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Question 1: Vocabulary Building
1.1. Unit 1 of the study guide (TUT501) highlights that dictionaries help to provide the meaning
of words. They can also be utilised to build vocabulary. As you read, you can use a dictionary to
look up the meaning of unfamiliar words, which helps to expand your vocabulary. Find any
newspaper article of approximately 150 words with content related to the field of economics and
management. You can either attach a photo of the article to your answer book or type it out.
Identify and underline or label new words you have learned from the article. Then, draft a
paragraph of about 100 words to demonstrate your understanding of these words.
To enhance vocabulary, dictionaries can be used to look up unfamiliar words, aiding comprehension
and language development. The following newspaper article excerpt discusses bank funding costs in
the context of economics and management:
"Bank funding costs refer to the expenses incurred by banks to finance their business activities
(Nguyen, Tran & Nguyen 2024). Aldasoro, Cho, and Park (2022) note that these costs are critical to
bank operations and the overall economy, as they directly influence the lending and borrowing
behavior of market participants. More specifically, higher funding costs can suppress loan demand
and weaken economic activities. Additionally, these costs can heighten liquidity risk, adversely
affecting financial stability (Levine, Lin & Xie 2021). Therefore, reducing funding costs is of utmost
importance for ensuring the resilience and functionality of banks. Banks can achieve this by
optimising their deposit mix, prioritising low-cost accounts, and employing diversification
strategies to attract cost-effective funding sources (Opoku Mensah et al. 2017)."
New vocabulary words from this excerpt include:
Funding costs: Expenses incurred to finance business activities.
Critical: Extremely important or essential.
Suppress: To restrain or reduce something.
Heighten: To increase the intensity of something.
Adversely: In a harmful or unfavorable way.
Utmost: The highest degree of importance.
Resilience: The ability to recover quickly from difficulties.
Functionality: The ability to perform a required task or role.
Optimising: Making the best or most efficient use of resources.
Prioritise: To treat something as more important than other things.
Diversification: Spreading risks by engaging in different financial strategies.
Using these words, the following paragraph demonstrates an understanding of their meanings:
Managing funding costs is critical for banks, as excessive expenses can suppress lending by forcing
interest rates to rise, which may adversely impact economic growth. Such increases also heighten
liquidity risks, making it of utmost importance for banks to strengthen their resilience and
functionality. To address this, banks can optimise their financial strategies by prioritising low-cost
accounts and employing diversification techniques to attract stable funding sources. These measures
contribute to a more efficient and secure banking system, ultimately benefiting the broader economy.