Text 3 The Supply of Money

Neither economists nor public officials are in agreement as to what specific items constitute the economy’s money supply. Narrowly defined – the money supply is composed of two items:

1) currency, that is, coins and paper money in circulation and

2) all checkable deposits, that is, deposits in commercial banks and various “thrift” or savings institutions upon which checks can be drawn.

Coins and paper money are debts (обязательства) of government and governmental agencies. Checking accounts represent debts of the commercial bank or savings institution.

Ranging from copper pennies to silver dollars, coins constitute a very small portion of American total money supply. Currently, coins constitute only 2 or 3 percent of the total $784 billion money supply. Coins are essentially “convenience money” in that they permit us to make all kinds of very small purchases.

Much more quantitatively significant than coins, paper money constitutes about 25 percent of the economy’s money supply. All of this $200 or so billion of paper currency is in the form of Federal Reserve Notes, that is, notes that have been issued by the Federal Reserve Banks with the authorization of Congress.

The safety and convenience of using checks have made checking accounts the most important type of money in the USA. A check must be endorsed (signed on the reverse side) by the person cashing it; the drawer of the check subsequently receives the canceled check as an endorsed receipt attesting to the fulfillment of the obligation. It is, furthermore, more convenient to write a check in many cases than it is to transport and count out a large sum of currency. For all these reasons, checkbook money has come to be the dominant form of money in American economy. In terms of dollar volume, about 90 percent of all transactions are carried out by the use of checks.

It might seem strange that checking accounts are a part of the money supply. But the reason for their inclusion is clear: checks which are nothing more than a means for transferring the ownership of deposits in banks and other financial institutions, are generally acceptable as a medium of exchange. Furthermore, such deposits can be immediately converted into paper money and coins on demand; checks drawn upon these deposits are for all practical purposes the equivalent of currency. To summarize, money = currency + check deposits.

6. Ответьте на следующие вопросы:

1) What items is the money supply composed of?

2) Why are coins considered to be “convenience money”?

3) How much money is in the form of Federal Reserve Notes?

4) What is the most important type of money in the USA?

5) Must a check be endorsed by the person cashing it?

6) Why has checkbook money come to be dominant form of money in American economy?

7) Are checks generally acceptable as a medium of exchange?

8) Checks are the equivalent of currency, aren’t they?

7. Дайте на английском языке развернутое определение понятиям:

currency –

checkable deposits –

coins and paper money –

checking accounts –

8. Закончите предложения, произведя нужный выбор:

1) Coins constitute	a) 25 percent of the economy’s money supply.
2) Paper money constitute	b) a very small portion of American total money supply.
3) Paper currency	c) can be immediately converted into coins and paper money on demand.
4) Checkable deposits	d) subsequently receives the canceled check.
5) The drawer of the check	f) is in the form of Federal Reserve Notes.

9. a) Расскажите на русском языке, сколько денег находится в обращении в США. Какое количество этих денег представлено бумажными и металлическими деньгами. b) Объясните на английском языке, какую форму денежной оплаты вы предпочтете при покупке в другой стране.

Chapter two. Supplementary reading

Unit one. BUSINESS EDUCATION

Text 1

Study at Bradford

The principal objective of the University is to educate men and women for creative and responsible positions in the constantly changing world of industry, commerce and the public service.

The University is concerned with education and research primarily in the fields of engineering, business, life sciences, physical sciences and social sciences, but many of the Schools of the University, both undergraduate and postgraduate, span several of these areas and this broadening of the scope of education and research is a major aim.

The main buildings of the University are situated less than a mile from the centre of Bradford providing a valuable opportunity for integrating the work and facilities of the University with the greater community of the city. A thirty-eight acre site is being developed to incorporate teaching, administrative and social functions of the University, including residential accommodation for 2,500 students.

Planning for growth and change are fundamental to the design of Bradford University as new areas of study are created by new technological demands. Standard multi-storey academic buildings, allowing for maximum flexibility, have been designed; these provide medium-scale laboratories, offices and small seminar rooms in a continuous linear development, with heavy laboratories and workshops in blocks alongside, and large seminar rooms and lecture theatres on upper floors.

The spacious, purpose-built library offers excellent study facilities, while the Computer Centre provides a research and teaching service to the whole University and is linked to the Yorkshire network of university machines and to the Manchester Regional Centre.

Close to the library and Computer Centre building, the new Communal Building offers extensive recreational facilities. Three bars, a coffee bar and a dance floor, together with the Students’ Union Travel Office and Shop, several television and indoor games rooms provide all members of the university with opportunities for pleasant and varied relaxation. Also in this part of the campus are the Sports Centre and Amenities Block with a coffee bar for staff and students, a bank, a bookshop and a twenty-metre swimming pool.