Unit 5. Money and Payment System

1. Remember the following words:

- goods

- face value

- paper bill

- barter

- indivisibility

- durable

- divisible

- credit cards

- value

- coin

- wealth

- coincide

- portable

- recognizable

2. Read and translate the following text:

Money is used for buying or selling goods, for measuring value and for storing wealth. Almost every society now has a money economy based on coins and paper bills of one kind or another. However this has not always been true. In primitive societies a system of barter was used. Barter was a system of direct exchange of goods or services one for another. In this system no money was used. Somebody could exchange a sheep, for example, for anything for a market place that they considered to be of equal value. The farmer specializing in production of beef might find a hungry barber and thus get a haircut, or find a hungry tailor and thus exchange meat for clothes, or find a hungry doctor and thus obtain medical treatment. Farmers spent half their time producing beef, and the other half searching for someone who wants beef, but that someone had also to be able to provide something in exchange that the farmer wanted. Clearly, barter was a very inefficient system, because people’s precise wants seldom coincided. Furthermore, with barter, there is a problem of indivisibility. A suit or an automobile, or a house should be bought all at once and not in pieces. People needed more practical system of exchange, and various money systems, developed based on goods which the members of a society recognized as having value. Cattle, grain, teeth, shells, feathers, salt, elephant tusks and tobacco have all been used. With money, exchange was much easier. Precious metals gradually took over because, when made into coins, they were portable, durable, recognizable and divisible into larger and smaller units of value. Until the 18^th and 19^th centuries coins were given monetary worth based on the exact amount of metal contained in them, but most modern coins are based on face value – the value that governments choose to give them, irrespective of the actual metal content. Most governments now issue paper money in the form of bills, which are really ready to pay. Paper money is obviously easier to handle and much more convenient in the modern world.

3. Answer the questions to the text:

1. What is modern money economy based on?

2. What system was used in primitive society?

3. Why was barter a very unsatisfactory system of exchange?

4. Why did precious metals gradually take over?

5. How was monetary worth given to coins?

6. In what form do most governments issue paper money now?

7. What is the system of direct exchange of goods called?

8. What can we measure value with?

9. What is face value of the coin?

4. Translate into English:

Прямий обмін, грошова система, вміст металу, монети та паперові гроші, накопичення, номінальна вартість, коштовні метали, кредитні картки, товари та послуги, неефективна система, спеціалізація, збіг потреб.

5. Finish the sentences:

- We use money to....

- Almost every society has a money economy based on....

- Barter is a system of....

- Money can more easily be kept for a long time than such things as....

- When people travel from one state to another they need....

- In Ukraine we may change hryvnias into currency in....

- You may pay in... or by....

6. Match the expressions with their definitions:

1. to put money into

2. funny money

3. pocket money

4. to roll in money

5. for my money

6. hush money

7. to coin the money

8. money foe jam

9. to marry into money

10. blood money

a) money that is paid to someone not to tell other people about something embarrassing;

b) money paid for murdering someone;

c) to marry someone whose family is rich;

d) to make much money;

e) to be very rich;

f) money that you earn very easily;

g) in my opinion;

h) to use your money in order to make profit;

i) a small amount of money you can use to buy small things;

j) money that has been printed illegally.

7. Read the English proverbs and try to find the Ukrainian equivalents:

1. Take care of the pence and the pounds will take care of themselves.

2. Money burns a hole in a pocket.

3. Money has no smell.

4. Money is a good servant but a bad master.

5. Muck and money go together.

6. Lend your money and lose your friend.

7. A friend in court is better than in purse.

8. A penny saved is a penny gained.

9. A light purse a heavy heart.

10. A bargain is a bargain.

11. Time is money.

12. Money makes the world go round.

13. Money spent on the brain is never spent in vain.

- Невитрачені гроші – вже придбання.

- Гроші горять в руках.

- Угода є угода.

- Копійка до копійки, воно і капітал.

- Витрати на навчання завжди виправдовують себе.

- Бруд і гроші ходять разом.

- Час – це гроші.

- Дружба дорожче за гроші.

- Гроші не пахнуть.

- Гроші керують світом.

- Коли немає грошей, це гірше за всі біди.

- Хочеш втратити друга, позич йому гроші.

- Гроші – це добрий слуга, але поганий господар.

8. The following are famous sayings about money. Comment on them and answer the questions:

1. “Neither a borrower nor a lender be” (W. Shakespeare)

- Have you ever borrowed money from anyone? Who from? How much?

- Have you ever lent money to anyone? Who to? How much?

- What is your attitude to debts? Which is better to borrow or to lend?

2. “A penny saved is a penny earned” (Benjamin Franklin)

- Do you save money?

- Are you saving for anything at the moment?

- Do you have a bank account? What’s the interest rates?

3. “Buy now; pay later”.

- Have your family ever bought anything on credit? What?

- Do you think buying on credit is a good idea?

- Which methods of payment (credit card, cash, payment card, cheque, traveller’s cheque) would you prefer to use? When can you use them?

- Would you like to have a credit card?

4. “A bank is a place where they lend you an umbrella in the fine weather and ask for it back when it begins to rain” (Frost)

- Is it a good idea to keep money in a bank?

9. Translate into English:

1. Бартер – це прямий обмін товарів чи послуг одне на одне.

2. Звичайно, бартер мав багато недоліків.

3. Гроші дають нам змогу встановлювати ціну товару.

4. Гроші – це засіб, що дає нам можливість робити обмін.

5. Прямий обмін товарами неможливий у розвинутому суспільстві.

6. Для того, щоб розвивалася торгівля, мають існувати гроші.

7. Монети виготовляють з різних металів.

8. Валюта – це певний тип грошей, що використовується в країні.

10. Read the following dialogues in pairs:

I. – I have a question about financial side, if you don’t mind.

- The financial side?

- Yes, I wonder how I’ll be paid, and when.

- Well, you’ll be paid twice a month, on the second and the forth Friday.

- Will it be in cash?

- No, it’s our usual practice to pay by check.

- I must admit I don’t know much about checks, or banks for that matter. You see our banking system is quite different from yours. We seldom use checks at all, actually.

- Oh, you’ll find it very easy to use our banking system. It saves you lots of trouble. I mean, you don’t have to carry too much cash around.

II. – Hello! I’d like to change some money.

- Yes, sir! How many pounds do you have?

- I have 500 pounds, but I want to change only 400.

- Certainly, sir. Do you have your passport? Could you give it to me?

- Here you are. I want to change the pounds into dollars.

- How would you like it?

- I’d like to change in five pound notes.

- All right, sir. Please sign this form. Here is your passport and money.

- Thank you.

III. – I’d like to change these English pounds, please.

- O.K. How many pounds do you have?

- Fifty. What’s the exchange rate?

- Just a minute, I’d check the today’s rates.

- I’d like to change them in US dollars.

- Well, it’s 2 for a pound.

- Thank you.

IV. – Good morning. I’d like to cash this check, please.

- What’s the denomination, sir?

- It’s one hundred pounds.

- Oh, you haven’t signed it.

- I’m sorry.

- How would you like the money?

- Four twenties and two tens, please.

11. Read the text and be ready to speak about characteristics of money:

1. Uniformity. This means that equal denominations of money should have the same value. The National Bank of Ukraine, for example, the Federal Reserve System in the USA have the responsibility in their countries to assure that money is uniform. They are institutions, which issue paper currencies. It doesn’t matter if the 1$ bill that I have in my pocket is crisp and new or whether it is tattered and soiled.

2. Stability. The value of money should be more or less the same today as tomorrow. In societies where the value of money fluctuates the economy is badly affected.

3. Durability. It refers to the lasting quality of money. For example, apples may be used as a medium of exchange in a barter economy, but they cannot be considered money because they are not durable. Even if the apples are not eaten, they will eventually spoil and become worthless. For this reason most countries use a very high quality paper for their money.

4. Portability. Modern money has to be small enough and light enough for people to carry. Money must be easily transferred from buyer to seller. Some of the early forms of exchange such as gold and salt were heavy and bulky. They were not a practical form of money.

5. Divisibility. It is a necessary characteristic of money and the principle advantage over barter. In other words, to make change for banknote is easier than to make change for a cow.

6. Recognisability. Money should be easily recognized for what it is and hard to copy.

12. Discuss the following questions:

- Why do we need money?

- What sum of money do you need every day?

- How much is your pocket money? How can you earn extra money?

- How would you like to earn your living?

- Do you agree that “money doesn’t smell”? Why?

- Is money very important in your life? Why?

- Which of the following statements do you agree with?

“We live to earn”

“We earn to live”. Explain your answer.

Дата добавления: 2014-11-29