Реферат: Темы для экзамена в Финансовой академии, 1 курс
№1. Economic Goods and Services.
People begin tolearn about economics when they are still very young. At first they find thatthey want a lot of but they couldn’t bye everything. There is a big gap betweenwhat they want and what they can have.
Than they discoverthat there are thousands of things they or their parents could buy. Gradually,they settle into two major economic roles: consumer and producer.
Consumer buy goods and services for personal use, not for resale.Consumer goods are products, such as food, clothing, and cars, that satisfypeople's economic needs or wants. Some consumer goods, such as food, do notlast a long time. It’s perishable goods. Other goods, such as cars or VCRs,last longer. Services are actions, such as haircutting, cleaning or teaching.Services are used up at the time they are provided.
A producer makes the goods or provides the services that consumers use.
In order toproduce something, a person must first have right resources. Resources are thematerials from which goods and services are made. There are three kinds ofresources: human (people), natural (raw materials), and capital resources(capital, or the money or property). No economy has an unlimited supply ofresources. In other words, there is a scarcity of resources.
The basic economic questions individuals and nationsface are: What goods and services will be produced? How will theybe produced? Who will get them? How much will be produced fornow and how much for the future? The answers to the questions depend on acountry's human, natural, and capital resources. Each country will answer 4questions in a different way.
№2. Opportunity costs. Tradeoffs.
All production involves a cost. This cost is not counted simply in termsof money but also in terms of resources used. In building a bridge, forexample, the real costs of the bridge are the human, capital, and natural resourcesit consumes. To build a bridge requires the labour ofmany people, including engineers and construction workers. The capitalresources these people use include a variety of tools and machines. Building abridge also requires natural resources.
Since resources are limited and human wants are unlimited, people andsocieties must make choices about what they want most. Each choice involvescosts. The value of time, money, goods and services given up in making a choiceis called opportunity cost.
When people make a choice between two possible uses of their resources,they are making a tradeoff between them.
Then, societywill understand the true costs of making one decision rather than another, andcan make the decision that best fits its values and goals.
How can theconcepts of opportunity costs and tradeoffs be used to help explain how theeconomy works? One way is to construct a simple plan of the economy called aneconomic model. The simple plan helps economists to analyseeconomic problems, seek solutions, and make comparisons between the economicmodel and the real world.
One of the most important choices a society makes is between producingcapital goods and producing consumer goods. If a nation increases itsproduction of consumer goods, its people will live better lives today. However,if a nation increases its production of capital goods, its people may livebetter in the future.
Since everyeconomic decision requires a choice, economics is a study of tradeoffs. Whenyou analyse each side of a tradeoff, you can makebetter decisions.
№11. Pricing policies.
There are twotypes of pricing policies: to concern price emphasis and to emphasize lowprices. The price emphasis charge appropriate prices, it encourages sales, butthe low prices don’t give extra services (some people are interested in lowprices and forget about extra services). The price determines the number ofsales. A good example of price emphasis is loss leader pricing. It means thatyou chose one item and sell it at a very low price. The consumer buys it anddecides to buy something else, because he gets some extra cash. There is alsooff-even pricing: it produces a favorable psychological effect (79,99$).
And now something about de-emphasis: it concerns highquality expensive items. Consumers don’t call attention to the price at all.
№3. Utility andprices.
Commodities ofdifferent kinds satisfy our wants in different ways. For example: food, car,medicine, books satisfy very different wants. This characteristic of satisfyinga want is known in economics as “utility”. Utility and usefulness are differentthings. For example: a submarine may or may not be useful in time of peace, butit satisfy a want. Many nations want submarine. Economists say that utility is“the relationship between a consumer and a commodity”.
Utility varies between different people and differentnations. For example: somebody can be a vegetarian and he will be rate theutility of vegetable very highly, whilesomebody who eats meat can rate the utility of meat very highly. And aboutnations: mountain-republic like Switzerland has little interest in submarineswhile maritime nations rate then very highly.
Utility variesis also in relation of time. For example: in wartime the utility of bombs andguns is high. Utility of the commodity is also depend from quantity. If paperis freely available, people will not be so much interested in buying too muchof it. If there is an excess of paper, the relative demand for paper will godown.
Let’s speak about prices.
Individual cannot change the prices of the commoditieshe wants. But theoretical he can do it. For example, if he byes a lot of smth., let’s say a lot of oil, or somebody discover a lotof oil, the price of oil will change on the international market.
Now let’s speak about desire.
The consumer’s desire for a commodity tends todiminish (ди/миниш) as he buys more units of it. Economists call thistendency the Low of Diminishing Marginal Utility.
The interaction of buyers and sellers determines theprices for goods and services. If the price is too low, a shortage will developand if the price is too high, a surplus will develop.
In a market economy, prices are the result of theneeds of both buyers and sellers. The sellers will supply more goods at higherprices. The buyer will buy more goods at lower prices. Some prices issatisfactory to both buyers and sellers. This price is called an equilibriumprice.
№4 Supply and demand.
In a marketeconomy, the actions of buyers and sellers set the prices of goods andservices. The price, in turn, determine what is produced, how it is producedand who will bay it. Supply, the quantity of a product that suppliers willprovide, is the seller’s side of a market transaction. Suppliers usually wantthe price that allows them to make the most money. Demand, the quantity of aproduct consumer want, is a buyer’s side of a market transaction. Buyers wantthe price that gives them the most value for the least cost.
The items aresold one at a time, buyers mast quickly decided what price they are willing topay. Imagine now that you want to buy electric popcorn maker on the auction. Inorder to get it you will have to outbid all the others who want it. New popcornmaker costs about $14 and you decided you are willing to go as high as $10 butnot hire. At first you look into yourwallet. Only $5 is there. But you know that you have $15 on the desk at home, and you know thatyour friend can lend you some money. And what factors so far have influenceyou? You decision is the result of your tastes, your available cash income,your wealth, your credit. You have also had to think of the price ofsubstitutes and the price of related items.
And on theauction you buy. The cost of popcorn maker is $9.
The popcorndemand schedule illustrates the low of demand, which indicates that as theprice of an item increases, a smaller quantity will be bought.
The degree towhich changes in price cause changes in quantity demanded is called elasticityof demand. There are two main kinds of the elasticity of demand, it is highlyelastic and inelastic. Highly elastic means that demand changes when the price changes and inelasticmeans when people buy nearly the same amount even though the price of smth. changes.
There are twomain reasons for elasticity of demand. The first concerns the relationshipbetween income and the cost of the product. The second reason why demand iselastic concerns whether or not substitute product is available.
№5. Markets andmonopolies.
Whenever peoplewho are willing to sell a commodity contact people willing to buy it, a marketfor that commodity is created. Buyers and sellers meet in person, or they maycommunicate by letter, by phone or through their agents. In a perfect marketthere can be only one price for a given commodity: the lowest price whichsellers will accept and the highest which consumers will pay. Competitioninfluences the prices prevailing in the market. Although in a perfect marketcompetition is unrestricted and sellers are numerous, free competition andlarge numbers of sellers are not always available in the real world. In somemarkets there may only be one seller or a very limited number of sellers. Sucha situation is called a «monopoly». It is possible to distinguish inpractice four kinds of monopoly.
State planningand central control of the economy often mean that a state government has themonopoly of important goods and services. A different kind of monopoly ariseswhen a country has control over major natural resources or important services.Such monopolies can be called natural monopolies. Legal monopolies occur whenthe law of a country permits certain producers, authors and inventors a fullmonopoly over the sale of their own products. These types of monopoly aredistinct from the sole trading opportunities. This action is often called«cornering the market» and is illegal in many countries.
In the market systems, competition answers the basic questions of what,how, for whom, and how much. Competition among producers is for the highestprofits. Competition among consumers is for the best goods and services at thelowest prices.
In a market economy three basic resources — land, labour and capital — are bought and sold for the bestprice. Market for labour is constantly changing.
If you spent all the money you have now, you might be able to buy manyof the things you want. But you realise that bysaving some now, you will save more for the future. Societies also must savesome of what they produce today in order to have more for tomorrow. Everysociety must produce capital goods as well as consumer goods to meet futureeconomic needs. Long-range economic growth depends on the continued productionof capital goods (goods used to produce other items).
Everyone who works contributes to the growth of capital resources.Suppose you earn $72 a week. Your labour must bevaluable enough to earn more than just the money to cover your wages. Your labour may earn your company $100 a week. Since you arepaid $72, you are helping the company to collect $28 a week. Some, or all, ofthis money can be used for capital resources. Company can use this money toreplace old tools and equipment for example. The manager may decide to replacethe old tools, hire more help, or expand the shop.
In recent years, many people haveargued that economic growth is a mixed blessing. The advantages of growth arefairly clear. As people produce more goods and services, the average standard ofliving goes up. Bat there is some disadvantages: (1) use of natural resourcesthat cannot be replaced, (2) generation of waste products, (3) destruction ofnatural environments, (4) uneven growth among different groups in society.
In the past, growth has allowed poor people to improvetheir economic conditions. Nevertheless, continuing economic growth at the paceof today may permanently damage our world, polluting air, land, and waters, andusing up natural resources. Growth, however, sometimes provides solution to theproblems.
№13The cost of growth.
Long-range economic growth depends on producingcapital goods. Everyone who works contributes to the growth of capitalresources. Your labor must be valuable enough to earn more than just the moneyto cover your wages. In recent yearsmany people have argued that economic growth is a mixed blessing. As peopleproduce more goods and services the standard of living goes up. Growth alsokeeps people employed and earning income. It provides people with more leisuretime, since they can decrease their working hours without decreasing theirincome. But what are the disadvantages: use of natural resources that can’t bereplaced, generation of waste products, destruction of natural environments,uneven growth among different groups of society.
In the past, growth has allowed poor people to improvetheir economic conditions.
So, if our natural, human, capital resources are overused now to promoteeconomic growth, future growth may be much slower.
Growth, however, provides solutions to the problems.
№7. The nation's economy. GNP. Economic indicators.
Economists study different sides of the economy in different ways.Microeconomics is the part of economics that analyses specific data affectingan economy. Macroeconomics is the branch of economics that analysesinterrelationships among sectors of the economy.
Macroeconomists measure gross national product, or GNP, which is thevalue of all goods and services produced for sale during one year. Threefactors limit the types of products counted.
First, only goods and services produced during a specific year arecounted Second, economists count a product or a service only in its final form.Third, GNP includes only goods sold for the first time. When goods are resoldor transferred, no wealth is created.
One way in which economists measure GNP is the flow-of-product approach.Using this method, they count all the money spent on goods and services todetermine total value. Each time a new product is sold, GNP increases.
Spending for products falls into four categories. The first, and thelargest, consumer spending, includes all expenditures of individuals for finalgoods and services. Called personal consumption expenditures, this categoryaccounts for about 65 per cent of GNP. The second category includes all spendingof businesses for new capital goods. It accounts for about 13 % of GNP. Thethird category includes spending of all levels of government. Governmentpurchases of goods and services account for about 21 per cent of GNP. Thefourth category is net exports of goods and services, about 1% of GNP.
Another way ofdetermining GNP is the earnings-and-cost approach. This method accounts for altthe money received for the production of goods and services, it mea-sures receipts. Figuring gross national product by countingwhat people receive requires calculating what the entire country earns for thegoods it makes and the services it performs. Included in earnings are suchthings as business profits, wages and salaries, and taxes' the governmentreceives for its services. Also counted are interest on deposits, moneyreceived as rent, and any other forms of income.
Business and government planners, investors, and consumers makedecisions based on their expectations of future economic performance. To helppredict expansion or contraction of the economy, government economistsidentified a number of indicators. They fall into three categories: leading,coincident, and lagging. Leading economic indicators rise or fall just before amajor change in economic activity. Coincident economic indicators change atabout the same time that shifts occur in general economic activity. Laggingeconomic indicators rise or fall after a change in economic activity.
Following and interpreting all economic indicators istime-consuming. The US Commerce Department, therefore, lists a composite index,or single number, for each of the three sets of indicators. These compositeindexes are an average of all the indicators in each category.
№ 12 The rights of a customer and the responsibilitiesof a supplier.
When youbuy something from ashop, you are making a contract. But you wantto make sure if this contract means that it's up tothe shop to deal with your complaints ifthe goods are not satisfactory. The first thing that comes to your mind is that the goods must not be broken or damaged and must work properly.The second thing that you find important is that the goods must be asdescribed — whether on the pack or bythe salesman. It makes you understandthe third principle: The goodsshould be fit for their purpose. This means the purpose for which most people buy thoseparticular goods. If you wanted something for a special purpose, youmust have said exactly what for.
Many people think that complaining about faulty goods or bad service is never easy. Mostof them dislike making a fuss. However, when you are shopping, it isimportant to know your rights. You are quite sure that if the shop sells you faulty goods, it has broken its side of the bargain. And that isabsolutely right. In this situationcustomerhave the right toreturn the goods and have a complete refund.
At that time if the good is broken and it was yourfault than seller shouldn’t return your money to you. That’ll be hisright.
№8.Income and Spending.
Income is the money a person receives in exchange for work or property.There are five basic types of income:
1. Employee compensation is the income earned by working forothers. It includes wages and fringe benefits such as health and accidentinsurance.
2. Proprietor compensation is the income that self-employedpeople earn.
3. Corporation profit is the income corporations have left afterpaying all the expenses.
4. Interest is the money received by people and corporations fordepositing their money in savings account or lending it to others.
5. Rent is income from allowing others to use one's propertytemporarily.
The total income is the sum of 5 basic types.
One other type of income is a transfer payment — money one personor group gives to another, though the receiver has not provided a specific goodor service. For example it can be gifts, inheritances, and aid to the poor arethree examples of transfer payments.
Now lets speak about work people. By the type of work people do workersfall into one of four broad categories.
1. White collar workers are people who do jobs in offices, forexample as secretaries, teachers, and insurance agents.
2. Blue collar workers are people who do jobs in factories oroutdoors.
3. Service workers provide services to other individuals orbusinesses.
4. Farmworkers are people who work ontheir own farms or those of others.
In the market system a person's income is determined by how the marketvalues that person's resources and skills.
People do a big mistake when they say that income is same as wealth. Wealth is anyresource that can be used to produce income. An individual's possessions, suchas a house, a car, or a stereo, are part of that person's wealth. Each of thesecould be sold to produce income.
Now if we want to understand it we have to consider two women whoreceive an income of $25,000 a year. One earns all of her income working at abank. The other receives her $25,000 income from dividends on stock worth$250,000. The second woman is much wealthier than the first women.
At the end of my presentation I have to say thatspending becomes income for someone else.
№9. Making a personal budget.
When you livein loneliness you understand that something should be done with your unlimitedwants and limited resources. You should use your income as effectively aspossible. Choices must be made concerning spending and saving. You never knowwhether you can afford another outing, or a disco, or a concert. Than you cometo the conclusion that you must develop a useful personal budget. And if youwant to do it you should keep track of your actual income and expenses for amonth, and, of course, at first you have to clear out what should be recorded.
Money resourcesmay include allowance, part-time jobs, babysitting, errands, interest onsavings. You must list all sources of income. And it means that if somebodypresented you with a sum of money on an account with a bank, so you can rely oninterest on savings and allowance have to be included.
Than you should record how muchyou spend for food, entertainment, clothing, college supplies, personal care,transportation, and miscellaneous items. You wonder in which category you spendthe most, the least. You think that you should decidewhat changes to make in the budget if you want to reduce your expenses.
You have to understand that thereis some difference between fixed, optional andflexible expenses. Fixed expenses are set in advance and must be paid regularly(e.g. rent payments, tuition, higher purchase installments). Flexible expensesare necessary but change with circumstances (food, clothing, college supplies).Optional expenses vary and are not always necessary (entertainment, personalcare).
Thus you cancompare your income and expenses. And of course you understand if you want tolive expenses should not be higher than income.<span Arial",«sans-serif»; color:#111111">
№10. The value of college education.
Every yearmillions of students graduate from high school. The decisions they make willaffect the rest of their lives. Some will choose to go to college; some willwant to get full-time jobs; others will decide to obtain technical jobtraining. In every case, economic reasoning will help students make betterchoices.
Everybody decide to consider the costs and trade-offsconnected with a decision to go to college. And the main questions in thissituation: Is a college education worth the expense in terms of immediate andfuture personal growth and economic well-being?
The opportunitycosts of going to college involve a loss of income and a loss of practical jobexperience while attending college. Lets consider two mans: The Education Level of the first one is less than 12 years andhis Projected Lifetime Earnings is $850.000; The Education Level of the second one is 5 years college and his Projected Lifetime Earnings is$1.500.000. We see a big difference between them.
The trade-offs involved in going to college include using time and moneynow to gain greater advantages in the future. But somebody think that if youcould invest $ 30.000 now, for instance, forego a college education, and withyour investment returns still have the same lifetime earning power as a college.It’s of course can be true bat where do you get $30.000 if you don’t haveeducation. Besides nobody give you a job if you haven’t got education andknowledge. And I am sure that my further education is worth the time and moneyinvolved.
№ 14 Annual report of a company.
Just as teachers send out report cards to the Dean’soffice each term, corporations issue annual reports summarizing the progressmade last year. Stockholders and potential investors use the annual report toevaluate the performance of corporation.
The annualreport is a message to the stockholders-the owners-of a corporation from thecorporate management. The report tells the stockholders the company’s financialstatus at the end of the fiscal year and what the management sees for thefuture. Also, the annual report fulfils a legal requirement. The Securities andExchange Commission a federal agency in the USA requires corporations topublish financial information about their firm. With such information,investors can make educated decisions.
Annual reports of company generally are divided intotwo sections. The first section contains a letter to the stockholders from thechief executive officer of a company. Accompanying this letter summarising the company’s performance is a chart offinancial highlights. Also frequently included in the first section is anoverview of the company’s organization. The second section includes statisticson the company’s performance. Most of the information appears in charts andgraphs.
For example, the balance sheet is a chart thatincludes the assets (items of value the company owns) and it’s liabilities(debts or claims against the assets of the company). The balance sheetrepresents the financial picture of the firm at the instant in time. The incomestatement shows the profit or loss of the company for the year. This chartreports the income the company received from sales, interest, and othersources. The operating costs – salaries, advertising, maintenance – deductedfrom income total the profit or loss. The statement of stockholders’investment, or equity includes information on the company’s stock such asnumber of shares outstanding and issued.
Various parts of the annual report can be used todetermine whether a company is profitable. In addition to reporting on thiscurrent year, most companies include in their annual reports comparisons of thecurrent year and the prior year’s financial information. Also important tostockholders and investors is the company’s return on sales. For example, if afirm sold $1 mln. worth of its products and itsprofit was $100,000; return on sales would be 10%.
So we can say that annual reports help us tounderstand financial status of the firm in the end of the fiscal year and tomake educated decisions- invest in company our capital or not.
№15. Money: history, functions and forms.
Today we buy bread, clothes with money in a shop. These are goods: weexchange our money for goods which others sell to us. Today we travel on atrain or bus. or maintain a banking account, and we pay the charge or fee.These are services: we exchange our money for the services which others providefor us.
In a primitive community people obtain goods and services by barter.Trade by barter is the earliest form of trade, when people offer goods inexchange for what they want, that is they swap goods for other goods.
As primitive communities develop into more advanced societies peoplerealize they need some commodity they can use in exchange for anything, somecommodity that does not decay and remains valuable, some commodity with thehelp of which people can measure the value of one thing against the value ofanother thing. Such commodity is money. Thus money is a necessary part of anycivilized society, ft serves as:(1) medium of exchange; (2) a store of wealth; (3) a measure of value.
Money means coins, banknotes and cash in the bank account. We use it tomake payments. Nowadays we know that the units of money must have certainqualities to be successful. They must be:
1. Standard. Theymust all be of the same kind.
2. Durable. They must be strong and long-lasting, so that they area store of value and do not wear out easily.
3. Scarce. They must be difficult to come by to keep their value.
4. Acceptable. They must be accepted as a medium of exchange in a.
5. Portable. They must beeasy to carry.
6. Divisible. It must bepossible to divide the units of money of large value into smaller values.
In the past many things were usedas the medium of exchange — corn, furs, rice, tobacco, salt tea, rum — there isno end to them. In time people realized that metals were superior to thecommodities previously mentioned.
The Ancient Britons and Greek used iron, the Romans used copper butgradually silver and gold replaced them.
The advent of coinage is a stepforward because coins are free from most of the disadvantages of earlier formsof money. The first coins are credited to China around about 1.000. B.C.
After coins came notes. Thehardest problem for anyone with money then was to find somewhere safe to keepit. Gold and silversmiths had safes, because their trade was traffic in coinand bullion, and they needed somewhere secure to keep their stocks.
So it came about in theseventeenth century that goldsmiths took theses deposits for safe keeping. Theyissued a receipt. More and more people come to hold these receipts and theybegan to circulate for value among merchants. They come to be trusted andbecome usual in payment, as easier, lighter and quicker to handle than a lot ofcoin.
In the beginning people had topay a fee for having money kept safe. Then goldsmith understood that some ofhis receipts were always out, circulating in the hands of the merchants. So the goldsmith always had some cash inhand, and he started to lend this out. This was the beginning of banks.
№16.The Bank of England.
c) keeps accounts for overseas central banks
The first and most important function of a central bank is to advise thegovernment on the making of the country's financial policy and then help tocarry it out which means carefully monitoring the money supply. Its business atfirst was to receive money on deposit, discount approved bills of exchange andlend against satisfactory security. At first this lending was nearly all tothe government, and gradually the Bank came to perform other services onbehalf of the government, and so to become regarded as 'banker to thegovernment'.
Then The Bank of England was empowered to open country branches.
From the time of its foundation the Bank had strong links with thegovernment and these strengthened over the centuries until in 1946 it was nationalised and became publicly owned.
The Bank of England is controlled by a Court of Directors — similar to aboard of directors running a large public company — made up of the Governor,the Deputy Governor and sixteen directors. They are all appointed by theCrown.
As the central bank of the United Kingdom, the Bank of England:
— Implements the monetary policy of the government. It decides whatpercentage of bank deposits is held as cash, and what percentage may be lent.
— Acts as banker to the government. It administers exchange control andkeeps the nation's gold and foreign currency reserves. The Bank keeps thegovernment's banking accounts, manages the accounts and funds of variousgovernmental departments.
— Acts as banker to the depositbanks. It keeps the accounts of other banks.
— Acts as lender of last resort to the discount houses.
Has about 90 accounts for overseas central banks.
№19. Types of bank services.
Banks are among the most important financialinstitutions in the economy that produce and sell financial services. Bankingcovers so many services that it is difficult to define it. Both types ofbanking, however, have three essential functions. They are:
Deposit function—receiving customers deposits and offering interest-bearing deposits.
Payments function— making payments on behalf of customers for their purchases of goodsand services.
Credit function—tending and investing money. There are some traditional services thatbanks offer.
Carrying out currency exchange. In today's financial marketplace trading in foreigncurrency is usually carried out by the largest banks due to currency risk andthe expertise needed to carry out cash transactions.
Safekeeping of valuables. During the Middle Ages, banks began the practice of holding gold,securities, and other valuables owned by their customers in secure vaults.Customers still leave articles of value, locked boxes, wills, and many otherthings in bank strong rooms for safety. The customer should lock boxes and sealparcels before he hands them in to the bank. The banker will issue a receipt ifso required. The banker hands them back only against a signature by hiscustomer or a properly-appointed agent whom the bank knows.
Trust services. This property management function is known as trust services. Mostbanks offer both personal trust services to individuals and families andcommercial trust services to corporations and other businesses.
Among the newest services offered by banks are:
Financial Advising—customers have long asked for financial advice, particularly, when itcomes to the use of credit and the saving and investing of funds.
Cash Management—over the years banks have found that some of the services they providefor themselves are also valuable for their customers.
SettingInsurance Policies—most banks either offer selectedinsurance policies to their customers or have plans to offer insurance servicesin die near future.
OfferingSecurity Brokerage Services—in today's financial marketplace manybanks are doing their best to become true «financial department stores”.This is one of the main reasons banks began to market security brokerageservices in the 1980s, offering their customers the opportunity to buy stocks,bonds, and other securities without security dealers or brokers.
It should be clear from the list of services describedthat the changes affecting the banking business today are so important thatmany industry analysts refer to current trends as „a bankingrevolution“.
№17. Banking in the US.
Banking services were associated with the Gold Rush.The first gold strike occurred in California in 1848. In the wake came theproblems of carrying mail and gold dust over hundreds of miles. A concerncalled Adams and Company opened its office in San Francisco in 1849. Theexpress company received the miner's gold for the pose of shipment. It weighedthe gold, gave a receipt for it and assumed responsibility for its safety. Thusthe express company’s iron safe became the local bank. About this time inSacramento a group also opened a bank. There were three clerks, all armed withColt revolvers and knives, and the banking hours were from six in the eveninguntil ten at night. It was in 1852 that Wells Fargo and Company was born. In the July ofthat year two of its senior men arrived in California, one to be responsiblefor the express service the other for the banking. The company forwardedpackages, parcels and freights of ail descriptions between New York and SanFrancisco, purchased and sold gold dust, bullion and bills of exchange. It alsoattended to the payment and collection of notes, bills and accounts.
It was very different from the goldsmiths and theirnotes. And yet the basic functions of providing security, accepting deposits,paying and collecting bills, were exactly the same. All that has happened sincehas been only a development of these basic functions.
At presentthe Federal Reserve System is the core of the country's financial institutions,payment processes, markets and instruments. The system has four basicfunctions:
(I) influencingthe supply of money and credit,
(2) regulatingand supervising financial institutions,
(3) serving asa banker and fiscal agent for the government
(4) supplyingpayments and services to the public through depositary institutions.
The system is an unusual system of public and privateelements and centralized and decentralized components. At the head of itsformal organization is the Board of Governors, located in Washington, D.C. Theseven members of the board appointed for 14-year terms by the President withthe advice and concent of the Senate. At the nextlevel are the regional Federal Reserve Banks. The Reserve Banks are not profitmotivated. Instead their policy is based on the System's estimates of the needsof the economy. The organization of the System also includes The Federal OpenMarket Committee. It is the most important money policymaking body because itexercises broad control over the growth Of the nation's money supply. It alsohas charge of the System's Operations both in domestic securities market and inforeign Exchange markets. Two-fifths of the 12.600 commercial banks in the USbelong to the System. National banks must be members; state-charted banks mayjoin if they meet certain requirements. Each member bank holds 3 percent of itscapital as stock in its Reserve Bank. About 25.000 other depositaryinstitutions provide American people with banking services.
№18. Types of banks.
Now there areonly a few banks, each with many branches in Great Britain (the Big Six —Barclays, Coutts, Lloyds, Midland, NationalWestminster and Williams and Glyns). They areclearing banks, i.e. they have a seat in the Clearing House. This is anarrangement for a quick settlement of payments between different banks. Thosebanks without a seat in the Clearing House get their chequescleared by a bank which has, acting as an agent. Clearing is the processwhereby the amount of a cheque is transferred fromthe drawer's bank to the payee's bank. The clearing banks have many competitorsin different sections of their business. These rival bodies want to collect anduse the public's savings for different purposes.
Merchant banks carry on a great variety of business, and each tends lospecialize in certain activities or in transactions with particular countries.Some activities, however, are basic to all of them. These are deposit banking,underwriting, and the management of client funds.
The National Giro is a nationally owned schemefor the fast transfer of payments through post offices.
One big drawback to the service provided by the clearing hanks is therestricted hours during which they are open to the public. This led to theestablishment of money shops.
The accent is on the lending and not all money shops provide currentaccount facilities, although some do; but attention is given to the provisionof personal, home improvement and mortgage loans, life and general insurancefacilities, investment advice, and savings accounts.
Similar lo them are money shops in chain stores, openwhere the store is open — the “in-store banks”. Of these the most numerous arethose of the Cooperative Bank, which set up nine 'handybanks'in the Birmingham area and hopes that within two years there will be 500 ofthese banking points in Cooperative stores around the country. Such a handyhank gives facilities for cashing cheques,depositing money, ordering travel cheques, etc., and it is open all day Saturday.
№20. The company's structure and developmenton the basis of „Harper and Grant Ltd.“
The company of Harper & Grant Ltd. was started forty-two years agoby Ambrose Harper and Wingate Grant. Wingate Grant died many years ago, and hisson Hector is the present ManagingDirector. Ambrose Harper is the Chairman. He is very old man and he comes to attend the board meetings and keepan eye on the business.
The company started by making steel wastepaper binsfor offices. These wastepaper bins are more safer than the old type of basketmade of cane or straw. Wingate Grant captured a big contract with governmentoffices.
From wastepaper bins, Harper & Grant began to manufacture otheritems of office equipment: desks, chairs, cupboards, filing cabinets andsmaller objects, such as filing trays, stapling machines and so on, until nowwhen there are fifty-six different items listed in their catalogue. All itemsare made of pressed steel.
The factory consists of. These are divided into the Tool Room, WorksStores, Press Shop, Machine Shops, Assembly Shop, Paint Shop, Inspection,Packing and Despatch Departments. There is alsothe Warehouse.
The firm has a history of slow, steady growth. ButPeter Wiles — Production Manager, and John Martin — Sales Manager think thatthey should be more adventurous. They want modernisinga business by using modern things to run a businesssuch as electronic data processing, Discounted Cash Flow, budgetary control,corporate planning, P.E.R.T. (Project Evaluation and Review Technique), automation,etc. Harper & Grant Ltd., like theirrivals, must get right up-to-date and enlarge their business, or they will beoutpaced by a firm whose business organisation isbetter than their own.
№11. Pricing policies.
Everybody, who wants to start his own business, mustknow, that it’s very important to attract the customers. There are many ways todo it. For example, to introduce new items of goods.
Economists say that the most important thing forsellers is to charge the appropriate price for goods. There are two types ofpricing policy: price emphasis(политакцентировРдлястимулсбыта) and price de-emphasis(Робразовнаоснощу-йцен-титов).
Price emphasis policy emphasizes low prices. And thisencourages sales. We must know that it has a weak point, because this policydoesn’t provide extra services. But it let sellers get more money, because thisprice determines a big number of sales.
A good example of price emphasis is “loss leader”pricing. It means that a seller chooses one item and sells it at very lowprice. There is also off-even pricing or “odd-pricing”.
Businessman must start with specially low prices inorder to compete with well-known goods. He can raise the price when hiscustomers get accustomed to a new brand, and they will continue to buy it.
Next type of pricing policy (price de-emphasis)concerns high quality expensive items. Seller doesn’t call attention to theprice at all. Sometimes when the price rises, it convince some customers thatthe product must be of high quality, or will soon become very hard to get. Andthis may increase sales.
№ 12 The rights of a customer andthe responsibilities of a supplier.
Many peoplethink that complaining about faulty goodsor bad service is never easy. Most of them dislike making a fuss. However, whenyou are shopping, it is important to knowyour rights.
When you buy something from ashop, you are making a contract. But you want to make sure if this contract meansthat it's up to the shop to deal with yourcomplaints if the goods are notsatisfactory. The first thing thatcomes to your mind is that the goodsmust not be broken or damagedand must work properly.Thesecond thing that you find importantis that the goods must be as described — whether on thepack or by the salesman. It makes you understand the third principle: The goods should be fit for theirpurpose. This means the purposefor which most people buy those particular goods. If you wanted something for aspecial purpose, you must have said exactlywhat for.
You are quite sure that if the shop sells you faulty goods, it has broken its side ofthe bargain. And that is absolutely right. In thissituation customerhave the right to return the goods and havea complete refund.
At that timeif the good is broken and it was your fault than seller shouldn’t return yourmoney to you. That’ll be his right.
There are fourgolden rules:
Examine thegoods your buy at once. If there are faulty, tell the seller quickly.
Keep anyreceipts you are given. If you have to return something, the receipt will helpto prove where and when you bought it.
Don’t be afraidto complain. You are not asking a favour to have faulty goods put right. Thelaw is on your side.
Be persistent.If your complaint is justified, it is somebody’s responsibility to put thingsright.
№13The cost of growth.
Long-range economic growth depends on producingcapital goods. Everyone who works contributes to the growth of capitalresources. Your labor must be valuable enough to earn more than just the moneyto cover your wages. In recent yearsmany people have argued that economic growth is a mixed blessing.
One of the advantages of economic growth is thecreation of new jobs. Some people have jobs that did not exist 20 years ago.Part of them makes their living operating the computers. Millions of workershave jobs that computers have made easier.
However, the introduction of computers spelledunemployment for many workers, for example for typesetters. It also cut themanagers’ stuff, make the management easier. Unemployment is the most undesirableconsequence of economic growth.
Unemployment causes social and economic problems.Those who lost their jobs can hardly ever find new full-time job with a goodwage. Many of the workers take jobs delivering flowers, polishing glass,stock-clerking, or driving taxes. Others do such odd jobs as painting and homerepairs to earn income. Some of them try retraining programs, but find thatemployers are reluctant to hire older, experienced persons as beginners.
Retraining in new skills is only one solution to theproblem, and not a simple one. Retraining is more useful to the young than tothe old.