Unit 3 Time to rebalance Exercises 1. Answer the questions on the text. 1) How did Steve Hilton feel when Lehman Brothers collapsed? The world was coming to an end. 2) What did Mr. Hilton do to save his company? (1) Giving up options to buy thousands of lots. (2) Laying off 3/4 of his employees. (3) Redesigning his houses to cut construction cost. (4) Serving customers with guaranteed payment. 3) In what sense America as a country is similar to Mr. Hilton’s company? Dismissing workers in the whole country and experiencing one of the worst economic recessions in history. 4) What does “the biggest transformations” mean? Macroeconomically, the US will change from debt and consumption to saving and exports. Microeconomically, Americans will have different lifestyles and do different jobs in different places. 5) According to the McKinsey Global Institute, what is the common practice of consumers during economic crises? Consumers generally try to cut their debt to more manageable levels. 6) What is the major difference between credit cards and charge cards? Both are a line of credit for a customer. For a credit card, the customer can choose to pay in full or partially at the end of a month. When paying partially, the customer can pay interest on the balance until it is paid in full. Some people just keep making partial payments and pay interest on credit cards for years and years. But for a charge card, the customer has to pay the entire amount off each time he/she receives a bill. It is not allowed to make a partial payment and no interest is involved. 7) How is the current recession different from the previous ones? It was triggered by a financial crisis that made it impossible...
