8. The diagram below shows some of the words you have learnt in Unit 2, organized in logical groups. Where in the diagram will you put the following words?
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government, mixed, trends, data, market(×2), regulation, consumption, supply and demand, production, collect, agricultural, specialized areas, planned(×2), public, competition, freedom |
Central Banks and Monetary policy
1. Make up words with the help of “derivational trees”. Point out classes to which they belong (n, V, Adj, Adv). Consult an English-Russian dictionary for their meanings.
operate create
/ / / / / / /
-tion -ive -ing -or -tion -ive -or
/ / / / /
-al -ly -ly -ty -ness
govern supervise
/ / / / / / / /
-ment -ing -or -ness -sion -or -ory -ing
/ /
-all -ship
2. Explain in English what is meant by:
acts as a banker to the government
the money supply
setting aside a small amount of each deposit as a “reserve”
to control the economy
multiplier effect
are allowed to get cheaper money at the central bank
putting the bakes on economic growth
pumps money into the economy
dips into it vaults to buy bonds
a central bank serves as a watchdog to supervise the banking system
3. Complete the following sentences joining the suitable part.
1. The central bank keeps control of the country’s economy…
a. by supervising the day-to-day activity of local banks.
b. by reducing the interest rate.
c. by increasing or decreasing the country’s supply of money.
2. If banks charge a very high interest rate on their loans to customers…
a. they increase the money supply.
b. they generate further deposits.
с they slow down business and economic development of the country.
3. “Money” is created when a central bank…
a. sells bonds in the open market.
b. borrows currency from other countries.
c. buys securities in the open market.
4. Fill in the correct words from the text a choosing from the list below.
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to, supply, take, coordinating, bonds, economy, vault, decreasing, control, by, reserve, on, selling, deposits, money, securities, are, controlled, by, with, lowering, supervising, rates, further, generating, enter, pumps, printing, make, to control, deposits, market, is, to
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It is usual for banks to … deposits and … loans … consumers and businesses. But central banks act as bankers… the government. For example, Britain’s Bank of England is responsible for … the money as well as … the banking system and …
monetary policy. In Germany, the central bank is noted for its active policy and strict monetary … limiting money … growth in order … inflation at all costs.
… increasing or decreasing bank lending and bank … central bank control the…
A bank’s supply of … for lending is limited only …its deposits and its …requirements. A bank’s funds … reserve … the central bank usually amount to 10 percent of … .When the reserve requirement … reduced, a new loans … the economy … more money for … loans. Money supply can be also … by raising or … interest … . The most unusual way of increasing or … the money supply is through open … operations. In this case the central bank … money into the economy or puts them into its … by buying or … government treasury … which … often called … .