Comprehension check. I. Give English equivalents to the following:

I. Give English equivalents to the following:

Резервные кредиты, страны-должники, благоприятный курс, в свою очередь, уменьшать субсидии, кредиты развития, одолеваемая долгами, текущая (краткосрочная) задолженность, слаборазвитые страны, в крайнем случае.

II. Read the words and guess their meanings:

global financial system, exchange rates, balance of payments, offering financial and technical assistance, to experience serious financial difficulties, increasing the prices, transition from centrally planned to market economies, currency convertibility, economic growth, the Executive board, monetary stake in, floating debt, debt-ridden, development loans, underdeveloped countries, in turn, favourable rate, debtor countries, to reduce subsidies, standby loans, in the last resort.

III.Which of the following is true?

1. The IMF came into existence in December 1945, when the first 29 countries signed its Articles of Agreement.

2. IMF is composed of 22 Governors.

3. The quota determines the amount of financial resources the member has to make available to the IMF.

4. IMF member countries may utilize the Fund’s resources.

5. Borrowing countries have to pay the loans back within 3-5 years.

6. Much of the IMF’s work is centered on annual consultations with each member country to ensure that its national policies take into account their consequences for the world economy and avoid unfair exchange policies.

7. The IMF's influence in the global economy steadily increased as it accumulated more members.

8. The IMF is for the most part controlled by the major Western Powers, with voting rights on the Executive board based on a quota derived from a monetary stake in the institution.

IV. Translate into English:

1. МВФ был создан 27 декабря 1945 года.

2. МВФ предоставляет кратко- и среднесрочные кредиты при дефиците платёжного баланса государства.

3. Предоставление кредитов обычно сопровождается набором условий и рекомендаций, направленных на улучшение ситуации.

4. Основные функции МВФ:

· содействие международному сотрудничеству в денежной политике

· расширение мировой торговли

· кредитование

· стабилизация денежных обменных курсов

5. Высший руководящий орган МВФ — Совет управляющих (Board of Governors), в котором каждая страна-член представлена управляющим и его заместителем. Обычно это министры финансов или руководители центральных банков.

V. Answer some questions on the Text:

1. What is the IMF?

2. For what purpose was it established?

3. What are the functions of IMF in countries with economic difficulties?

4. What new activities has the IMF been engaged with since the early 1990s?

5. Is the IMF funded by wealthy member countries?

6. Is the “structural adjustment” process of ailing economies painful for nations?

Литература

Основная: 1, 3, 5, 6.

Дополнительная: 1, 2, 4, 6, 7, 11.

TOPIC 12.

MONETARY POLICY

Monetary policy is one of the tools that a national Government uses to influence its economy. Using its monetary authority to control the supply and availability of money, a government attempts to influence the overall level of economic activity in line with its political objectives. Monetary policy is one of the main instruments of macroeconomics. It is based on the ability of the Central bank to control the money supply, which leads to changes in interest rates and the exchange rate, and therefore in the amount of investment, which influences directly the national output.

This method of controlling the economy centers on adjusting the amount of money in circulation in the economy and so the level of spending and economic activity.

The Central Bank attempts to achieve economic stability by varying the quantity of money in circulation, the cost and availability of credit, and the composition of a country's national debt. The Central Bank has three instruments available to it in order to implement monetary policy:

· Controlling the money supply

· Controlling interest rates

· Managing the exchange rate

The aim of the authorities when controlling the money supply is to limit the amount borrowed, and hence spent, by businesses and individuals during a inflationary period. It is hoped in this way to limit the level of overall demand in the economy and thus to remove or reduce inflationary pressure. During a recession monetary policy is aimed at increasing the money supply to encourage spendings.

The three most important instruments available to affect the money supply are:

· open market operations,

· reserve requirements

· the discount rate.

Open Market Operations. Open market operations are the most important way of controlling the money supply. It refers to the Bank trading government bonds in the open market - that is when they are bought from and sold to commercial banks and individuals.

When the Bank sells government bonds in the open market, the Bank withdraws the money from population and reduces the money supply. When the Bank buys government bonds in the open market, it increases the amount of money in circulation and hence the money supply.

Reserve requirements are a percentage of commercial banks', and other depository institutions', demand deposit liabilities (i.e. chequing accounts) that must be kept on deposit at the Central Bank as a requirement of Banking Regulations. Though seldom used, this percentage may be changed by the Central Bank at any time, thereby affecting the money supply and credit conditions. If the reserve requirement percentage is increased, this would reduce the money supply by requiring a larger percentage of the banks, and depository institutions, demand deposits to be held by the Central Bank, thus taking them out of supply. As a result, an increase in reserve requirements would increase interest rates, as less currency is available to borrowers. This type of action is only performed occasionally as it affects money supply in a major way. Altering reserve requirements is not merely a short-term corrective measure, but a long-term shift in the money supply.

Дата добавления: 2015-09-01