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. .
To understand the way a central bank can influence the money supply we should consider the creation of money by commercial banks and in the connection introduce the money multiplier.
Banks have to hold a proportion of their assets as a reserve in case customers demand repayment of their deposits. This required reserve has to be in a liquid form, that is easily convertible into cash. Many banks indeed hold a significant proportion of this reserve as notes and coin either vaults or at the central bank. A required reserve ratio (%) is a minimum ratio of cash reserves to deposits that the central bank requires commercial banks to hold.
2. :
1.What is the aim of monetary policy?
2.Why is it important to control the monetary supply?
3.Why does the Bank impose a reserve requirement?
3. :
, - , , , , , , , , .
4. , - . (, was going - Past Continuous Active to go).
1) Scientists will perhaps learn a great deal about how people lived in the ancient world.
2) Certain soil minerals bring about changes in the size or shape of plants.
3) The explorers have shown that the climate in Antarctica is possible even for untrained men.
4) They never carried the fire to the new place.
, , , , .
1) We were shown a very strange picture.
2) Why is he always laughed at?
3) We were given tickets to the exhibition.
4) All of you will be invited to the hall and told about all the changes in the school program.
5) This article must be read by all the group.
6. Passive Voice.
1) They teach three foreign languages at this school.
2) We received this letter after his departure.
3) Have dogs ever attacked you?
4) Bees gather honey from flowers.
5) The storm drove the ship against a rock.
7. , .
1) I (not to like) apples.
2) He (to come) home at five o'clock yesterday.
3) He (to come) home by six o'clock yesterday.
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4) This little boy never (to see) a crocodile.
5) Yesterday I (to put) five apples into the vase. Where they (to be) now? I (to eat) them. You (to bring) some more tomorrow?
6) You ever (to be) to the Hermitage?
7) What Nick (to do) when you (to ring) him up yesterday?
8. .
1) She speaks English well.
2) He is going to the USA this year.
3) He can sing English and American songs.
.
1) subjects, students, many, the first-year, study.
2) the third-year, had, last, students, training, industrial, summer.
3) one of the, is, the fog, worst features, of London
10. 10 , .
.
5.
, . .
INFLATION ().
Inflation is generally defined as a persistent rise in the general price level with no corresponding rise in output, which leads to a corresponding fall in the purchasing power of money.
In this section we shall look briefly at the problems that inflation causes for business and consider whether there are any potential benefits for an enterprise from an inflationary period.
Inflation varies considerably in its extent and severity. Hence, the consequences for the business community differ according to circumstances. Mild inflation of a few per cent each year may pose few difficulties for business. However, hyperinflation, which entails enormously high rates of inflation, can create almost insurmountable problems for the government, business, consumers and workers. In post-war Hungary< the cost of living was published each day and workers were paid daily so as to avoid the value of their earnings falling. Business would have experienced great difficulty in costing and pricing their production while the incentive for people to save would have been removed.
Economists argue at length about the causes of, and cures for, inflation. They would, however, recognize that two general types of inflation exist:
Demand-pull inflation
Cost-push inflation.
