Summarizing.

Complete the following sentences to summarize the text above:

1. In microeconomics we study the problem of…

2. In macroeconomics we analyze the overall…

3. State intervention in economic sectors began…

4. Governments have now four basic economic objectives:…

Text organization.

The statements below express the main ideas of the text. Number them so that they are in the same order as the ideas in the text. The first one is given for you:

	Statement	Order
	Governments have four basic economic objectives: full employ­ment, price stability, balance-of-payments equilibrium, and econ­omic growth
	In macroeconomics we employ the theory of the circular flow of income in order to analyze the overall behaviour of the economy.
	In microeconomics we approach the problem of allocating scarce resources with a theory of price determination based upon the interaction of supply and demand.
	Each microeconomic unit functions within the context of an entire economy.	1
	State intervention owes its development to the inter-war depression (1921-39).
	Governments now intervene in all economic sectors.

Viewpoint:

In your opinion, why is it important to study macroeconomics?

25. Money

Lead-in: How many functions of money can you mention? Key words and phrases 1. advanced economy – передова, прогресивна економіка 2. supply of money – грошова маса 3. bank account – банківський рахунок 4. notes and coins – банкноти та монети 5. disruptive effect – руйнівний ефект 6. medium of exchange – засіб обміну 7. unit of account – розрахункова грошова одиниця 8. store of value – засіб збереження 9. purchasing power – купівельна спроможність 10. real assets – нерухоме майно, нерухомість 11. building societies – житлово-будівельні товариства 12. property – власність, майно 13. to carry out transactions – здійснювати операції, справи 14. deferred payment – майбутні сплачування

Can anybody remember when the times

were not difficult and money not scarce?

Ralph Waldo Emerson

Anything can act as money if it is generally accepted by people as money. In Britain, and all advanced economies, the greater part of the supply of money consists of deposits in bank accounts, rather than notes and coins. The size of this quantity of bank money is influenced by the reserves that the banks hold, and an increase or decrease in reserves will tend to result in an increase or decrease in the total quantity of money.

Banking institutions in this country have evolved over centuries, and the organisation of the banking system plays an important part in determining the extent of the Bank of England’s control over the monetary system.

It is important for economists to examine the role of money. Money is basically the communications medium of the economic system, the means by which transactors indicate their wants, and their preparedness to offer supplies of economic goods. Any major imbalance in the monetary system can have a disruptive effect on the ‘real’ world of production.

Over the years the role of money has been formalised as provid­ing three distinct functions, the provision of a medium of exchange, of a unit of account and of a store of value.