INTERNATIONAL MONETARY SYSTEM
I’m student… Our university is a prominent economic establishment of higher learning. It provides a high quantity training of economic and managers for various fields of national economy. It has academic building with all education facilities, hostels, and a sport centre. The students have free access to the library, reading-rooms, laboratories. The students may enroll un day-time or correspondence department. The graduates of the university work at various branches of industry and agriculture, state and private organizations with different form of ownership, finance and banking system. The main purpose of the university is to equip students with excellent professional skills.
Economy of U.
Present-day independent U.has a considerable potential to quickly develop its economy – and this is explained not only by the favorable natural conditions. Reforms are aimed at the establishment of an open, effective market type economy.
Industry is the most important area of U. economy. In the current structure of U.industry a great proportion is occupied by heavy industry, machine-building and coal industries. The Donbas region is the centre of U.heavy industry. The machine-building is presently the largest branch of industry. However, today’s industries are unable to satisfy the consumers wants.
U.has very favorable conditions for the development of agricultural production. There are 2 main branches of agricultural production in U.: crop production and animal husbandry.
5. Economy of G.B.
G.B. is a highly-developed naval and industrial power. The main sectors of British economy are manufacturing, services and agriculture. Coal-mining, metallurgy, textile, shipbuilding are the older branches of industry.
Services play an important role in British economy and make up an increasing proportion of the national income.
Economy of the USA
The USA is one of the largest countries in the world. It has a developed free enterprise economy. It means that people are able to own capital and property and to run their own businesses for making profit.
The country has very powerful industries, advanced technologies and science.
One of the most important sectors of the US is agriculture. American agriculture produces more food products than any other capitalist country. The principle crops grown in the country are: corn, soy-beans, sugar-cane and sugar-beets, sunflower, tobacco, cotton etc.
Animal husbandry is also developed in the country.
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What is economic?
E. is a social science like history, geography, politics, sociology. Economics was defined as the study of mankind in the everyday business life. This means that economics deals with production, distribution, exchange and consumption.
E.has its own vocabulary. There are some key terms: needs, wants and demand. A need is a basic requirement for survival. People have basic needs and also higher level needs. A want is a means of expressing a need. A demand is the willingness and ability to purchase a desired object.
The study of economics is concerned with economic products – goods and services. The terms goods and services are used to describe many things people desire.
Factors of production
There are 4 factors of production: land, labour, capital and organization or entrepreneurship.
As an economic term land means the gifts of nature or natural resources not created by human efforts. They are the things provided by nature that go into creation of goods and services.
The 2 f. is labour – people with all their efforts and abilities. Unlike land, labour is a resource that may vary in size over time.
The 3 f. is capital – the tools, equipment and factories used in production of goods and services. It is a produced factor of production, a durable input which is itself an output of the economy.
Entrepreneurship, the managerial or organizational skills needed by most firms to produce goods and services, is the 4 factor of production. The entrepreneurship brings together with the other 3 factors – l.,l.,and cap.
Economic systems
There are 3 major kinds of economic systems: traditional, command and market.
In economic with traditional economy nearly all economic activity is the result of ritual and custom. The main advantage – is that everyone has a role in it. This helps keep economic life stable. The main disadv – is that is tends to discourage new ideas and even punishes people for breaking rules or doing things differently.
A command economy – one where a central authority makes most of the What, How and for Whom decisions. Economic decisions are made at the top and people are expected to go along with choices made by their leaders. It means that major economic choices are made by the government. The major adv – is that it can change direction drastically in a relatively short time. Disadv – is that it does not always meet the wants and needs of individuals.
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In a market economy the questions of What, How, and for Whom to produce are made by individuals and firms is an arrangement that allows buyers and sellers to come together to conduct transaction. A market economy has several major advantages. First, a market economy is flexible and can adjust to change over time. The 2- is the freedom that exists for everyone involved: 3 – incredible variety of goods and services available to consumers.
Business organizations
There are three major kinds of business organizations: the sole proprietorship2, the partnership3 and the corporation
The most common form of business organization is the sole proprietorship — a business owned and run by one person. The main advantage of a sole proprietorship is that it is the easiest form of business to start and run. The major disadvantage of a sole proprietorship is the unlimited liability8 that each proprietor faces. Since the business and the owner are legally the same, the sole proprietor is liable for9 all financial losses or debts that the business may incur A second disadvantage of the sole proprietorship is that it has limited financial resources.
A partnership is a business that is jointly owned by two or more people who have combined their talents and resources for the purpose of earning a profit. Partnerships are most common in such professional fields as medicine, law, accounting, stockbrokerage1, but they are also found in manufacturing, wholesaling and retailing2.
Partnerships have more advantages than sole proprietorships. Like sole proprietorship they are easy to form and often get tax benefits5 from the government. Partnerships have certain disadvantages too. The major disadvantage is unlimited financial liability. It means that each partner is responsible for all debts and is legally responsible for the whole business.
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. A business corporation is an institution established for the purpose of making profit. There are several advantages of the corporate form of ownership. The major advantage is the ability to acquire greater financial resources than other forms of ownership. The next advantage is that the corporation attracts a large amount of capital and can invest it in plants, equipment and research. It can offer higher salaries and thus attract talented managers and specialists. Corporations have great capacity for growth and expansion.Corporations face some major disadvantages. It is difficult and expensive to organize a corporation. The process of obtaining a charter usually requires the services of a lawyer. Most small firms prefer to avoid these expenses by forming proprietorships and partnerships
Market and market structures
In short, markets can be classified according to certain structural characteristics that are shared by most firms in the market. Economists have names for these different market structures: pure competition1, monopolistic competition2, oligopoly, and monopoly.
An important category of economic markets is pure competition. This is a market situation in which there are many independent and well-informed buyers and sellers of exactly the same economic products. Each buyer and seller acts independently. They depend on forces in the market to determine price. If they are not willing to accept this price, they do not have to do business.
To monopolize means to keep something for oneself3. A person who monopolized a conversation, for example, generally is trying to stand out from4 everyone else and thus attract attention5.
The term market, as used by economists, is an extension of the ancient idea of a market as a place where people gather to buy and sell goods. Today, however, markets such as the world sugar market, the gold market1 and the cotton market do not need to have any fixed geographical location. Such a market is simply a set of conditions permitting buyers and sellers to work together.
Demand and supply
Most people think of demand as being the desire for a certain economic product. That desire must be coupled with1 the ability and willingness to pay. Effective demand, that is desire plus ability and willingness to pay, influences and helps to determine prices.
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In economics the relationship of demand and price is expressed by the Law of Demand. It says that the demand for an economic product varies inversely2 with its price. In other words, if prices are high the quantities demanded will be low. If prices are low the quantities demanded will be high.
Supply means the quantity of a product supplied at the price prevailed at the time. The law of supply states that the quantity of an economic product offered for sale varies directly with its price. If prices are high suppliers will offer greater quantities for sale. If prices are low, they will offer smaller quantities for sale.
Market price
In a market economy prices act as signals. A high price, for example, is a signal for producers to produce more and for buyers to buy less. A low price is a signal for producers to produce less and for buyers to buy more.
In most economic systems, the prices of the majority of goods and services do not change over short periods of time. In some systems it is of course possible for an individual to bargain over prices, because they are not fixed in advance. In general terms, however, the individual cannot change the prices of the commodities he wants.
In economics, the term «price» denotes the consideration in cash (or in kind) for the transfer of something valuable, such as goods, services, currencies, securities, the use of money or property for a limited period of time
Prices perform two important economic functions: they ration scarce resources, and they motivate production.
Labour and capital
There are four major categories of labour that are based on the general level of skills needed to do any kind of job. These categories are unskilled, semiskilled, skilled and professional or managerial.
Unskilled labour. Workers who do not have the training to operate machines and equipment fall into3 the category of unskilled labour. Most of these people work chiefly with their hands at such jobs as digging ditches, picking fruit, etc.
Semiskilled labour. Workers who have mechanical abilities4 fall into the category of semiskilled labour. They may operate electric floor polishers, or any other equipment that calls for5 a certain amount of skill.
Skilled labour. Workers who are able to operate complex equipment and who can do their tasks with little supervisions fall into the category of skilled labour. Examples are carpenters, typists, toolmakers.
Professional labour. Workers with high level skills such as doctors, lawyers and executives of large companies fall into the category of professional labour.
Most occupations have wage rate — a standard amount of pay given for work performed.
How these rates are determined can be explained in two different ways. The first deals with supply and demand, the second recognizes the influence of unions on the bargaining process.
Money
Basically, money is what money does. This means that money can be any substance1 that functions as a Medium of Exchange, a Measure of Value, and a Store of Value.
As a medium of exchange, money is something generally accepted as2 payment3 for goods and services
As a measure of value, money expresses worth in terms that most individuals understand.
Money also serves as a store of value. This means goods or services can be converted into4 money that is easily stored until some future time.
The different forms of money are in use in the United States today. The most familiar are coin and currency. The term coin refers to metallic forms of money. The term currency refers to paper money issued by government.
Finance and financial system
Finance is the provision of money at the time when it is needed. It is a system of monetary relations leading to formation, distribution and use of money in the process of its turnover between economic entities.
Finance in an economic system comprises two parts: public finance and finance of economic entities.
Public finance is the provision of money (by the community through taxes) to be spent by national and local government authorities on1 projects of national and local benefit. It is a collective term for the financial flows and also the financial institutions of the public sector.
Public finance has the following four functions:
1)the provision of essential services;
2)the encouragement or control of particular sectors of the economy;
3)the implementation of social policy in respect of social services;
4)the encouragement of the growth of the economy as a whole.
The major instrument of any financial system is the budget. The budget is an estimate of national revenue and expenditure for the ensuing fiscal year. When expenditure exceeds the revenue the budget has a deficit.
Fiscal management
Financial policy is a very complex notion covering measures aimed at working out basic concepts, major guidelines, goals and objectives, as well as at creating an adequate financial mechanism and at directing financial activities of a country. Financial policy is based on strategic guidelines which set long-term and medium-term prospects for using financial resources and ensure attainment of major economic targets and solution of goals in the social sphere.
Over the past two decades financial problems have exacerbated the world over. Public debts have reached unsustainable levels in a growing number of industrial countries. This development and its results – higher interest rates, lower investment, and slower growth in living standards – have stimulated efforts by policymakers to find solutions to swollen budget deficits.
Central to these solutions is fiscal policy. Fiscal policy is the policy adopted by a government for raising revenue to meet expenditure.
Financial stabilization is the principles, institutional arrangements, information flows, and techniques that govern the budget process and define fiscal relation between levels of government.
Fiscal federalism, which is the system of taxation and public expenditure in which revenue-raising powers and control over expenditure are vested in various levels of government1 within a nation, ranging from the national government to the smallest unit of local government.
Central banking system
The central banking system is a major sector of any modern monetary system. It is of great importance to the fiscal policy of the national government and the functioning of the private sector.
Central banks are responsible for the implementation of monetary policy and supervision over the banking system. They control the money supply, fix the minimum interest rate, act as lenders of last resort to commercial banks with liquidity problems, issue coins and bank notes, influence exchange rates by interventing in foreign exchange markets.
The banking system in U. organized as a 2-tier system. The 1 tier is represented by the NBU; the 2 consist of commercial banks as well as branches and representation of foreign banks.
. The NBU has been using the following main instruments of monetary policy:
-fixed targets for the money supply growth;
-refinancing of commercial banks;
-interest rates;
-open market operations;
-commercial banks reserve requirements;
-foreign currency control;
-direct quantity restrictions.
INTERNATIONAL MONETARY SYSTEM
International monetary developments affect all individuals as workers, consumers, travelers, businessmen producing goods for domestic or foreign markets, and investors at home or abroad. The channels which transmit the impact of monetary events to people in their various roles in society are numerous.
The international monetary system is a set of arrangements, rules, practices, and institutions under which payments are made and received for transactions carried out across national boundaries. The international system is concerned not only with the supply of international money but with the relationships among the hundred or so currencies of individual countries and with the pattern of balance-of-payments relationships and the manner in which they are adjusted and settled.
The international monetary system is afflicted with problems. The main reason is that the nations that participate in it are politically independent but economically and financially interdependent.
The international monetary system involves the management, in one way or another, of three processes:
1)the adjustment of balance-of-payments positions, including the establishments and alteration of exchange rates.
2)the financing of payments imbalances among countries by the use of credit or reserves;
3)the provision of international money.
THE STOCK MARKET
Stock Markets are the means through which securities are bought and sold.
The appearance of formal stock markets and professional intermediation resulted from the supply of, demand for and turnover in transferable securities in the 19th century.
The largest, most active and best organized markets were established in Western Europe and the United States.
Members of stock exchanges drew up rules to protect their own interests and to facilitate the business to be done by creating an orderly and regulated marketplace.
Stock exchanges emerged as central elements in the financial systems of all advanced countries.
Potential investors, insurance companies, pension funds, governments and corporate enterprises see securities as a cheap and convenient means of finance.
An investor who purchases new securities is participating in a primary financial market. An investor who resells existing securities is participating in a secondary financial market.
There are two basic types of stock markets–organized exchanges, and the less formal over-the-counter markets.
The organized security exchanges are tangible physical entities, which have specially designated members5 and elected governing bodies – boards of governors.
FOREIGN EXCHANGE MARKET
Any one country’s currency is a legal tender only within its national boundaries. To trade beyond these boundaries involves exchange of monies. It is possible if national currencies are interchangeable.
Currencies can be bought or sold in the Foreign Exchange Market. It is the oldest and the largest international market in the world.
The Market performs two major functions: it facilitates the foreign exchange needs of exporters and importers, and it enables individuals, corporations and governments to obtain a desired currency mix of their portfolios.
The exchange market is global in character, it does not have one centralized location. . The market consists of three major sectors: the spot market, the forward and futures markets and the currency options market.
Prices in the market depend on the volume of transactions, exchange rate volatility, the availability of relevant information and the strength of competition in the Market.
TAXES AND TAXATION
Taxes are the compulsory financial contribution by a person or body of persons towards the expenditure of a public authority. In modern economies taxes are the most important source of government revenues.
Taxes have 3 functions:
1)fiscal or budgetary, to cover government expenditure, to provide the public authorities with the revenue required for meeting the cost of defence, social services, interest payments on national debt, municipal services, etc;
2)economic, to give effect to economic policy, to promote stable economic growth, to influence the rate of economic growth of the nation;
3)social, to increase the economic welfare of the community, to lessen inequalities in the distribution of income and wealth.
Taxes may be direct or indirect. For example, taxes on income and on capital are known as direct; taxes on commodities or services are known as indirect.
Taxes may be proportional, progressive and regressive.
A proportional tax is one that imposes the same percentage rate of taxation1 on everyone, no matter what their income.
A progressive tax is one that imposes a higher percentage rate of taxation of people with high incomes than on those with low incomes.
A regressive tax is one that imposes a higher percentage rate of taxation on low incomes than on high incomes.
TAXATION IN USA
In the United States of America nearly all of the federal government’s revenues come from taxes. By far the most important source of tax revenue is the personal income tax. Gross receipts from corporate income taxes yield a far smaller percentage of total federal receipts. Individual states levy their own taxes. As a result, for example, the profits of a corporation are liable to federal and sometimes state corporate income taxes. This often imposes a double tax burden. When the after-tax income is paid out to stock-holders as dividends, it is then taxed again as personal income.
In the United Kingdom there is no single code of tax law, the body of tax legislation being increased by each year’s Finance Act1.
The United Kingdom operates a “schedular” system2, where’by taxable income from different sources is calculated and taxed under the rules of a particular “schedule”.
Tax assessments are normally based on returns by the Board of Inland Revenue (referred to simply as “Inland Revenue”) for completion by the taxpayer. While companies may receive tax return, they normally submit instead a copy of their annual accounts together with a computation of taxable profits.
The United Kingdom does not yet operate a system of self-assessments for tax on income and capital gains, but it is being introduces at the moment.
TAXATION IN UKRAINE
Under Ukrainian law, all Ukrainian legal entities, whether they have foreign investment or not, are subject to the profit tax law. Foreign entities that have a taxable permanent establishment in Ukraine are also taxed under this law.
Ukrainian taxes provide revenue for two tiers of the budget: national and local. The major taxes paid to the budget are: tax on income, tax on wages, profit tax, excise duty, state duty, value added tax (VAT) and others.
In Ukrainian government tries to create the climate in which business can thrive, to keep the tax burden as low as possible. It also attempts to eliminate tax allowances, which deprive the budget of tax revenues, and to improve tax collection.
Tax returns in Ukrainian legal entities are audited by the tax authorities at the time they are submitted.
If the company or a person assessed believes the assessment is incorrect in any way, an appeal may be lodged against it. The appropriate financial organ is required by law to reply to such an appeal within five days.
When a company resident in one country receives income or gains from source in another, or when shareholders and company are domiciled in different countries it is possible that incomes arising will be taxable in each country, i.e. taxed twice.
A number of countries have problems because of significant taxpayer non-compliance.
Along with cases of illegal evasion of tax obligations there are entirely legal ways of avoidance by which a person may so arrange his affairs as to minimize, or even eliminate, tax liability on his property and income.
HIGHER EDUCATION IN UKRAINE
Higher education is generally recognized as preparing individuals to realize more fully their human potential, enrich their understanding of life and make them more productive to society.
Future specialists in various fields of science, technology, economies and art get a fundamental general and specialized training, all students regardless of their specialty study foreign languages.
Our country needs specialists in all fields of science and all branches of industry and agriculture. Institutes exist not only in big cities like Kyiv, Kharkiv, Lviv, but in many towns of Ukraine like Irpin.
Higher educational establishments of our country fall into three main types and have four levels of accreditation. The first type includes the universities and institutes where there are only full-time students, which receive state grants. Students who do not live at home get accommodation in the hostels.
The second and third types of higher schools provide educational facilities for factory and office workers who combine work with studies. The second type of higher education in establishments includes evening faculties and evening higher schools for those who study in their spare time.
The third type covers extra-mural higher schools where students take correspondence courses. Every year extra-mural students receive from 30 to 40 days’ leave to prepare for their exams.
The diplomas by the evening faculties and extra-mural higher schools have the same value as the diplomas of all other institutes and universities.
The period of study at higher schools is from 4 to 6 years. According to the subjects studied there exist three groups of higher schools’ universities, polytechnic and specialized institutes.
Higher education in Ukraine undergoes tangible changes. It accepts different European standards, Bologna system and becomes more and more innovative. And now there are a lot of educational establishments having student changing and correlations with the Universities throughout the world. Our higher education gets European level and international recognition.
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