Профессия – менеджер. Учебно-методическое пособие

goods in exchange for money. We accept money not to consume it directly but because it can subsequently be used to buy things we do wish to consume. Money is the medium through, which people exchange goods and services.

To see that society benefits from a medium of exchange, imagine a barter economy.

A barter economy has no medium of exchange. Goods are traded directly or swapped/or other goods.

In a barter economy, the seller and the buyer each must want something the other has to offer. Each person is simultaneously a seller and a buyer. In order to see a film, you must hand over in exchange a good or service that the cinema manager wants. There has to be a double coincidence of wants. You have to find a cinema where the manager wants what you have to offer in exchange.

Trading is very expensive in a barter economy. People must spend a lot of time and effort finding others with whom they can make mutually satisfactory swaps. Since time and effort are scarce resources, a barter economy is wasteful. The use of money – any commodity generally accepted in payment for goods, services, and debts – makes the trading process simpler and more efficient.

Other Functions of Money

Money can also serve as a standard of value. Society considers it convenient to use a monetary unit to determine relative costs of different goods and services. In this function money appears as the unit of account, is the unit in which prices are quoted and accounts arc kept.

In Russia prices are quoted in roubles; in Britain, in pounds sterling; in the USA, in US dollars; in France, in French francs. It is usually convenient to use the units in which the medium of exchange is measured as the unit of account as well. However there are exceptions. During the rapid German inflation of 1922 – 1923 when prices in marks were changing very quickly, German shopkeepers found it more convenient to use dollars as the unit of account. Prices were quoted in dollars even though payment was made in marks, the German medium of exchange.

The situation in Russia nowadays reminds of that of in Germany. Money is a store of value because it can be used to make purchases in

the future.

To be accepted in exchange, money has to be a store of value. Nobody would accept money as payment for goods supplied today if the money was going to be worthless when they tried to buy goods with it tomorrow. But money is neither the only nor necessarily the best store of value. Houses, stamp collections, and interest-bearing bank accounts all serve as stores of value. Since money pays no interest and its real purchasing power is eroded by inflation, there are almost certainly better ways to store value.

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Finally, money serves as a standard of deferred payment or a unit of account over time. When you borrow, the amount to be repaid next year is measured in pounds sterling or in some other hard currency. Although convenient, this is not an essential function of money. UK citizens can get bank loans specifying in dollars the amount that must be repaid next year. Thus the key feature of money is its use as a medium of exchange. For this, it must act as a store of value as well. And it is usually, though not invariably, convenient to make money the unit of account and standard of deferred payment as well.

Different Kinds of Money

In prisoner-of-war camps, cigarettes served as money. In the 19th century money was mainly gold and silver coins. These are examples of commodity money, ordinary goods with industrial uses (gold) and consumption uses (cigarettes), which also serve as a medium of exchange. To use commodity money, society must either cut back on other uses of that commodity or devote scarce resources to producing additional quantities of the commodity. But there are less expensive ways for society to produce money.

A token money is a means of payment whose value or purchasing power as money greatly exceeds its cost of production or value in uses other than as money.

A $10 note is worth far more as money than as a 3x6 inch piece of highquality paper. Similarly, the monetary value of most coins exceeds the amount you would get by melting them down and selling off the metals they contain. By collectively agreeing to use token money, society economizes on the scarce resources required to produce money as a medium of exchange. Since the manufacturing costs are tiny, why doesn't everyone make $10 notes?

The essential condition for the survival of token money is the restriction of the right to supply it. Private production is illegal.

Society enforces the use of token money by making it legal tender. The law says it must be accepted as a means of payment.

In modem economies, token money is supplemented by 10 U money. An IOU money is a medium of exchange based on the debt of a private

firm or individual.

A bank deposit is IOU money because it is a debt of the bank. When you have a bank deposit the bank owes you money. You can write a cheque to yourself or a third party and the bank is obliged to pay whenever the cheque is presented. Bank deposits are a medium of exchange because they are generally accepted as payment.

VIII. Use the correct sentences according to the content of the text:

1.Money is a medium of exchange.

2.People accept money not to consume it directly, but because it can be used to buy things they want to consume.

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3.In a barter economy goods are swapped directly for other goods.

4.In a barter economy there is no double coincidence of wants.

5.The use of money makes the trading process simpler and more efficient.

6.In Britain prices are quoted in dollars.

7.During the rapid inflation in Germany it was convenient to use dollars as the unit of account and not marks.

8.To be accepted in exchange, money has to be a store of value.

9.Trading without money is cheaper than using money as a medium of exchange.

10.Since money‘s real purchasing power in Britain eroded by inflation, there is no better way to store value.

11.During the rapid inflation when prices in the country‘s own currency are changing very quickly it is more convenient to use some other stable currency, dollars for example, as the unit of account.

12.There are examples of commodity money, originally goods with industrial uses and consumption uses, which also serve as a medium of exchange.

13.Bank deposits are not a medium of exchange because they are not accepted as payment.

14.Bank deposits are IOU money as they are debts of the bank.

IX. Answer the questions

1.Why do people accept money?

2.Dwell on the functions of money.

3.Dwell on different kinds of money.

4.What's a barter economy? Why is trading expensive in a barter economy?

5.What currency can be used as the unit of account? Speak on the current situation in Russia.

6.What does IOU stand for?

X.Translate into English:

1.Деньги – это мера ценности вещей и средство обмена. Существует несколько функций денег. Прежде всего, деньги являются средством платежа или обращения; деньги можно использовать при покупке и продаже товаров и услуг. Деньги выступают также мерой стоимости . Покупательная способность денег в наше время может быстро меняться. Общество считает удобным использовать денежную единицу в качестве масштаба для соизмерения относительных стоимостей различных благ и ресурсов. Прямой обмен товарами невозможен в развитом обществе. Для того чтобы развивалась торговля, должны существовать деньги.

2.Деньги служат средством сбережения. Когда человек кладет деньги в банк, он должен быть уверен, что они не пропадут. Поскольку деньги являются наиболее ликвидным товаром, то есть таким, который

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можно без проблем продать (обменять), то они являются очень удобной формой хранения богатства. Это, однако, не единственная форма хранения богатства. Во время упадка в экономике население, скорее всего, будет хранить богатство в виде недвижимости или других дорогостоящих товаров – предметах искусства, драгоценностях.

XII. Text for additional reading:

TEXT B. Adam Smith

Adam Smith (baptised 16 June 1723 – died 17 July 1790 [OS: 5 June 1723 – 17 July 1790]) was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. It earned him an enormous reputation and would become one of the most influential works on economics ever published. Smith is widely cited as the father of modern economics and capitalism. Smith studied social philosophy at the University of Glasgow and the University of Oxford. After graduating, he delivered a successful series of public lectures at Edinburgh, leading him to collaborate with David Hume during the Scottish Enlightenment. Smith obtained a professorship at Glasgow teaching moral philosophy, and during this time he wrote and published The Theory of Moral Sentiments. In his later life, he took a tutoring position that allowed him to travel throughout Europe, where he met other intellectual leaders of his day. Smith returned home and spent the next ten years writing The Wealth of Nations, publishing it in 1776. He died in 1790.Main article: The Wealth of Nations

There is a fundamental dissent between classical and neoclassical economists about the central message of Smith's most influential work: An Inquiry into the Nature and Causes of the Wealth of Nations. Neoclassical economists emphasize Smith's invisible hand, a concept mentioned in the middle of his work – book IV, chapter II – and classical economists believe that Smith stated his programme how to promote the "Wealth of Nations" in the first sentences.

Smith used the term "the invisible hand" in "History of Astronomy" referring to "the invisible hand of Jupiter" and twice – each time with a different meaning – the term "an invisible hand": in The Theory of Moral Sentiments (1759) and in The Wealth of Nations (1776). This last statement about "an invisible hand" has been interpreted as "the invisible hand" in numerous ways. It is therefore important to read the original:

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As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his

own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other eases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.

[http://en.wikipedia.org/wiki/Adam Smith]

Chapter III. Market economics

I .Remember the words on the topic:

own and run businesses – владеть и управлять бизнесом intervene – вмешиваться

private enterprise– частное предпринимательство

private ownership of the means of production – частная собственность на средства производства

common ownership – общественная собственность personal property – личная собственность state-owned property– государственная собственность a measure of value – мера стоимости

various uses – различные функции

a relative value – относительная стоимость goods and services – товары и услуги buying power – покупательная способность

gold and silver coins – золотые и серебряные монеты not at all convenient – совершенно неудобно

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private supplies of capital – частный капитал surplus income–дополгительный доход employ –предоставлять работу, нанимать employer – работодатель

employee – служащий employment – занятость unemployment – безработица persuade – убеждать

adjust automatically – автоматически приспосабливаться; приводиться в соответствие

competitive – конкурентоспособный

make the largest profits possible – получить наибольшую прибыль pursue one's own interests – преследовать свои интересы

make money out of it – заработать деньги на этом

move the production possibility frontier outwards – продвинуть вперед предел производственных возможностей

make the society better-off – сделать общество более состоятельным create new jobs and opportunities – создать новые рабочие места, воз-

можности

provide free or subsidized supplies – обеспечить бесплатное или субсиди-

рованное (дотированное) предоставление (товаров, услуг) cornerstone – краеугольный камень

consequences – последствия

labourintensive production – трудоемкое производство working conditions – условия работы

safety standards – нормы техники безопасности

largescale intervention – широкомасштабное вмешательство pass laws – принимать законы

gain sufficient sales – добиться достаточного объема продаж rival firms – фирмы-конкуренты, соперники

have confidence – иметь уверенность lack confidence – не хватать уверенности

II. Give Russian equivalents: social insurance – employment opportunities – tax-transfer payment system – market failure –

public products – pricing behavior – stable price level – welfare program –

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III. Give English equivalents:

Общественные блага – Социальное страхование – Управление экономикой – Распределение ресурсов – Частные фирмы –

Фирмы, принадлежащие государству – Правовая и социальная система – Сокращать производство – Налог на добавленную стоимость – Несостоятельность рынка – Платить за что-либо – Рабочая сила – Уровень безработицы –

IV. Read the following text:

TEXT A

Markets in primary commodities are found in many countries abroad. For example, the distinguishing feature of the UK markets is their international character; in the sphere of international merchanting, that is, buying from one country and selling to another, and in the variety of commodities in which they deal, they are collectively the most important in the world.

In a true market economy the government plays no role in the management of the economy, the government does not intervene in it. The system is based on private enterprise with private ownership of the means of production and private supplies of capital, which can be defined as surplus income available for investment in new business activities. Workers are paid wages by employers according to how skilled they are and how many firms wish to employ them. They spend their wages on the products and services they need. Consumers are willing to spend more on products and services, which are favoured. Firms producing these goods will make more profits and this will persuade more firms to produce these particular goods rather than less favoured ones.

The UK markets play an important part in the use of sterling as an international currency. A more significant contribution to the UK balance of payments is made by the banking, insurance and shipping services which are employed by commodity traders in the execution of contracts made in the UK markets.

Thus, we can see that in a market economy it is consumers who decide what is to be produced. Consumers will be willing to pay high prices for products they particularly desire. Firms, which are privately owned, see the oppor-

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tunity of increased profits and produce the new fashionable and favoured products.

Not surprisingly there are also problems. Some goods would be underpurchased if the government did not provide free or subsidized supplies. Examples of this type of good and service are health and education. A cornerstone of the market system is that production alters swiftly to meet changing demands. These swift changes can have serious consequences

In a market economy there might be minimal control on working conditions and safety standards concerning products and services. It is necessary to have large-scale government intervention to pass laws to protect consumers and workers.

Some firms produce goods and then advertise heavily to gain sufficient sales. Besides wasting resources on advertising, firms may also duplicate one another's services. Rival firms, providing rail services, for example, could mean that two or more systems of rail are laid.

Finally, firms have to have confidence in future sales if they are to produce new goods and services. At certain times they tend to lack confidence and cut back on production and the development of new ideas. This decision, when taken by many firms, can lead to a recession. A recession means less spending, fewer jobs and a decline in the prosperity of the nation.

V. Answer the questions:

1.What's a market economy?

2.What's the main difference between a market economy and a planned economy?

3.Do changing demands affect production? In what way?

4.What's the mechanism of producing goods and services in a market economy?

5.Give the advantages of a market economy.

6.Give the disadvantages of a market economy.

VI. Translate into English:

1.В рыночной экономике нет большой необходимость в планировании, контроле и широкомасштабном вмешательстве со стороны государства (правительства) в экономический процесс.

2.В условиях рыночной экономики изменения потребительского спроса играют заметную роль в формировании политики фирм.

3.Чтобы быть конкурентоспособными и увеличивать доходы, фирмы должны постоянно изучать спрос и менять свою деятельность исходя из сложившейся ситуации.

4.Чем более модный товар, тем более высокую цену надо за него

платить.

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5. Пошлина на ввозимые товары защищает местную промышлен-

ность.

6. Некоторые виды услуг, например, здравоохранение и образование, не могут быть полностью обеспечены только частными фирмами.

7. При помощи налогов государство получает деньги на здравоохранение, армию и другие расходы.

8. Рыночная экономика характеризуется частной собственностью на ресурсы и использованием системы рынков и цен для управления экономической деятельностью.

9. Существуют разные взгляды на то, как надо распределять налоги.

VII. a) Look through the text and understand it:

TEXT B. Business leaders

In large organizations, leaders should spend no more than four hours a day in their offices. The rest of the time, they should be out with their people, talking the lower-level employees. They should be traveling widely throughout their organizations.

The best leaders are those whose minds are never closed and who are eager to deal with new issues. Leaders should not change their minds too frequently after a major decision has been made. Executives must take a disciplined approach to their schedules, their post, their telephone calls, their travel schedules and their meetings. Staying busy and working long hours are not necessarily a measurement of leadership effectiveness.

Leaders may run efficient organizations, but they do not really serve the long-term interests of the institution unless they plan, set goals and provide strategic perception. The leader must work very closely with people to help them be creative.

Reliability is something that leaders must have in order to provide stability and strength to organizations. Leaders must not only understand the major elements of their businesses but must also keep up with any changes.

Leaders should be able to look at themselves objectively and analyze where they have made mistakes and where they have disappointed people.

[http://any-book.org]

b)Answer the questions:

1.How much time should leaders of large organizations spend in their offices?

2.Must they travel widely throughout their organizations?

3.What leaders are the best leaders?

4.The leader must help people be creative, mustn‘t he?

5.Must leaders analyze their activity?

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c)Arrange these words according to sentences:

1.Communicator, should be, a leader, a good teacher, and.

2.By, the company, a Board of Directors, run, is.

3.Is, for strategic planning, the Director, and, responsible, making decisions.

4.Are being used, fast, computers, more and more, because, efficient, and, in business, accurate, they, are.

5.To meet, companies, try, of the individuals, the needs, and, desires.

VIII. Learn the following expressions:

government offices – правительственные учреждения; by means of taxation – посредством налогов;

direct and indirect taxation – прямое и косвенное налогообложение; a taxpayer's income –доход налогоплательщика.

IX. Translate into Russian:

Great Powers, The United Nations Organization, national interests, the country's territory, our Fatherland /Motherland, a state-owned industry;

a stamp-collector, a tax-collector, a ticket-collector, collective ownership of land and means of production, collective farms, collective security, governing classes, the governor of the state.

X. Insert the missing words: (fair, fairly, income, refused, equality, obtain, suffer)

1. It would not be ... to play down their contribution to the budget. 2. The French bourgeois revolution proclaimed Liberty, Fraternity and ...

3. These workers belong to a low ... category. 4. It is difficult to ... statistical data about tax evasion in the USA. 5. Who will ... most from the public spending cuts in the United Kingdom? Obviously not the moneyed classes. 6. ... distributed wealth is a principle of communism. 7. During the war in Viet-Nam many Americans ... to pay taxes to the government.

XI. Translate the sentences into Russian:

1. Taxation should be arranged in such a way, as to make the rich pay more than the poor. 2. People have different ideas as to how taxpayers' money should be .used. 3. There are different views as to the way taxes should be collected. 4. If children are to become responsible members of society they should be taught to handle money. 5. The percentage of the tax should grow with the taxpayer's income. 6. People with large families should pay less taxes than those having no children to support.7. Should everyone pay the same tax, whether he is rich or poor? 8. We may ask whether our system of taxation is fair. 9. We don't know whether the new financial policy of the government will

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