Exercise 7. Match the English words with their Russian equivalents.

EXERCISES

Exercise 1. Underline the Predicates, read and translate the sentences:

1. New coins are being minted in this country now.

2. Where are these banknotes being printed?

3. A new daughter company was being founded when he visited Newall Ltd. last year.

4. Are these products being widely sold throughout the world?

5. This product is being launched on the Russian market.

6. A very good exhibition is being held in Novosibirsk

Exercise 2. Find the equivalents in the text:

1. Что же касается монет, то они...

2. На лицевой стороне можно увидеть...

3. На лицевой стороне написано...

4. Первая подпись — это подпись лица, уполномоченного правительством.

5. На оборотной стороне английских банкнот, как и у многих других банкнот,...

6. На оборотной стороне изображен....

7. Банкноты достоинством один фунт...

Exercise 3. Find the answers to the following questions in the text:

1. What is the official currency of the UK?

2. What is the smallest unit?

3. How many pence are there in one pound?

4. What banknotes and coins are in circulation in the UK now?

5. Who issues banknotes and mints coins in the UK?

6. What famous people are featured on the back of various English banknotes?

Exercise 4. Complete these sentences with the following words:

banknote, bearer, words, inscription, denomination, signature, Bank of England, Chief Cashier

1. On the face of English banknotes one can read the...

2. The... is given both in figures and in...

3. The... on the face of the... reads: I promise to pay the... on demand fifty Pounds.

4. The first... is that of the person authorized by the Government and the...

5. The second signature is that of the...

Exercise 5. Sum up what the text says about:

the UK currency

English coins

the backs of English banknotes

the faces of English banknotes

Exercise 6. Have a look at a banknote (coin) which is in circulation now in Russia and say a few words about:

1. its denomination

2. its issuer

3. inscriptions, if any

4. portraits, if any

5. flags, if any

6. other pictures

1. monetary unit A. Международный валютный фонд

2. monetary agreement B. меняла

3. monetary policy C. денежные суммы, валюты, мо­нетные системы

4. International Monetary Fund D. дешевые деньги, деньги с низкой покупательной способностью

5. cheap money E. валютный рынок, рынок кратко­срочных операций

6. dear money F. почтовый денежный перевод

7. easy money G. денежно-кредитная политика

8. hot money H. копилка

9. ready money I. легкие деньги, деньги при избы­точном предложении кредита

10. moneys J. ссудный процент

11. money in cash K. горячие деньги, большие массы краткосрочных капиталов

12. money market L. денежная единица

13. money rate M. дорогие деньги, деньги с высо­кой стоимостью займов

14. money-box N. наличные деньги

15. money-changer O. валютное соглашение

16. money-order P. деньги, которые могут быть вы­плачены сразу

TEXT 4. THE FUNCTIONS OF MONEY

Money serves as a medium of exchange, a unit of account, and a store of value. We would like to examine each of these functions, begin­ning with medium of exchange.

A medium of exchange, or a transactions medium, is anything gen­erally acceptable as a means of payment in the exchange of goods and services, in repaying debts, and in the exchange of assets, such as shares of common stock.

The second function of money is to serve as a unit of account. A unit of account is a yardstick for measuring prices and values and a bench­mark for comparing them. In principle, any commodity can serve as a unit of account. Having chosen the good, we can express the price of each of the rest of the goods in units of that good. Historically, societies desig­nated a single item to serve as the unit of account, say, a kilogram of wheat. In this way, each good could be priced at so many kilograms of wheat per unit. In modern times, paper money is the unit of account. For example, the dollar is the unit of account in the United States. Knowing that a pound of peaches costs two dollars and a pound of apples costs one dollar enables us to compare their value. Thus, money becomes a standard of value.

Normally, the same item serves as the unit of account and the medi­um of exchange: the dollar in the United States; the yen in Japan; the mark in Germany. In abnormal times, however, societies divorce the two func­tions of money, often unofficially. For example, although the ruble is the unit of account in Russia, some Russians use foreign currencies, such as the dollar and the mark, as the unofficial medium of exchange. Many Russians, without access to foreign currencies, resort to barter. Invar­iably, the reason for the divorce of the medium of exchange from the unit of account is a deterioration of the currency as a store of value, which takes us to the third function of money.

A store of value is a reservoir of future purchasing power. Money is both a temporary and a permanent store of purchasing power. The func­tion of money as a temporary store of purchasing power is an outgrowth of its function as a medium of exchange. If an item is to serve as a medium of exchange, people must hold that item to carry out their transactions. For example, consider an individual who earns $700 a week but plans to spend $560 on goods and services and save $140 every week. Usually this individual will not spend the entire $560 on payday. Instead, he may spend $90 on payday and hold $470 in the form of money to be spent over the course of the week. This $470 held in money is a temporary store of purchasing power.

People, however, hold more money than they need to carry out their transactions. Why? The answer is that money can also serve as a perma­nent store of purchasing power. Individuals who save forgo present consumption to have higher future consumption. The wealth of individ­uals is their accumulated savings. Money is one form in which individu­als may keep their wealth; stocks, bonds, and real estate are other forms. Of course, when wealth is held in money, in the future it will not need to be exchanged to buy goods and services. The ability of money to serve as a store of value depends on its capacity to retain its purchasing power.

EXERCISES

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