Understanding a printed text

Exercise 2. Make different parts of speech from the following words according to the models.

Exercise 1. Check the translation in a dictionary, read and translate the words listed below.

WORD-STUDY

Unit X

42 – 43

Nouns

monopoly, consumer, consumption, growth, circulation, deposit, fuel, inflation.

Verbs

determine, encourage, stimulate, increase, predict, inflate.

Adjectives

modern, available, stimulating, basic.

a) Model: adjective + th=noun (wide – width);

young, strong, broad, long.

b) Model: noun + ic=adjective (economy – economic);

atom, climate, energy.

WHAT IS MONEY SUPPLY?

Every economy in the world is controlled by its supply of money, even one as small as the Monopoly game where players are provided with Monopoly money for buying and selling houses, hotels, and property around the board. The money supply of the Monopoly game, for example, primarily consists of the players' cash on hand and the money they get for passing Go.

A modern economy is based on the use of money. Each country's money supply, therefore, determines how quickly the economy can grow. If the central bank increases the money supply, consumers and businesses have more money to spend on goods and services.

Just as the game of Monopoly can be stimulated by increasing the amount money available to its players, a country can encourage economic growth by increasing its money supply, which includes currency in circulation and readily available funds such as bank deposits on which checks can be drawn. This "narrow" measure of the money supply is usually called "M1." This easy-to-access money, often called "high-powered" money, tends to fuel most consumer and business consumption and therefore stimulates most economic growth.

Other measures of a country's money supply include funds that are not so readily available, such as time deposits and other long-term investments. These "wider" measures are often referred to as "M3" and "M4" or "L."

Basically, when businesses and individuals have less money at their disposal, economic activity slows down. Central banks usually limit money supply growth in order to slow down the economy and control inflation. In a Monopoly game with less money floating around the board, for example, players will pay less money when buying properties from other players.

On the larger scale of a national economy, less money usually leads to an economic slowdown. When less money is available, interest rates tend to increase-the cost of money increases-and it becomes more expensive to borrow. If it costs businesses and consumers more to borrow money, they will be less inclined to increase spending. In this way, control of the money supply allows a central bank to reduce inflation.

The money supply can also be increased to stimulate economic activity. If the players in a Monopoly game are given more than two hundred dollars for passing Go-five hundred dollars, say-the results are predictable: the "economy" speeds up and players start buying and selling at higher and higher prices. Increasing the money supply usually results in rapid growth and inflated prices.

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