- •Unit VI. Finance. Money and credit
- •Text 1. Financial Literacy
- •Text 2. Money
- •Text 3. Evolution of the Payments System
- •Text 4. What is Money Supply?
- •Text 5.The Banking System of Ukraine
- •Text 6. Personal Banking
- •Text 7. Commercial and Retail Banking
- •Text 8. Central Banking
- •Types of Bank
- •Text 9. Interest Rates
- •Text 10. What Is a Loan?
- •Text 11. Money Transfer
- •Text 12. Investment Banking
- •Text 13. How Banks Choose Overseas Offices
- •Text 14. Venture Capital
- •Text 15. Stocks and Shares
- •Text 16. Futures
- •Text 17. Foreign Exchange
- •Text 18. How Is Foreign Exchange Traded?
- •Text 19. Financing International Trade: The Letter of Credit
- •Text 20. Finance and Insurance Institutions
- •Text 21. Insurance
- •Text 22. Aircraft Finance
- •Islamic leasing
Unit VI. Finance. Money and credit
Exercise 1. Learn the following words and word combinations.
literacy |
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insurance |
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credit management |
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income |
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saving |
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retirement |
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stretching |
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mortgage |
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Exercise 2. Read, translate and give the gist of text 1.
Text 1. Financial Literacy
Financial literacy encompasses the knowledge and skills for personal financial planning, the selection of financial services, budgeting and investing, developing an insurance program, credit management, consumer purchases, consumer rights and responsibilities, and decision-making skills for all aspects of life as consumers, workers, and citizens.
Financial literacy affects all aspects of an individual’s planning and spending: income, money management, the use of credit, saving and investing, and decision-making for the wise use of resources. A lifelong process, financial literacy is a critical area of knowledge and skills for all consumers who must make choices about their financial resources. From a child’s earliest spending to a senior citizen’s retirement decisions, individuals apply their knowledge and skills to financial choices. Managing finances has become increasingly complex.
Income
What income is to be managed? This question is a first step in wise management of financial resources. All consumers must manage their finances, but incomes vary.
“Stretching” income to meet needs and wants is a part of financial management; knowing how to develop goals for spending, based on a realistic understanding of income, is a basic part of financial literacy.
Money management
Money management is the process of planning how to get the most from money - how to use money to meet needs and wants. Budgeting, either by a formal or informal plan, is a first step in deciding what needs and wants must be met and what resources are available. Money management includes plans for saving and investing, not just spending.
Too often consumers spend all of their income, which means no money is left for saving.
Saving and investing
Consumers must set goals for saving and investing, because their choices of vehicles for saving and investing depend on those goals. Saving, contrasted to investing, may be thought of as safeguarding money for future use.
Saving may not provide a return on money. Investing, however, may be defined as putting money to use in order to earn a return. Providing for the future can mean short-term savings and long-term investments. If a goal is to provide retirement income, a consumer should consider long-term investment. Buying a new small appliance, on the other hand, may require only short-term saving.
Income, money management, saving and investing, and the use of credit require consumer planning and decision-making skills. Underlying all aspects of financial literacy is the knowledge and skills for wise use of all financial resources a consumer may accumulate over a lifetime.
Use of credit
Knowledge about credit is a major part of financial literacy. Consumers use credit to buy durable and nondurable goods, large and small. Credit provides a convenient way to “buy now, pay later.” Buying on credit enables a consumer to build a credit rating, a necessity for mortgages and loans. All consumers should be aware of the ways in which they can use credit as a convenient way to purchase goods and services, but they should also know the costs of credit and how to avoid the pitfalls of unwise use of credit.
Exercise 3. Translate into English.
Фінансова грамотність, фінансове планування, складання бюджету, інвестування, програма страхування, регулювання кредитів, права та обов’язки споживачів, дохід, заощадження, задовольняти потреби, довгострокові інвестиції, покупка, накопичувати, іпотечний кредит, позика.
Exercise 4. Answer the questions.
1. What does financial literacy encompass? 2. What does financial literacy affect? 3. What is financial literacy? 4. What does money management mean? 5. What is the difference between saving and investment? 6. Why do consumers use credit? 7. What skills do consumers need for wise use of financial resources?
Exercise 5. Complete the sentences according to text 1.
1. Financial literacy is a critical area of … 2. Individuals apply their … to financial choices. 3. Knowing how to develop … is a basic part of financial literacy. 4. … is a first step in deciding what needs and wants must be met and what resources are available. 5. Investing may be defined as … 6. Credit provides a convenient way to ... 7. All consumers should also know the costs of credit and how to ….
Exercise 6. Put 5 types of questions to the sentence.
Credit provides a convenient way to “buy now, pay later.”
Exercise 7. Compose a dialogue on “Financial Literacy”.
Exercise 8. Comment on the proverbs.
Money is power.
Money has no smell.
Money is the root of all evil.
Money makes money.
Exercise 9. Learn the following words and word combinations.
take for granted |
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consume |
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barter |
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trade for |
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cobbler |
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coincidence |
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evolve |
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complexity |
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medium of exchange |
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measure of value |
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store of value |
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proceeds of the sale |
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stocks |
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bond |
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real estate |
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fee |
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appreciate |
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Exercise 10. Read, translate and give the gist of text 2.