Active vocabulary

equities (syn. ordinary shares, equity shares, ordinary stocks) - обыкновенные акции

to deplete - истощать, исчерпывать

obvious - очевидный

to offset - возмещать

treasury bills - казначейские векселя

consequently - следовательно, поэтому

conversely - наоборот

temporary surplus - временный избыток, излишек

Text 1

The money market (рынок денег)

The money market comprises the demand for money and the money supply. The equilibrium in the money market is such a state of balance when the demand for money from households and businesses is satisfied by the quantity of the money supplied. The equilibrium in the money market is reached by changing bond prices.

People can hold their wealth in various forms - money, bonds, equities, and property. For simplicity we assume that there are only two assets: money, the medium of exchange that pays no interest, and bonds, which we use to stand for all other interest-bearing assets that are not directly a means of payment. As people earn income, they and to their wealth. As they spend, they deplete their wealth. How should people divide their wealth at any instant between money and bonds to gain the best profits possible and not to incur losses?

There is an obvious cost of holding money. The opportunity cost of holding money is the interest one would have gained if he (she) had held bonds. It naturally follows that people will hold money rather than bonds only if there is a benefit to offset this cost, only if holding money is more profitable than holding bonds. It may happen only when interest rates on bonds are too low to make it profitable to hold bonds.

Suppose the money market is in equilibrium when the interest rate on interest-bearing assets (e.g. Treasury bills and other securities) is 6% and the amount of money demanded is $200 mln. Now suppose the interest rate goes down, say, to 4%. In this case interest-bearing assets are no longer profitable as they can't earn a sufficient return. Hence the demand for money will rise and will lead to a temporary lack of money in the money market. If they lack money, households and businesses are likely to sell bonds they possess for cash. That will cause an increase in the bond supply, which lowers bond prices and rises interest rates on interest-bearing assets. With a higher interest rate the amount of money people are willing to have in hand will decrease again. Consequently, the money supply will adjust to a current demand to reflect a new higher interest rate.

Conversely, the increase in the money supply creates its temporary surplus, which results in the demand for bonds and bond prices going up. The interest rate falls thus restoring balance in the money market, but at a new lower interest rate.

Переведите на русский язык.

interest-bearing assets are no longer profitable; to sell bonds they possess for cash; the supply will adjust to the current demand; we use to stand for all other interest-bearing assets; thus restoring balance

Заполните пропуски словами и выражениями из текста.

1. The money market comprises ____ and ____.

2. The equilibrium in the money market is such ____ when the demand for money from ____ is satisfied by the quantity of ____.

3. The equilibrium in the money market is reached by ____.

4. Money is the medium of ____that ____.

5. We use bonds to stand for all other ____ that are not directly ____.

6. As people earn income, they ____ their wealth. As they spend, they ____ their wealth.

7.____of holding money is the interest one ____ if he (she) ____ bonds.

8. People will hold money rather than bonds only if holding money is ____ than holding bonds, that is when ____ on bonds are ____ to make it profitable to ____.

9. In case the interest rate goes down ____ are no longer profitable as they can't ____.

10. The demand for money will rise and will lead to ____ in the money market.

11. If they lack money, households and businesses are likely to they possess ____.

12. If there is an increase in the bond supply, it will ____ bond prices and ____ interest rates on ____.

13. The money supply will ____ to a current demand to ____ a new higher interest rate.

14. The increase in the money supply creates its ____, which results in ____.

Переведите выражения на английский язык.

равновесие денежного рынка; временная нехватка (избыток) денег; иметь на руках; быть в равновесии; восстанавливать равновесие; достичь равновесия; активы (облигации), приносящие процентный доход; увеличивать богатство; исчерпывать (истощать) богатство; для простоты допустим, что...; альтернативные издержки владения деньгами; компенсировать издержки.

Ответьте на вопросы.

1. Explain in your own words the term “opportunity costs”. What is the opportunity cost of holding money?

2. What’s the equilibrium in the money market? How can it be reached?

3. How does the money market work?

Переведите на английский язык.

Для экономики плох как недостаток, так и избыток денег, так как первый ведет к снижению расходов во время упадка, а последний – к обесцениванию денег и снижению их покупательной способности во время инфляции.

Денежный рынок объединяет спрос и предложение денег для определения равновесной ставки процента.

Равновесие денежного рынка устанавливается посредством изменения цен на облигации. С изменением цен на облигации процентные ставки меняются в обратном направлении. При равновесной ставке процента цены на облигации постоянны, а спрос и предложение денег равны.

Уменьшение предложения создает временную нехватку денег на денежном рынке. Люди и учреждения пытаются получить больше денег путем продажи облигаций. Поэтому предложение облигаций увеличивается. Что повышает цену на облигации и поднимает процентную ставку.

Увеличение предложения денег создает временный их избыток, в результате чего увеличивается спрос на облигации и цена на них становится выше. Процентная ставка падает, и на денежном рынке восстанавливается равновесие.

Text 2