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2.Economic entities

3.Surplus funds

4.Financial intermediaries

5.Finance of economic entities

III. Vocabulary

Match up the terms on the left with the definitions on the right.

IV. Translate into Russian.

Commercial or retail banks are businesses that trade in money. They receive and hold deposits, pay money according to customers' instructions, lend money, offer investment advice, exchange foreign currencies, and so on. They make a profit from the difference (known as a spread or a margin) between the interest rates they pay to lenders or depositors and those they charge to borrowers. Banks also create credit, because the money they lend, from their deposits, is generally spent (either on goods or services, or to settle debts), and in this way transferred to another bank account – often by way of a bank transfer or a cheque (check) rather than the use of notes or ccins – from where

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it can be lent to another borrower, and so on. When lending money, bankers have to find a balance between yield and risk, and between liquidity and different maturities.

Контрольная работа № 8

«Money and Its Functions»

I. Tractate this text into Russian iп a written form.

Money and Its Functions

Money has four functions: a medium of exchange or means of payment, a store of value, a unit of account and a standard of deferred payment. When used as a medium of exchange, money is considered to be distinguished from other assets.

Money as the medium of exchange is believed to be used in one half of almost all exchange. Workers exchange labour for money, people buy or sell goods in exchange for money as well.

People do not accept money to consume it directly but because it can subsequently be used to buy things they wish to consume. To see the advantages of a medium of exchange, imagine a baiter economy, that is, an economy having no medium of exchange. Goods are traded directly or swapped for other goods. The seller and the buyer each must want something the other has to offer. Trading is very expensive. People spend a lot of time and effort finding others with whom they can make swaps. Nowadays, there exist actually no purely barter economics, but economies nearer to or farther from the barter type. The closer is the economy to the barter type, the more wasteful it is.

Serving as a medium of exchange is believed to have for centuries been an essential function of money.

The unit of account is the unit in which prices are quoted1 and accounts are kept. In the USA, for instance, prices are quoted in US dollars, in Japan, in yen. It is usually convenient to use the same unit to measure the medium of exchange as well as to quote prices and keep accounts in. However, there may be exceptions. During the rapid German inflation of 1922-23 when prices in marks were changing

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very quickly, German shopkeepers found it more convenient to use US dollars as the unit of account. Prices were quoted in dollars though payment was made in marks. The same goes for Russia and other post-communist economies who used the US dollar as a unit of account, keeping their national currencies as means of actual payment. The higher is the inflation rate, the greater is the probability of introducing a temporary unit of account alongside the existing units for measuring medium of exchange.

Money is a store of value, for it can be used to make purchases in future. For money to be accepted in exchange, it has to be a store of value. Unless suitable for buying goods with tomorrow, money will not be accepted as payments for the goods supplied today. But money is neither the only nor necessarily the best store of value. Houses, stamp collections, and interest-bearing bank accounts ail serve as stores of value.

Finally, money serves as a standard of deferred payment or a unit of account over time. When money is borrowed, the amount to be repaid next year is measured in units of national currency, pounds of sterling for the United Kingdom, for example. 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 money to be used successfully as a means of exchange, it must be a store of value as well. And it is usually, though not always, convenient to make money the unit of account and standard of deferred payment.

II. Fill the gaps in the sentences below with the words and expressions from the box. There are two expressions, which you don't need to use.

standard of value, portability, fiat money, store of value, stability in value, commodity money, medium of exchange, representative money, acceptability, accumulate their wealth, relative value, durability

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1.As a _____________, money assists in the buying and selling of goods and services.

2.Money enables people to judge the ______________ of different items by comparing their prices.

3.Money’s function as a _______________ is important to record keeping because it provides uniformity to accounting tasks.

4.As money is nonperishable and keeps its value over time it is considered a _________________.

5.People save money in order to _____________ for later use.

6.Money's ability to be used over and over again is called

__________ .

7._________________is money’s ability to be carried from one place to another and transferred from one person to another.

8._____________ encourages saving and maintains money s purchasing power.

9.Precious metals such as gold and silver have often been used as ___________ .

10.Checks are _________ because they can be exchanged for currency.

Vocabulary

medium ['mi:dj m] n (pl -dia) средство, способ

exchange [ ks't e n ] n обмен

medium of exchange - средство обмена; средство обращения

(как функция денег)

in exchange for smth — в обмен на что-л.

exchange v (smth for smth) менять, обменивать (что-л. на что-

л.).

exchange rate – обменный курс

the exchange rate of rouble against US dollar — обменный курс рубля по отношению к американскому доллару

means [mi:nz] n (употребляется с глаголом в ед. или мн. числе)

средство, средства

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store [st ] n запас, резерв

store of value – средство сбережения, средство образования сокровища; средство «сохранения стоимости» (как функция денег) store v накапливать, запасать; хранить

account [ 'ka nt] п 1. расчет, подсчет; 2. счет; запись финансовых операций

unit of account – расчетная единица to keep an account – вести счет

defer [d 'f:] v откладывать, отсрочивать

deferred payment – отложенный, отсроченный платеж

distinguish [d s't w ] v (smth from smth) отличать, различать

(одну вещь от другой); (between things) проводить различие

(между двумя вещами)

accept [ k'sept] v принимать

barter [' :tə] n бартер (способ торговли, состоящий в обмене то-

варами и услугами без использования денег)

trade [tre d] v 1. (in smth. with smb.) торговать (чем-л. с кем-л.); 2. (smth for smth) обменивать (что-л. на что-л.)

trade n торговля

swap [sw p] v (smth for smth) менять (что-л. на что-л.) (упот-

ребляется преимущественно для обозначения бартерных операций)

swap n обмен

to make a swap – произвести обмен expensive [ ks'pens v] adj. дорогой

nowadays ['na əde z] adv в наше время, в наши дни, теперь actually [' iktj l ] adv фактически, па самом деле

actual [' iktj l] adj фактический

wasteful [we stf l] adj неэкономный, расточительный

waste [we st] v расточать, попусту тратить, терять (время, сред-

ства)

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convenient [kən'vi:njənt] adv удобный

exception [ k'sep n] п исключение with the exception of this bank – за исключением этого банка

rapid ['r p d] adj быстрый, скорый currency ['k rəns ] n валюта temporary ['temp r r ] adj временный

alongside [ 'l sa d] prep наряду с, вместе с finally [fa nəl ] adv в конце концов, в заключение

repay [r 'ре ] (repaid [r 'pe d] repaid) v возвращать (долг) loan [lə n] n заем, ссуда