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Essential characteristics of money
Money has all of the following three characteristics:
1. It must be a medium of exchangeand must circulate either due to coercion or faith. When people are coerced to use or they trust an object in order to do their exchanges and trades, then this object is considered to be money.
It must be a unit of account
When the value of a good is frequently used to measure or compare the value of other goods or where its value is used to denominate debts then it is functioning as a unit of account.
It must be a store of value
When an object is purchased primarily to store value for future trade then it
is being used as a store of value. Most non-perishable goods have this quality.
Many goods or tokens have some of the characteristics outlined above.
However no good or token is money unless it can satisfy all three criteria.
Find English equivalents to the following word combinations. Notion: not all the words are present in the text. Some of them you have to translate using a dictionary.
Ознака, засіб заощадження, засіб обігу, одиниця розрахунку, засіб
обміну, потреби зростають, існувати, змушувати/підкорювати, з’являтися,
ринкова цінність, взаємозалежний, товар-гроші, полегшувати, бартерна
економіка, товар, який швидко псується, гроші, що забезпечені золотом,
паперові гроші (2), визнання, користуватися попитом, засіб платежу,
цінність, борг, “я вам винен”, в порівнянні до, купувати, товар, що не
псується.
Answer the questions:
1. What is money?
3. What was the first unit of exchange?
4. When did the first medium of exchange begin to function?
5. How many characteristics does the money have? What are they?
6. What characteristics does it have as a medium of exchange?
7. What characteristics does it have as a unit of account?
8. What characteristics does it have as a store of value?
9. Why do we need money?
Lesson 3
PRICING
Words to master:
Credit terms - кредитні умови
Trade-in allowance - сума грошей, яку віддали за попередню покупку і врахували нову
To cover costs - покрити затрати
To pursue unsound price polices - проводити нерозумну ціноутворюючу політику
Supply and demand - пропозиція і попит
Price competition - конкуренція в ціноутворенні
To set prices - встановлювати ціни
Read and translate the text:
Pricing
All products and all services have prices. The price depends on different things such as credit terms, delivery, trade-in-allowance, guarantees, quality and other forms of service, which price can produce the biggest profit during a long period of time. It’s hardly possible to determine such a price. The price may be too high to produce a large volume or too low to cover costs. No other area of marketing operations has been a subject to bad practice. Many businesses pursue unsound price policies for long periods of time and are not aware about it.
Prices can be determined in different ways. For example, the prices on meat, cotton and other agricultural products can be decided in a large central market where forces of supply and demand exist. This is pure price competition. The prices of industrial products (iron, steel, etc.) are usually decided by large companies. As a rule the amount and price of goods sold to a large number of buyers are controlled by a few competing sellers. Prices also can be set by the government, usually for different public services – railroads, electricity, manufactured gas, bus services, etc.
If demand increases, prices rise, profits expand and new investment is attracted. But other factors may be involved as well. Prices are related to each other in different ways. Ultimately, everything is related by price, since the consumer can buy and must pay for everything out of a particular, limited amount of money.
Find English equivalents to the following word combinations:
a) Мати ціни
b) Залежати від різних факторів
c) Важко визначити ціну
d) Вести нерозумну ціноутворюючу політику
e) Визначатись різними шляхами
f) Існують пропозиції і попит
g) Промислові товари
h) Ціни встановлює уряд
Complete the sentences:
a) The price depends on …….
b) The price may be too high to …..
c) Many businesses pursue …….
d) Can be decided in a large central ….
e) The amount and price of goods ……
f) If demand increases …….