Read the article again and answer the questions.

1. What currencies does the article mention?

2. What do rich people in the USA often give money to build?

3. What problems can rich people help to find solutions to?

6. Speaking. Think of some ways for the Bill and Melinda Gates Foundation to spend their $ 31 billion.

When we say prices, we don’t say the decimal point (.) €13.95 thirteen euros ninety-five cents thirteen euros ninety-five thirteen ninety-five Money can be in notes (a €50 note) or coins(€1 coin) We can pay for things: with cash, by cheque, using a credit card.

7 (3). Listening. Listen and complete the prices.

1. A new Orion laptop costs _£_1,290______.

2. The share price is _______.

3. The Dior bag is ________.

4. Those cars cost about ________.

5. A seven-day rail pass is ________.

6. We import the DVDs at _______ and sell them at ________.

7. The book costs _______.

8. The prices of our digital cameras start at ________.

Say these prices.

$30.25 (cents), £420.88 (pence), ¥2,500, €18.25 (cents)

Say the prices of different things you usually buy.

10 (4). Listening. Listen to three people talking about the cost of living in their city. Write the name of the cities in the table below (a-c). Then listen again and fill in the prices in the table.

City a b c
Monthly rent for a one-bed apartment ¥550,00 4. 7.
Dinner for four at a top restaurant 1. €1,000 8.
A newspaper ¥130 5. 70 pence
A Big Mac hamburger 2. €2.94 9.
A cinema ticket 3. 6. £8
Bread ¥120 90 cents 10.

11. Speaking. How much do the items in the table cost in your country? Is the cost of living high in your country? Where is the cost of living low?

Read the text and explain the words in bold.

Money

Money is anything that is accepted as payment for goods and services and repayment of debts. The main functions of money are as follows: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment.

The money supply of a country usually consists of currency (banknotes and coins) and demand deposits or 'bank money'. Bank money exists only in the form of various bank records. Bank money performs the basic functions of money, as checks are generally accepted as a form of payment and as a means of transferring ownership of deposit money.

Many items are used as commodity money such as naturally scarce precious metals. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity. Use of commodity money is similar to barter.



In 1875 economist William Stanley Jevons described "representative money," i.e., money that consists of token coins, or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it. But it is not composed of that commodity.

Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank) to be legal tender. It is unlawfulnot to accept the fiat currency as a means of repayment for all debts, public and private.

Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal. You shouldn’t give the bank any prior notice. Banks have the legal obligation to return funds upon demand (or 'at call').

Commercial bank money is created through fractional-reserve banking. This is banking practice where banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder. But they maintain the obligation to redeem all these deposits upon demand.

Commercial bank money differs from commodity and fiat money in two ways. Firstly it is non-physical, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent.


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