Unit 8 MONEY

1. Read and memorize the following words, word- combinations and word-groups:

fluctuation – коливання

e.g. In societies where value of money fluctuates people spend it immediately thinking it will be worth less tomorrow.

to hoard – запасати, накопичувати

e.g. In societies where value of money fluctuates people hoard it in the hope that its value will increase.

portability – портативність

durability – міцність

uniformity – однаковість; однорідність

e.g. Money should possess such features as portability, durability, uniformity.

dollar bill – доларова банкнота

e.g. If dollar bills had no equal denominations of money that had the same value, things could be pretty confusing.

medium of exchange – спосіб обміну

e.g. Money serves us as medium of exchange.

measure of value – міра цінності

e.g. Money serves us as measure of value.

to enable – давати право або можливість (що-небудь робити)

e.g. Money enables us to state the price of something in terms that everyone can understand.

2. Give English equivalents of the following:

бути небезпечним для економіки, бартерна економіка, головна перевага грошей, встановлювати ціну, накопичення цінноcтей, робити покупку, високоякісний папір, засіб обміну, вартість грошей, валюта, мірило цінності.

3. Fill in the blanks with appropriate words:

Words: denomination, payment, paper money, medium, advantages, barter economy, money economy.

1. Money can be anything, that is generally accepted in... for goods and services.

2. Equal... of money should have the same value.

3. One of the principal... of money over barter is its ability to be divided into parts.

4. The principal difference between a... and a... is that in a barter economy you must find someone who has what you want and wants what you have.

5. Money, therefore, is the... that enables exchanges to be made easily.

6. The money you are most familiar with, currency, consists of the... and coins that you use almost daily.

4. Read and translate the text:

What is money? Money can be anything that is generally accepted in payment for goods and services.

Although anything can serve as money, as a practical matter the material should possess the following qualities:

Stability. The value of money should be more or less the same today as tomorrow. In societies where value of money fluctuates (goes up and down) people will hoard if in the hope that its value will increase, or spend it immediately thinking it will be worth less tomorrow. Either action could be harmful to the economy.

Portability. Modern money has to be small enough and light enough for people to carry. Bowling balls would not be a practical form of money.

Durability. The material chosen has to have a reasonable life expectancy. For that reason most countries use a very high quality paper for their money.

Uniformity. Equal denomination of money should have the same value. It's easy to see that if some quarters or dollar bills were worth more than others, things could be pretty confusing.

Divisibility. One of the principal advantages of money over barter is its ability to be divided into parts. In other words, while making change for a dollar is easy, making change for a chicken is more difficult.

Recognizability. Money should be easily recognized for what it is and hard to copy. The quality of the paper and the engravings make paper money extremely difficult to counterfeit.

We can also define money by what it does, which is to provide: A Medium of Exchange; A Measure of Value; A Store of Value.

A Medium of Exchange. The principal difference between a barter economy and a money economy is that in a barter economy you must find someone who has what you want and wants what you have. In a money economy people can sell what they have to anyone and use the money to buy what they want. Money, therefore, is the medium that enables exchanges to be made easily.

A Measure of Value. Money enables us to state the price of something in terms that everyone can understand. We can say the eggs we have for sale are worth 85 cents a dozen. That is far simpler than having to figure out how much milk or meat or clothing we would expect in payment for a dozen eggs.

A Store of Value. Money enables us to use the value of something that we sell today to make a purchase sometime in the future. For example, our egg seller could put the money from the day's sale toward a college education sometime in the future. You can imagine the difficulties if that person tried to save one or two year's worth of eggs toward a college education.

Currency. The money you are most familiar with, currency, consists of the paper money and coins that you almost use daily.

5. Answer the following questions:

1. What is money?

2. What qualities should the material for money possess?

3. What is the principal difference between a barter economy and a money economy?

4. What functions does money play in the society?

5. What is currency?

6. Define the terms:

Stability, durability, divisibility, portability, uniformity, recognizability.

7. Translate into English:

1. Більшість країн використовує високоякісний папір для виготовлення грошей. 2. Одна з головних переваг грошей над бартером – це те, що гроші можна ділити на частини. 3. Головна різниця між бартерною та грошовою економікою полягає в тому, що при бартерній економіці вам слід шукати когось, хто мав би те, що ви хочете, і хотів би те, що ви маєте. 4. Гроші дають нам змогу встановлювати ціну товару. 5. Гроші – це засіб, що дає нам можливість робити обмін. 6. Гроші дають змогу нам робити покупки коли-небудь у майбутньому, використовуючи вартість чогось, що ми продаємо сьогодні. 7. Валюта – це паперові гроші та монети, якими ми користуємося майже щодня.

8. Read and dramatize the following dialogue:

A.: In what currency will payments be made?

B.: We'll provide for payments in local currency in our contract.

A.: Is currency conversion allowed under your local legislation?

B.: Yes, it is.

A.: How will currency fluctuations be taken into account?

B.: To avoid currency tosses we shall provide for a currency clause in our contract.

A.: How will the currency be exchanged?

B.: At the rate of the day.

A.: To avoid currency losses we suggest including into the contract a currency clause pegging the currency of payments to SDRs in US dollars.

B.: No objections. And in what cases will payments be adjusted?

A.: Payments will be adjusted if the cost of one SDR changes.

В.: We believe that you will use the adjustments of the International Monetary Fund.

A.: Yes, certainly. Please note that if the amount of the letter of credit is not sufficient the Customer will have to increase the letter of credit accordingly.

9. Make up your own dialogue using the following expressions:

local currency, currency fluctuations, to exchange currency, to make payments, to provide for payments, to take into account, to adjust payments, to avoid currency losses

10. Put the infinitives in brackets in the Past Continuous Tense:

Model: The company (to raise) prices for the merchandise the whole year.

The company was raising prices for the merchandise the whole year.

1. The management (to consider) the outflow and inflow of capital, while they produced the new types of devices. 2. The company (to buy) currency from the foreign exchange department, when they dealt with the foreign firm. 3. Our partner (to provide) for payments in local currency, when currency conversion was allowed under the local legislation. 4. Our bank (to make) loans to corporations when they were in need. 5. The bank (to accept) money from depositors at that time.

11. Paraphrase the following sentences as in the model:

Model: He intended to convert American dollars to Swiss francs in foreign exchange departments. - He was going to convert American dollars to Swiss francs in foreign exchange departments.

1. We intended to buy merchandise from another country using the currency of that country. 2. Our bank intended to accept money from depositors. 3. This bank intended to make loans to corporations. 4. We intended to provide for a currency clause in our contract. 5. I intended to invest money into this corporation.

12. Translate into English using the Past Continuous Tense (the Active Voice):

1. Цей банк надавав позики нашій компанії з 1995 по 1999 роки. 2. Я мав намір обміняти валюту в пункті обміну. З. У цей час вони намагались уникнути грошових втрат. 4. Коли вона зателефонувала, ми розмовляли про фонди підприємства. 5. Ми мали намір виплатити всі борги до початку фінансового року.

13. Communicative situations:

1. Money is the root of all evil.

2. Money is the guarantee of security.

3. «Time is money». (B. Franklin)

4. Money put in a bank is as safe as anything in this world can be.