Lesson 1 Flashcards
is any item or commodity that is generally accepted as a means of payment for goods and services.
Money
is accepted as means of Repayment of debt.
Money
Money includes the funds stored as electronic entries in one’s checking account and savings account.
True or false?
True
is a periodical publication, which can either be printed or published electronically
magazine
is the oil that keeps the machinery of our world turning.
Money
It is the oldest form of payment to exchange of goods and services.
and was first observed around 10,000 – 3000 BCE
BARTER SYSTEM or BARTER
The barter observes the
‘IOU’ concept.
Characteristics of money:
MUST HAVE VALUE
MUST BE DURABLE
MUST BE PORTABLE
MUST BE UNIFORM
MUST BE LIMITED
MUST BE DIVISIBLE
MUST NOT BE PERISHABLE FOR PEOPLE TO STORE IT AS THEIR WEALTH IN THE FUTURE AND PEOPLE SHOULD BE ABLE TO USE IT ANYTIME, ANYWHERE.
CHARACTERISTICS AND KEY FUNCTIONS OF MONEY
STORE OF VALUE
CONTAINS AN INTRINSIC VALUE, SUCH AS THAT OF A PRECIOUS METAL THAT WAS USED TO MAKE A COIN. .
CHARACTERISTICS AND KEY FUNCTIONS OF MONEY
ITEM OF WORTH
MUST BE FREELY AND WIDELY USED FOR EXCHANGE OF GOODS AND SERVICES, AND THERE MUST BE STABILITY TO THE MONEY BEING USED.
CHARACTERISTICS AND KEY FUNCTIONS OF MONEY
MEANS OF EXCHANGE
MUST BE USED TO RECORD WEALTH POSSESSED, TRADE, OR SPENT PERSONALLY OR NATIONALLY. **must only be issued and recognized by one authorized **
CHARACTERISTICS AND KEY FUNCTIONS OF MONEY
UNIT OF ACCOUNT
MUST BE WIDELY ACCEPTED TO VALUE A DEBT THEREBY ALLOWING GOOD AND SERVICES TO BE ACQUIRED NOW AND PAID FOR IN THE FUTURE.
CHARACTERISTICS AND KEY FUNCTIONS OF MONEY
STANDARD OF DEFERRED PAYMENT
Insufficient money circulating in the economy will slow it down = Surplus of money circulating in the economy can cause inflation due to higher price levels
MONETARY THEORY
Monetary Theory formula?
MV= PQ
M
MONETARY THEORY
Money Supply
V
MONETARY THEORY
Velocity (number of times currency is spent in a year)
P
MONETARY THEORY
Price of Goods and Services
Q
MONETARY THEORY
Number of Good and Services
happens when all available labor resources are being used in the most efficient way possible.
FULL EMPLOYMENT
Two type of unemployment:
-Frictional Unemployment
-Structural Unemployment
WHAT PERCENTAGE CONSIDERED AS FULL EMPLOYMENT?
5% OR LOWER
WHAT PERCENTAGE CONSIDERED ACCEPTABLE RATE FOR UNEMPLOYMENT?
2% TO 7%
THE CENTRAL BANK SETS MACROECONOMIC OBJECTIVES SUCH AS TO ENSURE PRICE STABILITY AND ECONOMIC GROWTH.
MONETARY THEORY AND THE CENTRAL BANKS
DEFINING MONETARY POLICY
THEY ARE THE AUTHORITY FOR ISSUING COINS AND NOTES, THE MONEY SUPPLY, AND FOR REGULATING HOW MUCH MONEY IS IN CIRCULATION.
MONETARY THEORY AND THE CENTRAL BANKS
REGULATING MONEY IN CIRCULATION
THEY ENSURE THAT THE RELEVANT FINANCIAL LAWS ARE RESPECTED, AND THEY MONITOR NATIONAL PAYMENT SYSTEMS TO MAKE SURE THAT THEY ARE WORKING PROPERLY.
MONETARY THEORY AND THE CENTRAL BANKS
OVERSEEING THE INTERBANK MARKET
based on the Asian Development Bank statistics, How many are unbanked people?
50 Million
THEY PROVIDE LIQUIDITY TO COMMERCIAL BANK IN CASE OF SOLVENCY ISSUES.
MONETARY THEORY AND THE CENTRAL BANKS
THE BANK OF LAST RESORT
7 types of banks
OVERVIEW OF THE PHILIPPINE FINANCIAL SYSTEM
Universal Banks
Commercial Banks
Thrift Banks
Rural Banks
Cooperative Banks
Islamic Banks
Digital Banks
NBFIs stands for?
Non - Bank Financial Institutions
Insitutional design and arragement:
- Securities and exchange Commission (SEC)
- Bank Sentral ng Pilipinas
- PDIC (Philippince Deposit Insurance Corporation)
- Komisyon ng Seguro
- Cooperative Develepoment Authority
FIRST LINE OF DEFENSE
Three lines of defense
BUSINESS LINE FUNCTIONS
SECOND LINE OF DEFENSE
Three lines of defense
risk management and compliance functions
THIRD LINE OF DEFENSE
Three lines of defense
Internal audit Funtion
Key policy and priorites and reform agenda
Institutional Stability
Sustainability
Prudent Innovation
Promoting digitalization to accelerate financial inclusion and boost econmic growth.
Prudent Innovation
