III. Say what is meant by:

the money supply is partly a liability of the Bank and partly a liability of commercial banks; money multiplier; a reserve requirement acts like a tax on banks; special deposits; the transaction motive for holding money; the precautionary motive for holding money; to meet contingencies; industrial shares are quite risky

IV. Listening.

1. Listen to the lecture to answer the questions in the textbook.

2. Listen to the lecture again taking notes to give a summary of it.

V. Match the words (1 – 5) with their corresponding definitions (a – e):

interest rate reserve requirement discount rate opportunity cost receipt

the rate charged by a Central Bank for lending to other banks. Charges in this rate will influence interest rates in the economy as a whole the real cost of doing something, including the cost of things that you cannot do because of the choice you have made the percentage rate used for calculating interest over a particular period of time a written statement showing that you have received money, goods, or services an amount of money the government says that banks must possess, or leave with the Central Bank, calculated in relation to the amount of the loans that it makes

VI. Match the words in the left-hand column with their synonyms:

1. monetary base a) to compensate

2. to study b) to attain

3. to foresee c) to count

4. distinction d) therefore

5. to guarantee e) base money

6. to withdraw f) difference

7. to achieve g) to contemplate

8. to make up h) to hope

9. hence i) to assure

10. to add up j) draw out

VII. Fill in the gaps in the following text with suitable words.

stock, exchange, banker, adjusting, authority, accounts, national, budgetary, handle, fund, receipts, assets, bonds, issuing, to settle, monetary

The central bank is a country's leading bank which acts as 1)______to the government and the banking system and acts as the 2)______ responsible for implementing the government's 3)______ policy. Central banks such as the Bank of England in the UK 4)______ the government's financial 5)______ in conjunction with the treasury, taking in 6) ______ from taxation and the sale of government 7)______, and making disbursements to the various government departments 8)______their activities. The central bank acts as the government's broker in its borrowing and lending operations, 9)_______ and dealing in

government 10)______ and treasury bills to underpin its year-to-year 11)______ position and management of the country's 12)______ debt.

Commercial banks hold accounts with the central bank and, in its role as banker to the banking system, the central bank makes it possible for banks 13)_____ their indebtedness with one another by 14)______ their accounts as appropriate.

The central bank is also responsible for managing the country's 15)_____rate and holding the country's 16)______ of international reserve to be used in the financing of balance of payments deficits.