Pre-reading Activities. 1. In your “Key Vocabulary”, find synonyms and antonyms to the words below

1. In your “Key Vocabulary”, find synonyms and antonyms to the words below. Use a dictionary and learn this vocabulary.

Give synonyms to:	Give antonyms to:
buy v	temporary adj
buyer n	valueless adj
exchange v	seller n
deal n

Reading

Read the text and get ready to define all the types and functions of money.

Money is any good that is widely used and accepted in transactions involving the transfer of goods and services from one person to another. Economists differentiate between three different types of money: commodity money, fiat money,andbank money.

Commodity money is a good whose value serves as the value of money. Gold coins are an example of commodity money.

Fiat money is money that has value only because of the government regulation or law. Dollar bills are an example of fiat money.

Bank money is the balance held in checking accounts and savings accounts. Bank deposits usually form the larger part of the money supply of a country.

Some people may think that money's function is limited to one use — to buy things. Money actually has three functions, which allow money to be exchangeable, durable, and valuable. Classically it is said that money acts as a medium of exchange, a unit of account, and a store of value.

The most important function of money is as a medium of exchange to facilitate transactions. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another. The difficulty with a barter system is that in order to obtain a particular good or service, a person has to possess a good or service of equal value, which the supplier also desires.

In order to be a medium of exchange, money must hold its value over time; that is, it must be a store of value. But as a store of value, money is not unique; many other stores of value exist, such as land, works of art, stamps.

Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase.

Today money is considered one of the outstanding inventions of the entire history of mankind. The introduction of money has eliminated all the difficulties of a barter system, it has made easy to save wealth for future, and has played a significant role for the specialization in business through the division of labour. Although money itself creates nothing, it is very helpful in the process of production, consumption and exchange.

Comprehension Check

1. Say whether these statements are True or False:

1. Economists differentiate between three different types of money:commodity money,a store of value, a unit of account.

2. Commodity money is a medium of exchange that may be transformed into a good, useful in production or consumption.

3. Bank money is money that has value only because of the government regulation.

4. The function of money is limited to one use — to buy things.

5. Barter involves direct exchange of one good or service for another.

6. The most important function of money is a store of value.

7. There are many different stores of value.

8. Knowing the value or price of a good enables suppliers and purchasers to make different decisions.

2. Read the text more carefully and complete the following statements. In some cases more than variant is possible.

1. Money is … .

2. Commodity, fiat and bank money are … .

3. Bank money is … .

4. Money can be … .

5. Without money … .

6. … in order to be a medium of exchange.

7. As a unit of account, money … .

8. The introduction of money … .

3. Prepare to speak about money. Firstly, complete the following plan of the text.

1. Different types of money:

a. ……

b. ……

c. ……

2. …….

a. ……

b. Money as a store of value.

c. ……..

3. ………

Vocabulary Focus

1. Complete the definitions.

a) to trade by exchange of commodities rather than by the use of money is to …;

b) … is a system of organizing the manufacture of goods in a series of separate operations, each of which is carried out by a different worker or group of workers;

c) a piece of metal stamped and issued by the government for use as money is a …;

d) a … is someone whose business is to supply a particular service or commodity;

e) to … means ‘to make easier or less difficult’.

2. Complete the sentences with the words from the box. Mind grammar forms.

valuable

a unit of account

facilitate

durable

eliminate

a medium of exchange

1. Careful planning … any kind of work.

2. The company plans to … more than 2,000 jobs in the coming year.

3. The machines have to be made of … materials.

4. … is a standard monetary unit of measurement of value of goods, services, or assets.

5. Something commonly accepted in exchange for goods and services and recognized as representing a standard of value is … .

6. This painting is extremely … .

3. Match the verbs on the left with nouns on the right to make phrases from the text.

Translate them and use in the sentences of your own.

to use in
to purchase	transactions
to create	goods and services
to facilitate	difficulties
to eliminate
to obtain

Talking Points

1. Think and say whether you agree or disagree with the following quotations and proverbs. Be ready to express your opinion and give their Russian equivalents.

a) A penny saved is a penny earned.

b) Lend your money and lose your friend.

c) Money talks.

d) Never spend your money before you have it.

2. Plastic money has become the alternative to cash or standard money nowadays. In small groups brainstorm the questions: Are credit cards a form of money? If not, why do we call them ‘plastic money’? What are their advantages and disadvantages?

3. What do you know about WebMoney? How can people use it and why is it convenient?

Summary Points

1. Read the passage. What title can you suggest?

Most of the money used by business comes from the sale of its products and services. Since these funds come from within the firm they are described as internal funds. The rest must come from outside, or external funds.

As a firm sells its products or services, it receives money, which it uses to meet its expenses. One of these expenses, depreciation, represents the cost of replacing assets (like tools, machinery, and buildings) that wear out. Typically, businesses use internal funds to cover the cost of depreciation.

Notes:

internal / external – внутренний / внешний

depreciation – изнашивание (в результате износа и морального устаревания); списание стоимости;

wear out – изнашивать(ся)

2. What is the main idea of the passage?

3. What have you learned from this passage? Use the given expressions.

The author describes (discusses, studies, offers, states, analyzes) …	автор описывает (обсуждает, изучает, предлагает, утверждает, анализирует) …
On the one hand … on the other hand …	С одной стороны…; с другой стороны …
After reading the passage I have understood …	Прочитав отрывок, я понял(а) …

Unit 8

MARKETS AND PRICES

Lead-in

1. Express your opinion on the following issues.

1. How would you define the term “market” in your own words?

2. What factors influence prices in the market?

2. Finish the phrase.

- If I were a marketer, I would ……… .

Key Vocabulary

Study the following list of vocabulary.