4. Give the best definition for the following economic terms.

Money, commodity money, fiat money, representative money, surplus, a unit of account, a medium of exchange, a measure of values, a standard of value, a store of value.

5. Explain the difference between the terms in each of these pairs.

1) To hoard money – to circulate money; 2) to store money – to hoard money; 3) barter – financial transaction; 4) to outstrip the demand – to satisfy the demand; 5) to put money aside – to spend money; 6) inflation – deflation.

6. Say how you understand the sentence “Money is what money does”.

7. Give profound answers to the following questions.

1. Is each of the following items as easy to use as money? Diamonds? Salt? Whale teeth? Why/ Why not?

2. Why are economic transactions easier with money than with barter?

3. Why is it important for money to be divisible?

4. How are the economic properties of money related to its functions?

5. What is fiat money? Why is fiat money said to have no tangible backing?

6. Must money be scarce? Why/ Why not?

8. Practise reading §5 of the text. Translate it into Russian. Give a short summary of it.

C. How the text is organized

1. What do these words refer to in the text?

1) that (§1); 2) it (§1); 3) its (§2); 4) They (§3); 5) It (§5); 6) it (§5).

2. Find the paragraphs of the text dealing with the following concepts.

1) means through which goods and services can be exchanged; 2) money that acts as a unit of account; 3) the economic worth in the exchange process; 4) money that holds its value over time; 5) money that derives its value from the type of material from which it is made; 6) paper money backed by something tangible; 7) value that can be used as money according to the government decree.

3. Based on the text, fill in these gaps related to money:

I FUNCTIONS: ...; II PROPERTIES: ...; III TYPES: ... .

V. Speaking

A. Giving your opinion

Explain how you understand the following sayings.

1. Money talks.

2. The love of money is the root of all evil.

B: Discussion

Work in pairs or groups. Discuss your views on the following issues.

1. The way the Belarusian currency serves each of the three properties of money.

2. If you were in business, what type of economic transactions would you prefer? With money or with barter? Why?

C. Role play

Prepare for a role play. Read the situation and the roles, and follow the procedure.

The situation

“The EURO as a common currency”

On January1, 2002 a new currency – the euro – was put into full use in 12 European countries, each a member of the European Union (EU). Today, there are 27 countries in the European Union. Each country that adopted the euro gave up its national currency. Great Britain, Norway, Denmark and Sweden refused to give up their currencies, though they adopted the euro. Finland is the only country in Scandinavia where the euro is characterized as fiat money.

The roles:

Representatives: Students choose a country they would represent (Austria, Denmark, Belgium, the Netherlands, France, Finland, the U. K, Iceland, Spain, Norway, Italy, Greece, and Germany) to participate in the summit: “The EURO expansion”. Students choose one of the following issues and get ready to make a report on one of the following topics. The issues of this summit are:

• Economic and political integration of European countries

• The euro as a common currency

• Easy and cheap trade among the nations

• Meeting specific economic standards

• Control of the supply of Euros

Moderator: The moderator gives the floor to the representatives, asks questions, and evaluates the summit.

The Procedure:

1. Make a careful study of the situation.

2. Appoint the moderator and representatives.

3. Hold the summit “The EURO expansion”.

4. The moderator evaluates the participants’ performance.