II. Are sentences below “Right” or “Wrong”? If there is not enough information to answer, choose “Doesn’t say”.

1. Monetary policy does not influence the economic growth.

A. Right B. Wrong C. Doesn’t say

2. The trustworthiness of monetary policy often depends on the level of independence of a central bank.

A. Right B. Wrong C. Doesn’t say

3. Monetarists believe that controlling money is the only essential function of governments.

A. Right B. Wrong C. Doesn’t say

4. An independent bank should have a clearly set of objectives defined by the government.

A. Right B. Wrong C. Doesn’t say

5. There might be situations when a sustained rise in the average prices of goods could lead to reduced unemployment.

A. Right B. Wrong C. Doesn’t say

6. It should be noted that central banks ordinarily do not provide commercial banking services for the general public.

A. Right B. Wrong C. Doesn’t say

III. The mistakes in the sentences below have been underlined. Write the corrections in the spaces provided.

1. To achieve such goals may be difficult with a central bank committing to monetary stability.

2. In the early 1990s international pressure has mounted on the country.

3. Recently it has been much discussion of this issue.

4. The Bundesbank is crediting with being helpful in Germany’s success.

5. The greater the independence of a country’s central bank, lower and more stable is the rate of inflation.

1. _____________________________________________

2. _____________________________________________

3. _____________________________________________

4. _____________________________________________

5. _____________________________________________

Are the days of cash numbered?

EFTPOS versus ATMs

I. Read the text. Some parts of the texts have been taken out. These extracts are listed below. Complete each gap with the appropriate extract. One sentence does not belong in any of the gaps.

a) But under some circumstances cheques are more efficient than cash.

b) Subsequently your account will be automatically debited and the retailer’s account automatically credited.

c) So are we using more cash or less cash?

d) So are we moving towards a cashless society? Probably not.

e) This is where you pay for goods in the shops by means of a card – either a credit card (like Access or Visa) or a debit card (like Switch or Connect).

f) Banking is becoming increasingly automated, with computer debiting and crediting of accounts replacing the moving around of pieces of paper.

___ (1) What was once done by a bank clerk is often now done by computer.

One possible outcome of this replacement of labour by computers is the gradual elimination of cash from the economy – or so some commentators have claimed.

The most dramatic example of computerisation in recent years has been EFTPOS (electronic funds transfer at the point of sale). ___ (2) The card is simply “swiped” across a machine at the till which may then require you to enter your PIN (personal identification number). The details of the transaction (the amount, the retailer and your card number) are then transmitted down the line to the EFTPOS UK processing centre. If necessary, the information is then directed down the line to the card issuer for authorisation. If the card is valid and the transaction acceptable, then within seconds the machine will issue a slip for you to sign and the purchase is complete. ___ (3)

The advantage of this system is that it does away with the processing by hand of pieces of paper. In particular it does away with the need for (a) credit-card slips when used in conjunction with credit cards and (b) cheques. Both cheques and credit-card slips have to be physically moved around and then read and processed by people. If this EFTPOS system were to become widely used for small transactions, it could well reduce the need for cash. But reducing the need for cash is not the prime purpose of EFTPOS. Its prime purpose is to do away with cheques and credit-card slips.

____ (4) Cash is still the simplest and most efficient way of paying for a host of items, from your bus ticket to a newspaper to a packet of mints. What is more, another technical innovation is moving us in the direction of using more cash, not less! This is the cash machine – or ATM (automated teller machine), to give it its official title.

____ (5) The evidence suggests a gradual decline in cash in circulation as a proportion of GDP. It fell from just over 5 per cent of GDP in 1980 to just over 2% per cent in 1997.

But although the effects of EFTPOS and ATMs may be quite different in terms of the use of cash, they both have the same advantage to banks: they reduce the need for bank staff and thereby reduce costs.