Language practice

I. Mind the following words and phrases.

1. Сoin, credit, currency, purchasing power, constant store of value, measure, commodity, inflation, transaction, rapidity, provide, substitute. 2. In Great Britain the currency used is the pound sterling (Ј). In the USA (and many other countries) the currency is the dollar ($). The sign goes before the figure. $1 = 100 cents (c). 3. A sum of money is used with a verb in the singular. These days $ 50,000 is not a large sum of money. 4. I can’t afford (=don’t have enough money) to go on holiday this year. 5. The cost of living (=how much people have to pay for things) is very high in places like Sweden or Norway, but people still have a good standard of living (=the level of money and comfort people have).

II. Complete the blanks.

1. Our goods and services are sold for … . 2. The value of money is basically its value as a … of exchange. 3. Purchasing power depends on supply and … . 4. The condition when too much money is available is known as … . 5. The supply of money is the actual … in notes and coins. 6. The demand for money is related to the … with which business is done. 7. Money acts as a … of account. 8. Money is a … of value. 9. Money is a … of making … payment. 10. Credit money is a … with promises by the issuer to pay.

III. Form all possible combinations using the words of both columns.

provide with valuable constant national purchasing paper issue sell

commodities money coins currency note store power goods

IV. Say whether these statements are true or false, and if they are false say why.

1. Some values in the economic system are measured in terms of money. 2. The demand for money is related to the rapidity of the business. 3. Barter means the exchange goods for goods. 4. Paper money was invented in China. 5. Now people use cash only. 6. Purchasing power does not depend on demand. 7. If too much money is available its value increases. 8. Money has two functions. 9. Credit money are documents with promises by the issuer to pay an equivalent. 10. The value of paper money is fixed by the banks. 11. The role of money doesn’t depend on the state of development of an economy. 12. Money is necessary to make transactions simple. 13. Modern economies can’t function without money.

V. Answer these questions.

1. What does barter mean? 2. Where was paper money invented? 3. Who was to first to issue paper notes in Europe? 4. What notes were the beginning of paper notes in Europe? 5. What device is used instead of cash? 6. How do economists determine the value of money depend on? What is the most important function of money? 9. What does the role of money depend on? 10. What do you know about commodity money?

Unit 5 central banking system Word list

Central banking system – система центрального банка; interest – процент, прибыль; monetary system – денежная система; money supply – денежная масса; lender – кредитор; lender of last resort – последний кредитор в критической ситуации, центральный банк; issue – осуществлять эмиссию (денег); intervene – вмешиваться; oblige – обязывать, заставлять; deposit – вклад; refinancing – рефинансирование; board of governors – совет управляющих; make sure – обеспечивать, гарантировать; accept – акцентировать; security – ценная бумага; maintain accounts – вести счета; lend – ссужать; obligatory insurance – обязательное страхование; investment bank – инвестиционный банк; savings bank – сберегательный банк; loan bank – ссудный банк; bank of consumer credit (creditor bank) – банк-кредитор; branch bank – филиал банка; release – разрешение; assets – активы, средства, капитал; contribution – вклад; joint-stock – акционерный; grant – давать дотацию, субсидию; overdraft – кредит по текущему счету (овердрафт); letter of credit – аккредитив; depository – банк-хранилище (депозитарий); license – разрешать, давать лицензию; account – счет; safekeeping – хранение; bill – вексель; intermediary – посредник.