篇文章都講的.美元下跌的後果。
A. 美元下跌的印象。 C. 美元下跌的副作用，均不對。 因爲還講述了有利的一面。 D. 日本的、西德擔憂美元下跌，這只是其中的部分內容。
2. A. 繁榮。第五段“美元下跌是否會失控：如果美元下跌過多，投資者可能會失去對美國投資的信心，特別是對美國的債務市場。對聯邦政府預算和貿易赤字提供的資金可能移向其它市場，因爲日本和西德廠商最終會將上漲的價格轉嫁出去，美國公司也可能這麼做，以提高其市場利潤幅度，從而使通貨膨脹再次爆發。美國聯邦儲備委員會這時可能需要介入，提高利率來穩定美元。而較高利率會導致美國經濟減慢，華爾街的繁榮行將結束。”
B. 衰退。 C. 富有。 D. 出口，都不是rally之含義。
3. C. 因爲下跌對他們貿易有損害。第三段“改善美國競爭力意味着其他國家的競爭力下降。”第四段，“日本和西德正瀕於經濟衰退的邊緣。其出口導向的經濟正在面臨嚴重問題。日本擔心由於日元堅挺而給其貿易帶來損害，西德也在發愁。上個星期，法蘭克福股市價格暴跌。據說，波恩已在考慮降低利率以振興其經濟。
A. 美元下跌會使他們國家通貨膨脹。沒有正式提到, 內涵只是貿易帶來的其他具體問題。 B. 它可能迫使他們賣掉許多美國股票。 D. 這可能使日本競爭力下降。問題是提出兩國，不單單是日本。
4. A. 美國經濟繁榮消失，見第2題答案A的註釋。
B. 美國經濟可能面臨嚴重問題。太籠統。 C. 投資者可能對在美國投資失去信心。這不是美國聯邦儲備委員會介入後發生之事。 D. 通貨膨脹全面爆發。這也是介入之後果。
