Comprehension Check

1. Say whether these statements are True or False.

1. Economists differentiate between three different types of money: commodity money, a store of value, a unit of account. (false)

2. Commodity money is a medium of exchange that may be transformed into a good, useful in production or consumption. (true)

3. Bank money is money that has value only because of the government regulation. (false)

4. The function of money is limited to one use — to buy things. (false)

5. Barter involves direct exchange of one good or service for another. (true)

6. The most important function of money is a store of value. (false)

7. There are many different stores of value. (true)

8. Knowing the value or price of a good enables suppliers and purchasers to make different decisions. (true)

9. Money is unique as a store of value. (false)

10. Money isn’t helpful nowadays. (false)

2. Read the text more carefully and complete the following statements. In some cases more than one variant is possible.

1. Money is ….. . (any good that is widely used and accepted in transactions involving the transfer of goods and services from one person to another)

2. Commodity, fiat and bank money ….. . (are three different types of money)

3. Bank money is ….. . ( the balance held in checking accounts and savings accounts)

4. Money can be ….. . ( a medium of exchange, a unit of account, and a store of value. )

5. Without money ….. . ( all transactions would have to be conducted by barter)

6. ….. in order to be a medium of exchange. ( money must hold its value over time)

7. As a unit of account, money ….. . ( provides a common measure of the value of goods and services being exchanged; enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase)

8. Today money is considered ….. . ( one of the outstanding inventions of the entire history of mankind)

9. The introduction of money ….. . ( has eliminated all the difficulties of a barter system, it has made easy to save wealth for future, and has played a significant role for the specialization in business through the division of labour. )

10. Money is very helpful ….. . ( in the process of production, consumption and exchange. )

3. Prepare to speak about money. Firstly, complete the following plan of the text.

1. Different types of money:

a. ….. (commodity money)

b. ….. (fiat money)

c. ….. (bank money)

2. ….. (money's functions: )

a. ….. (Money as a medium of exchange)

b. Money as a store of value.

c. ….. (Money as a unit of account)

3. ….. (Money as one of the outstanding inventions)

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