Английский язык: Сборник текстов и упражнений. Бодргина Л.И - 83 стр.

producing additional quantities of the commodity. But there are less expensive
ways for society to produce money.
      A token money is a means of payment whose value or purchasing power as
money greatly exceeds its cost of production or value in uses other than as money.
      A $ 10 note is worth far more as money than as a 3 * 6 inch piece of high
quality paper. Similarly, the monetary value of most coins exceeds the amount
you would get by melting them down and selling off the metals they contain. By
collectively agreeing to use token money, society economizes on the scarce re-
sources required to produce money as a medium of exchange. Since the manufac-
turing costs are tiny, why doesn’t everyone make $ 10 notes?
      The essential condition for the survival of token money is the restriction of
the right to supply it. Private production is illegal.
      Society enforces the use of token money by making it legal tender. The law
says it must be accepted as a means of payment.
      In modern economies, token money is supplemented by IOU money.
      An IOU money is a medium of exchange based on the debt of a private firm
or individual.
      A bank deposit is IOU money because it is a debt of the bank. When you
have a bank deposit the bank owes you money. You can write a cheque to yourself
or a third party and the bank is obliged to pay whenever the cheque is presented.
Bank deposits are a medium of exchange because they are generally accepted as
payment.

     Answer the questions.
     1. Why do people accept money?
     2. Dwell on the functions of money.
     3. Dwell on different kinds of money.
     4. What’s a barter economy? Why is trading expensive in a barter economy?
     5. What currency can be used as the unit of account? Speak on the current
situation in Russia.
     6. What does IOU stand for?




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