Comprehension check. I. Suggest the Russian equivalents:

I. Suggest the Russian equivalents:

To restore their required reserve ratio; maintain cash reserves equal to 5%of sight deposits; create $20 million of sight deposits; a higher fraction of their total assets; a lower fraction as loans; the interest rate that the Bank charges; extra lending; impose a reserve requirement; the dangers and costs involved; prudent banks; lend up to the hilt; the minimum safe ratio of cash to deposits; flood of withdrawals; the Bank can induce banks voluntarily to hold additional cash reserves; the required reserve ratio given

II. Find in the text English equivalents for the following:

Источник денег, добавлять или изымать деньги, давать взаймы деньги банкам, денежный запас, ставка процента, регулирование ставок процента, брать деньги взаймы, сокращать производство, снижать инфляцию, кредитные ставки, способствовать росту деловой активности, ограничивать денежный запас, от имени правительства; кредитно-денежная политика; для поощрения расходов; операции на открытом рынке; резервные требования; кассовый резерв; избыточные резервы; требуемая резервная норма (уровень резервных требований); создавать деньги; денежный мультипликатор; обратно пропорциональный; сверх резервной нормы; дисконтная (учет­ная) ставка; повышенная ставка.

III. Fill in the gaps with the words and expressions from the text:

1. Monetary policy is a method of controlling the economy that centres on the amount of money _____ in the economy and so ______ and _____.

2. In some ____ countries the Central Bank operates monetary policy government policy.

3. Monetary policy has three main aspects: controlling ____, controlling ____, managing ____.

4. The aim of the authorities when controlling the money supply is ____, and hence ____, by businesses and individuals during ____.

5. It is hoped to limit the level of ____ in the economy and thus to remove or reduce ____.

6. During a recession monetary policy is aimed at ____ to ____ spendings.

7. The three most important instruments ____ the money supply are ____, ____ and ____.

8. When the Bank sells ____ in the open market, the Bank ____ the money from population and ____ the money supply.

9. When the Bank buys government bonds in the open market, it ____ the amount of money____ and hence ___.

10. Banks have to hold a proportion of their assets ____ in case customers demand.

11. The required reserve has to be ____, that is easily____ into cash.

12. ____ is a minimum ratio of____ to ____ hat the central bank requires commercial banks to hold.

13. Commercial banks can make loans, i.e. they can ____ and increase ____.

14. The discount rate is ____ that the Bank ____ when the commercial banks want ____.

IV. Are the following statements true or false? If they are false correct them.

1. The Central Bank borrows money from other banks.

2. The responsibility of the Central Bank is managing the money supply and interest rates.

3. The Central Bank tries to lower inflation restricting the supply of money and increasing credit costs.

4. Small businesses and consumers pay the prime rate when they borrow money from banks.

5. A required reserve ratio is a minimum ratio of cash reserves to deposits that the central bank requires commercial banks to hold.

6. Commercial banks can make loans, i.e. they can create money and increase their excess reserves.

7. According to recent studies the money supply and interest rates can be effectively changed by the traditional central bank tools.

8. Monetary policy is an instrument for moving the economy from a recession.

9. During inflation velocity may fall when the money supply is restrained.

10. Expenditures on capital goods and interest rates are mutually dependent.

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