Ex. 20. a) Read the text quickly for the main points

Money is as hard to measure and define as it is to control. Money is graded according to its LIQUIDITY – notes and coins being completely liquid, whereas some kinds of bank deposits become spendable only after notice to withdraw them has expired.

In Britain:

• M1 is notes and coins in circulation, plus sterling sight deposits (that is, those withdrawable without notice) held by the private sector.

• Sterling М3 (М3) is Ml plus sterling time deposits (those requiring notice of withdrawal) of the British private sector, plus all sterling deposits of the British public sector. To get M3, add the foreign currency deposits of all British residents.

• PSL2, short for private sector liquidity, is notes and coins in circulation; all sterling deposits (that is, including time deposits and certificates of deposit); other money market instruments (for example, treasury bills, bank bills and local authority debt held by the non-bank private sector); building societies' share and deposit accounts, and some national savings securities.

The United States uses three measures:

• M1 is defined as currency in circulation, travellers' cheques, demand deposits of the private sector at commercial banks, automatically withdrawable deposit accounts at banks and thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks.

• M2 is Ml plus savings and small-denomination time deposits, overnight deposits at commercial banks, overnight Eurodollars held by American residents (other than at Caribbean branches of Fed member banks) and balances of accounts with money market funds.

• M3 is M2 plus large denomination time deposits, companies term repurchase agreements at commercial banks and savings and loan associations, and money markets funds held by institutions.

Based on: The Pocket Economist

Words you may need:

measure v измерять

grade v (зд.) группировать, классифицировать

spendable adj могущий быть истраченным

notice to withdraw (the deposit) уведомление о снятии вклада

sterling sight deposit вклад до востребования в фунтах стерлингов

PSL-private sector liquidity ликвидность частного сектора Великобритании (широкий показатель денежной массы в обращении)

certificate of deposit депозитный сертификат

building society строительное общество

travellers' cheques дорожные чеки

share draft account чековый паевой счет

mutual savings bank взаимно-сберегательный банк

overnight Eurodollars суточные евродоллары

money market fund взаимный фонд денежного рынка

repurchase agreement (REPO) соглашение о продаже и обратной покупке (РЕПО)

savings and loan association ссудо-сберегательная ассоциация

b) Reread the text more carefully to complete the sentences below:

1. Money is graded....

2. Notes and coins....

3. Ml is....

4. Private sector liquidity is notes and coins in circulation plus....

5. Sterling M3 is M1 plus....

6. In the United States Ml includes....

7. M2 is M1 plus....

8. M3 is M2 plus....