Money Is a Spectrum of Assets
Currency and checkable deposits are readily convertible into one another.Together, they constitute money in the narrow sense.
In a broader sense, some other assets are also “money”. But they are often called near-moneys.Their values are known in the terms of money, and they can be easilyconverted into money, if this is desired.
The concept of near-moneys is important. For one thing, people who possess near moneys may feel wealthier than other people of the same income level who do not. Hence, people who hold near moneys are likely to have higher propensity to consume.
Money is more than just paper currency and coins. Money is a spectrum of assets. It ranges from currency and checkable deposits through various types of time deposits to financial claims against businesses and US Treasury.
LET’S READ AND TALK
Read the text. Then explain the meanings of the words and phrases which have been highlighted.
TE X T 1
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 barterwas used.
Barter, however, was a very unsatisfactory system. Precious metals gradually took over because, when made into coins, they were portable, durable, recognizable and divisible into larger and smaller units of value.
Coins have been made of gold (Au), silver (Ag), copper (Cu), aluminium (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. 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. 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.
Most governments now issue paper money in the form of notes.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.
T E X T 2
THE WORLD’S MAJOR CURRENCIES
The currencies of the world’s major economies have names and backgrounds that are as diverse as the countries themselves.
The dollar, used in many countries including the USA, Canada, Australia.
The pound, used in Britain, Egypt, and Lebanon among others, refers to the weight used in determining the value of coins, based on precious metals such as gold or sterling. In Italy and Turkey, the currency is called lira. The word is based on the Latin libra, meaning "pound," and once again refers to the weight of the original coins.
In Spanish, the word meaning "weight," peso, is used to describe the coins that were based on a certain weight of gold or silver.The word peso is used to describe the currency in many Spanish-speaking countries in Latin America.
In Denmark, Norway, and Sweden, the word for crown—krone in Denmark and Norway, krona in Sweden—is used to describe the currency that was originally minted by the king and queen, with royal crowns stamped on the earlier coins.
The franc, used in France, Switzerland, Belgium, and other countries and territories, is based on the early coins used in France that bore the Latin inscription franconium rex, meaning "king of the Franks".
The German mark and Finnish markka derive their names from the small marks that were cut into coins to indicate their precious metal content.
The riyal, in Saudi Arabia and Qatar, and the rial in Iran, are based on the Spanish word real—which, in turn, was derived from the Latin regal(is)—referring to earlier "royal" coins. The dinar, used in Iraq and Kuwait among others, derives its name from "denarius," a Roman coin that was worth "ten bronze asses," an item of considerable value in days of old. In India, Pakistan, and other countries of the subcontinent, the currency is called rupee (in Indonesia, rupiah), based on the Sanskrit word rupya, meaning "coined silver".
The ancient Chinese wordyiam meant "round," or "small round thing". The name of the Japanese currency, the yen, and the name of the Chinese currency, the yuan, both derived from the old Chinese word, refer to the round shape of theoriginal coins.
1.What other names and backgrounds of the national currencies do you know? 2.What are the backgrounds of the national currency in your country?
Ex. 5.What is the English for?
a) деньги – мера стоимости; деньги – наиболее ликвидный из всех активов; наличные денежные средства; чековые депозиты; сберегательные счета; мелкие срочные депозиты; взаимные фонды денежного рынка; обратить в наличность; индивидуальные счета взаимных фондов денежного рынка;крупные срочные депозиты; чековый депозит; бессрочный вклад; средство сбережения.
b)1.Деньги служат средством обращения.2.Деньги используются для купли-продажи товаров и услуг.3.Деньги помогают избежать неудобств бартерного обмена. 4. Мы оцениваем стоимость товара в денежном выражении.5. Деньги используются для выполнения любого финансового обязательства. 6. Деньги – это все, что выполняет функцию денег. 7. Это позволяет покупателям и продавцам сравнивать стоимость различных товаров и ресурсов.8. Долговые обязательства также измеряются в денежном выражении.9. Деньги являются удобной формой хранения богатства. 10. Текущие счета (чековые депозиты) представляют собой обязательства коммерческих банков и сберегательных учреждений.11. При
необходимости люди могут обратить свои чековые вклады в бумажные и металлические деньги.
Ex. 6.Join the parts to make up a sentence.
A) A medium of exchange
B) we can express the price of each of
C) in the future it will not to be
D) distinguished by the type of deposits
E) can be converted to a medium of exchange
F) The reason for the divorce of
G) the store-of-wealth function more than
1. There are narrow and broad measures
2. to buy goods and services
3. the medium of exchange from the unit of account is a deterioration of
4. Having chosen the good
5. is anything generally acceptable as a
6. The term liquidity
7. the medium-of-exchange function.
a) the currency as a store of value.
b) included in the definition of money.
c) means of payment in the exchange of good and services.
d) When wealth is held in money,
e) refers to the ease and convenience with which an asset
f) The broader measure emphasizes
g) the rest of the goods in units of that good.
BANKING
A banker is a man who lends you umbrella when the weather is fair, and takes it away from you when it rains.
Banks
- financial institutions that offer the widest range of financial services – especially credit, savings, and payment services – and perform the widest range of financial functions of any business firm in the economy.
Affiliated bank
- bank whose stock has been acquainted by a bank holding company.
Bankers’ banks
- groups of banks that are given a legal permit to create regional service firms in order to facilitate the delivery of certain customer services, such as rapid transfer and investment of customer funds and the execution of orders to buy or sell securities.
Bank holding company
- a corporation charted for the purpose of holding the stock (equity shares) of one or more banks.
Correspondent banking
- a system of formal and informal relationships among large and small banks established to facilitate the exchange of certain services, such as clearing checks.
Nonbank banks
- financial service firms that either offer checking account services or grant commercial loans but not both of these services.
Unit banks
- banks that offer the full range of their services from one office, though a small number of services (such as taking deposits or cashing checks) may be offered from limited – service facilities (such as drive-in windows and automated teller machines).
Ex.1.Translate the following sentences. Pay attention to the italicized words.
1. Don’t bank on going abroad this summer, we may not have enough money.
2. The morning began fine, but now clouds are banking up.
3. I have always bank with the Royal Bank.
4. They have an access to huge banks of public data or library information.
5. The only way out is to ask your bank for a loan.
6. I am not sure if I should buy this suit. – Come on! It won’t break the bank.
7. Mr. Smith had bankrolled them when they had nothing.
Ex. 2.Match the term with its definition.