Задание по самостоятельному чтению к зачету/экзамену для факультета полиграфических технологий и оборудования

Cпециальность; 080502 – Экономика и управление на предприятии

TEXT 1: MONEY

The work, which people undertake, provides them with money. People buy essential commodities with money. All values in the economic system are measured in terms of money. Our goods and services are sold for money, and that money is in its turn exchanged for other goods and services. Coins are adequate for small transactions, while paper notes are used for general business. Originally, a valuable metal (gold, silver or copper) served as a constant store of value, and even today the American dollar is technically 'backed' by the store of gold which the US government maintains. Be­cause gold has been universally regarded as a very valuable metal, national currencies were for many years judged in terms of the so-called 'gold standard'. Nowa­days national currencies are considered to be as strong as the national economies which support them.

Valuable metal has generally been replaced by paper notes. 'These notes are issued by government and authorized banks, and are known as 'legal tender'. Other arrangements such as cheques and money orders are not legal tender. They perform the function of substitute money and are known as 'instruments of credit'. Credit is offered only when creditors believe that they have a good chance of obtaining legal tender when they present such instruments at a bank or other authorized institutions.

TEXT 2: FUNCTIONS OF MONEY

People accept money in exchange for goods and services. But the role of money depends on the state of development of an economy. Money has become an essential element of economies based on the division of labour, in which individuals have specialized in certain activities and enterprises have focused on manufacturing specific goods and rendering specific services. In order to make transactions as simple and efficient as possible, the introduction of a generally accepted medium of exchange suggested itself.

Money performs the function of a medium of exchange or means of payment with goods being exchanged for money and money for goods. At the same time, it also acts as a unit of account.

Money is a store of value, as part of an individual income may be set aside for future consumption. These three functions of money - medium of exchange, unit of account and store of value - can only be fulfilled if there is great confidence in its stability of value. Safeguarding monetary stability is the primary task of the central banks all over the world. Moreover, the central bank has the function of regulating the money supply order to guarantee a smooth functioning of the monetary system.

Whatever serves as a medium of exchange is called money, no matter what it is, no matter how it first came to serve as a medium of exchange, and no matter why it continues to serve this function.

TEXT 3: INVESTMENT

If you do not spend all your income - your monthly salary or weekly wages with any other earnings such as fees, interest or dividends – you will have some money left over to save. What can you do with this money? You can simply put it in a box under the bed of course but it is more sensible to make your money earn more money for you. To do this, you can put it into a deposit account at the Post Office. In this way, it will earn interest for you. Rates of interest fluctuate (go up and down) but your money is secure - except of course against inflation, which reduces the value and purchasing power of money in the economy as a whole.

Another thing you can do is to invest in a building society where the interest rate may be a little better than in a bank. A building society is a firm, which lends money to people who want to buy property. If you want to buy your own house, for instance, you, take out a mortgage with the society and repay the loan at, say, 10% per annum over 30 years.

In addition, you can invest directly in a commer­cial company by buying shares in it. Once or twice a year you will receive a statement from the company and if the company has done well, a cheque. This money is your dividend and it increases if the company's profits rise and decreases if they fall. The centre of stock broking (buying and selling stocks and shares) is the Stock Exchange in the City of London.

TEXT 4: TRAVELLER'S CHEQUES

When travelling abroad it is always wise to carry your money in traveller's cheques because cheques are protected against loss or theft. If your cheques are lost or stolen, the issuing authority will refund your money.

Not only are they safe, they are also convenient. They are available in different denominations and different currencies and they can be cashed at most banks throughout the world. Most shops, hotels and restaurants also accept them.

To obtain traveller's cheques you usually go to your bank. They can be paid for in cash or debited to your account. Large amounts, however, must be ordered in advance,

For the safety and convenience of traveller's cheques you are charged two commissions. An insurance commission (usually 1%) when you buy them and an encashment commission (this varies) when you cash them. They are very easy to use. When you collect them you sign each cheque once. The cashier may enter the amount in your passport. When you cash them you sign each cheque again. The cashier will usually ask to see your passport again too.

It is advisable to make a note of the serial number and denomination of your cheques in case they are lost or stolen. Keep this separate from the cheques.

TEXT 5: THE BANK OF ENGLAND

The Bank of England does business with many international institutions and central banks of many countries keep their accounts there. It advises banks, companies and governments. This Bank has three main functions in England.

1. It holds the central accounts of the Government.

Any money received or paid out by the central government goes through these accounts. It arranges short - term borrowing of money for the government. It manages the government's stocks. There are nearly 200 types of stock with a nominal value of 20, 000, 000, 000! The Bank issues the stocks, keeps a list of the three million stockholders and pays out the dividends.

It manages the Exchange Equalization Account. This means making sire the exchange value of sterling does not change too much. It controls the country's reserves of gold and foreign currencies and administers the Exchange Control Regulations.

2. It acts as the principal bank for all the other banks, e.g. Lloyds, Barclays, Midland. They all keep a large amount of their cash in the Bank of England. It has close relations with the Committee of London dealing Banks and the British Bankers Association, the Stock Exchange and the insurance industry.

3. Only the Bank of England can issue notes. Until 1931, it was possible to take a bank note to the Bank of England and exchange it for the same amount of gold. Nowadays, the value of a bank 'note' does not depend on gold, but on a complicated system, of government' securities.

TEXT 6: INTEREST RATES

The Bank’s influence on short-term interest rates arises from its role in the domestic money markets. As banker to the government and to the banks, the Bank is able to forecast fairly accurately the pattern of flows between the government’s accounts on the one hand and the commercial banks on the other, and acts on a daily basis to smooth out the imbalances which arise. When more money flows from the banks to the government than vice versa, the bank’s holdings of liquid assets are run down and the money market finds itself short of funds. When more money flows the other way, the market can be in cash surplus, but the pattern of government and bank operations usually results in a shortage of cash in the market each day — a shortage which the Bank then relieves.