We Live in a “Money Economy”
Money is a vital part of our everyday lives.
Money can be earned by working, spent on things we need, saved for future spending or borrowed for immediate use.
Money, as we know it, takes two forms: cash money which consists of coin and paper currency and checkbook money which most people use to pay many of their bills. The important thing to remember, though, is that they are interchangeable. We can deposit cash into a checking account. Or we can write a check as a substitute for cash.
Money in itself really is useless. But as a medium of exchange it has value. The value is what the money can buy. Here is a simple example.
Ten years ago one dollar could buy:
hamburger postage stamp
ice cream cone ball point pen
Today one dollar can buy:
Ten years from now one dollar might buy more or less or the same. Strange, isn't it? One dollar always equals 4 quarters or 10 dimes or 20 nickels or 100 pennies. So the dollar itself doesn't change. But what the dollar will buy, how much it will buy, does vary. Why does the value of the dollar change? How does this change affect us? How can we limit the dollar's changing value?
Imagine our economy as one huge machine. Instead of mills, factories, farms, offices and shops, this one machine turns out all our goods and services. Everyone with a job works this Total Production Machine. Some workers repair and maintain it. But most work to produce cars, washing machines, houses, food, tanks, roads and health services —— almost all the things we need and want.
Of course, everyone who works the machine gets paid. Some are paid in cash. Others are paid by check. In fact, sometimes this checkbook money is deposited directly into workers' bank accounts.
Then either with their cash money or checkbook money,people buy things to eat and wear and enjoy. Thus, people work on the machine,get paid by the machine and buy what the Total Production Machine has produced. When people buy all that the machine has produced, then everything is in balance, and the value of our money is stable and healthy.
But once in a while, people decide to buy fewer cars. Or the federal government may cut back its spending on the space program. Perhaps local governments defer building a new school. Or industry decides to spend less on steel, for example, thinking that there is enough stockpiled in the nation's warehouses. And when spending or demand slows, then the machine's speed is reduced.
Fewer people are needed to work the Total Production Machine. As some incomes are cut out, total buying is even less than before. The machine works still slower and more people are laid off. This state of economic affairs —— the imbalance between demand and supply —— is called recession.
Sometimes the opposite happens. Instead of cutting back, people, industry and governments may decide to buy more. Demand goes up and our Total Production Machine gets busier. As the demand for its output becomes greater and greater, the machine must work harder and longer to produce more cars, more space capsules, more schools, more steel, more health care —— more of the things that are wanted.
More people are hired to work the machine. Earnings rise. And spending increases. We push the machine to even greater efforts.
However, there's a limit to what the machine can produce —— at stable prices. Working at full throttle, the machine must use obsolete and inefficient parts. This is costly. Further, untrained people must be hired who may be less productive. So costs go up still more. And as costs go up, prices go up,too.
How can we produce more without rising prices? How can growing demand be satisfied at stable prices? To solve this problem, we must improve and enlarge the machine. To produce more at prices that stay level we must add to the machine's capacity. Therefore, part of the machine's output must be assigned to expand its capacity. This means that we must postpone the demand for additional cars, washing machines and services, so that we can spend more on steel mills, electric generating plants and spare parts —— the things that are needed to expand the Total Production Machine.
It seems, though, that people prefer not to postpone their demand. They would rather spend their incomes right away.
Some suggest that we get funds for new parts for the Total Production Machine by creating more money.
The banking system can create more money when people wish to borrow to supplement their spending out of current income. Borrowing may expand the Total Production Machine's output. But when the machine is working near or at full capacity, the rapid creation of more money will not increase production fast enough.
Since we cannot buy more than is being produced, the additional money only increases the competition for the available supply of products. Too many dollars are chasing too few goods. Prices of many kinds of goods will tend to go up. A dollar will not buy what it did before, and its value —— what and how much it will buy —— will go down. This state of economic affairs —— this imbalance between demand and supply —— is called inflation.
Inflation hurts many people. Those receiving fixed incomes, such as pensioners, find that their dollars buy less. And people with savings accounts find that inflation reduces the value of their savings.
Since too little spending may lead to recession and too much spending may lead to inflation, how much new money is needed to keep our economy growing, employment high and prices relatively stable? We are waiting for the answer.
value n.limit vt.
Phrases and Expressions
a checking account
ice cream cone
ball point pen
1.We Live in a "Money Economy".我们生活在"货币经济社会"。
(1)money n.pl.mon.eys或 monies
①a commodity, such as gold, or an officially issued coin or paper note that is legally established as an exchangeable equivalent of all other commodities, such as goods and services, and is used as a measure of their comparative values on the market钱，货币，纸币：一种商品，如金子或官方发行的铸币或纸币，把这种货币或纸币定为可与其他一切商品、如货物和服务的等价交换物，并用作市场交换价值的尺度
②the official currency, coins, and negotiable paper notes issued by a government通货：由政府发行的官方货币、铸币和可转让纸币
③assets and property considered in terms of monetary value; wealth财产，财富：被认为有金钱价值的财产或财富；财富
(2)economy n.①the system or range of economic activity in a country, region, or community经济体：国家、地区或群体的经济活动体系和范围：
例：Effects of inflation were felt at every level of the economy.
②a specific type of economic system经济制度：特定经济体系类型
例：an industrial economy工业经济体制；
a planned economy计划经济体制
2.The important thing to remember, though, is that they are interchangeable.然而，需要记住的事情是支票货币是可用于交换的。
3.But what the dollar will buy, how much it will buy, does vary.但是，一美元能买什么东西，买多少东西却是变化无常的。
(1)此句的主语是两个主语从句what the dollar will buy和how much it will buy，谓语是does vary,此处的does起强调作用。
4.Of course, everyone who works the machine gets paid.当然，任何开动机器的人都会得到报酬。
(1)此句是"主-系-表"句型结构。句中的get作系词，意为"to be successful in becoming成功地变成"；paid是动词pay的过去分词，在句中做表语。
(2)句中的"who works the machine开机器的…"是定语从句。动词work意为to operate操作。
5.When people buy all that the machine has produced, then everything is in balance, and the value of our money is stable and healthy.当人们将其生产出来的产品全部购买掉，那一切都处于平衡状态，我们社会中的货币价值就会稳定，机器就会正常运转。
(1)此句中的(all)that the machine has produced是由关系代词that引导的定语从句。由于先行词是不定代词all，所以关系代词只能用that，而不能用which。
balance n.a state of equilibrium or parity characterized by cancellation of all forces by equal opposing forces平衡：平衡或均等的状态，具有所有力量被相反的力量所抵消的特点
(3)句末的healthy解释为"possessing good health健康的；拥有良好健康状况的"，意为"社会就像一个机器正常运转"。