Get Ready for the Postgraduate Entrance English Exam. Working with Texts. Часть 1. Учебное пособие

VI. Test II (6)

1. Read the text again and decide which statements are true.

1.The purpose of monitoring is to gather information managers need to guide their behavior toward subordinates, peers, superiors, and outsiders.

2.Managers can use only a few of approaches to improve the upward flow of information.

3.It is easy to evaluate progress in research and development than progress in sales or production.

4.Progress review meetings give manager an opportunity to monitor subordinate progress without having to supervise too closely on a day- to-day basis.

2. Match the words given in the left column with the words in the

Final test II

1. Match the Russian terms on the left with the English ones on the right.

1. трудовые ресурсы

2. доход, прибыль

3. оптовый

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2. Match the English terms on the left with the Russian ones on the

3. Fill in the gaps with words from the list below.

1.… develop pricing strategy with an eye towards maximizing the firm’s share of the market and its profits while ensuring that the customers are satisfied.

2.… is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities.

3.Public utilities are often considered part of the … as they provide services to people, while creating the utility's infrastructure is often considered part of the secondary sector, even though the same business may be involved in both aspects of the operation.

4.The most successful … in the world have probably been those that have been separated physically and psychologically from banks and insurance companies.

5.… is the process of planning and executing the pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals.

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6.… involves gathering information about the operations of the manager's organization or work unit and about relevant events in the external environment.

1.investment firms

2.marketing

3.monitoring

4.tertiary sector

5.marketing managers

6.entrepreneurship

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Глава III

Финансы, денежное обращение и кредит

Unit 1

I. Information for study

Money

Money is any marketable good or token used by a society as a store of value, a medium of exchange, or a unit of account. Money objects can meet some or all of these needs. Since the needs arise naturally, societies organically create a money object when none exists. In other cases, a central authority creates a money object; this is more frequently the case in modern societies with paper money.

Commodity money was the first form of money to emerge. Under a commodity money system, the object used as money has inherent value. It is usually adopted to simplify transactions in a barter economy; thus it functions first as a medium of exchange. It quickly begins functioning as a store of value, since holders of perishable goods can easily convert them into durable money. In modern economies, commodity money has also been used as a unit of account. Gold-backed currency notes are a common form of commodity money.

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Fiat money is a relatively modern invention. A central authority creates a new money object that has minimal intrinsic value. The public's use of the money exists only because the central authority mandates the money's acceptance under penalty of law. In cases where the public loses faith in the fiat money, there is little a central authority can do to prevent the adoption of other money objects by society.

Essential characteristics of money

Money has the following three characteristics. 1. It must be a medium of exchange.

When an object is in demand primarily for its use in exchange – for its ability to be used in trade to exchange for other things – then it has this property.

This characteristic allows money to be a standard of deferred payment, i.e., a tool for the payment of debt.

2. It must be a unit of account.

When the value of a good is frequently used to measure or compare the value of other goods or where its value is used to denominate debts then it is functioning as a unit of account.

A debt or an IOU can not serve as a unit of account because its value is specified by comparison to some external reference value, some actual unit of account that may be used for settlement.

For example, if in some culture people are inclined to measure the worth of things with reference to goats then we would regard goats as the dominant unit of account in that culture. For instance we may say that today a horse is worth 10 goats and a good hut is worth 45 goats. We would also say that an IOU denominated in goats would change value at the same rate as real goats.

3. It must be a store of value.

When an object is purchased primarily to store value for future trade then it is being used as a store of value. For example, a sawmill might maintain an inventory of lumber that has market value. Likewise it might keep a cash box that has some currency that holds market value. Both would represent a store of value because through trade they can be reliably converted to other goods at some future date. Most non-perishable goods have this quality.

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Many goods or tokens have some of the characteristics outlined above. However no good or token is money unless it can satisfy all three criteria.

Credit as money

Credit is often loosely referred to as money. However credit only satisfies items one and three of the above "Essential Characteristics of Money" criteria. Credit completely fails criterion number two. Hence to be strictly accurate credit is a money substitute and not money proper.

This distinction between money and credit causes much confusion in discussions of monetary theory. In lay terms credit and money are frequently used interchangeably. Even in economics credit is often referred to as money. For example bank deposits are generally included in summations of the national broad money supply. However any detailed study of monetary theory needs to recognize the proper distinction between money and credit.

The rest of this article frequently uses the term money in the looser sense of the word.

Desirable features of money

To function as money in a modern economy a good or token should possess a number of features:

•It must have a stable value.

•It must be difficult to counterfeit.

•It must be easily divisible and transportable.

•It must be fungible. That is, one artifact of the token or good must be equivalent to another.

Modern forms of money

When using money anonymously, the most common methods are cash (either coin or banknotes) and stored-value cards.

When using money substitutes in such a way as to leave a financial record of the transaction, the most common methods are checks, debit cards, credit cards, and digital cash.

Money and economics

Money is one of the most central topics studied in economics and forms its most cogent link to finance.

The amount of money in an economy directly affects inflation and interest rates and hence has profound effects. A monetary crisis can have very significant economic effects, particularly if it leads to monetary fail-

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ure and the adoption of a much less efficient barter economy. This happened in Russia (for instance) during the 1990s.

Modern economics also faces a difficulty in deciding what exactly 'is' money.

There have been many historical arguments regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them. These arguments are covered in financial capital which is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.

II. Vocabulary Items

banknote n – банкнота cash n – наличные деньги coin n – монета commodity n – товар counterfeit v – подделывать

credit card – кредитная карточка currency note – банкнота

digital a – цифровой

debit card – дебетовая карточка

debt n – долг, задолженность, обязательство deferred payment – отсроченный платеж exchange n – обмен

fiat n – неразменные бумажные деньги fungible a – взаимозаменяемый

good n – товар

interest rate – процентная ставка, ссудный процент IOU I owe you – я вам должен

liquid a – ликвидный, быстрореализуемый

medium of exchange – средство обращения (о функции денег) money supply – денежная масса, сумма денег в обращении; запас денег

penalty n – штраф

settlement n – заключение сделки

store of value – средство сохранения стоимости tender n – предложение, заявка на торгах

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token money – денежные знаки transaction n – сделка

unit of account – расчетная единица value n – ценность, стоимость

III. Exercises

1.Read the text.

2.Learn the vocabulary items by heart.

3.Translate the text in written form.

4.Retell the text using the following expressions and terms: a store of value, medium of exchange, a unit of account, paper money, token money, commodity money, inherent value, barter economy, to convert into, gold backed currency notes, fiat money, central authority, market value, money supply, a standard of deferred payment, to counterfeit, to be easily divisible and transportable, to be fungible, stored-value cards, checks, debit cards, credit cards, digital cash, interest rate barter economy, liquid instrument.

IV. Test III (1)

1.Read the text again and decide which statements are true.

1.Token money was the first form of money to emerge.

2.When using money substitutes in such a way as to leave a financial record of the transaction, the most common methods are cash (either coin or banknotes) and stored-value cards.

3.A monetary crisis can have very significant economic effects, particularly if it leads to monetary failure and the adoption of a much less efficient barter economy.

4.The public's use of the money exists only because the central authority mandates the money's acceptance under penalty of law.

2. Match the words given in the left column with the words in the

Unit 2

I. Information for study

Bank

The essential function of a bank is to provide services related to the storing of deposits and the extending of credit. The evolution of banking dates back to the earliest writing, and continues in the present where a bank is a financial institution that provides banking and other financial services. Currently the term bank is generally understood as an institution that holds a banking license. Banking licenses are granted by financial supervision authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank, a so called non-bank. Banks are a subset of the financial services industry.

Typically, a bank generates profits from transaction fees on financial services and on the interest it charges for lending.

Services typically offered by banks

Although the type of services offered by a bank depends upon the type of bank and the country, services provided usually include:

•Directly taking deposits from the general public and issuing checking and savings accounts

•Lending out money to companies and individuals

•Cashing checks

•Facilitating money transactions such as wire transfers and cashiers checks

•Issuing credit cards, ATM, and debit cards

•online banking

•Storing valuables, particularly in a safe deposit box

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Types of banks

There are several different types of banks including:

•Central banks usually control monetary policy and may be the lender of last resort in the event of a crisis. They are often charged with controlling the money supply, including printing paper money. Examples of central banks are the Bank of England and the U.S. Federal Reserve Bank.

•Investment banks "underwrite" (guarantee the sale of) stock and bond issues and advise on mergers. Examples of investment banks are Goldman Sachs of the USA or Nomura Securities of Japan.

•Merchant banks were traditionally banks which engaged in trade financing. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike Venture capital firms, they tend not to invest in new companies.

•Private banks manage the assets of the very rich. An example of a private bank is the Union Bank of Switzerland.

•Savings banks traditionally just did savings and mortgages, and had special charters, but at present there is nothing inherently distinct about a savings bank.

•Offshore banks are banks located in jurisdictions with low taxation and regulation, such as Switzerland or the Channel Islands. Many offshore banks are essentially private banks.

•Commercial bank is the term used for a normal bank to distinguish it from an investment bank. Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with corporations or large businesses.

•Retail banks primary customers are individuals. An example of a retail bank is Washington Mutual of the USA.

•Universal banks, more commonly known as a financial services company, engage in several of these activities. For example, Citigroup, a large American bank, is involved in commercial and retail lending; it owns a merchant bank (Citicorp Merchant Bank Limited) and an investment bank (Salomon Smith Barney); it operates a private bank (Citigroup Private Bank); finally, its subsidiaries in tax-havens offer offshore banking services to customers in other countries. Almost all large financial institutions are diversified and engage in multiple activities. In Eu-

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