Match the words with the definitions below.

1. commodity (n)

2. currency (n)

3. demand (n)

4. rapidity (n)

5. tender (n)

6. transaction (n)

7. value (n)

8. issue (v)

9. measure (v) 10.reckon (v)

a. a piece of business

b. to bring out something printed and official for the notice of the public

c. the act of quick-moving

d. to consider, suppose, guess, regard

e. an article of trade or commerce

f. a statement of the price one would charge for doing a job

g. the desire of people for particular goods or service
h. the particular type of money in use in a country
i. the degree of usefulness of something
j. to show or record amount, size, length

4. Choose the words with similar meaning from the two groups and
arrange them in pairs.

A. medium, money, note, order, power, rapidity, store, transaction, value, to provide, to issue, to regard

B. tender, speed, to consider, cash, memorandum, reserve, deal, price, command, force, to supply, to publish

What are the opposites?

Demand, inflation, power, rapidity, constant, valuable, to sell.

6. Form all possible word combinations using the words of both
columns and translate them into Russian.

II. Reading comprehension

Read and translate the following text. Consult a dictionary if necessary.

MONEY

The work which people undertake provides them with money. People buy essential commodities with money. All values in the economic system are measured in terms of money. Our goods and services are sold for money, and that money is in its turn exchanged for other goods and services. Coins are adequate for small transactions, while paper notes are used for general business. Originally, a valuable metal (gold, silver or copper) served as a constant store of value, and even today the American dollar is technically 'backed' by the store of gold which the US government maintains. Because gold has been universally regarded as a very valuable metal, national currencies were for many years judged in terms of the so called “gold standard”. Nowadays national currencies are considered to be as strong as the national economies which support them.

Valuable metal has generally been replaced by paper notes. These notes are issued by government and authorized banks, and are known as “legal tender”. Other arrangements such as cheques and money orders are not legal tender. They

perform the function of substitute money and are known as “instruments of credit”. Credit is offered only when creditors believe that they have a good chance of obtaining legal tender when they present such instruments at a bank or other authorized institutions. If a man's assets are known to be considerable then his credit will be good. If his assets are in doubt, then it may be difficult for him to obtain large sums of credit or even to pay for goods with a cheque.

The value of money is based on its value as a medium of exchange or as economists put it, its “purchasing power”. This purchasing power is dependent on supply and demand. The demand of money is reckonable as the quantity needed to effect business transactions. The demand for money is related to the rapidity with which the business is done. The supply of money is the actual amount in notes and coins available for business purposes. If too much money is available, its value decreases. This condition is known as “inflation”.

1. Answer the questions:

1. Why is the role of money so important?

2. What are sold for money?

3. What is the difference between coins and paper notes?

4. What is “gold standard?”

5. What is known as “legal tender?”

6. What can substitute money?

7. When can credit be offered?

8. What does the purchasing power depend on?

2. Translate into English:

1. Люди покупают товары за деньги.

2. Товары и услуги продаются за деньги, а деньги в свою очередь обмениваются на другие товары и услуги.

3. Драгоценные металлы (золото, серебро и медь) служили постоянным запасом ценностей.

4. Сейчас национальные валюты оцениваются в соответствии с уровнем развития национальных экономик.

5. Банкноты выпускаются правительством и некоторыми банками и
считаются законным платежным средством.

6. Если человек обладает значительными активами, он может получить
хороший кредит.

7. Покупательная способность денег зависит от спроса и предложения.

8. При инфляции ценность денег уменьшается.

Complete the sentences with the words from the box below.

Currencies, medium, money, metal, paper notes, demand, amount, inflation

1. Our goods and services are sold for ... .

2. A valuable ... (gold, silver or copper) served as a constant store of value.

3. National ... are considered to be as strong as the national economies.

4. ... ... are issued by government and authorized banks.

5. The value of money is basically its value as a ... of exchange.

6. Purchasing power is dependent on supply and ... .

7. The supply of money is the actual ... in notes and coins.

8. The condition when too much money is available is known as ... .

4. Make up your own sentences using the following words and word
combinations:

money, coins, paper notes, purchasing power, goods and services, to be sold, to be considered, inflation, gold, valuable metal, gold standard, national currencies, to be judged.

III. Intensive Reading Task

Read and translate the following text. Consult a dictionary if necessary.

THE HISTORY OF MONEY

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 notes 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. Somebody could exchange a sheep, for example, for anything in the market place that they considered to be of equal value. Barter, however, was a very unsatisfactory system because people's precise needs seldom coincided. People needed a 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, feather, salt, tobacco have been used. Precious metals gradually took over because, when made into coins, they were portable, durable, recognizable and divisible into larger and smaller units of value.

A coin is a piece of metal, usually disc-shaped, which bears lettering, designs or numbers showing its value. Until the eighteenth and nineteenth 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. Coins have been made of gold (Au), silver (Ag), copper (Cu), aluminum (Al), nickel (Ni), plastic and in China even from pressed leaves. Gold proves to be the most popular. Since civilization began gold has been regarded as a symbol of power and wealth. In many societies gold was seen as a magic substance which could protect people against illness or evil spirits. Mankind never seems to have enough gold and the search for it has driven men mad. The need to search for gold has been compared to a disease, and is called “gold fever”.

An incredible variety of items have served as money at various times and places, but all can be classified as either commodity money or fiat money.Commodity money is valuable apart from what it will buy. Gold, for example, is useful in jewelry or dentistry, even when it is not used for money. But some money is useless except when treated as money. Certain pieces of paper of which you would probably like (e.g. 100 dollar bills) are example of fiat money. Use of fiat money is ultimately based on faith – faith in its purchasing power, in its general acceptability, and in the stability of the government that issues it.

Most governments now issue paper money in the form of notes,which are really “promises to pay”. Paper money is obviously easier to handle and much more convenient in the modern world. Cheques, bankers' cards, and credit cards are being used increasingly and it is possible to imagine a world where “money” in the form of coins and paper currency will no longer be used.

1. Join the halves.

BUSINESS AND MONEY

Some once described the age we live in as that of a vanishing world, one in which the familiar is constantly disappearing for ever and technological change is

often difficult to 1 ___ with. So it should come as no surprise to most of us to

hear that yet another part of everyday life is 2 __ to go forever. Still, when I

read recently that within the next decade money as we 3 ___ it will probably

cease to exist in technologically advanced countries, I had to read the article twice

to make sure it wasn’t April 1st. 4 ____ to Professor Gerry Montague of the

Institute for Economic Reform, the familiar 5 ___ and banknotes will soon be

replaced entirely by credit cards of various kinds. And the shop of the future (the

“retail outlet” as Prof. Montague puts it) will be 6 _ directly to the network of

banking computers. The assistant will simply key in your bank account code

number and the 7 ___ you have spent, and thank you politely. You won’t have

to dig deep in your 8 ____ for change or pretend at the pub that you have left

your money at home. You may not even have a number for your 9 _ as such,

as the computer may by then be able to read your hand print. So no more credit

card frauds 10 ___ . But I am afraid that I shall 11 ____ money. I have felt

strongly attached to it, ever since I received my first pocket money when I was five, and kept it in a money-box. Even if my credit card of the future will be able

to tell me exactly how much 12 ____ power I have left in the computer files,

even if it light up and plays a happy (or sad) tune at the same time, nothing will be
able to replace the sheer pleasure I gained from 13 __ the coins in my money-

box. Not to 14 ____ the other obvious problems which will be caused by

15 ____ of real money-like how to start a football match, for example.

IV. Speaking Practice

Agree or disagree

1. People buy only some commodities with money.

2. Some values in the economic system are measured in terms of money.

3. Coins are adequate for general business, while paper notes are used for small transactions.

4. Today the American dollar isn't “backed” by the store of gold which the US government maintains.

5. Gold has been universally regarded as a very valuable metal.

6. Paper notes, cheques and money orders are issued by government and
authorized banks, and are known as “legal tender”.

7. The demand for money is related to the rapidity of the business.

2. Dramatize the dialogue and make up your own conversation on
analogy.

David Hook wants to invest his money, so he is speaking to an investment

advisor, Mr Robinson, about it.

D.H.: I have recently inherited a large sum of money and would like to invest it for ten years. It's a pity, I have little experience of financial affairs. What can you recommend me to do?

R.: You have several options available, but first I must know how much money you are planning to invest.

D.H.: The total amount I have inherited is $20,000. I would like to invest half of that for the full ten years and the other half for only seven years. I have two children and they will be entering college in seven and ten years.

A: One of your options is to invest some of the money in the stock market unless you put your affairs in the hands of a reputable stockbroker. But if you wish to do so you should be wise enough to consult your bank manager. I hope he'll be able to recommend you a reliable firm. This option is a little more risky than other options available. A safer option would be to invest in an annuity.

D.H.: Which option would yield more money?

A: We can only predict a possible amount the stock market investment would yield, but the annuity we can be certain of the amount yielded.

D.H.: What else can you recommend me to do?

A: Property is generally a safe investment. Why not buy another flat? As you

know, house prices are always above the inflation level. Besides, you could

always put the management of the property in the hands of an estate agent, so

you'd have no bother with the tenants. D.H.: I have been given so many pieces of advice that now I'm really at a loss. I'd

like to know what you think of gold. A: It might not be a bad idea. Many people say nothing beats gold as an

investment. But the price of gold is just too high at the moment for it to be

worth considering. D.H.: I'm inclined to buy a new Motorola shares. We all know it's going to be a

tremendous success. A: Of course, it's your choice to decide where to put your money, but I'd like to

advise you the following. Even if you think a particular company has a

bright future, it's unwise to invest the whole of your money in one venture.

The best way is to diversify. D.H.: What about starting a business of my own? Do you think that's a good

idea? A: Pretty good, but you should definitely think it all through very carefully. D.H.: I'm very grateful to you for your valuable advice. A: Good luck.

3. Speak about money, substitute money, purchasing power and
inflation using key words, phrases, the topic sentences and the outline.

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