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Маркетинг Monetary Policy during the Great Depression
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TRANSLATION

A.Translate into Russian with a dictionary.

Monetarists and Keynesians still debate the causes of the Great Depression. Monetarists Milton Friedman and Anna Schwartz, in their book A Monetary History of the United States, argued that the Great Depression was caused by the decline in the money supply, the changes in the price level, real GDP, and unemployment rate.

During the 1920s, the money supply expanded steadily, and prices were generally stable. In response to the great stock market crash of 1929, bank failures, falling real GDP, and rising unemployment, the Fed changed its monetary policy. Through the Great Depression years from 1929 to 1933, M1 declined by 27 percent. Assuming velocity is relatively constant, how will a sharp reduction in the quantity of money in circulation affect the economy? Monetarists predict a reduction in prices, output, and employment. The price level declined by 24 percent between 1929 and 1933. In addition to deflation, real GDP was 30 percent lower in 1933 than in 1929. Unemployment rose from 3.2 percent in 1929 to 24.9 percent in 1933.

Friedman and Schwartz argued that the ineptness of the Fed's monetary policy during the Great Depression caused the trough in the business cycle to be more severe and sustained. As proof, let's look at the period after 1933. The money supply grew and was followed closely by an increase in prices, real GDP, and employment.

The Great Depression was indeed not the Fed's finest hour. In the initial phase of the contraction, foreign banks were fearful and withdrew large amounts of their gold from U.S. banks. To stop the outflow of gold to other countries, the Fed raised the discount rate in 1931. As a result, banks borrowed less of their required reserves from the Fed's discount window, and the money supply fell. Later the discount rate fell, but only after the economy was deeper into the Great Depression.

What should the Fed have done? Friedman and Schwartz argued that the Fed should not have waited until 1931 to use open market operations to increase the money supply. Thus, they concluded that the Fed was to blame for not pursuing an expansionary policy, which would have reduced the severity and duration of the contraction.

Finally, although the emphasis here is monetary policy, it should be noted that both monetary and fiscal policies worsened the situation. President Hoover was attempting to balance the budget, rather than using expansionary fiscal policy.

Note:

1. ineptness n – неуместность.

B. Translate into English with a dictionary.

Сущность денег полнее всœего проявляется в их функциях. Деньги выполняют следующие функции: мера стоимости, средство обращения, средство накопления и образования сокровищ, средство платежа, мировые деньги. Первой является функция меры стоимости. Именно в деньгах определяется стоимость любого товара (определяется его цена). Стоит заметить, что золото выполняет данную функцию идеально. Функция денег как средства обращения обуславливает нормальное протекание обмена товарами. Деньги становятся посредником в любом акте товарного обмена, делая данный процесс менее сложным для товаропроизводителœей. Функция денег как средства накопления также представляется достаточно очевидной. Накопление денег в виде золота - это фактически накопление стоимости в наиболее ликвидной форме. Интересной является функция денег как средства платежа. Здесь важным представляется то, что процесс продажи и оплаты товара разрывается во времени. Между актом купли товара и его оплатой проходит неĸᴏᴛᴏᴩᴏᴇ время. Очевидно, что такая отсрочка может иметь место только в том случае, если продающий данный товар получит от покупающего его гарантии оплаты в определœенное время. И, наконец, функция мировых денеᴦ. Здесь мы фактически утверждаем, что товар- деньги - ϶ᴛᴏ всœеобщий эквивалент, который выходит за национальные границы, превращаясь в общемировое явление, выступая в международном товарном обмене и мерой стоимости, и средством обращения, и средством платежа.


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    TRANSLATION A.Translate into Russian with a dictionary.Monetarists and Keynesians still debate the causes of the Great Depression. Monetarists Milton Friedman and Anna Schwartz, in their book A Monetary History of the United States, argued that the Great Depression was caused by the decline in the money supply, the changes in the price level, real GDP, and unemployment rate. During the 1920s, the money supply expanded steadily, and prices were generally stable. In response to the... [читать подробенее]