Banks often borrow money from the central bank to lend to consumers and businesses. When a central bank decides to change its discount rate, the interest rate it charges for loans to banks, interest rates across the nation almost always follow suit. The interest rates on loans made between banks-called Fed Funds rates in the United States and interbank rates in Europe-tend to rise whenever banks have to pay more to borrow money themselves.

All interest rates are linked, because money, like most commodities, is interchangeable. Banks and individuals will go wherever interest rates are lowestbasically, wherever money is cheapest-so a change in interest rates announced in Washington will affect interest rates in Singapore.

In the global village of the international money markets, interest rates have become the heartbeat of economic activity, regulating economic growth worldwide. A country's consumers and businesses, therefore can be directly affected by central bank decisions made on the other side of the world. Foreign investment money can come flooding in at a moment's notice, or be pulled out just as quickly if one country's interest rates are not kept in line with other countries in the world economy.

COMPREHENSION CHECK

Exercise 1. Choose the correct completion of the sentence according to the information in the text.

1.In free market economies consumers and businesses can do … a) almost anything they want as long as they pay for it.

b) nothing.

c) everything without payment.

2.Banks often borrow money …

a)from other banks.

b)from the central bank.

c)from the government.

3. All interest rates are linked …

a)because money is interchangeable.

b)because they don’t encourage economic activity.

c)because they don’t affect anything.

INCREASE YOUR VOCABULARY

Exercise 1. Match the antonyms.

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LANGUAGE ACTIVITY

Exercise 1. Insert articles where necessary.

1.By controlling … cost of money … banks are able to influence economic growth.

2.In … totalitarian country … government tells its citizens what to do.

3.Banks often borrow money from … central bank.

4.… change in interest rates announced in … Washington will affect interest rates in …Singapore.

5.… interest rates have become … heartbeat of economic activity.

Exercise 2. Insert prepositions (of, by, on, for, between, from) where necessary.

1.Consumers and businessmen pay … what they want to do.

2.The interest rates … loans made … banks are called Fed Funds rates … the United States.

3.… lowering interest rates, a central bank encourages economic activity.

4.Decisions made, … central bank affects a country’s consumers and business.

5.Consumers and businesses often borrow money … banks.

Exercise 3. a) Study the words.

To consume – потреблять Consumer –потребитель

Consumer goods – потребительские товары

Consumption – потребление

b) Fill in the missing words from the same word family.

Exercise 4. Translate the sentences paying attention to the words from exercise 3.

1.Americans, only 5 per cent of the world’s population, consume one-fourth of its oil.

2.On every continent more and more people are adopting the American consumer lifestyle.

3.The Consumer’s Association is an organization in the UK that tests the quality of products and services and publishes the results.

4.Many newer cars have a much lower fuel consumption.

5.The change has been criticized by consumer groups.

6.In free-market economies consumers and business can do almost they want as long as they pay for it.

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Exercise 5. State the function and translate the verb “to have” according to the list given below.

1 - смысловой глагол

2 - заменитель модального глагола

3 - вспомогательный глагол (Perfect)

1.I have a new computer.

2.I don’t have to clean my room: my mother has cleaned it for me.

3.The boy has high temperature, the doctor has examined the boy, and he has to stay at home.

4.She has to cook, to wash and to clean.

5.I have not finished doing my assignment.

6.I have to translate a text but I have no dictionary.

7.Every woman has much work at home.

8.I have lived in Paris for 20 years.

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