400 Must Have Words for the TOEFL » LESSON 20 - Financial Systems

Word List
  • allocate [ˈæləˌkeɪt] v.
    To give out different amounts for different purposes
    The budget allocates $58 billion to the military and only about $2 billion to education.
    Usage tips     Things that can be allocated are things that can be “spent”—money, time, energy, etc.
    Parts of speech     allocation n.
  • commodity [kəˈmɑdədi] n.
    A thing that can be bought and sold,such as grain, oil, or wood
    Tulip bulbs were one of the most valuable commodities in seventeenth-century Holland.
    Usage tips     A thing is called a commodity only in the context of buying or selling it.
  • decline [dɪˈklaɪn] v.
    To decrease in power or amount
    America’s railroads declined because the automobile dominated American life.
    Parts of speech     decline n.
  • equity [ˈekwɪtɪ] n.
    The value of one’s share in an investment
    Barnard’s equity in the business was one-third,or about $350,000.
    Usage tips     In this meaning, equity is always singular and usually followed by an in phrase.
  • inflation [ɪnˈfleɪʃən] n.
    A situation in which prices for many items rise quite fast
    During the rapid inflation of the 1970s, prices for food and fuel sometimes rose 20 percent in a single month.
    Parts of speech     inflate v., inflationary adj.
  • net [net] adj.
    After all costs have been subtracted from an amount
    My gross salary is around $35,000, but my net pay is closer to $29,000.
    Parts of speech     net v., net n.
  • per capita [pəˈkæpɪtə] adv.
    For each person
    Research shows we’re likely to sell 15 light bulbs per capita per year in medium-sized cities.
    Parts of speech     per capita adj.
  • regulate [ˈrɛɡjəˌleɪt] v.
    Control according to a set of rules
    Trading on the New York Stock Exchange is regulated by officials of the exchange and by federal law.
    Parts of speech     regulation n., regulatory adj.
  • subsidy [ˈsʌbsɪdɪ] n.
    Money given by a government or other organization to support an activity
    Federal subsidies to grain farmers have helped them stay in business despite three years of bad weather.
    Parts of speech     subsidize v.
  • tangible [ˈtændʒəbl] adj.
    Obviously real because it can be seen, touched, or otherwise observed
    One tangible benefit of putting electrical cables underground is a clearer view of the sky.

TOEFL Prep I Cross out the one word or phrase that doesn’t fit into each of the lists.

  1. things that can be allocated
    money     time     temperature     attention
  2. kinds of commodities
    oil     sadness     corn     meat
  3. tangible things
    fairness     a road     trees     money
  4. things you can have equity in
    a company     a house     a child     a racehorse

TOEFL Prep II Circle the word that best completes each sentence.

  1. Buy a car now, before (equity / inflation) drives the price up.
  2. Most investors make a mistake. During a stock-market (decline / subsidy) they get frightened and sell.
  3. The government is giving a (regulation / subsidy) to tobacco farmers so they can compete with foreign producers.
  4. Cortecal Inc. estimates that it spends $80.00 (per capita / net) on its annual picnic and on its New Year party for the company’s 1,300 employees.
  5. I think that artificial “holidays”like Valentine’s Day or Secretary’s Day are just an attempt to turn private feelings into a(n) (commodity / equity).
Answer Key
TOEFL Prep I
  1. temperature
  2. sadness
  3. fairness
  4. a child
TOEFL Prep II
  1. inflation
  2. decline
  3. subsidy
  4. per capita
  5. commodity
Answer Key

TOEFL Success Read the passage to review the vocabulary you have learned. Answer the questions that follow.

The great unsettled question of economics is: “How much should the government regulate business?” Conservatives generally argue for a decline in government involvement, but they favor certain subsidies to farmers, steelmakers, or airplane manufacturers. Some conservatives also see no conflict between their small-government views and their eagerness for the government to allocate more money for roads into national forests. The net result of these incursions into national forests is a tangible infrastructure that helps some companies but not the public. Publicly owned trees, land, and oil become commodities from which a few private companies (many owned by small-government conservatives) profit. No per capita benefit goes to the American people, aside perhaps from the brief anti-inflation effect that comes with new oil exploration.

Bonus StructureAside perhaps from means “maybe except for.”

  1. What is the main idea of this reading?
    • a. Conservatives have tried to keep others from expanding government regulations.
    • b. Even though conservatives say they want to limit government involvement in business, they actually do often favor it.
    • c. There are several views about the proper role for government in business.
    • d. Small-government conservatives want the government to allocate a certain amount of federal money per capita to help all Americans.
  2. Which of the following does the author claim?
    • a. Industries will become subsidies.
    • b. Oil exploration causes inflation.
    • c. Some elements of nature will become commodities.
    • d. Infrastructure will be made of trees, oil, and land.
Answer Key
Answer Key
  1. b
  2. c
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